working capital project tcs ion.docx

8/17/2019 working capital project tcs ion.docx

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A STUDY ON CASH FLOW STATEMENT

OF

TCS- ION Company

A project report su m!tte" to t#e Punjab Technical University !n part!a$ %u$%!$$ment o% t#ere&u!rements %or t#e a'ar" o% t#e "e(ree

o%

Bachelor of Commerce (Professional)

)*+, -*+,./

Un"er t#e 0u!"ance o% Su m!tte"1y

2ro%3 )Department o% Mana(ement Stu"!es/13com )2/

, *456.

DAV College, BAT !"DA

(Affiliate# to Punjab! University, PAT!A$A)

TA1LE OF CONTENTS


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S3NO NAME OF TO2IC 2A0E NO3


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CE7TIFICATE

DECLA7ATION

AC8NOWLED0EMENT

E9ECUTI:E SUMMA7Y

CHA2TE7-, COM2ANY 27OFILE

CHA2TE7-* INT7ODUCTION TO TO2IC

CHA2TE7- 7E:IEW OF LITE7ATU7E

CHA2TE7-; 7ESEA7CH METHODOLO0Y

-7ESEA7CH O1 7ECOMMENDATION?

SU00ESTION

CHA2TE7-4 1I1LIO07A2HY

D%C$A&AT!'"

I #ere y "ec$are t#at t#e project ent!t$e" A TUD* '" CA +$' TAT%-%"T

'+ TC . i'" / Su m!tte" !n part!a$ %u$%!$$ment o% t#e re&u!rements %or a'ar" o% t#e


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"e(ree o% 1313A3 at DA: Co$$e(e 1at#!n"a@ A%%!$!ate" to 2unja ! Un! ers!ty@ 2at!a$a !s an

aut#ent!c 'orB an" #as not een su m!tte" to any ot#er Un! ers!ty?Inst!tute %or a'ar" o%

any "e(ree ?" ! p$oma3

Name-

0AC1"' $%D2%-%"T


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F!rst$y I 'ou$" $!Be to e press our !mmense (rat!tu"e to'ar"s our !nst!tut!on DAV College

Bathin#a, '#!c# create" a (reat p$at%orm to atta!n pro%oun" tec#n!ca$ sB!$$s !n t#e %!e$" o%

13com)2/ t#ere y %u$%!$$!n( our most c#er!s#e" (oa$3

I 'ou$" t#anB a$$ t#e %!nance "epartment o% TC . i'" spec!a$$y Mr3 Aman 8umar@ an"

t#e emp$oyees !n t#e %!nance "epartment %or (u!"!n( me an" #e$p!n( me !n success%u$

comp$et!on o% t#e project3

I '!$$ a$so spec!%!ca$$y t#anB toProf3, Department@ Hea"@ Da co$$e(e 1at#!n"a %or t#e

(!nternal 2ui#e) %or e ten"!n( #!s cooperat!on !n "o!n( t#!s project3

I s#a$$ e %a!$!n( !n my "uty !% I "o not acBno'$e"(e t#e a%%ect!on@ ass!stance@ $ess!n(san mora$ support (! en to me y my %am!$y@ spec!a$$y my %at#er '#o encoura(e" me

an" !nst!$$e" me t#e se$% e$!e% an" ne er to say "!e att!tu"e3

Last ut not t#e $east@ I '!$$ $!Be to t#anB 0o" %or $ess!n( me an" (! !n( me suc# a

'on"er%u$ opportun!ty3


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C APT%&.4

COM2ANY 27OFILE

TATA Consultancy ervice


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Type 2u $!c

Tra"e" as 1SE 6 *6;+

NSE TCS

1SE SENSE9 Const!tuent

CN9 N!%ty Const!tuent

In"ustry IT ser !ces @ IT consu$t!n(

Foun"e" ,5.4

Foun"er


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S$o(an E per!ence certa!nty

We s!te '''3tcs3com

Tata Consu$tancy Ser !ces L!m!te" )TCS/!s an In"!an mu$t!nat!ona$ !n%ormat!on tec#no$o(y

)IT/ ser !ce@ consu$t!n( an" us!ness so$ut!ons company #ea"

&uartere" !n Mum a!@ Ma#aras#tra 3 It !s a su s!"!ary o% t#e Tata 0roup an" operates !n ;.

countr!es3TCS !s one o% t#e $ar(est In"!an compan!es y marBet cap!ta$!Gat!on ) 4+

!$$!on/3 TCS !s no' p$ace" amon( t#e 1!( ; most a$ua $e IT ser !ces ran"s

'or$"'!"e3 In *+,6@ TCS !s ranBe" .;t# o era$$ !n t#e For es Wor$"Js Most Inno at! e

Compan!es ranB!n( @ maB!n( !t ot# t#e #!(#est-ranBe" IT ser !ces company an" t#e %!rst

In"!an company3 It !s t#e 'or$"Js ,+t# $ar(est IT ser !ces pro !"er@ measure" y t#e re enues3

istory5

6777 to 8resent

On *6 Au(ust *++;@ TCS ecame a pu $!c$y $!ste" company3

https://en.wikipedia.org/wiki/Sloganhttp://www.tcs.com/http://var/www/apps/conversion/tmp/scratch_3/multinationalhttps://en.wikipedia.org/wiki/Information_technologyhttps://en.wikipedia.org/wiki/Service_(economics)https://en.wikipedia.org/wiki/Information_technology_consultinghttps://en.wikipedia.org/wiki/Information_technology_consultinghttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Mumbaihttps://en.wikipedia.org/wiki/Mumbaihttps://en.wikipedia.org/wiki/Maharashtrahttps://en.wikipedia.org/wiki/Maharashtrahttps://en.wikipedia.org/wiki/Tata_Grouphttps://en.wikipedia.org/wiki/Market_capitalizationhttps://en.wikipedia.org/wiki/Market_capitalizationhttps://en.wikipedia.org/wiki/Forbeshttps://en.wikipedia.org/w/index.php?title=World%27s_Most_Innovative_Companies_ranking&action=edit&redlink=1https://en.wikipedia.org/w/index.php?title=World%27s_Most_Innovative_Companies_ranking&action=edit&redlink=1https://en.wikipedia.org/wiki/Public_companyhttps://en.wikipedia.org/wiki/Public_companyhttps://en.wikipedia.org/wiki/Sloganhttp://www.tcs.com/http://var/www/apps/conversion/tmp/scratch_3/multinationalhttps://en.wikipedia.org/wiki/Information_technologyhttps://en.wikipedia.org/wiki/Service_(economics)https://en.wikipedia.org/wiki/Information_technology_consultinghttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Headquarterhttps://en.wikipedia.org/wiki/Mumbaihttps://en.wikipedia.org/wiki/Maharashtrahttps://en.wikipedia.org/wiki/Tata_Grouphttps://en.wikipedia.org/wiki/Market_capitalizationhttps://en.wikipedia.org/wiki/Forbeshttps://en.wikipedia.org/w/index.php?title=World%27s_Most_Innovative_Companies_ranking&action=edit&redlink=1https://en.wikipedia.org/w/index.php?title=World%27s_Most_Innovative_Companies_ranking&action=edit&redlink=1https://en.wikipedia.org/wiki/Public_company


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In *++6@ TCS ecame t#e %!rst In"!a- ase" IT ser !ces company to enter

t#e !o!n%ormat!cs marBet3

In *++.@ TCS "es!(ne" an E72 system %or t#e In"!an 7a!$'ay Cater!n( an" Tour!sm

Corporat!on 3

In *++4@ TCSJs e- us!ness act! !t!es 'ere (enerat!n( o er US 6++ m!$$!on !n annua$ re enues3

In *++4@ TCS un"ertooB an !nterna$ restructur!n( e erc!se '#!c# a!me" to !ncrease t#e

companyJs a !$!ty3

TCS entere" t#e sma$$ an" me"!um enterpr!ses marBet %or t#e %!rst t!me !n *+,,@ '!t# c$ou"-

ase" o%%er!n(s3 On t#e $ast tra"!n( "ay o% *++, TCS o ertooB 7IL to ac#!e e t#e #!(#est

marBet cap!ta$!Gat!on o% any In"!a- ase" company3

In t#e *+,,?,* %!sca$ year@ TCS ac#!e e" annua$ re enues o% o er US ,+ !$$!on %or t#e %!rst

t!me3

In May *+, @ TCS 'as a'ar"e" a s! -year contract 'ort# o er ₹ ,,++ crores to pro !"e

ser !ces to t#e In"!an Department o% 2osts3

In *+, @ TCS mo e" %rom t#e , t# pos!t!on to ,+t# pos!t!on !n t#e Lea(ue o% top ,+ ($o a$ IT

ser !ces compan!es

In


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Asset $e era(e so$ut!ons )*3>+K/

Assurance ser !ces )>3>+K/

1us!ness process outsourc!n( ),*36+K/

Consu$t!n( )*3++K/

En(!neer!n( an" In"ustr!a$ ser !ces );3.+K/

Enterpr!se so$ut!ons ),63*+K/ an"

IT !n%rastructure ser !ces ),,36+K/3

'8erations5

TCS #a e * + o%%!ces across ;. countr!es an" ,;> "e$! ery centers !n *, countr!es3At t#e

same "ate TCS #a" a tota$ o% 64 su s!"!ary compan!es3

$ocations5

TCS #as operat!ons !n t#e %o$$o'!n( $ocat!ons

In"!a A#me"a a" @1an(a$ore @ 1aro"a @1#u anes'ar @ C#enna! @ Co!m atore @2atna @ De$#!@ 0a

n"#!na(ar @0oa @0ur(aon @0u'a#at! @ Hy"era a" @1#opa$ @In"ore @


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TCS esta $!s#e" t#e %!rst so%t'are researc# centre !n In"!a@ t#e Tata 7esearc# De e$opment

an" Des!(n Centre@ !n 2une@ In"!a !n ,54,3 T7DDC un"ertaBes researc# !n So%t'are

en(!neer!n( @2rocess en(!neer!n( an" systems researc#3 7esearc# at T7DDC #as a$so resu$te"

!n t#e "e e$opment o% Suja$@ a $o'-cost 'ater pur!%!er t#at can e manu%acture" us!n( $oca$$y

a a!$a $e resources3 TCS "ep$oye" t#ousan"s o% t#ese %!$ters !n t#eIn"!an Ocean Tsunam!

