working capital j k bank

8/19/2019 Working Capital j k Bank

1/58

Training Report on

Working capital management

In

JAMMU AND KASHMIR BANK LIMITED

SRINAGAR

S!mitte" in partial #l#ilment o# Re$irement #or t%e "egree o# Ma&ter& o# B&ine&&

A"mini&tration in 'inance to

(UNJAB TE)HNI)AL UNI*ERSIT+

,-./0,-.1

S!mitte" to2 S!mitte" !3

Mi&&4 Di53a (reet 6H7D8 Mamin M&%ta$

Mi&&4 Harpreet Kar 6Inc%arge8 M4B4A09r" Sem

./1:;:-

1


2/58

AR+ANS GR7U( 7' )7LLEGES

STUDENT


3/58

A)KN7WLEDGEMENT

This report wo&ld not ha)e been possible witho&t the help of certain people &nstinting

s&pport of 8pressed keen interest

and gi)en contin&ed enco&rage%ent thro&gh the st&dy enabled the s&ccessf&l co%pletion of

%y pro?ect=

!ractical training in 8a%%& and Kash%ir @onal Office; #== road 1rinagar was )ery )al&able

to &s and o&r special thanks are d&e to o&r pro?ect coAordinator

#r= #oha%%ad shraf ($>ec&ti)e Officer0 for his inspiring g&idance; )al&able help and

angelic s&pport for the co%pletion of %y pro?ect in “”WORKING C!IT"””=

In the 8tend %y gratit&de to the %anage%ent and staff of 8


4/58

(RE'A)E

On the ?ob training in b&siness organisation inf&ses a%ong st&dents a sense of critical

analysis to apply of real %anagerial sit&ation to which they are e>posed= It gi)es the% an

opport&nity to apply their concept&al; theoretical and i%aginati)e skills to the real life

sit&ation and to e)al&ate the res&lts thereafter=

I was l&cky to ha)e got an opport&nity to work at 8 weeks and prepared %y pro?ect “Working capital %anage%ent”= I

also got the practical e>perience in the field of %anage%ent=

This report is written acco&nt of what I learnt; e>perienced and e>plored d&ring %y s&%%er

training=

4


5/58

)7NTENTS

)%apter 0. 10..

.4. INTR7DU)TI7N

.4, HIST7R+ 7' BANKS

)%apter0, .,0,.

,4. J=k BANK (R7'ILE

,4, SW7T ANAL+SIS

,49 HIST7R+ 7' J=K BANK

,4/ MISSI7N AND *ISSI7N

,4: A)HIE*EMENTS

,4: 7RGANISATI7NAL STRU)TURE

)%apter09 ,,0,>

94. RE*IEW 7' LITERATURE

94, W7RKING )A(ITAL MANAGEMENT

)%apter0/ 9-0//

/4. 7BJE)TI*ES? S)7(E? LIMITATI7NS

/4 , RESEAR)H METH7L7G+

)%apter0: /:0:.

'INAN)IAL ANAL+SIS

)%apter01 :,0:/

14. RE)7MMENDATI7NS AND SUGGESTI7NS

14, )7N)LUSI7N

BALAN)E SHEET ::0:1

(R7'IT AND L7SS STATEMENT :@0:;

RE'EREN)E :>

5


6/58

)HA(TER0I

6


7/58

.4. INTR7DU)TI7N T7 BANKING SE)T7R

The banking syste% in India is significantly different fro% that of other sian nations

beca&se of the co&ntry2s &ni'&e geographic; social; and econo%ic characteristics= India has a

large pop&lation and land siBe; a di)erse c&lt&re; and e>tre%e disparities in inco%e; which are

%arked a%ong its regions= There are high le)els of illiteracy a%ong a large percentage of its

pop&lation b&t; at the sa%e ti%e; the co&ntry has a large reser)oir of %anagerial and

technologically ad)anced talents= 4etween abo&t / and - percent of the pop&lation resides

in %etro and &rban cities and the rest is spread in se)eral se%iA&rban and r&ral centers= The

co&ntry2s econo%ic policy fra%ework co%bines socialistic and capitalistic feat&res with a

hea)y bias towards p&blic sector in)est%ent= India has followed the path of growthAled

e>ports rather than the “e>portled growth” of other sian econo%ies; with e%phasis on selfA

reliance thro&gh i%port s&bstit&tion= These feat&res are reflected in the str&ct&re; siBe; and

di)ersity of the co&ntry2s banking and financial sector= The banking syste% has had to ser)e

the goals of econo%ic policies en&nciated in s&ccessi)e fi)eyear de)elop%ent plans;

partic&larly concerning e'&itable inco%e distrib&tion; balanced regional econo%ic growth;

and the red&ction and eli%ination of pri)ate sector %onopolies in trade and ind&stry= I order for the banking ind&stry to ser)e as an instr&%ent of state policy; it was s&b?ected to )ario&s

nationaliBation sche%es in different phases (*D--; *D,D;and *D./0= s a res< banking

re%ained internationally isolated (few Indian banks had presence abroad in international

financial centers0 beca&se of preocc&pations with do%estic priorities; especially %assi)e

branch e>pansion and attracting %ore people to the syste%= #oreo)er; the sector has been

assigned the role of pro)iding s&pport to other econo%ic sectors s&ch as agric&lt&re; s%allA

scale ind&s tries; e>ports; and banking acti)ities in the de)eloped co%%ercial centers (i=e=;

%etro; &rban; and a li%ited n&%ber of se%iA&rban centers0=

7


8/58

The banking syste%2s international isolation was also d&e to strict branch licensing controls

on foreign banks already operating in the co&ntry as well as entry restrictions facing new

foreign banks= criterion of reciprocity is re'&ired for any Indian bank to open an office

abroad= These feat&res ha)e left the Indian banking sector with weaknesses and strengths=

big challenge facing Indian banks is how; &nder the c&rrent ownership str&ct&re; to attain

operational efficiency s&itable for %odern financial inter%ediation= On the other hand; it has

been relati)ely easy for the p&blic sector banks to recapitalise; gi)en the increase in

nonperfor%ing assets (N!s0; as their Go)ern%ent do%inated ownership str&ct&re has

red&ced the conflicts of interest that pri)ate banks wo&ld face=

8


9/58

.4, HIST7R+ 7' BANKS IN INDIA

Indian %erchants in Calc&tta established the 5nion 4ank in *.D; b&t it failed in *.+. as a

conse'&ence of the econo%ic crisis of *.+.A+D= The llahabad 4ank ; established in *.,- and

still f&nctioning today; is the oldest 8oint 1tock bank in India=(Joint Stock Bank E co%pany

that iss&es stock and re'&ires shareholders to be held liable for the co%panyFs debt0 It was not

the first tho&gh= That hono&r belongs to the 4ank of 5pper India; which was established in

*.,; and which s&r)i)ed &ntil *D*; when it failed; with so%e of its assets and liabilities

being transferred to the lliance 4ank of 1i%la=

When the %erican Ci)il War stopped the s&pply of cotton to "ancashire fro%

the Confederate 1tates; pro%oters opened banks to finance trading in Indian cotton= With

large e>pos&re to spec&lati)e )ent&res; %ost of the banks opened in India d&ring that periodfailed= The depositors lost %oney and lost interest in keeping deposits with banks=