"!saster o% *++; as part o% !ts re$!e% act! !t!es3 T#!s pro"uct #as een marBete" !n In"!a as Tata

s'ac# @ a $o' cost 'ater pur!%!er3

!nnovation $abs

In *++>@ TCS $aunc#e" !ts co-!nno at!on net'orB@ a net'orB o% !nno at!on $a s@ start up

a$$!ances@ un! ers!ty researc# "epartments@ an" enture cap!ta$!sts3 In a""!t!on@ TCS #as ,5

!nno at!on $a s ase" !n t#ree countr!es3TCSJ partners !nc$u"e Co$$a net@Cassatt @ aca"em!c!nst!tut!ons suc# as IITs @ Stan%or"@MIT @Carne(!e Me$$on an" enture cap!ta$!sts

$!BeSe&uo!a an" 8$e!ner 2erB!ns3

%m8loyees5

TCS !s one o% t#e $ar(est pr! ate sector emp$oyers !n In"!a@ an" t#e secon"-$ar(est emp$oyer

amon( $!ste" In"!an compan!es )a%ter Coa$ In"!a L!m!te" /3

TCS #a" a tota$ o% o er 6@.*+ emp$oyees as o% Octo er *+,6@ o% '#!c# ,K 'ere

'omen3 T#e num er o% non-In"!an nat!ona$s 'as *,@*4* as at Marc# ,@ *+, )>3>K/3T#e

emp$oyee costs %or t#e FY *+,*-, 'ere US ;3 4 !$$!on@ '#!c# 'as appro 3 4K o% t#e

tota$ re enue o% t#e company %or t#at per!o"3 In t#e %!sca$ year *+,*-, @ TCS recru!te" a tota$

o% .5@>*4 ne' sta%%@ o% '#om 65@*>. 'ere ase" !n In"!a an" ,+@;6* 'ere ase" !n t#e rest o%

t#e 'or$"3 In t#e same per!o"@ t#e rate o% attr!t!on 'as ,+3.K3 T#e a era(e a(e o% a TCS

emp$oyee !s *4 years3 T#e emp$oyee ut!$!sat!on rate@ e c$u"!n( tra!nees@ %or t#e FY *+,*-,

'as 4*K3 TCS 'as t#e %!%t#-$ar(est Un!te" States !sa rec!p!ent !n *++4 )a%ter

In%osys@ CTS @ W!pro an" Ma#!n"ra Satyam /3In *+,*@ t#e Tata (roup compan!es@ !nc$u"!n(TCS@ 'ere t#e secon" $ar(est rec!p!ent o% H-,1 !sas3

Su raman!am 7ama"ora!@ %ormer CEO o% TCS@ #as 'r!tten an auto !o(rap#!ca$ ooB a out

#!s e per!ences !n t#e company ca$$e" T#e TCS Story333an" eyon"3

As o%


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On ,; Fe ruary *++.@ U3S3 $a' %!rm L!e%%Ca raserHe!mann= 1ernste!n@ LL2 %!$e" a

nat!on'!"e c$ass act!on $a'su!t a(a!nst Tata3 In


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Tota$ assets US ,*364 !$$!on )*+,6/

Tota$ e&u!ty US ;3 6 !$$!on )*+,6

Num er emp$oyees +++ )Au(ust *+,6/

2arent Tata 0roup

S$o(an E per!ence certa!nty

We s!te '''3tcs!on3com

TC . i'"

https://en.wikipedia.org/wiki/Assethttps://en.wikipedia.org/wiki/Equity_(finance)https://en.wikipedia.org/wiki/Parent_companyhttps://en.wikipedia.org/wiki/Tata_Grouphttps://en.wikipedia.org/wiki/Sloganhttp://www.tcsion.com/https://en.wikipedia.org/wiki/Assethttps://en.wikipedia.org/wiki/Equity_(finance)https://en.wikipedia.org/wiki/Parent_companyhttps://en.wikipedia.org/wiki/Tata_Grouphttps://en.wikipedia.org/wiki/Sloganhttp://www.tcsion.com/


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No' TCS !s "ea$!n( !n e"ucat!on an" 'e "e e$opment un"er t#e name o% !ON3

TC .i'" !s at present@ t#e most rap!"$y (ro'!n( on$!ne 'e so$ut!ons company !n

In"!a@ pro !"!n( IT ena $e" ser !ces@ consu$tat!on an" outsourc!n( to compan!es

sprea" !n more t#an ,.6 countr!es across > cont!nents3 T#e!r a" ance" "e$! ery mo"e$

$en"s tec#no$o(y pract!ces '!t# %unct!ona$ e pert!se to #e$p us !mpro e our us!ness

processes an" oost per%ormance3

T#e!r pro%ess!ona$ 'e s!te "es!(n@ We s!te "e e$opment@ $o(o "es!(n@ F$as# "es!(n@

an" SEO ser !ces@ amon( ot#ers@ can (o a $on( 'ay !n "eterm!n!n( t#e success o%

your us!ness3 Custom creat!on a$so !nc$u"es@ ut !s not $!m!te" to@ !ncorporat!n(

!ma(es@ !"eo an" ot#er !nteract! e content !nto our s!te@ apart %rom t#e usua$ te t

e$ement

T#ey o%%er t#e!r c$!ents a reperto!re o% ser !ces $!Be ecommerce 'e s!te creat!on an"

porta$ "e e$opment@ ran" marBet!n( on $ea"!n( a" net'orBs@ "!(!ta$ marBet!n(@ 'e

ana$yt!cs an" muc# more3 T#e!r ta$ente" an" e per!ence" team o% pro%ess!ona$s

compr!se We *3+ "e e$opment e ecut! es '#o o%%er a" ance" so$ut!ons %or

pu $!s#ers an" a" ert!sers3 T#ey create pro%ess!ona$ an" "ynam!c pa(es %or us us!n(

!nte$$!(ent an" smart pract!ces3

T#ey a$so "ou $e up as a "!(!ta$ marBet!n( a(ency t#at ser es $ea"!n( ran"s@

corporate c$!ents@ as 'e$$ as ot#er p$ayers3 T#e!r cost-e%%ect! e an" custom!Ge" 'e

"e e$opment@ an" on$!ne me"!a so$ut!ons are ta!$or-ma"e to su!t our spec!%!c nee"s an"

re&u!rements3 TCS-!ON o%%ers us cutt!n( e"(e ser !ces %or 'e s!te "es!(n!n(@

"e e$opment an" !nternet marBet!n(3 T#e!r a!m !s to con ert our Creating 2lobal

Profeesionate 3


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2et :uality an# %conomic eb ervicesTCS-!ON !s a 'e "es!(n an" "e e$opment company ase" !n In"!a 3A %u$$y!nte(rate" ITEs %!rm@ 'e pro !"e 'or$"-c$ass 'e "es!(n ser !ces to t#e!r ($o a$c$!ente$e sprea" across > cont!nents an" major countr!es !nc$u"!n( USA@ U8@Austra$!a@ an" se era$ t#rou(#out As!a an" Europe 3

TCS-!ON pro !"es a '!"e ran(e o% #!(#$y cost-e%%ect! e an" custom!Ge" 'e ser !cesto compan!es !n ar!e" !n"ustr!es suc# as enterta!nment@ %as#!on@ mus!c@ %!nance@en !ronment@ us!ness@ commerce@ IT an" te$ecommun!cat!ons@ tra e$ an" tour!sm@

#osp!ta$!ty@ e"ucat!on@ etc3 T#e!r a%%or"a $e 'e ser !ces are !"ea$ %or sma$$@ me"!uman" $ar(e sca$e" pr! ate an" corporate or(an!Gat!ons an" a$so start-up us!nesses an"asp!r!n( entrepreneurs

TC .i'" is 'ne.sto8 ho8 for Com8rehensive eb ervices;

T#e!r compre#ens! e $!st o% 'e "es!(n an" "e e$opment ser !ces !nc$u"es (rap#!cs"es!(n@ corporate !"ent!ty "es!(n an" custom $o(o "es!(n ser !ces@ custom 'e

pro(ramm!n(@ $o( custom!Gat!on an" e-commerce so$ut!ons@ F$as# "es!(ns@ searc#en(!ne opt!m!Gat!on ser !ces an" muc# more3

3


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ebsite Design ervices5

At TCS !ON In"!a@ creat! e ta$ent meets tec#n!ca$ e pert!se to pro"uce smart an" e%%ect! e

"es!(ns '!t# #!(# appea$ an" usa !$!ty a$ue3 T#ey un"erstan" your nee" to e "!%%erent %rom

re(u$ar se$$!n( or !n%ormat! e s!tes@ !ncrease !s!tor !n%$o' an" "ecrease ounce rates3 T#e!r

pro%ess!ona$ 'e "es!(ners emp$oy %res# !nno at! e !"eas an" a" ance" "es!(n!n( too$s to

pro"uce opt!m!Ge" an" pro%!t (enerat! e 'e s!tes %or you3

T#e!r 'e s!te "es!(n ser !ces are %ocuse" on pro"uc!n( un!&ue$y appea$!n( an" resu$t-

or!ente" 'e s!tes %or our spec!a$!Ge" us!ness3 Le era(e our &ua$!ty 'e "es!(n ser !ces

%or "ynam!c an" %$e ! $e 'e s!tes an" enjoy ma !mum ene%!t3

!T . as . a ervice5

T#e IT-as-a Ser !ce us!ness mo"e$ o% !ON a c$ou" ase" E72 so$ut!on 'as conceptua$!Ge"

y TCS t#rou(# c$ose !nteract!ons '!t# Sma$$ an" Me"!um 1us!nesses )SM1/ across re$e ant

staBe#o$"ers@ "e e$op!n( a "eep un"erstan"!n( o% t#e!r ICT consumpt!on pattern an" us!ness


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c#a$$en(es3 An !nno at! e ser !ce mo"e$@ !ON uses emer(!n( tec#no$o(!es $!Be c$ou"

comput!n( an" !rtua$!Gat!on to create a #o$!st!c@ %!t-%or-purpose so$ut!on stacB %or SM1s

!nte(rat!n( #ar"'are@ net'orB@ so%t'are an" ser !ces3 An" a$$ o% t#!s !s acBe" y us!ness@

tec#n!ca$ an" consu$t!n( ser !ces y !ON3 T#e !ON C$ou" E72 So$ut!on !s #!(#$y mo"u$ar@

sca$a $e an" con%!(ura $e (! !n( SM1s t#e ene%!ts o% !ncrease" e%%!c!enc!es %aster (o to

marBet@ pre"!cta !$!ty o% tec#no$o(y as 'e$$ as spen"@ IT ta$ent on ca$$ an" etter us!ness

resu$ts3

*ou gain from5

!ntegrate# solutions5

We as a C$ou" E72 So$ut!on %or SM1s o%%er s!n($e- '!n"o' IT '!t# a pre-!nte(rate" su!te o%