1&bse'&ently; banking in India re%ained the e>cl&si)e do%ain of $&ropeans for ne>t se)eral

decades &ntil the beginning of the /th cent&ry=

3oreign banks too started to arri)e; partic&larly in Calc&tta; in the *.,/s= The Co%ptoire

dF$sco%pte de !aris opened a branch in Calc&tta in *.,/; and another in 4o%bay in *.,H

branches in #adras and !ondicherry; then a 3rench colony; followed= 914C established itself

9

http://en.wikipedia.org/wiki/Allahabad_Bankhttp://en.wikipedia.org/wiki/Alliance_Bank_of_Simlahttp://en.wikipedia.org/wiki/American_Civil_Warhttp://en.wikipedia.org/wiki/Lancashirehttp://en.wikipedia.org/wiki/Confederate_Stateshttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/w/index.php?title=Comptoire_d%27Escompte_de_Paris&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Comptoire_d%27Escompte_de_Paris&action=edit&redlink=1http://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/HSBChttp://en.wikipedia.org/wiki/Alliance_Bank_of_Simlahttp://en.wikipedia.org/wiki/American_Civil_Warhttp://en.wikipedia.org/wiki/Lancashirehttp://en.wikipedia.org/wiki/Confederate_Stateshttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/w/index.php?title=Comptoire_d%27Escompte_de_Paris&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Comptoire_d%27Escompte_de_Paris&action=edit&redlink=1http://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/HSBChttp://en.wikipedia.org/wiki/Allahabad_Bank


10/58

in 4engal in *.,D= Calc&tta was the %ost acti)e trading port in India; %ainly d&e to the trade

of the 4ritish $%pire; and so beca%e a banking centre=

The first entirely Indian ?oint stock bank was the O&dh Co%%ercial 4ank; established in

*..* in 3aiBabad= It failed in *D-.= The ne>t was the !&n?ab National 4ank ; established

in "ahore in *.D-; which has s&r)i)ed to the present and is now one of the largest banks in

India=

ro&nd the t&rn of the /th Cent&ry; the Indian econo%y was passing thro&gh a relati)e

period of stability= ro&nd fi)e decades had elapsed since the Indian #&tiny; and the social;

ind&strial and other infrastr&ct&re had i%pro)ed= Indians had established s%all banks; %ost of

which ser)ed partic&lar ethnic and religio&s co%%&nities=

The presidency banks do%inated banking in India b&t there were also so%e e>change banks

and a n&%ber of Indian ?oint stock banks= ll these banks operated in different seg%ents of

the econo%y= The e>change banks; %ostly owned by $&ropeans; concentrated on financing

foreign trade= Indian ?oint stock banks were generally &ndercapitaliBed and lacked the

e>perience and %at&rity to co%pete with the presidency and e>change banks= This

seg%entation let "ord C&rBon to obser)e; In respect of banking it see%s we are behind the

ti%es= We are like so%e old fashioned sailing ship; di)ided by solid wooden b&lkheads into

separate and c&%berso%e co%part%ents=

The period between *D/, and *D**; saw the establish%ent of banks inspired by

the 1wadeshi %o)e%ent= The 1wadeshi %o)e%ent inspired local b&siness%en and political

fig&res to fo&nd banks of and for the Indian co%%&nity= n&%ber of banks established then

ha)e s&r)i)ed to the present s&ch as 4ank of India; Corporation 4ank ; Indian 4ank; 4ank of

4aroda; Canara 4ank and Central 4ank of India=

The fer)o&r of 1wadeshi %o)e%ent lead to establishing of %any pri)ate banks in 6akshina

Kannada and 5d&pi district which were &nified earlier and known by the na%e Sot%

)anara ( 1o&th Kanara 0 district= 3o&r nationalised banks started in this district and also a

leading pri)ate sector bank= 9ence &ndi)ided 6akshina Kannada district is known as Cradle

of Indian 4anking=

10

http://en.wikipedia.org/wiki/Bengalhttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/Faizabadhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Lahorehttp://en.wikipedia.org/wiki/Indian_rebellion_of_1857http://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Swadeshihttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Corporation_Bankhttp://en.wikipedia.org/wiki/Indian_Bankhttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Canara_Bankhttp://en.wikipedia.org/wiki/Central_Bank_of_Indiahttp://en.wikipedia.org/wiki/Dakshina_Kannadahttp://en.wikipedia.org/wiki/Dakshina_Kannadahttp://en.wikipedia.org/wiki/Udupi_districthttp://en.wikipedia.org/wiki/Bengalhttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/Faizabadhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Lahorehttp://en.wikipedia.org/wiki/Indian_rebellion_of_1857http://en.wikipedia.org/wiki/Joint_stock_companyhttp://en.wikipedia.org/wiki/Swadeshihttp://en.wikipedia.org/wiki/Bank_of_Indiahttp://en.wikipedia.org/wiki/Corporation_Bankhttp://en.wikipedia.org/wiki/Indian_Bankhttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Canara_Bankhttp://en.wikipedia.org/wiki/Central_Bank_of_Indiahttp://en.wikipedia.org/wiki/Dakshina_Kannadahttp://en.wikipedia.org/wiki/Dakshina_Kannadahttp://en.wikipedia.org/wiki/Udupi_district


11/58

6&ring the 3irst World War (*D*+A*D*.0 thro&gh the end of the 1econd World War (*DDA

*D+-0; and two years thereafter &ntil the independence of India were challenging for Indian

banking= The years of the 3irst World War were t&rb&lent; and it took its toll with banks

si%ply collapsing despite the Indian econo%y gaining indirect boost d&e to warArelated

econo%ic acti)ities= t least D+ banks in India failed between *D* and *D*.=

11

http://en.wikipedia.org/wiki/First_World_Warhttp://en.wikipedia.org/wiki/Second_World_Warhttp://en.wikipedia.org/wiki/Indian_independence_movementhttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/First_World_Warhttp://en.wikipedia.org/wiki/Second_World_Warhttp://en.wikipedia.org/wiki/Indian_independence_movementhttp://en.wikipedia.org/wiki/Economy_of_India


12/58

)HA(TER0II

12


13/58

,4. BRIE' (R7'ILE 7' JAMMU AND KASHMIR BANK

NAMES

DESIGNATI7N

MUSHTA AHMAD

)HAIRMAN

Mo%amma" I!ra%im S%a%"a"

EE)UTI*E DIRE)T7R

Arna! Ro3

DIRE)T7R

13

http://www.reuters.com/finance/stocks/officerProfile?symbol=JKBK.BO&officerId=1416730http://www.reuters.com/finance/stocks/officerProfile?symbol=JKBK.BO&officerId=1416730


14/58

S"%an&% (an"e3

DIRE)T7R

NISAR ALI

DIRE)T7R

A!"l MaCi" Matto

N7N0EE)UTI*E DIRE)T7R

14

http://www.reuters.com/finance/stocks/officerProfile?symbol=JKBK.BO&officerId=1414256http://www.reuters.com/finance/stocks/officerProfile?symbol=JKBK.BO&officerId=1501295http://www.reuters.com/finance/stocks/officerProfile?symbol=JKBK.BO&officerId=1414256http://www.reuters.com/finance/stocks/officerProfile?symbol=JKBK.BO&officerId=1501295