#ar"'are@ net'orB@ so%t'are an" ser !ces3 We ensure t#at your %unct!ons are "!(!t!Ge"@

automate" an" connecte"3 For e amp$e@ !% you are us!n( a C7M so$ut!on a$on( '!t# a core

E72 )e3( a Manu%actur!n( E72/ an" #a e a "ocument mana(ement system to or(an!Ge

support!n( %!$es an" an H7MS@ 'e ensure t#at t#ese so$ut!ons are connecte" an" 'orB as one3

So %or you@ !t !s s!mp$y one IT an" not mu$t!p$e app$!cat!ons3 Inte(rate" app$!cat!ons t#us

pro !"e a compre#ens! e !e' o% us!ness ena $!n( etter "ec!s!ons3

!ncrease# agility5

We r!n( !n t#e a(!$!ty to Beep pace '!t# c#an(!n( processes or a ne' $!ne o% us!ness3 We

#e$p you con%!(ure t#e processes to 'orB as you current$y "o or t#e so%t'are recommen"s

an" a$$o's you to c#oose !n"ustry est pract!ces ase" on your us!ness parameters3 !ON

(! es you !ncrease" con en!ence a$$o'!n( you to per%orm ar!ous tasBs %rom your mo !$e

"e !ce@ no matter '#ere you are3 1e!n( automat!ca$$y comp$!ant '!t# statutory re&u!rements@

t#e so$ut!on ensures your company !s a$'ays au"!t rea"y an" $e(a$$y comp$!ant3

A 8ay.as.you.use mo#el5

Our mo"e$ e$!m!nates cap!ta$ !n estment up %ront as 'e %ac!$!tate procurement o% t#e IT

!n%rastructure an" so%t'are on rent %or t#e "urat!on o% t#e contract3 A""!t!ona$$y@ you on$y pay

%or t#e num er o% users '#o actua$$y use t#e so%t'are3 T#us@ you pay as you use on a mont#$y

as!s '#!c# !nc$u"es ma!ntenance an" tra!n!n(3 Typ!ca$$y@ '!t# t#e !ON C$ou" E72 t#e 7OI

e cee"s renta$ '!t#!n t#ree mont#s@ '#en est pract!ces are 'e$$ %o$$o'e"3


18/115


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!ON C#anne$ Sa$es 2artners #a e !n-"ept# un"erstan"!n( o% t#e e"ucat!on se(ment3 T#e

C#anne$ Sa$es 2artners #e$p customers across "!%%erent e"ucat!on se(ments !mp$ement t#e

most appropr!ate !ON so$ut!on3

A -anufacturing nervous system

7ecor"!n( or"ers@ sa$es an" purc#ases 'ou$" #a e $!tt$e mean!n( un$ess t#ey 'ere connecte"3

At t#e #eart o% our manu%actur!n( so$ut!on $!es a pro"uct!on system t#at ensures t#at t#ese are

!n sync3 You procure as muc# as you pro"uce an" pro"uce as muc# as you are a $e to se$$3

T#e (oa$ !s as s!mp$e as Beep!n( t#e $o'est !n entory3

At !ON@ 'e ten" to maBe t#e comp$e manu%actur!n( process $ooB s!mp$e y connect!n( t#e

"!%%erent parts o% t#e operat!ons3 T#e so%t'are !s or(an!Ge" !nto p$ann!n( an" e ecut!on3

2ro"uct!on p$an %or !nstance@ 'ou$" te$$ your operat!ons to e pect t#e r!(#t amount o% sa$es@

an" t#en !n!t!ate t#e r!(#t &uant!ty o% procurement3 1ut '#at #appens '#en t#e e ecut!on

s$!ps %rom '#at !s p$anne" :!(!$ant reports an" "as# oar"s 'ou$" a$ert you !n t!me3

olution tac=5


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Po9er your 9or=force 8erformance5

Across !n"ustr!es@ or(an!Gat!ons are $ooB!n( at ne' 'ays to mana(e t#e!r 'orB%orce an"

measure per%ormance t#rou(# H7 ana$yt!cs@ per%ormance mana(ement systems@ an" soc!a$

me"!a3

T#e !ON Human Cap!ta$ Mana(ement )HCM/ So$ut!on !s an !nte(rate" so$ut!on t#at #e$ps

you e%%ect! e$y mana(e your emp$oyees an" !ncrease pro"uct! !ty across your 'orB%orce3 You

can a$!(n emp$oyee (oa$s '!t# us!ness o ject! es@ cu$t! ate emp$oyee sB!$$s@ measure an"

re'ar" per%ormance3 !ON HCM !s a comp$ete Enterpr!se 7esource 2$ann!n( )E72/ so$ut!on

t#at automates your #uman resource mana(ement an" payro$$ processes '!t# on-"eman"

1us!ness Inte$$!(ence )1I/ report!n( capa !$!t!es an" "as# oar"s to #e$p maBe &u!cB "ec!s!ons

'#!$e ma!nta!n!n( statutory comp$!anc !ON Human 7esources Mana(ement So$ut!on

)H7MS/ mana(es your recru!tment an" per%ormance e a$uat!on processes@ '#!$e a$so

mana(!n( emp$oyee recor"s an" a$!"at!n( t#e!r %!nanc!a$ "eta!$s!ON 2ayro$$

So$ut!on mana(es e ery sta(e o% t#e payro$$ process@ ensur!n( e%%ect! e@ accurate payro$$

cyc$es an" #e$ps !n %aster "ec!s!on maB!n( '!t# on-"eman" us!ness !nte$$!(ence )1I/

report!n( capa !$!t!es In a""!t!on@ !ON HCM #as a""!t!ona$ so$ut!on an" ser !ces to %urt#er


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en#ance t#e pro"uct! !ty an" $earn!n( en !ronment !n your or(an!Gat!on !ON Human Cap!ta$

Mana(ement )HCM/ !s "e$! ere" as a

-anage# ervice Mana(es t#e process en"-to-en" '!t# t#e ser !ce "e$! ere" as an output3

!m8lementation ervice De$! ers a comp$ete$y con%!(ure" system rea"y %or en" users to

transact an" e tract output on a "ay-to-"ay as!s3


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TC in e#ucation5

Cam8us ystem5

!ON Campus Mana(ement System compr!ses a su!te o% o%%er!n(s@ cater!n( to seasona$

aca"em!c e ents@ mappe" to spec!%!c "epartments o% an !nst!tut!on3 Our so$ut!on %ac!$!tates t#e

ent!re stu"ent $!%ecyc$e mana(ement %rom en&u!ry to a$umn!3 O%%er!n(s are !nte(rate"@ yetmo"u$ar !n nature@ '#!c# can #e$p automate certa!n %unct!ons '!t#!n t#e !nst!tut!on "epen"!n(

on pre%erence an" su!ta !$!ty3 W!t# 2re- u!$t us!ness processes an" easy-to-con%!(ure

so$ut!on capa !$!t!es@ !nst!tut!ons can start us!n( t#e system '!t# m!n!ma$ !mp$ementat!on

t!me an" e%%ort3 To maBe t#e "e$! ery process smoot# an" e%%ect! e %or t#e en" users@ some o%

t#e mo"u$es are a a!$a $e !n a Mana(e" Ser !ces mo"e$ as 'e$$3

Assessment -anagement5


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!ON Assessment Mana(ement so$ut!on pro !"es en"-to-en" ser !ces to con%!(ure an"

sc#e"u$e e am!nat!ons start!n( %rom creat!n( on$!ne an" o%%$!ne assessments to con%!(ur!n(

atten"ance@ #a$$ t!cBets@ creat!n( "r! es@ as 'e$$ as ass!(n!n( a test center an" e am s#!%t to

can"!"ates3 T#e so$ut!on a$so mana(es t#e "!str! ut!on o% &uest!on papers@ t#e E a$uat!on

process@ !n a""!t!on to 7esu$ts Mana(ement an" pro !"!n( Support Ser !ce3

Digital evaluation5

!ON D!(!ta$ E a$uat!on so$ut!on ena $es e a$uat!on o% p#ys!ca$ ans'er scr!pts ma"e a a!$a $e

!n e$ectron!c %orm3 A$$ t#e pa(es o% t#e ans'er scr!pt an" respect! e ta u$ate" reports can e

accesse" y t#e E a$uator@ Super !sor an" se$ect mem ers o% t#e Inst!tut!on3 T#e so$ut!on

com !nes ease o% manua$ e a$uat!on coup$e" '!t# %$e ! !$!ty@ accuracy an" e%%!cacy o% a

computer3

T#e manua$ e a$uat!on met#o" !s trans%orme" !nto a "!(!ta$ process start!n( '!t# e$ectron!c

scann!n( o% ans'er scr!pts@ '#ere stu"ent "eta!$s are masBe" '!t# %!ct!t!ous co"e@ &uest!ons

an" re$e ant marB!n( sc#eme !s up$oa"e" !nto t#e so$ut!on@ e a$uators ass!(ne" '!t#

!n"! !"ua$ ID an" pass'or"@ super !sor re !e's or re-ass!(ns e a$uate" scr!pts !n case o%

"!screpanc!es an" %!na$$y t#e o era$$ status o% ans'er scr!pts e a$uate"@ re !e'e" an" pen"!n(

are Bno'n t#rou(# t#e "eta!$e" 7eports %unct!ona$!ty3 T#us@ !ON D!(!ta$ E a$uat!on so$ut!on

%rom TCS a""resses t#e major !ssues o% t#e current e a$uat!on process $!Be m!ss!n( ans'er

scr!pts !n trans!t@ #uman error !n e a$uat!on@ ta u$at!on an" a'ar" $!sts an" most !mportant$y

stru(($!n( to announce resu$ts on t!me3

Demat ervice5

!ONDemat Ser !ces #e$ps un! ers!t!es !n $e era(!n( IT to mana(e t#e ent!re $!%ecyc$e o%

!ssu!n( cert!%!cates start!n( %rom stu"ent recor" co$$ect!on up to pr!nt!n( o% cert!%!cates@ a$on(

'!t# "!(!ta$ er!%!cat!on !n a secure"@ or(an!Ge"@ an" cost-e%%ect! e manner3

For stu"ent recor"s t#at 'ere ma!nta!ne" !n p#ys!ca$ re(!sters e%ore "!(!t!Gat!on@ t#e ser !ces

!nc$u"e scann!n( an" "!(!t!G!n( o% t#e recor"s a$on( '!t# secure" stora(e an" retr!e a$ on-