15/58

,4, HIST7R+ 7' J=K BANK

The origin of 8a%%& and Kash%ir 4ank "i%ited; %ore co%%only referred to as 8tended Central laws of the state; 8change (N1$0 and 4o%bay 1tock $>change (41$0 as well=

Uni$e )%aracteri&tic& = Ser5ice&

• 8


16/58

• 8 re)en&es are ro&ted thro&gh the 8


17/58

• Other 1er)ices

T%ir" (art3 Ser5ice&

• #&t&al 3&nds

• Ins&rance 1er)ices A "ife < Non "ife

• Re%ittance 1er)ices

)a&% Management Ser5ice&

•

Real Ti%e Gross 1ettle%ent (RTG10

• National $lectronic 3&nd Transfer (N$3T0

,49 SW7T ANAL+SIS

Strengt%

*= Reso&rces and capabilities=

= 1trong brand na%e== Good rep&tation a%ong c&sto%ers=

+= Good '&ality sche%es=

-= "atest %achines and ad)anced technology=

Weakne&&

*= "ack of stress on research and de)elop%ent=

= "ack of inno)ation=

= "ack of co%%ercial sche%es=

7pportnitie&

*= rri)al of new technology=

= New %arket=

= 8


18/58

,4/ MISSI7N AND *ISI7N 7' J=K BANK

“To catalyse econo%ic transfor%ation and capitalise on growth=” O&r )ision is to engender

and catalyse econo%ic transfor%ation of 8a%%& and Kash%ir and capitalise fro% the growth

ind&ced financial prosperity th&s engineered= 4ank aspires to %ake 8a%%& and Kash%ir the

%ost prospero&s state in the co&ntry; by helping create a new financial architect&re for the

8


19/58

s a corporate process; the &ni'&eness and distinct c&lt&re of the 8a%%& Central CoA

operati)e 4ank is o&r e>perience specialisation in the field of agric&lt&ral credit and )ast

clientele base= Therefore; as a corporate %ission; o&r foc&s wo&ld be agric&lt&ral finance and

needs of the r&ral people= In light of abo)e; the corporate %ission wo&ld be to do&ble the

flow of gric&lt&re Credit d&ring the ne>t three years=

The organisational %ission wo&ld be to inc&lcate sense of belongingness by

bringing professionaliBation in tr&e sense to introd&ce and &pgrade technology based skill

with h&%an face and strengthen its reso&rce base by broadening its c&sto%er base=

,4: A)HIE*EMENTS

$%erging as topper; the 8tended by the banks operating in 8


20/58

held at ITC #aratha in ndheri ($0 #&%bai that also %arked the la&nch of the fifth edition

of 6


21/58

,41 7RGANIATI7NAL STRU)TURE 7' J=K BANK

21

Chairman & CEO

Executive Director

(Chief inancia!

Executive Director

(Chief O$eratin%

re'ient()u'*

re'ient(Com$*+ec*#

re'ient(.v*& a''et

re'ient(in*

re'ient(+trate%/ &)u' *+u *

+r*re'ient

re'ient(C-C#

umane'ourc

a &

e%u!ator -rea'ur/

+u$ervi'ion

& Contro!'

inancia!

+ervice'

Com$an/

+ecretar/

.vanc

e' &

De$o'it

' &

+trate%/

&

inance &

i')u'ine''

+u$$ort

-echno!o%/

&

De$artmen

De$artme

De$artme

De$artme

De$artme

De$artme

De$artme

De$artme

De$artme

De$artme

De$artme

De$artme

nt'

Concurrent

.uit

Creit

.uit

De$o'itor/

+ervice'

Di'triutio

n

Em$ane!m

ent Of

a!uer'

+ .uit

n'urance

)


22/58

)HA(TER0III

22

.''etonitor

in% &

nform :ation

Cor$orat

e Creit

inancia!

nc!u'ion

icro

Creit &

riorit/

'ector

etai!

Creit

+ma!! &

eiu

m

De$o'ito

r/

+ervice'

Di'triuti

on

.-

+itch

Ca!!

Centre

Connectivit

/

Dataa'e

E

)anin%

inac!e

arare

nformatio

n

-echno!o%/

ana%eme

nt &

Car

''uin%

&

.c;uirin

%

Cor$orate

commun

ication

Data

inin%

inancia!

rouct'

acro

Economic

Cor$or

ate

De$o'it

etai!

De$o'it


23/58

94. RE*IEW 7' LITERATURE

*A The research done by !ass C="=; !ike R=9=; “n o)er)iew of working capital

%anage%ent and corporate financing”;(*D.+0 describes that o)er the past +/ years %a?or

theoretical de)elop%ents ha)e occ&rred in the areas of longerAter% in)est%ent and

financial decision %aking= #any of these new concepts and the related techni'&es are

now being e%ployed s&ccessf&lly in ind&strial practice= 4y contrast; far less attention has

been paid to the area of shortAter% finance; in partic&lar that of working capital

%anage%ent= 1&ch neglect %ight be acceptable were working capital considerations of

relati)ely little i%portance to the fir%; b&t effecti)e working capital %anage%ent has a

cr&cial role to play in enhancing the profitability and growth of the fir%= Indeed;

e>perience shows that inade'&ate planning and control of working capital is one of the

%ore co%%on ca&ses of b&siness fail&re=

A The research done by 9errfeldt 4=; “9ow to 5nderstand Working Capital #anage%ent”

describes that“Cash is king”AAso say the %oney %anagers who share the responsibility of

r&nning this co&ntryFs b&sinesses= nd with banks de%anding %ore fro% their prospecti)e

borrowers; greater e%phasis has been placed on those acco&ntable for soAcalled working

capital %anage%ent= Working capital %anage%ent refers to the %anage%ent of c&rrent or

shortAter% assets and shortAter% liabilities= In essence; the p&rpose of that f&nction is to

%ake certain that the co%pany has eno&gh assets to operate its b&siness= 9ere are things

yo& sho&ld know abo&t working capital %anage%ent=

23


24/58

A The research done by; 1a%ilogl& '4 an" 6e%irg&nes K4? FThe $ffect of Working Capital

#anage%ent on 3ir% !rofitabilityE $)idence fro% T&rkey” (//.0 describes that the

effect of working capital %anage%ent on fir% profitability= In accordance with this ai%;

to consider statistically significant relationships between fir% profitability and the

co%ponents of cash con)ersion cycle at length; a sa%ple consisting of Istanb&l 1tock

$>change (I1$0 listed %an&fact&ring fir%s for the period of *DD.A// has been analysed

&nder a %&ltiple regression %odel= $%pirical findings of the st&dy show that acco&nts

recei)ables period; in)entory period and le)erage affect fir% profitability negati)elyH

while growth (in sales0 affects fir% profitability positi)ely=

+A The research done by; pp&ha%i; Ran?ith 4 ; “The I%pact of 3ir%sF Capital $>pendit&re

on Working Capital #anage%entE n $%pirical 1t&dy across Ind&stries in Thailand” ;

International #anage%ent Re)iew;(//.0; The p&rpose of this research is to in)estigate

the i%pact of fir%sF capital e>pendit&re on their working capital %anage%ent= The a&thor

&sed the data colleted fro% listed co%panies in the Thailand 1tock $>change= The st&dy