"eman"3 T#e so$ut!on maBes use o% "!(!ta$ encrypt!on tec#no$o(!es %or pro !"!n( t#e #!(#est

"e(ree o% Data Secur!ty an" Inte(r!ty a$on( '!t# !ncrease" spee" o% cert!%!cate !ssuance an"

"!(!ta$ er!%!cat!on3

Communicator5


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!ON Commun!cator !s t#e u$t!mate commun!cat!on too$ %or Sc#oo$s3 Ena $!n( t#e sc#oo$

a"m!n!strat!on an" teac#ers to connect '!t# parents an" stu"ents !n rea$-t!me@ %rom any'#ere@

!ON Commun!cator $ets you commun!cate a$most anyt#!n( - ne's@ a$erts@ ca$en"ar e ents@

p#oto(rap#s@ act! !t!es or #ome'orB@ %rom one@ easy-to-use system3 0! !n( you t#e %$e ! !$!ty

to commun!cate t#e 'ay you 'ant@ !t a$so !nc$u"es a user-%r!en"$y smartp#one app to access

a$$ t#e commun!cat!ons3 1e assure"@ t#at parents '!$$ ne er m!ss a commun!cat!on@ anymore3

%>am management5

TCS !ON E am Mana(ement So$ut!on "!(!t!Ges an" automates Un! ers!ty an" 1oar"s

E am!nat!on processes en"-to-en"@ pro !"!n( uncomprom!se" JSecrecyJ !n E am!nat!on

uest!on 2aper creat!on an" !ts "!str! ut!on to ar!ous e am!nat!on centers '!t# s!(n!%!cant

re"uct!on !n a"m!n!strat! e an" $o(!st!ca$ o er#ea"s an" costs3 Increas!n( automat!on at e ery

step $!Be enro$$!n( stu"ents %or eac# e am!nat!on@ sc#e"u$!n( o% e ams@ e am centre

mana(ement@ a$$ocat!n( stu"ents to e am centers@ ass!(n!n( su jects to %acu$t!es %or &uest!on

paper creat!on@ a$erts an" not!%!cat!ons to ar!ous staBe#o$"ers s!(n!%!cant$y re"uces manua$

e%%ort@ sc#e"u$e comp$!ance %a!$ures an" un%oreseen errors3

Course management5

!ON In-Course Assessment !s "es!(ne" to ena $e Inst!tut!ons "e$! er!n( 2ro%ess!ona$ #!(#er e"ucat!on an opportun!ty to $e era(e Computer 1ase" Test!n( to empo'er t#e!r teac#!n( sta%%

an" en#ance t#e a$ue "e$! ere" to stu"ents3 !ON In-Course Assessment a$$o's %or secure an"

co$$a orat! e content "e e$opment an" ett!n( y %acu$ty@ seam$ess "e$! ery o% tests an"

captur!n( o% stu"ent responses an" (enerat!on o% mu$t!p$e mean!n(%u$ staBe#o$"er spec!%!c

reports on stu"ent per%ormance "ata3

$ea#ing %>change5

!ON Learn!n( E c#an(e !s a co$$a orat! e Learn!n( 2$at%orm "es!(ne" to pro !"e an

!ncrementa$ an" !nteract! e $earn!n( en !ronment to ena $e an Inst!tute !ncrease part!c!pant

$earn!n( outcomes3 2o'ere" y est-!n-c$ass Learn!n( Mana(ement System )LMS/@ t#e

$earn!n( spaces are enr!c#e" '!t# a su!te o% co$$a orat!on too$s #e$p!n( $earners to $earn %rom

one anot#er !n a commun!ty structure3

%m8o9er $earning5


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!ON Learn!n( E c#an(e empo'ers teac#ers '!t# too$s to persona$!Ge $earn!n( %or e ery

$earner3 A teac#er can "es!(n = #ost course cata$o(ues@ en$!st stu"ents !nto $earner

commun!t!es an" "e$! er !ncrementa$ $earn!n( mater!a$ !n an !mmers! e 'ay us!n( !"eo@

au"!o@ po'er po!nt presentat!ons an" a ar!ety o% SCO7M Comp$!ant $earn!n( a!"s3 E terna$

$!nBs to 'or$"-c$ass $earn!n( mater!a$ !n t#e 'or$" '!"e 'e o% $earn!n( ena $es t#e $earner to

"!p !nto est resources on a su ject or top!c3 Teac#er can co-s#are "e$! ery respons! !$!t!es

'!t# In"ustry pro%ess!ona$s or su ject e perts to pro !"e re$e ancy to curr!cu$um an" meet

In"ustry emp$oya !$!ty e pectat!ons3

Personali


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True?Fa$se@ 7ea"!n( compre#ens!on/ an" enr!c# t#e tests y ta((!n( t#em to Sy$$a us@

D!%%!cu$ty Le e$ an" 1$ooms Ta onomy parameters3 Create uest!on 2apers ase" on 7u$e

En(!ne@ '#!c# %etc#es uest!ons ase" on uest!on Types@ Sy$$a us@ D!%%!cu$ty Le e$ an"

1$ooms Ta onomy 2arameters3

Analytics %ngine5

Ana$yGe t#e assessment resu$ts on ar!ous parameters an" pro !"e "as# oar" %or pro !"!n(

r!(#t $earn!n( !nter ent!ons to t#e part!c!pants o% t#e Course to !mpro e per%ormance@ #ence

c$os!n( t#e $earn!n(-$oop o% JLearn-Assess-Impro eJ3

Communication tools5

Le era(e Commun!cat!on %eatures )1anner? Mu$t!p$e In-Focus = Not!ce- oar" !tems? Not!%!cat!ons !a Ema!$?SMS/ to en(a(e an" !n%orm mem ers3 A$$ t#!s '!t# t#e %$e ! !$!ty to

commun!cate '!t# an !n"! !"ua$ or '!t# a$$ t#e mem ers o% a Commun!ty on (enera$

roa"casts3


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About Us


28/115

%B P&'2&A--!"2

E ery on$!ne us!ness !s "!%%erent %rom ot#er@ e en s!m!$ar n!c#e 'e s!te3 TCS-!ON

In"!a un"erstan"s an" respect !n"! !"ua$ c$!ents nee"s an" pro !"e custom 'e

pro(ramm!n( ser !ces to ser e un!&ue 'e re&u!rements3 T#e!r team o% &ua$!%!e"

pro%ess!ona$s uses strate(!c p$ann!n( an" smart "e e$opment process '!t# &u!cB

operat!ona$$y e%%!c!ent an" pro"uct! e 'e s!te3 T#e!r a!m !s to pro !"e smart an"

pract!ca$ so$ut!ons %rom t#e!r 'e s!te3 TCS-!ON In"!a s custom 'e s!te pro(ramm!n(

ser !ces cause "ramat!c an" measurea $e (ro't# !n t#e!r 'e s!te3

+$A D% !2"

Creat! e #ea"s at TCS-!ON In"!a e p$o!t F$as# s ector tec#no$o(y to pro"uce@


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eaut!%u$ an" eye-catc#!n( "es!(ns %or you3 From F$as# !ntros@ anners $o(os an"

a" ert!sements to %u$$- $o'n F$as# 'e s!tes@ t#ey (! e our 'e s!te t#e !nteract! e

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e%%ect! e commun!cat!on !nter%ace3

$'2' D% !2"

TCS-!ON In"!aJs $o(os are "es!(ne" to success%u$$y !ntro"uce your company to !ts

consumers an" compet!tors3 T#e!r $o(os are sty$!s# an" aest#et!c ear!n( super

co$or sc#eme an" (rap#!ca$ "eta!$!n( t#at create $on(-$ast!n( !mpress!ons3 T#e!r $o(o

"es!(n ser !ces (! e ran" a s!mp$e@ creat! e@ an" appea$!n( &ua$!ty capa $e o%

s!(n!%!cant !mpact on !e'ers3 T#ey (uarantee &ua$!ty $o(o "es!(n at m!n!ma$ rates

on$y at TCS-!ON In"!a3


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$'2' D% !2"

Bran#ing that #elivers your message 3

T#e &u!cBest 'ay to !ncrease t#e a$ue o% t#e company s ran" !s '!t# a 'e$$-!nte(rate"

"es!(n t#eme t#at !s cons!stent across t#e 'e as 'e$$ as on paper3 A (reat $o(o !s t#e

Beystone o% t#!s t#eme an" '!$$ attract t#e attent!on you 'ant an" "e$! er t#e sa$es t#at

company nee"s3

T#e!r $o(os "on t just create an !"ent!ty t#ey create a connect!on '!t# t#e au"!ence t#ey

speaB to an" "!%%erent!ate t#e pro"uct or ser !ce e!n( o%%ere"3 T#e!r $o(o an" ran"!n(s#ou$" a$$o' t#e!r customer to see you as pro !"!n( a "!st!nct so$ut!on to t#e!r un!&ue

pro $em3 A $o(o speaBs o$umes a out '#at t#e company "oes@ '#at !ts a$ues are an" '#at

!t can ac#!e e3 T#ey maBe sure t#e $o(o #as as muc# persona$!ty as you "o3

Lo(os t#at are "es!(ne" y TCS-!ON are as %o$$o's !n marc# *+,. -


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%&V!C% '+ C'-PA"*

T-$? @ C

At ION t#ey o%%er 2SD to CSS ?