&sed 1h&l%an and Co>Fs (*D.-0 Net "i'&idity 4alance and Working Capital Re'&ire%ent

as a pro>y for working capital %eas&re%ent and de)eloped %&ltiple regression %odels=

The e%pirical research fo&nd that fir%sF capital e>pendit&re has a significant i%pact on

working capital %anage%ent= The st&dy also fo&nd that the fir%sF operating cash flow;

which was recogniBed as a control )ariable; has a significant relationship with working

capital %anage%ent=

-A The research done by; 9ardcastle 8=; “Working Capital #anage%ent”;(//0 describes

that Working capital; so%eti%es called gross working capital; si%ply refers to the fir%Fs

total c&rrent assets (the shortAter% ones0; cash; %arketable sec&rities; acco&nts recei)able;

and in)entory= While longAter% financial analysis pri%arily concerns strategic planning;

working capital %anage%ent deals with dayAtoAday operations= 4y %aking s&re that

prod&ction lines do not stop d&e to lack of raw %aterials; that in)entories do not b&ild &p

beca&se prod&ction contin&es &nchanged when sales dip; that c&sto%ers pay on ti%e and

that eno&gh cash is on hand to %ake pay%ents when they are d&e= Ob)io&sly witho&t

good working capital %anage%ent; no fir% can be efficient and profitable=

24

http://scialert.net/asci/author.php?author=F.&last=Samilogluhttp://scialert.net/asci/author.php?author=K.&last=Demirguneshttp://scialert.net/asci/author.php?author=F.&last=Samilogluhttp://scialert.net/asci/author.php?author=K.&last=Demirgunes


25/58

,A The research done by; Thachappilly G=; “Working Capital #anage%ent #anages 3low of

3&nds”;(//D0 describes that Working capital is the cash needed to carry on operations

d&ring the cash con)ersion cycle; i=e= the days fro% paying for raw %aterials to collecting

cash fro% c&sto%ers= Raw %aterials and operating s&pplies %&st be bo&ght and stored to

ens&re &ninterr&pted prod&ction= Wages; salaries; &tility charges and other incidentals

%&st be paid for con)erting the %aterials into finished prod&cts= C&sto%ers %&st be

allowed a credit period that is standard in the b&siness= Only at the end of this cycle does

cash flow in again=The research done by; 4eneda; NancyH @hang; 7ilei; “Working Capital

#anage%ent; Growth and !erfor%ance of New !&blic Co%panies”=

A The research done by; 6&bey R=;“Working Capital #anage%entAan $ffecti)e Tool for

Organisational 1&ccess” (//.0 describes that The working capital in a fir% generallyarises o&t of fo&r basic factors like sales )ol&%e;technological changes;seasonal ; cyclical

changes and policies of the fir%=The strenghth of the fir% is dependent on the working

capital as disc&ssed earlier b&t this working capital is inteslf dependent on the le)el of

sales )ol&%e of the fir%=The fir% re'&ires c&rrent assets to s&pport and %aintain

operational or f&nctional acti)ities=4y c&rrent assets we %ean the assets which can be

con)erted readily into cash say within a year s&ch as recei)ables;in)entories and li'&id

cash=If the le)el of sales is stable and towards growth the le)el of cash;recei)ables and

stock will also be on the high=

.A The research done by; Mc)lre B4? FWorking Capital Works” describes that Cash is the

lifeline of a co%pany= If this lifeline deteriorates; so does the co%panyFs ability to f&nd

operations; rein)est and %eet capital re'&ire%ents and pay%ents= 5nderstanding a

co%panyFs cash flow health is essential to %aking in)est%ent decisions= good way to

?&dge a co%panyFs cash flow prospects is to look at its working capital %anage%ent

(WC#0= Cash is king; especially at a ti%e when f&nd raising is harder than e)er= "etting itslip away is an o)ersight that in)estors sho&ld not forgi)e= nalyBing a co%panyFs

working capital can pro)ide e>cellent insight into how well a co%pany handles its cash;

and whether it is likely to ha)e any on hand to f&nd growth and contrib&te to shareholder

)al&e=

DA The research done by; Gass 6=; “9ow To I%pro)e Working Capital #anage%ent” (//,0

Cash is the lifeblood of b&siness is an often repeated %a>i% a%ongst financial

%anagers= Working capital %anage%ent refers to the %anage%ent of c&rrent or shortAter%

assets and shortAter% liabilities= Co%ponents of shortAter% assets incl&de in)entories;

25

http://www.suite101.com/profile.cfm/gopinathanhttp://www.suite101.com/profile.cfm/gopinathanhttp://www.suite101.com/profile.cfm/gopinathan


26/58

loans and ad)ances; debtors; in)est%ents and cash and bank balances= 1hortAter%

liabilities incl&de creditors; trade ad)ances; borrowings and pro)isions= The %a?or

e%phasis is; howe)er; on shortAter% assets; since shortAter% liabilities arise in the conte>t

of shortAter% assets= It is i%portant that co%panies %ini%iBe risk by pr&dent working

capital %anage%ent=

94, W7RKING )A(ITAL MANAGEMENT

$)ery b&siness needs finance for two p&rposes for its establish%ent and to carry o&t its day

to day operations= "ong ter% f&nds are re'&ired to create prod&ction facilities thro&gh p&rchase of fi>ed assets s&ch as plant and %achinery; land < b&ilding; f&rnit&re etc= f&nds

are also needed for short ter% p&rposes E for p&rchase of raw %aterial ; pay%ent of wages

and other day to day e>penses etc= These f&nds are known as working capital= In si%ple

ter%s working capital refers to that part of fir%2s capital which is re'&ired for financing short

ter% or c&rrent assets s&ch as s&ch as cash; %arketable sec&rities; debtors and in)entories

etc= 3&nds th&s in)ested in c&rrent assets keep re)ol)ing fast and are being constantly

con)erted into cash and these cash flows o&t again in e>change for other assets= 9ence it is

also known as re)ol)ing or circ&lating capital or short ter% capital=

KINDS 7' W7RKING )A(ITAL

Working capital %ay be classified into two waysE

• On the basis of concept=

• On the basis of ti%e=

On the basis of concept; working capital is classified as Gross Working capital and Net

Working capital= On the basis of ti%e; working capital is classified as per%anent or fi>ed

working capital and te%porary and )ariable working capital=

26


27/58

• Gro&& orkingE It represents the a%o&nt of f&nds in)ested in c&rrent assets= Th&s the

Gross working capital is the capital in)ested in the total c&rrent assets of the

enterprise= C&rrent assets are those assets which in the ordinary co&rse of b&siness

can be con)erted into cash within a short period of nor%ally one acco&nting year=

$>a%ples of c&rrent assets areE

*= Cash in hand and bank balance== 4ills recei)ables

= 1&ndry debtors(less pro)ision for bad debts0=

+= 1hort ter% loans and ad)ances=

-= In)entories of stock=

,= Te%porary in)est%ent in s&rpl&s goods=

= !repaid e>penses=

.= ccr&ed inco%es=

Net orking capital2 It is the e>cess of c&rrent assets o)er c&rrent liabilities= Net working

capital %ay positi)e or negati)e= When the c&rrent assets e>ceed the c&rrent liabilities; the

working capital is positi)e and the negati)e working capital res&lts when the c&rrent

liabilities are then the c&rrent assets= C&rrent liabilities are those liabilities which are intended

to paid in the ordinary co&rse of b&siness within a short period of nor%ally one acco&nting

year o&t of the c&rrent assets or the inco%e of the b&siness=

$>a%ples of c&rrent liabilities areE

D= 4ills payables

*/= 1&ndry creditors=

27


28/58

**= ccr&ed or o&tstanding e>penses=

*= 6i)idend payable=

*= 4ank o)erdraft=

*+= !ro)ision for ta>ation; if it does not a%o&nt to appropriate to profits=

Net working capital J c&rrent assets c&rrent liabilities=

(ermanent orking capitalE It is the %ini%&% a%o&nt which is re'&ired to ens&re effecti)e

&tilisation of fi>ed facilities and for %aintaining the circ&lation of c&rrent assets= There is

always a %ini%&% le)el of c&rrent assets which is contin&o&sly re'&ired by the enterprise to

carry o&t its nor%al b&siness operations= 3or e>a%ple; e)ery fir% has to %aintain a %ini%&%

le)el of raw %aterial; work in progress; finished goods and cash balance= The %ini%&% le)el

of c&rrent assets is called fi>ed or per%anent working capital as this part of working capital is

per%anently blocked in c&rrent assets= s the b&siness grows; the re'&ire%ent of per%anent

working capital also increases de to the increase in c&rrent assets= The per%anent working

capital can f&rther be classified as reg&lar working capital and reser)e working capital=

Temporar3 or *aria!le orking capital2 it is that a%o&nt of working capital which is

re'&ired to %eet the seasonal de%and and so%e special e>igencies= :ariable working capital

can f&rther be classified as seasonal working capital and special working capital= #ost of the

enterprise ha)e to pro)ide additional working capital to %eet seasonal and special needs= Thecapital re'&ire%ent to %eet the seasonal needs of the enterprise is called seasonal working

capital= 1pecial working capital is that part o working capital which is re'&ired to %eet the

special e>igencies s&ch as la&nching of e>tensi)e %arketing ca%paigns for cond&cting

research=

IM(7RTAN)E 7' W7RKING )A(ITAL

The working capital is the lifeAblood and ner)e centre of a b&siness fir%= The s&fficiency of

working capital assists in raising credit standing of a b&siness beca&se of better ter%s on

goods bo&ght; lesser cost of %an&fact&ring d&e to the acceptance of cash disco&nts; fa)orable

rates of interest etc=

No b&siness can r&n effecti)ely witho&t a s&fficient '&antity of working capital= It is cr&cial

to retain right le)el of working capital= 3inance %anager is re'&ired to decide the a%o&nt of

acc&rate working capital=

28


29/58

b&siness enterprise with a%ple working capital is always in a position to a)ail ad)antages

of any fa)orable opport&nity either to b&y raw %aterials or to i%ple%ent a special order or to

wait for enhanced %arket stat&s=

Cash is needed to carry o&t dayAtoAday workings and b&y in)entories etc= The shortage of

cash %ay badly affect the position of a b&siness concern= The recei)ables %anage%ent is

related to the )ol&%e of prod&ction and sales= 3or escalating sales there %ay be a need to

offer additional credit facilities= While sales %ay ascend b&t the danger of bad debts and cost

in)ol)ed in it %ay ha)e to be considered against the benefits=

In)entory control is also a significant constit&ent in working capital %anage%ent= The

deficiency of in)entory %ay ca&se work stoppage= On the other hand; s&rpl&s in)entory %ayres&lt in blocking of %oney in stocks=

The o)erall s&ccess of the co%pany depends &pon its working capital position= 1o; it sho&ld

be handled properly beca&se it shows the efficiency and financial strength of co%pany=

29


30/58

)HA(TER0I*

30


31/58

/4. 7BJE)TI*ES 7' THE STUD+

To analyBe the trend in )ario&s co%ponents of working capital=

$)al&ation of working capital %anage%ent=

To st&dy the operating cycle of 8


32/58

*= The analysis of this st&dy is %ainly based on secondary data=

= The st&dy co)ers for +- 671=

= The financial state%ents are generally based on historical or original cost= The c&rrent

econo%ical condition is ignored=

/4, RESEAR)H METH7D7L7G+

In order to learn and obser)e the practical applicability and feasibility of )ario&s theories and

concepts; the following so&rces are being &sedE

(rimar3 Sorce& o# In#ormation

6isc&ssions with the pro?ect g&ide and staff %e%bers=

6isc&ssions with )ario&s other depart%ent head=

Secon"ar3 Sorce& o# In#ormation

R4I g&idelines reg&lating the acti)ities of the banks

4anks Credit policy and related circ&lars and g&idelines iss&ed by the bank=

Research papers; power point presentations and !63 files prepared by the bank and

its related officials=

1t&dy of proposals and %an&als

Website of 8a%%& and Kash%ir bank and other net so&rces

Anal3&i& o# "ata

32


33/58

The infor%ation gathered are the policies and practices regarding %anage%ent of the

working capital= nalysis is done in ter%s of the theoretical concepts= nalysis of the

working capital perfor%ance is done with the help of percentages by showing graphs;

ratios and operating cycles etc=

)7M(7SITI7N AND LE*EL 7' )URRENT ASSETS

The le)el of c&rrent assets is %eas&red with the help of ratio i=e=; c&rrent assets as a

percentage of total assets=

IN:$NTOR7

(Rs in M2///220

7$R1 IN:$NTOR7

(IN R10

TOT"

11$T1

IN:$NTOR7

IN G$

/* -D*-. *-.*++/+ =-

/*+ +,+,-D, *,-+/, .=/D

/*- +-,D, *.*-,- =/

33


34/58

Inventory of total assets

2013

2014

2015

2013 2014 2015

0

5

10

15

20

25

30

35

Inventory in %age

nventor/ in Ba%e

ANAL+SIS

34


35/58

The percentage of in)entory is clearly depicted in the table fro% the year /* to

/*-= 3ro% /* to /*+ the percentage of the total in)entory to total assets has increased

fro% = to .=/D and this has been f&rther increased to /=/=

INTER(RETATI7N20

The le)el of in)entory is contin&o&sly increasing in the 8


36/58

5*56

6*78

8*84

DEBTORS IN %AGE

2013

2014

2015

2013 2014 2015

02000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

18000000

20000000

DEBTORS TO TOTAL SSETS

DE)-O+ -O -O-. ++E-+

ANAL+SIS20

3ro% the abo)e table it is )ery e)ident that the debtors are increasing fro%

/* to /*-= In /* debtors are -=-. and in /*+ it is ,=. and in /*+ age of debtors

to total assets has increased to .=.+=

36


37/58

INTRE(RETATI7N20

In the year /*-; debtors ha)e increased fro% **-,+ tho&sand to **+* tho&sand

indicating an increase fro% ,=. to .=.+ of total assets= 1&ch increase has been gained by

bank d&e to increase in sales followed by e>pansion acti)ities in spinning; wea)ing and

processing &nits respecti)ely=

)ASH BALAN)E

7$R1 C19 TOT"