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!mportant %or any us!ness $ooB!n( to e success%u$ on t#e Internet3 Let Su%%esCom e our

ecommerce so$ut!on pro !"er an" t#ey '!$$ e sure to #a e t#ousan"s o% sat!s%!e" customers3

T#e %ocus %or an ecommerce us!ness '!$$ e a 'e s!te !ncorporat!n( pro"uct !n%ormat!on

an" t#e a !$!ty to purc#ase or maBe or"ers on$!ne3 At Su%%es3Com t#ey use t#e $atest "ata ase

tec#no$o(y to create ecommerce so$ut!ons %or our ne' or e !st!n( us!ness3

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Searc# En(!ne Opt!m!Gat!on )SEO/ !s a tec#n!ca$ cum marBet!n( tec#n!&ue '!t# '#!c#

Su%%esCom ass!sts !ts c$!ents to rea$!Ge t#e!r "ream o% maB!n( t#e!r 'e s!tes ranB #!(# !n 'e

searc#es3 Searc# En(!ne Opt!m!Gat!on !s a process t#rou(# '#!c# 'e s!tes are #one" !n or"er

to maBe t#em !s! $e to on$!ne searc#ers3 It s 'ort# po!nt!n( out t#at SEO !s not a ma(!c

u$$etR t#at '!$$ necessar!$y "r! e tra%%!c an" sa$es t#rou(# t#e roo%3 SEO maBes t#e 'e s!testan" out

%rom t#e cro'"@ espec!a$$y !% your !n"ustry !s #!(#$y compet!t! e or !% you 'ant to attract a

capt! e au"!ence %or a popu$ar Bey'or" or Bey'or"s3


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'ur 8rocess involves the follo9ing crucial ste8s5

&esearch

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un"erstan" t#e re&u!rements o% t#e c$!ent3 T#ey pre%er to seeB ass!stance %rom t#e c$!ent y

asB!n( t#em ar!ous &uest!ons re$ate" to t#e!r 1us!ness )rea" 'e s!te/@ Tar(et Au"!ence@

Strate(!c 8ey'or"s@ etc3 an" t#en t#ey %ormu$ate t#e c$ear an" measura $e o ject! e %or t#e

projects3

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hy Choose TC . i'"

!ON !s t#e company '#!c# (! es t#e (uarantee t#at 'e can #e$p your us!ness or or(an!Gat!on

to e t#e est y !mpro !n( your pro%!ta !$!ty an" e%%!c!ency3

T#ey un"erstan" t#at you cou$" e concerne" a out '#y you s#ou$" ut!$!Ge our ser !ces %or

your re&u!rements3 It !s ut natura$ t#at you $o(!ca$$y put t#ese &uest!ons to yourse$%3 In an era

'#ere t#ere are many ot#ers out t#ere o%%er!n( s!m!$ar ser !ces c$a!m!n( s!m!$ar a" anta(es@ !t

!s 'ort# cons!"er!n( t#e %o$$o'!n( po!nts3 At Su%%esCom 'e t#orou(#$y un"ertaBe t#e

%o$$o'!n( ($o a$$y acBno'$e"(e" a" ance" pract!ces3

$atest technologies

T#ey "ep$oy t#e $atest tec#no$o(!es to meet your unmatc#e" IT re&u!rements3

%>cellent su88ort

T#ey o%%er t#e most e ce$$ent support an" "e"!cate" ser !ce y a %u$$ %$e"(e" 'e e perts

team3

Best talent

T#ey #!re on$y t#e est ta$ent a a!$a $e !n t#e marBet an" ensure t#at 'e ut!$!Ge t#e cutt!n(

e"(e top ran(e met#o"o$o(!es an" tec#n!&ues to "e e$op an" e ecute your projects3

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a #a !tua$ pract!ce3

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re(u$ar$y commun!cate '!t# our c$!ents an" Beep t#em a'are o% t#e $atest "e e$opments3

atisfie# Clientele

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aroun" t#e ($o e3 T#ey are rea$$y prou" to say t#at a$$ t#!s !s "ue to our #onest an" e&u!$atera$

comm!tment !n un"erstan"!n( t#e nee"s o% our c$!ents an" pro !"!n( t#em '!t# prec!se

so$ut!ons !n accor"ance '!t# t#e!r !n"! !"ua$ re&u!rements3


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AT C$!%"T A*

cott A#ams

7em!n" peop$e t#at pro%!t !s t#e "!%%erence et'een re enue an" e pense3 T#!s maBes you$ooB smart an" a$so s!(n!%!cant$y !ncreases your c#ances3

Tasia

Amr!n"er 'orBe" "!$!(ent$y unt!$ #e pro"uce" somet#!n( I 'as #appy '!t#3 We

commun!cate" o er SBype as o%ten as nee"e" an" somet!mes #e " 'orB a%ter#ours to (et t#e

re !s!ons "one e%ore #e 'ent #ome %or t#e "ay3 He s ery pat!ent an" t#at maBes $!%e easy

'#en youre try!n( to pro"uce somet#!n( 'on"er%u$3

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t#e!r o'n pro $ems3 T#at !s a ery Bno'n %act t#ere3

T %!& %&V!C%

T#e!r e-commerce so$ut!ons are t#e est $en" o%

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T#ere are many ar!at!ons o% passa(es o% LoremIpsum a a!$a $e@ ut t#e joy #a e su%%ere"

a$terat!on !n some %ormat@ y !njecte" #umour3

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a$terat!on !n some %ormat@ y !njecte" #umor3

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a$terat!on !n some %ormat@ y !njecte" #umor3

ebsite -aintenance5


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Let Your We s!te SpeaB For You333 Mana(e It L!Be Your SALESMAN33

T#ey o%%er you %ast an" e%%!c!ent9ebsite maintenance ser !ces3 T#ey '!$$ up"ate@ en#ance@

acBup an" repa!r our s!te &u!cB$y an" e%%!c!ent$y@ '#!$e you can (o on runn!n( your

us!ness3 T#ey '!$$ ma!nta!n t#e &ua$!ty o% our 9ebsite @ Beep!n( !t %res# %or our return

c$!ents3 I% you nee" to a"" more !ma(es@ ne' anners@ ne' ca$en"ar e ents@ c#an(e t#e

content o% t#e s!te@ acBup

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maintenance ser !ces are pro%ess!ona$ an" a%%or"a $e '!t# &u!cB turnaroun" an" "e$! ery t!mes3

T#ey a$'ays #a e custom so$ut!ons to 'e s!te %unct!ona$!ty pro $ems at an a%%or"a $e cost3 T#ey

o%%er pro%ess!ona$ #e$p '!t# any u(s or m!s%ortunes '#!c# may #appen to your s!te3 T#e!r

s!te mon!tor!n( !s e%%ect! e an" pro%ess!ona$3 As soon as t#ey rece! e ma!ntenance re&uests@

t#e s!tes (et up"ate" or %! e" r!(#t a'ay3 A$$ t#e 'e s!te "e e$opment an" ma!ntenance !s

e!n( per%orme" !n a secure 'ay@ '!t# non-"!sc$osure o% t#e pass'or"s or any s!te

!n%ormat!on3

ome other ervices they offer5

a/ 2#one 1us!ness App$!cat!on De e$opment

/ !2#one Mu$t!me"!a App$!cat!on De e$opmentc/ !2#one Internet Apps De e$opment"/ !2#one 02S 1ase" App$!cat!on De e$opmente/ !2#one Enterta!nment App$!cat!on De e$opment%/ !2#one 0am!n( App$!cat!on De e$opment3


37/115

!"T&'DUCT!'"

'&1!"2 CAP!TA$

or=ing Ca8ital is the $ife.Bloo# an# Controlling "erve Center of a

business/

No one can start us!ness or run an enterpr!se '!t#out a"e&uate %un"s3 E ery us!ness

re&u!res money to start an" to carry out !ts "ay-to-"ay operat!ons as re&u!rement o% amount o%

cap!ta$ "epen"s on s!Ge an" nature o% us!ness3 To %u$%!$ "ay to "ay re&u!rement suc# as


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purc#ase o% current assets or maeBeta $e secur!t!es '#!c# can e eas!$y con erte" !nto cas#@

purc#ase o% ra' mater!a$@ payment o% 'a(es an" ot#er rout!ne e penses@ an enterprenuer #as

re&u!re" 'orB!n( cap!ta$3 T#ose %!nance '#!c# are nee"e" !n s#ort term to carry on operat!n(

an" s#ort term act! !t!es !s Bno'n as WorB!n( Cap!ta$@ '#!$e $on( term %!nance '#!c# !s

re&u!re" to esta $!s# us!ness t#rou(# purc#ase o% %! e" assets suc# as 2$ant = Mac#!nery@

Lan" an" 1u!$"!n(@ etc@3 !s ca$$e" F! e" Cap!ta$3

WorB!n( cap!ta$ !s t#e "!%%erence et'een resources !n cas# or rea"!$y con ert! $e !nto cas#

)current assets/ an" Current L!a !$!t!es3 0enera$$y t#e enterpr!se '#!c# #as #!(#er amounts o%

'orB!n( cap!ta$ !s etter pos!t!one" %or success3 T#e company nee"s an a"e&uate 'orB!n(

cap!ta$ re&u!rement@ t#e m!n!mum amount o% resources t#at re&u!re to e%%ect! e$y co er!n( t#e

cost an" e penses necessary to operate t#e us!ness3 T#ere s#ou$" e matc# et'een assetsan" $!a !$!t!es o% t#e company3 I% a company #as more "e ts t#an current assets@ t#en 'orB!n(

cap!ta$ 'ou$" e e presse" !n ne(at! e num er@ '#ere as !% assets are more t#an $!a !$!t!es@ a

company #as pos!t! e 'orB!n( cap!ta$3

A$$ suc# matc# '!$$ e poss! $e '#en t#ere s#ou$" e a proper trans%ormat!on o% sources %rom

one to ot#er re%erre" to as C!rcu$at!n( AssetsR ecause o% t#e!r cyc$!ca$ nature3 Mana(ement

o% 'orB!n( cap!ta$ !s muc# !mportant ecause s#orta(e as 'e$$ as e cess o% !t may cause t#e

!((est %a!$ure o% us!ness !n recent t!mes3 Mean'#!$e@ t#e re$at!ons#!p et'een %!rm s s#ort

term assets an" $!a !$!t!es !s cons!"ere" to e 'orB!n( cap!ta$ mana(ement3

T#e rat!ona$e e#!n" t#!s project stu"y o% WorB!n( Capta$ Mana(ementR !s to "eterm!ne t#e

amount o% 'orB!n( cap!ta$ re&u!rement on t#e as!s o% ar!ou!s %!nanc!a$ rat!os '#!c# #e$p a

us!ness man to taBe a"e&uate "ec!s!on t#rou(# proper p$ann!n( an" contro$ o er us!ness

act! !t!es3 T#e project a$so "epen"s on stu"y o% c#an(es !n t#e uses an" sources o% 'orB!n(

cap!ta$ to un"erstan" t#at #o' a mana(er can !ncrease t#e e%%!c!ency o% us!ness !n

mana(ement o% 'orB!n( cap!ta$3

For a mana(er !t !s ery !mportant to %! an a"e&uate amount o% 'orB!n( cap!ta$ as o%

c!rcu$at!n( assets '#!c# re o$ es as %ast as per t#e!r cyc$!ca$ nature3 For !$$ustrat!on@ !n a

us!ness enterpr!se@ !n!t!a$$y cas# emp$oye" to purc#ase !n entory@ '#!c# m!(#t e !n cas# or

on cre"!t3 I% t#e !n entory so$" on cre"!t@ !t turne" !nto rece! a $es@ "e tors3 An" once t#e

rece !a $es are co$$ecte"@ t#ey ecome cas# an" %urt#er re!n este" %or purc#ase o% a""!t!ona$