11$T1

C19 4"NC$

G$

/* *+-+* *-.*++/+ *=+

/*+ **,*- *,-+/, =**

/*- **D/ *.*-,- */=D-

37


38/58

13*43

7*11

10*95

CASH BALANCE %AGE

2013

2014

2015

2013 2014 2015

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

18000000

20000000

C.+ )..CE -O-. .++E-+

L7ANS AND AD*AN)ES

7$R "ON1 N6

6:NC$1

TOT"

11$T1

"ON1 N6

6:NC$1 G$

/* +/;+=, .;+=* /=

/*+ -,,=D, */;+*.=+ D=+

/*- /;D/=*D *,,=D ++=-

38


39/58

2013 22B

2014 31B

2015 47B

LOANS AND ADVANCES %AGE

2013 2014 20150

5000

10000

15000

20000

25000

30000

35000

40000

45000

LOANS AND ADVANCES TO TOTAL ASSETS

O.+ .D .D.CE+

-O-. .++E-+

ANAL+SIS

3ro% the abo)e table it is clear that the loans and ad)ances are contin&o&sly decreasing b&t

consec&ti)ely its total assets are increasing= It is d&e to the reason that bank is &sing

conser)ati)e %ode of iss&ing loans and ad)ances and is reco)ery the loans and ad)ances by

the effecti)e %eans=

INTER(RETATI7N

39


40/58

3ro% the table since loans and ad)ance to total assets is consec&ti)ely increasing fro% /=

in /*; D=+ in /*+ and +=- in /*-; it %eans bank2s are opti%ally &sing their

assets to gain the %a>i%&% profits and is relati)ely trying to attracting the %ore c&sto%ers=

)7M(7SITI7N AND LE*EL 7' )URRENT LIABILITIES20

!RTIC5"R1 /* /*+ /*-

C&rrent liabilities %t= %t= %t=

1&ndry creditors /,* *=D- +,D,/ =/, .*. =

1ec&rity deposits D =/*- +*,/ =/ +DDD =+

Int= accr&ed -D, =/+- /D =/*./ +, =//+-

d)= 3ro%

c&sto%ers

*.. =*+ -****+ +=,// **,D =*-

1tat liabilities D/*-- =.- +,*D =,-. -/ =,-

Other liabilities *++-+ =/ -DD* =* ++. =

5nclai%ed

di)idend

*++-+ =/D -D,D* =* ++. =

!ro)isions +,.. =++ +,.. =+*- +,.. =-*-

Total :;/1;1 :4:99 .9>;-., .,49/ ;/@9.; >49,>

Total lia!ilitie& .-:1@-,9 ..9,1@,9 >-;,,.1

ANAL+SIS20

The abo)e table shows the co%position and le)el of c&rrent liabilities= The position of

creditors of 8


41/58

)7M(UTATI7N 7' GR7SS W7RKING )A(ITAL20

(ARTI)ULARS ,-.9 ,-./ ,-.:

In)entory -D*-. +,+,-D, -+-,D,

(P0 s&ndry debtors .D,,/ **-,+ **+*=

(P0 cash balance *+-+* **,*- *D/

(P0 loans and

ad)ances

*+,+D/ */., *.*+DD/

GR7SS

W7RKING

)A(ITAL

;-19;/> ;.:/:/; .->.@:;@

INTER(RETATI7N20

3ro% the table it is e)ident that the gross working capital is constantly

increasing in 8


42/58

to ,//,, in /*+ and again increased to .*D* in /*-= The reason for this increase is

the bank2s inter)ention in different financial fields (%&t&al f&nds; ins&rance; etc0 and the

profo&nd c&sto%er base infraAstr&ct&re=

7(ERATING )+)LE AND )ASH )+)LE

ll b&siness fir%s ai% at %a>i%iBing the wealth of the shareholder for which they need to

earn s&fficient ret&rn on their operations= To earn s&fficient profits they need to do eno&gh

sales; which f&rther necessitates in)est%ent in c&rrent assets like raw %ateriel etc= There is

always an operating cycle in)ol)ed in the con)ersion of sales into cash=

The d&ration of ti%e re'&ired to co%plete the following se'&ences of e)ents in case of a

%an&fact&ring fir% is called the operating cycleEA

.4 )on5er&ion o# ca&% into ra material

,4 )on5er&ion o# ra material into WI(

94 )on5er&ion o# WI( into 'G

/4 )on5er&ion o# 'G into "e!tor& an" !ill& recei5a!le t%rog% &ale&

:4 )on5er&ion o# "e!tor& an" !ill& recei5a!le into ca&%

$ach co%ponent of working capital na%ely in)entory; recei)ables and payables has

two di%ensions ti%e and %oney= When it co%es to %anaging working capital A Time I&

Mone3= Therefore; if cash is tight; consider other ways of financing capital in)est%ent A

loans; e'&ity; leasing etc= 1i%ilarly; if yo& pay di)idends or increase drawings; these are cash

o&tflows re%o)e li'&idity fro% the b&siness=

42

I# 3o 4444444 T%en 444444

• )ollect recei5a!le& 6"e!tor&8 #a&ter

+o relea&e ca&% #rom t%e c3cle

• )ollect recei5a!le& 6"e!tor&8 &loer

+or recei5a!le& &oak p ca&%

• Get !etter cre"it #rom &pplier&

+o increa&e 3or ca&% re&orce&

• S%i#t in5entor3 6&tock&8 #a&ter

+o #ree p ca&%

• Mo5e in5entor3 6&tock&8 &loer

+o con&me more ca&%


43/58

7perating )3cle 7# Non Man#actring 'irm& 7perating )3cle 7# Ser5ice An"

'inancial 'irm&

Operating cycle of nonA%an&fact&ring fir% like the wholesaler and retail incl&des con)ersion

of cash into stock of finished goods; stock of finished goods into debtors and debtors into

cash= lso the operating cycle of financial and ser)ice fir%s in)ol)es con)ersion of cash into

debtors and debtors into cash=

T%& e can &a3 t%at t%e time t%at elap&e& !eteen t%e prc%a&e o# ra material an"

collection o# ca&% #or &ale& i& calle" operating c3cle %erea& time lengt% !eteen t%e

pa3ment #or ra material prc%a&e& an" t%e collection o# ca&% #or &ale& i& re#erre" to a&

ca&% c3cle4 The operating cycle is the s&% of the in)entory period and the acco&nts

recei)ables period; whereas the cash cycle is e'&al to the operating cycle less the acco&nts

payable period=

43

DE)-O+

DE)-O+C.+C.+

+-OC= O

+ED

>OOD+

C.+ ECD*+-OC= .E+

.,C+ EC* EODODE .CED * EOD

.,C+ a/*

erio


44/58

DEBT7RS )7LLE)TI7N (ERI7D20

,-.9 ,-./ ,-.:

SALES D/-, .D*. *//*,-

SALES (ER DA+ -*- ++ .,,

B77K DEBTS .D,,/ **-,+ **+*

D)( - 671 +, 671 + 671

ANAL+SIS2

In the year /* the 6C! is - days which increases to +- days in /*+= In /*+

there has been slight increase in 6C! and it rises to + days=

INTER(RETATI7NE

In the year /* bank is able to %aintain its satisfactory debtor2s

collection period b&t in the year /*+ and /*-; debtor2s collection period has been increased

to +, days and f&rther to + days in /*-= This shows the bank is not able to %aintain its debt

collection policy= 9owe)er bank en?oys its good debtor stat&s=

44

C.+ * O .-E.+ EC* OCE

OE.-> CACE

C.+ CACE


45/58

)HA(TER0*

45


46/58

'INAN)IAL ANAL+SIS

3inancial analysis is the process of identifying the financial strength < weakness of

the fir% by establishing relationship between the ite%s of the balance sheet < profit < loss

acco&nt= The p&rpose of financial analysis is to diagnose the infor%ation contained in

financial state%ents so as to ?&dge the profitability and financial so&ndness of the fir%=

3inancial state%ents in)ol)eE

• 1t&dy of financial state%ents

• nalysis of data gi)en in the financial state%ents=

• Interpretation of financial state%ents=

3inancial analysis of 8


47/58

)7M(ARATI*E BALAN)E SHEET

'or t%e perio" o# ,-./0,-.:

(ARTI)ULARS ,-./ ,-.: )HANGE )HANGE

LIABILITIES

1hare capital +.=+D +.=+D/ AA AA

Reser)e ;-+= ;D,*=D .=, *-=-

"ong ter%

"iabilities

--=+ *+=D- *,=,* D=++

C&rrent

liabilities

*;/,D=, *;*D.=D *D= *=/-

T7TAL /,/:4., />,/49; 1@>4,1 .14-.

ASSETS

C&rrent assets --=+ *+=D- *,=,* D=++

3i>ed assets -*=D+ -,*=- +=+* .=.

In)est%ent */;,= *;D-,=- *D=*D D=D.

#isc= e>penses */;/./=D, *;/D*=-* /*-=-- *D=D

T7TAL ,.;;@4:@ ,@9,/4-1 :/914/> ,/49;

RATI7 ANAL+SIS2

ratio is the si%ple arith%etic e>pression of the relationship of one

n&%ber to another= Ratio analysis is a techni'&e of analysis and interpretation of financial

state%ents= It is the process of establishing and interpreting )ario&s ratios for the helping in

%aking certain decisions=

47


48/58

3ollowing ratios are calc&lated for the /*+A/*-=

"i'&idity ratiosE

These ratios are &sed to %eas&re the fir%2s ability to %eet its short ter% obligations=

"IL5I6IT7 RTIO1E

*= C&rrent ratio J c&rrent assets Q c&rrent liabilities=

!RTIC5"R1 /* /*+ /*-

TOT" C5RR$NT

11$T1

+.,=+ --=+ *+=D-

TOT" C5RR$NT

"I4"ITI$1

*;*/=/ *;/,D=, *;*D.=D

C5RR$NT RTIO /=++ E * /=- E * /=-D E *

N"71I1E

The c&rrent ratio is consec&ti)ely increasing fro% the year /* to /*-= In /*

it was /=++ E* ; in /*+ it went &p to /=- E * and in /*- it reached to /=-D E *=

INT$R!R$TTIONE

s a r&le E* ratio is referred to as banker2s th&%b r&le= 1ince the c&rrent ratio of the fir%

for the past years is %ore than E*; therefore the fir% has been in good li'&id position= 1o;

this i%plies that the f&nds of the co%pany since last years ha)e been decreased to pay off

liabilities=

"IL5I6 11$T1 RTIO J "IL5I6 11$T1 Q C5RR$NT "I4I"ITI$1=

!RTIC5"R1 /* /*+ /*-

Total li'&id assets +*/ /.+,-+ +/.

Total c&rrent assets -.+,.D *D./* .+*.

"i'&id Ratio =/E* =/E* +=/E*

N"71I1E

In the year /* the li'&idity ratio is =/E* which has decreased in the /*+=

nd in the year /*- the ratio is increased to +=/E*

48


49/58

INT$R!R$TTIONE

s a con)ention ratio of *E* is considered satisfactory; hence

co%pany is en?oying satisfactory li'&idity position= In the year /*+ ratio has been decreased

to =/E* fro% =/E*= This is d&e to the decreasing cash balance and increasing debtors

!RTIC5"R1 /* /*+ /*-

1ales D/-, .D*. *//*,-

OC ,-, D++**/ D+D*/

7R ;/49- >-49: >/41-

O!$RTING RTIO1 J Operating cost Q Net sales*//

N"71I1E

3ro% the abo)e table it shows that in /* the OR was .+=/ and in

/*+ OR has been increased to D/=-= in year /*- it reached to D+=,/

INT$R!R$TTIONE

s the abo)e table shows that the operating cost of the bank increased o)er

three years; this is %ainly d&e to increasing sales of sche%es and ter% loans=

(ro#ita!ilit3 ratio20

Gross profit ratioEA Gross profit Q net sales *//

(articlar& ,-.9 ,-./ ,-.:

1ales D/-, .D*. *//*,-

(A0COG1 ,D+. /,-., .-.D*+*

G! *D+ **-, *++,+G(R ,94:- .>4:. ./49;

N"71I1EA

3ro% the abo)e table it shows that the G! ratio was =-/ in /* and it

decreases to *D=-* in /*+= In /*- G!R has been f&rther decreased to *+=.=

Net profit ratioJ Net profit Q net sales *//

(articlar& ,-.9 ,-./ ,-.:

1"$1 D/-, .D*. *//*,-

N! ,., ,,+ +.-

49


50/58

N(R . .4-9 .4-/

N"71I1EA

In the year /* the N! ratio of the co%pany is * b&t in the year /*+ the

co%pany2s N! has increased i%%ensely to *=/ and in /*- it reached to *=/+

INT$R!R$TTIONEA

The co%pany2s increasing N! ratio is d&e to its strong s&pport and

easy pro)idence of ter% loans to the different class of c&sto%ers=

TREND ANAL+SIS20

The financial state%ents %ay be analysed by co%p&ting trend series

infor%ation= The %ethod deter%ines the direction &pward and downward and in)ol)es the

co%p&tation of the percentage relationship that each state%ent ite% bears to the sa%e in the

base year= The infor%ation for the n&%ber of years has been taken &p and one year generally

*st year is taken as the base year= The fig&res of the base year ha)e been taken as *// and

trend ratios for the other years are calc&lated on the basis of the base year= The analysis is

able to see the trend of fig&res; whether &pward or downward=

SALES TREND

+EARS SALES IN RS TREND IN AGE

/* D/D/*, *//

/*+ ...- D

/*- *//,.+D **/=

50


51/58

)HA(TER0*I

51


52/58

14. RE)7MMENDATI7NS AND SUGGESTI7NS

The following are the reco%%endations and s&ggestions for the efficient working of

8


53/58

14 , )7N)LUSI7N

#ost of the banking co%panies %ake s&bstantial in)est%ents in c&rrent assets so proper

%anage%ent of working capital in a large concern ass&%es i%portance as it reflects the so&nd

financial health of the corporation= chie)ing b&dgeted growth rate and e>celling past

perfor%ance n sales t&rno)er do not necessarily indicate the proper %anage%ent of working

capital as e)en a highly working capital as e)en a highly profitable co%pany %ay be ha)ing a

poor cash position= thoro&gh analysis of the working capital position; drawing of

appropriate action plans for i%pro)e%ent; thoro&gh re)a%ping of e>isting syste%=

3ro% the st&dy of working capital %anage%ent of 8cess of opening stock in

/*- and bank try to sell to the %a>i%&%=

• In the year /*- debtors ha)e been increased fro% **-,+ tho&sands to **+*

tho&sands indicating an increase fro% ,=. to .=.+ of total assets; s&ch increase

has been gained by bank d&e to increase in sales followed by e>pansion acti)ities in