!n entory or as part o% reta!ne" earn!n(3


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T#e a"e&uate 'orB!n( cap!ta$ re&u!rement !s t#e m!n!mum amount o% resources re&u!res to

e%%ect! e$y co er costs an" e penses necessary to operate t#e us!ness an" mana(ement o% !t

!s nee"e" to "eterm!ne proper %!nanc!a$ structure@ taB!n( a"e&uate "ec!s!on on !ts re&u!rement

o% 'orB!n( cap!ta$@ source o% %!nance %rom '#ere %un"s to procure@ components an" %actors o%

a%%ect!n( !t '#!c# re&u!re %or prompt payment@ re(u$ar supp$y o% ra' mater!a$3 It must ensure

t#at t#ere #as su%%!c!ent 'orB!n( cap!ta$ t#at 'ou$" ear a$$ t#e cas# %$o' pro $ems suc# as

"e$ay !n payment to supp$!ers '#!c# e$!m!nate t#e c$a!m o% "!scounts %or prompt payment3 In

recent t!mes@ to run a us!ness !s most cruc!a$ tasB %or an entrepreneur ecause !t !s not

su%%!c!ent to #a e money !n #an" o% us!nessman@ ut proper mana(ement o% cas#-%$o's an"

returns '#!c# #e$p to "eterm!ne an opt!mum a$ance o% !t !s nee"e" '#!c# a$$o's t#e

us!ness to meet "ay to "ay e pense3 T#ere s#ou$" e an opt!mum a$ance o% cas# !n %!rm to

ma!nta!n a soun" $!&u!"!ty pos!t!on to sett$e "ues !n t!me %u$%!$$ transact!ona$ act! !t!es an"

re"uce opportun!ty cost3

So@ t#!s project concentrates on 'orB!n( cap!ta$@ !ts %actors@ 'ay to mana(e !t a"e&uate$y@ an"

!ts $!nBe" components '#!c# #e$p a us!nessman to a!r us!ness %unct!on!n( proper$y '!t#

ma !mum return at r!(#t t!me '!t# r!(#t opportun!ty3 It #e$ps a mana(er to Bno' '#at !s t#e

reason to ma!nta!n a"e&uate 'orB!n( cap!ta$ re&u!rements@ #o' !t s#ou$" e "one !n %orm o%

cas#@ rece! a $es an" !n entory an" a$so "eterm!ne t#e !mpact o% !t3

AT ! '&1!"2 CAP!TA$

WorB!n( cap!ta$ re%ers to t#e !n estment y t#e company !n s#ort terms assets suc# as cas#@

marBeta $e secur!t!es3 Net current assets or net 'orB!n( cap!ta$ re%ers to t#e current assets $ess

current $!a !$!t!es3Sym o$!ca$$y@ !t means@

"et Current Assets Current Assets.Current $iabilities3

In account!n(@ WorB!n( cap!ta$ !s t#e "!%%erence et'een t#e !n%$o' an" out%$o' o% %un"s3 In

ot#er 'or"s@ !t !s t#e net cas# !n%$o'3 It !s "e%!ne" as t#e e cess o% current assets o er current

$!a !$!t!es an" pro !s!ons3 In ot#er 'or"s@ !t !s net current assets or net 'orB!n( cap!ta$3R


40/115

WorB!n( cap!ta$ represents t#e tota$ o% a$$ current assets3 In ot#er 'or"s !t !s t#e 0ross

'orB!n( cap!ta$@ !t !s a$so Bno'n as C!rcu$at!n( cap!ta$ or Current cap!ta$ %or current assets

are rotat!n( !n t#e!r nature3

A stu"y o% 'orB!n( cap!ta$ !s o% major !mportance to !nterna$ an" e terna$ ana$ys!s ecause o% !ts c$ose re$at!ons#!p '!t# t#e "ay-to-"ay operat!ons o% a us!ness3 WorB!n( Cap!ta$ !s t#e

port!on o% t#e assets o% a us!ness '#!c# are use" on or re$ate" to current operat!ons@ an"

represente" at any one t!me y t#e operat!n( cyc$e o% suc# !tems as a(a!nst rece! a $es@

!n entor!es o% ra' mater!a$s@ stores@ 'orB !n process an" %!n!s#e" (oo"s@ merc#an"!se@ notes

or !$$ rece! a $es an" cas#3

WorB!n( cap!ta$ compr!ses current assets '#!c# are "!st!nct %rom ot#er assets3 In t#e %!rst

!nstance@ current assets cons!st o% t#ese assets '#!c# are o% s#ort "urat!on3WorB!n( cap!ta$ may e re(ar"e" as t#e $!%e $oo" o% a us!ness3 Its e%%ect! e pro !s!on can "o

muc# to ensure t#e success o% a us!ness '#!$e !ts !ne%%!c!ent mana(ement can $ea" not on$y

to $oss o% pro%!ts ut a$so to t#e u$t!mate "o'n%a$$ o% '#at ot#er'!se m!(#t e cons!"ere" as a

prom!s!n( concern3

The fun#s re uire# an# ac uire# by a business may be investe# to t9o ty8es of

assets5

43+i>e# Assets3

63 Current Assets

+i>e# assets are t#ose '#!c# y!e$" t#e returns !n t#e "ue course o% t!me3 T#e ar!ous

"ec!s!ons $!Be !n '#!c# %! e" assets %un"s s#ou$" e !n este" an" #o' muc# s#ou$" e

!n este" !n t#e %! e" assets etc3 are !n t#e %orm o% cap!ta$ u"(et!n( "ec!s!ons3 T#!s can e

sa!" to e %! e" cap!ta$ mana(ement3

Current Assets are re&u!re" to ensure smoot# an" %$uent us!ness operat!ons an" can e

sa!" to e $!%e $oo" o% t#e us!ness3 T#ere are t'o concepts o% 'orB!n( cap!ta$ 0ross an"

Net3 0ross 'orB!n( cap!ta$ re%ers to (ross current assets3 Net 'orB!n( cap!ta$ re%ers to t#e

"!%%erence et'een current assets an" current $!a !$!t!es3 T#e term current assets re%ers tot#ose assets #e$" y t#e us!ness '#!c# can e con erte" !nto cas# '!t#!n a s#ort per!o" o%


41/115

t!me o% say one year@ '!t#out re"uct!on !n a$ue3 T#e ma!n types o% current assets are stocB@

rece! a $es an" cas#3 T#e term current $!a !$!t!es re%er to t#ose $!a !$!t!es@ '#!c# are to e pa!"

o%% "ur!n( t#e course o% us!ness@ '!t#!n a s#ort per!o" o% t!me say one year3 T#ey are

e pecte" to e pa!" out o% current assets or earn!n(s o% t#e us!ness3 T#e current $!a !$!t!es

ma!n$y cons!st o% sun"ry cre"!tors@ !$$ paya $e@ anB o er"ra%t or cas# cre"!t@ outstan"!n(

e penses etc3

$!:U!D!T* Vs P&'+!TAB!$!T*5 &! 1.&%TU&" T&AD% '++

Anot#er !mportant aspect o% a 'orB!n( cap!ta$ po$!cy !s to ma!nta!n an" pro !"e su%%!c!ent$!&u!"!ty to t#e %!rm3 L!Be t#e most corporate %!nanc!a$ "ec!s!ons@ t#e "ec!s!on on #o' muc#

'orB!n( cap!ta$ e ma!nta!ne" !n o$ es a tra"e o%%- #a !n( a $ar(e net 'orB!n( cap!ta$ may

re"uce t#e $!&u!"!ty r!sB %ace" y a %!rm@ ut !t can #a e a ne(at! e e%%ect on t#e cas# %$o's3

T#ere%ore@ t#e net e%%ect on t#e a$ue o% t#e %!rm s#ou$" e use" to "eterm!ne t#e opt!ma$

amount o% 'orB!n( cap!ta$3 Soun" 'orB!n( cap!ta$ !n o$ es t'o %un"amenta$ "ec!s!ons %or

t#e %!rm3

T#ey are t#e "eterm!nat!on o%

T#e opt!ma$ $e e$ o% !n estments !n current assets3

T#e appropr!ate m! o% s#ort-term an" $on(-term %!nanc!n( use" to support t#!s

!n estment !n current assets@ a %!rm s#ou$" "ec!"e '#et#er or not !t s#ou$" use s#ort-

term %!nanc!n(3 I% s#ort-term %!nanc!n( #as to e use"@ t#e %!rm must "eterm!ne !ts

port!on !n tota$ %!nanc!n(3 S#ort-term %!nanc!n( may e pre%erre" o er $on(-term

%!nanc!n( %or t'o reasons


42/115

T#e cost a" anta(e

F$e ! !$!ty

C$A !+!CAT!'" '+ '&1!"2 CAP!TA$

WorB!n( cap!ta$ may e c$ass!%!e" !n to 'ays

E 'n the basis of conce8t3

'n the basis of time 3

On t#e as!s o% concept 'orB!n( cap!ta$ can e c$ass!%!e" as (ross 'orB!n( cap!ta$ an" net

'orB!n( cap!ta$3 On t#e as!s o% t!me@ 'orB!n( cap!ta$ may e c$ass!%!e" as

E Permanent or fi>e# 9or=ing ca8ital3

E Tem8orary or variable 9or=ing ca8ital

P%&-A"%"T '& +!F%D '&1!"2 CAP!TA$5

2ermanent or %! e" 'orB!n( cap!ta$ !s m!n!mum amount '#!c# !s re&u!re" to ensure e%%ect! e

ut!$!Gat!on o% %! e" %ac!$!t!es an" %or ma!nta!n!n( t#e c!rcu$at!on o% current assets3 E ery %!rm

#as to ma!nta!n a m!n!mum $e e$ o% ra' mater!a$@ 'orB- !n-process@ %!n!s#e" (oo"s an" cas#

a$ance3 T#!s m!n!mum $e e$ o% current assets !s ca$$e" permanent or %! e" 'orB!n( cap!ta$ as


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t#!s part o% 'orB!n( !s permanent$y $ocBe" !n current assets3 As t#e us!ness (ro' t#e

re&u!rements o% 'orB!n( cap!ta$ a$so !ncreases "ue to !ncrease !n current assets3