%&t&al f&nds; ter% loans; etc=

• Net working capital is the e>cess of c&rrent assets o)er the c&rrent liabilities= It

indicates the financial strength of the co%pany= In /* net working capital of the

bank decreased beca&se of increase in the c&rrent liabilities of the bank= 4&t in year

/*- the net working capital of the bank decreased d&e to s&bstantial decrease in the

in)entory of the bank which res&lted in decrease in the o)erall c&rrent assets of the

bank=

Balance Sheet of Jammu and Kashmir Bank ------------------- in Rs. Cr. -------------------

53


54/58

Mar '15 Mar '14 Mar '13 Mar '1 Mar '11

12 mths 12 mths 12 mths 12 mths 12 mths

Ca!ital and "ia#ilities$

Total Share Capital 48.49 48.49 48.49 48.49 48.49

Equity Share Capital 48.49 48.49 48.49 48.49 48.49

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preerence Share Capital 0.00 0.00 0.00 0.00 0.00

!eser"es #$0#1.%# %$#&%.12 4$81#.20 4$044.#9 '$4'0.19

%et &orth (11).)5 5(*3.1 4(+4., 4(),3.1+ 3(4*+.+

(eposits #%$&%#.1

9 #9$''%.8# #4$220.#2 %'$'4#.90 44$#&%.94

)orro*in+s 2$''9.#& 1$%.00 1$0&%.00 1$240.9# 1$104.#%

otal e#t+(),5.+

*1(1)).+ 5(,5. 54(5+*.+ 45(*+).5,

,ther -iailities / Pro"isions 1$8&9.%4 1$&9%.2% 1$%8'.00 1$%88.18 1$248.88

otal "ia#ilities*()+5.4

5*+(1,.* *1(*43.31 )(,. 5)(5)+.15



/ssets

Cash / )alances *ith !) 2$'&'.0# '$04%.%9 2$#9%.1% 2$&8'.#% 2$9&4.9#

)alance *ith )ans$ Money at

Call 1$'#0.&1 1$1#8.'1 2$&09.18 1$#&0.21 %&'.8%

/d0ances44(5+5.+

4(3+4.) 3,()).41 33()**.4 (1,3.4

54


55/58

n0estments5(14.3

)(1,5.)* 5(*41.)* 1(4.3 1,(,5.**

ross )loc #%4.&% %0#.%2 44'.%0 41%.09 '91.#4

!e"aluation !eser"es 0.00 0.00 0.00 0.00 0.00

Accumulate3 (epreciation 0.00 0.00 0.00 0.00 0.00

%et Block 54.*5 5).5 443.5) 415.), 3,1.4

Capital or n Pro+ress '4.1# 2&.29 12.#8 %.18 2.1'

,ther Assets 1$9%2.## 1$292.'% 941.'' #9'.'4 #.1&

otal /ssets*()+5.4

*+(1,.*3 *1(*43.3 )(,.1 5)(5)+.1

Contin+ent -iailities 22$8&0.'

' 1&$'.#1 ''$1&8.&9 1%$98#.41 2#$9&9.'4

)ills or collection 0.00 0.00 0.00 0.00 0.00

)oo 5alue 6!s7 12#.04 1$180.#& 1$00'.49 844.'4 &1&.%8

55


56/58

amm an!

"as#mir

Ban$

2re0ious ears

Standalone 2rofit "oss

account------------------- in Rs. Cr. -------------------



ncome

nterest Earne3 &$0#1.1' #$&.00 #$1'#.80 4$8'%.%8 '$&1'.1'

,ther ncome %9'.9& '90.2# 48'.&' ''4.12 '#4.

otal ncome *(55.1) *(15*. ().53 5(1,.*) 4()**.+,

67!enditure

nterest epen3e3 4$410.22 4$082.%2 '$820. 2$99&.22 2$1#9.4&

Employee Cost 894.0' &4'.91 #%2.2# %21.41 %2'.#1

Sellin+$ A3min / Misc Epenses 1$&4&.&% 1$0&0.%2 1$042.#8 80'.8# &'1.#8

(epreciation 94.%0 &&.8# 49.&' 4'.9% '&.9'

Preoperati"e Ep Capitalise3 0.00 0.00 0.00 0.00 0.00

,peratin+ Epenses 1$409.0% 1$1&%.00 989.01 802.14 &%8.9'

Pro"isions / Contin+encies 1$'2&.2' &1&.29 &%%.## %#&.08 %'4.29

otal 67!enses *(14.5) 5(,*4.+1 5(55.43 4(3.44 3(4.,



56


57/58

%et 2rofit for the ear 5)+.) 1(1+.4* 1()55.1) +)3.5 15.)

Etraor3inary tems 0.00 0.00 0.00 0.00 0.00

Proit rou+ht or*ar3 0.00 0.00 0.00 0.00 0.00

otal 5)+.) 1(1+.4* 1()55.1) +)3.5 15.)

Preerence (i"i3en3 0.00 0.00 0.00 0.00 0.00

Equity (i"i3en3 101.80 242.'9 242.'9 1#2.40 12#.04

Corporate (i"i3en3 Ta 20.'% 41.19 41.19 2#.'# 20.94

2er share data 8annualised9

6arnin: 2er Share 8Rs9 1).4, 43., 1*.5 15., 1.,)

Equity (i"i3en3 67 210.00 %00.00 %00.00 ''%.00 2#0.00

)oo 5alue 6!s7 12#.04 1$180.#& 1$00'.49 844.'4 &1&.%8

/!!ro!riations

Transer to Statutory !eser"es '8#.44 898.89 &&1.%2 #14.49 4#8.22

Transer to ,ther !eser"es 0.01 0.00 0.00 0.00 0.00

Propose3 (i"i3en3:Transer to

o"t 122.1% 28'.%8 28'.%8 188. 14#.98

)alance c: to )alance Sheet 0.00 0.00 0.00 0.00 0.00

otal 5)+.) 1(1+.4* 1()55.1) +)3.5 15.)

57


58/58

RE'EREN)E

B77KS

K9N; #=7= 8IN; !=K; 3inancial %anage%ent; TT #CGRW 9I"" !54"I19$R1; IQe;

////

1hashi k g&pta; Neeti g&pta; 3inancial %anage%ent; Kalyani p&blishers Q lyall bk depot /*

#ir Geelani and fsal khan financial o&tlook; ##T !54"I19$R1=

1howkat Rah and bd&l Rahi%; banking; ##T !54"I19$R1=

)7M(AN+ ANNUAL RE(7RTS

• 4alance sheet

• !rofit and "oss cco&nt

• Notes and cco&nts=

WEBLINKS

WWW=8K4NK=CO#

NetbankingS?kb%ail=co%

www=?kbankonline=co%

?kb%ail=co%
http://www.jkbank.com/mailto:[email protected]://www.jkbankonline.com/http://www.jkbank.com/mailto:[email protected]://www.jkbankonline.com/

working capital j k bank

Documents