T%-P'&A&* '& VA&!AB$% '&1!"2 CAP!TA$5

Temporary or ar!a $e 'orB!n( cap!ta$ !s t#e amount o% 'orB!n( cap!ta$ '#!c# !s re&u!re" to

meet t#e seasona$ "eman"s an" some spec!a$ e !(enc!es3 :ar!a $e 'orB!n( cap!ta$ can %urt#er

e c$ass!%!e" as seasona$ 'orB!n( cap!ta$ an" spec!a$ 'orB!n( cap!ta$3 T#e cap!ta$ re&u!re" to

meet t#e seasona$ nee" o% t#e enterpr!se !s ca$$e" seasona$ 'orB!n( cap!ta$3 Spec!a$ 'orB!n(

cap!ta$ !s t#at part o% 'orB!n( cap!ta$ '#!c# !s re&u!re" to meet spec!a$ e !(enc!es suc# as

$aunc#!n( o% e tens! e marBet!n( %or con"uct!n( researc#@ etc3

'&1!"2 CAP!TA$ C'-P'"%"T

E Cash an# e uivalents5 . T#!s most $!&u!" %orm o% 'orB!n( cap!ta$ re&u!res constant

super !s!on3 A (oo" cas# u"(et!n( an" %orecast!n( system pro !"es ans'ers to Bey

&uest!ons suc# as !s t#e cas# $e e$ a"e&uate to meet current e penses as t#ey come

"ue W#at !s t#e t!m!n( re$at!ons#!p et'een cas# !n%$o' an" out%$o' W#en '!$$

peaB cas# nee"s occur W#en an" #o' muc# anB orro'!n( '!$$ e nee"e" to meetany cas# s#ort%a$$s W#en '!$$ repayment e e pecte" an" '!$$ t#e cas# %$o' co er !t

E Accounts receivable5 . Many us!nesses e ten" cre"!t to t#e!r customers3 I% t#ey "o@

!s t#e amount o% accounts rece! a $e reasona $e re$at! e to sa$es Ho' rap!"$y are

rece! a $es e!n( co$$ecte" W#!c# customers are s$o' to pay an" '#at s#ou$" e

"one a out t#em

E !nventory5 . In entory !s o%ten as muc# as 6+ percent o% a %!rm s current assets@ so

natura$$y !t re&u!res cont!nua$ scrut!ny3 Is t#e !n entory $e e$ reasona $e compare"

'!t# sa$es an" t#e nature o% your us!ness W#at s t#e rate o% !n entory turno er

compare" '!t# ot#er compan!es !n your type o% us!ness

E Accounts 8ayable5 . F!nanc!n( y supp$!ers !s common !n sma$$ us!ness !t !s one o%

t#e major sources o% %un"s %or entrepreneurs3 Is t#e amount o% money o'e" to

supp$!ers reasona $e re$at! e to '#at you purc#ase W#at !s your %!rm s payment

po$!cy "o!n( to en#ance or "etract %orm your cre"!t rat!n(


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E Accrue# e>8enses an# ta>es 8ayable5 . T#ese are o $!(at!ons o% your company at

any (! en t!me an" represent a %uture out%$o' o% cas#3

"%%D +'& '&1!"2 CAP!TA$

WorB!n( cap!ta$ may e re(ar"e" as t#e $!%e $oo" o% t#e us!ness3 W!t#out !nsu%%!c!ent

'orB!n( cap!ta$@ any us!ness or(an!Gat!on cannot run smoot#$y or success%u$$y3 In t#e

us!ness t#e WorB!n( cap!ta$ !s compara $e to t#e $oo" o% t#e #uman o"y3 T#ere%ore t#e

stu"y o% 'orB!n( cap!ta$ !s o% major !mportance to t#e !nterna$ an" e terna$ ana$ys!s ecause

o% !ts c$ose re$at!ons#!p '!t# t#e current "ay to "ay operat!ons o% a us!ness3 T#e !na"e&uacy

or m!smana(ement o% 'orB!n( cap!ta$ !s t#e $ea"!n( cause o% us!ness %a!$ures3

T#e nee" o% (ross 'orB!n( cap!ta$ or current assets cannot e o eremp#as!Ge"3 T#e o ject o%

any us!ness !s to earn pro%!ts3 T#e ma!n %actor a%%ect!n( t#e pro%!ts !s t#e ma(n!tu"e o% sa$es

o% t#e us!ness3 1ut t#e sa$es cannot e con erte" !nto cas# !mme"!ate$y3 T#ere !s a t!me $a(

et'een t#e sa$e o% (oo"s an" rea$!Gat!on o% cas#3 T#ere !s a nee" o% 'orB!n( cap!ta$ !n t#e

%orm o% current assets to %!$$ up t#!s t!me $a(3 Tec#n!ca$$y@ t#!s !s ca$$e" as operat!n( cyc$e or

'orB!n( cap!ta$ cyc$e@ '#!c# !s t#e #eart o% nee" %or 'orB!n( cap!ta$3 T#!s 'orB!n( cap!ta$

cyc$e can e "escr! e" !n t#e %o$$o'!n( 'or"s3 I% t#e company #as a certa!n amount o% cas#@ !t

'!$$ e re&u!re" %or purc#as!n( t#e ra' mater!a$ t#ou(# some ra' mater!a$ may e a a!$a $e

on cre"!t as!s3 T#en t#e company #as to spen" some amount %or $a our an" %actory

o er#ea"s to con ert t#e ra' mater!a$ !n 'orB !n pro(ress@ an" u$t!mate$y %!n!s#e" (oo"s3

T#ese %!n!s#e" (oo"s '#en so$" on cre"!t as!s (et con erte" !n t#e %orm o% sun"ry "e tors3

Sun"ry "e tors are con erte" !n cas# on$y a%ter t#e e p!ry o% cre"!t per!o"3 T#us@ t#ere !s a

cyc$e !n '#!c# t#e or!(!na$$y a a!$a $e cas# !s con erte" !n t#e %orm o% cas# a(a!n ut on$y

a%ter %o$$o'!n( t#e sta(es o% ra' mater!a$@ 'orB !n pro(ress@ %!n!s#e" (oo"s an" sun"ry

"e tors3 T#us@ t#ere !s a t!me (ap %or t#e or!(!na$ cas# to (et con erte" !n %orm o% cas# a(a!n3

WorB!n( Cap!ta$ nee"s o% company ar!se to co er t#e re&u!rement o% %un"s "ur!n( t#!s t!me

(ap@ an" t#e &uantum o% 'orB!n( cap!ta$ nee"s ar!es as per t#e $en(t# o% t#!s t!me (ap3


45/115

T#us@ some amount o% %un"s !s $ocBe" !n ra' mater!a$s@ 'orB !n pro(ress@ %!n!s#e" (oo"s@

sun"ry "e tors an" "ay-to-"ay re&u!rements3 Ho'e er some part o% t#ese current assets may

e %!nance" y t#e current $!a !$!t!es a$so3 E3(3 some ra' mater!a$ may e a a!$a $e on cre"!t

as!s@ a$$ t#e e penses nee" not e pa!" !mme"!ate$y@ 'orBers are a$so to e pa!" per!o"!ca$$y

etc3 1ut st!$$ t#e amounts re&u!re" to e !n este" !n t#ese current assets !s a$'ays #!(#er t#an

t#e %un"s a a!$a $e %rom current $!a !$!t!es3 T#!s !s prec!se reason '#y t#e nee"s %or 'orB!n(

cap!ta$ ar!se3

From t#e F!nanc!a$ mana(ement po!nt o% !e'@ t#e nature o% %! e" assets an" current assets

"!%%er %rom eac# ot#er--

,3 T#e %! e" assets are re&u!re" to e reta!ne" !n t#e us!ness o er a per!o" o% t!me an" t#ey

y!e$" t#e returns o er t#e!r $!%e@ '#ereas t#e current assets $oose t#e!r !"ent!ty o er a s#ort

per!o" o% t!me@ say one year3

*3 In t#e case o% current assets@ !t !s a$'ays necessary to str!Be a proper a$ance et'een t#e

$!&u!"!ty an" pro%!ta !$!ty pr!nc!p$es@ '#!c# !s not t#e case '!t# %! e" assets3 E3(3 I% t#e s!Ge o%

current assets !s $ar(e@ !t !s a$'ays ene%!c!a$ %rom t#e $!&u!"!ty po!nt o% !e' as !t ensures

smoot# an" %$uent us!ness operat!ons3 Su%%!c!ent ra' mater!a$ !s a$'ays a a!$a $e to cater to

t#e pro"uct!on nee"s@ su%%!c!ent %!n!s#e" (oo"s are a a!$a $e to cater to any B!n" o% "eman" o% customers@ $! era$ cre"!t per!o" can e o%%ere" to t#e customers to !mpro e t#e sa$es an"

su%%!c!ent cas# !s a a!$a $e to pay o%% t#e cre"!tors an" so on3

Ho'e er@ !% t#e !n estment !n current assets !s more t#an '#at !s !"ea$$y re&u!re"@ !t a%%ects

t#e pro%!ta !$!ty@ as !t may not e a $e to y!e$" su%%!c!ent rate o% return on !n estment3 On t#e

ot#er #an"@ !% t#e s!Ge o% current assets !s too sma$$@ !t a$'ays !n o$ es t#e r!sB o% %re&uent

stocB out@ !na !$!ty o% t#e company to pay !ts "ues !n t!me etc3 As suc#@ t#e !n estment !n

current assets s#ou$" e opt!mum3 Hence@ !t !s necessary to mana(e t#e !n"! !"ua$

components o% current assets !n a proper 'ay3 T#us@ 'orB!n( cap!ta$ mana(ement re%ers to

proper a"m!n!strat!on o% a$$ aspects o% current assets an" current $!a !$!t!es3 WorB!n( Cap!ta$

Mana(ement !s concerne" '!t# t#e pro $ems ar!s!n( out o% t#e attempts to mana(e current

assets@ current $!a !$!t!es an" !nter-re$at!ons#!p et'een t#em3 T#e !ntent!on !s not to

ma !m!Ge t#e !n estment !n 'orB!n( cap!ta$ nor !s !t to m!n!m!Ge t#e same3 T#e !ntent!on !s to

#a e opt!mum !n estment !n 'orB!n( cap!ta$3 In ot#er 'or"s@ !t can e sa!" t#at t#e a!m o%

'orB!n( cap!ta$ mana(ement !s to #a e m!n!mum !n estment !n 'orB!n( cap!ta$ '!t#out


46/115

a%%ect!n( t#e re(u$ar an" smoot# %$o' o% operat!ons3 T#e $e e$ o% current assets to e

ma!nta!ne" s#ou$" e su%%!c!ent enou(# to co er !ts current $!a !$!t!es '!t# a reasona $e

mar(!n o% sa%ety3

'&1!"2 CAP!TA$ C*C$%

WorB!n( cap!ta$ cyc$e !n"!cates t#e $en(t# o% t!me et'een a %!rm s pay!n( %or mater!a$s

enter!n( !nto stocB an" rece! !n( t#e cas# %rom sa$e o% %!n!s#e" (oo"s3 In a manu%actur!n(

%!rm@ t#e "urat!on o% t!me re&u!re" to comp$ete t#e se&uence o% e ents !s ca$$e" operat!n(

cyc$e3

In case o% a manu%actur!n( company@ t#e operat!n( cyc$e !s t#e $en(t# o% t!me necessary to

comp$ete t#e %o$$o'!n( cyc$e o% e ents Q

Con ers!on o% cas# !nto ra' mater!a$s

Con ers!on o% ra' mater!a$s !nto 'orB-!n-pro(ress


47/115

Con ers!on o% 'orB-!n-pro(ress !nto %!n!s#e" (oo"s

Con ers!on o% %!n!s#e" (oo"s !nto accounts rece! a $es

Con ers!on o% accounts rece! a $e !nto cas#

T#e a o e operat!n( cyc$e !s repeate" a(a!n an" a(a!n o er t#e per!o" "epen"!n( upon t#e

nature o% t#e us!ness an" type o% pro"uct etc3 t#e "urat!on o% t#e operat!n( cyc$e %or t#e

purpose o% est!mat!n( 'orB!n( cap!ta$ !s e&ua$ to t#e sum o% "urat!on a$$o'e" y t#e

supp$!ers3

WorB!n( cap!ta$ cyc$e can e e presse" as

&G G+GDGC

W#ere@

7 - ra' mater!a$ stora(e per!o" V a (3 stocB o% ra' mater!a$ ? a (3 cost o% pro"uct!on per "ay

W Q 'orB !n pro(ress #o$"!n( per!o" V a (3 'orB !n pro(ress !n entory ? a (3 cost o%

pro"uct!on per "ay

F Q %!n!s#e" (oo"s stora(e per!o" V a (3 stocB o% %!n!s#e" (oo"s ? a (3 cost o% (oo"s so$" per

"ay

D Q "e tors co$$ect!on per!o" V a (3 ooB "e ts ? a (3 cre"!t sa$es per "ay

C Q cre"!t per!o" a a!$e" V a (3 tra"e


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'&1!"2 CAP!TA$ -A"A2%-%"T

To start any us!ness@ F!rst o% a$$ 'e nee" %!nance an" t#e success o% t#at us!ness ent!re$y

"epen"s on t#e proper mana(ement o% "ay-to-"ay %!nance an" t#e mana(ement o% t#!s s#ortterm cap!ta$ or %!nance o% t#e us!ness !s ca$$e" WorB!n( Cap!ta$ Mana(ement3

WorB!n( Cap!ta$ !s t#e Bey "!%%erence et'een t#e $on( term %!nanc!a$ mana(ement an" s#ort

term %!nanc!a$ mana(ement !n terms o% t#e t!m!n( o% cas#3 WorB!n( cap!ta$ mana(ement !s a

s#ort term %!nanc!a$ mana(ement3 WorB!n( cap!ta$ mana(ement !s concerne" '!t# t#e

pro $ems t#at ar!se !n attempt!n( to mana(e t#e current assets@ t#e current $!a !$!t!es = t#e

!nter re$at!ons#!p t#at e !sts et'een t#em3 T#e current assets re%er to t#ose assets '#!c# can

e eas!$y con erte" !nto cas# !n or"!nary course o% us!ness@ '!t#out "!srupt!n( t#e operat!ons

o% t#e %!rm3

or=ing ca8ital management or short.term financial management !s a s!(n!%!cant %acet

o% %!nanc!a$ mana(ement3 It !s !mportant "ue to * reasons

In estment !n current assets represents a su stant!a$ port!on o% tota$ !n estment

In estment !n current assets an" t#e $e e$ o% current $!a !$!t!es #a e to e (eare"

&u!cB$y to c#an(es !n sa$es3

WorB!n( cap!ta$ !n o$ es act! !t!es suc# as arran(!n( s#ort-term %!nance@ ne(ot!at!n(

%a ora $e cre"!t terms@ contro$$!n( t#e mo ement o% cas#@ a"m!n!strat!n( accounts

rece! a $es@ an" mon!tor!n( t#e !n estment !n !n entor!es a$so taBe a (reat "ea$ o% t!me3

Mana(ement o% 'orB!n( cap!ta$ !s concerne" '!t# t#e pro $em t#at ar!ses !n attempt!n( tomana(e t#e current assets@ current $!a !$!t!es3 T#e as!c (oa$ o% 'orB!n( cap!ta$ mana(ement

!s to mana(e t#e current assets an" current $!a !$!t!es o% a %!rm !n suc# a 'ay t#at a

sat!s%actory $e e$ o% 'orB!n( cap!ta$ !s ma!nta!ne"@ !3e3 !t !s ne!t#er a"e&uate nor e cess! e as

ot# t#e s!tuat!ons are a" %or any %!rm3 T#ere s#ou$" e no s#orta(e o% %un"s an" a$so no

'orB!n( cap!ta$ s#ou$" e !"ea$3 WO78IN0 CA2ITAL MANA0EMENT 2OLICES o% a

%!rm #as a (reat on !ts pro a !$!ty@ $!&u!"!ty an" structura$ #ea$t# o% t#e or(an!Gat!on3 So

'orB!n( cap!ta$ mana(ement !s t#ree "!mens!ona$ !n nature as


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,3 It concerne" '!t# t#e %ormu$at!on o% po$!c!es '!t# re(ar" to pro%!ta !$!ty@ $!&u!"!ty

an" r!sB3

*3 It !s concerne" '!t# t#e "ec!s!on a out t#e compos!t!on an" $e e$ o% current

assets3

3 It !s concerne" '!t# t#e "ec!s!on a out t#e compos!t!on an" $e e$ o% current

$!a !$!t!es3

!2"!+!CA"C% '+ '&1!"2 CAP!TA$ -A"A2%-%"T


50/115

The management of 9or=ing ca8ital is im8ortant for several reasons5

For one t#!n(@ t#e current assets o% a typ!ca$ manu%actur!n( %!rm account %or #a$%o% !ts

tota$ assets3 For a "!str! ut!on company@ t#ey account %or e en more3

WorB!n( cap!ta$ re&u!res cont!nuous "ay to "ay super !s!on3 WorB!n( cap!ta$ #ast#e

e%%ect on companyJs r!sB@ return an" s#are pr!ces3T#ere !s an !ne !ta $e re$at!ons#!p et'een sa$es (ro't# an" t#e $e e$ o% current

assets3

T#e tar(et sa$es $e e$ can e ac#!e e" on$y !% supporte" y a"e&uate'orB!n( cap!ta$

Ine%%!c!ent 'orB!n( cap!ta$ mana(ement may $ea" to !nso$ ency

!-P'&TA"C% '& ADVA"TA2% '+ AD%:UAT% '&1!"2

CAP!TA$


51/115

olvency of the business A"e&uate 'orB!n( cap!ta$ #e$ps !n ma!nta!n!n( t#e so$ ency

o% t#e us!ness y pro !"!n( un!nterrupte" o% pro"uct!on3

2oo#9ill Su%%!c!ent amount o% 'orB!n( cap!ta$ ena $es a %!rm to maBe prompt

payments an" maBes an" ma!nta!n t#e (oo"'!$$3

%asy loans A"e&uate 'orB!n( cap!ta$ $ea"s to #!(# so$ ency an" cre"!t stan"!n( can

arran(e $oans %rom anBs an" ot#er on easy an" %a ora $e terms3

Cash Discounts A"e&uate 'orB!n( cap!ta$ a$so ena $es a concern to a a!$ cas#

"!scounts on t#e purc#ases an" #ence re"uces cost3

&egular u88ly of &a9 -aterial Su%%!c!ent 'orB!n( cap!ta$ ensures re(u$ar supp$y

o% ra' mater!a$ an" cont!nuous pro"uct!on3

&egular Payment 'f alaries, ages An# 'ther Day T' Day Commitments It

$ea"s to t#e sat!s%act!on o% t#e emp$oyees an" ra!ses t#e mora$e o% !ts emp$oyees@

!ncreases t#e!r e%%!c!ency@ re"uces 'asta(e an" costs an" en#ances pro"uct!on an"

pro%!ts3

%>8loitation of +avorable -ar=et Con#itions I% a %!rm !s #a !n( a"e&uate 'orB!n(

cap!ta$ t#en !t can e p$o!t t#e %a ora $e marBet con"!t!ons suc# as purc#as!n( !ts

re&u!rements !n u$B '#en t#e pr!ces are $o'er an" #o$"!n(s !ts !n entor!es %or #!(#er pr!ces3

Ability to +ace Crises A concern can %ace t#e s!tuat!on "ur!n( t#e "epress!on3

:uic= An# &egular &eturn 'n !nvestments Su%%!c!ent 'orB!n( cap!ta$ ena $es a

concern to pay &u!cB an" re(u$ar o% "! !"en"s to !ts !n estors an" (a!ns con%!"ence o%

t#e !n estors an" can ra!se more %un"s !n %uture3

igh -orale A"e&uate 'orB!n( cap!ta$ r!n(s an en !ronment o% secur!t!es@

con%!"ence@ #!(# mora$e '#!c# resu$ts !n o era$$ e%%!c!ency !n a us!ness3

%FC% '& !"AD%:UAT% '&1!"2 CAP!TA$

E ery us!ness concern s#ou$" #a e a"e&uate amount o% 'orB!n( cap!ta$ to run !ts us!ness

operat!ons3 It s#ou$" #a e ne!t#er re"un"ant or e cess 'orB!n( cap!ta$ nor !na"e&uate nor

s#orta(es o% 'orB!n( cap!ta$3 1ot# e cess as 'e$$ as s#ort 'orB!n( cap!ta$ pos!t!ons are a"


52/115

%or any us!ness3 Ho'e er@ !t !s t#e !na"e&uate 'orB!n( cap!ta$ '#!c# !s more "an(erous

%rom t#e po!nt o% !e' o% t#e %!rm3

D! ADVA"TA2% '+ !"AD%:UAT% '&1!"2 CAP!TA$

E ery us!ness nee"s some amounts o% 'orB!n( cap!ta$3 T#e nee" %or 'orB!n( cap!ta$ ar!ses

"ue to t#e t!me (ap et'een pro"uct!on an" rea$!Gat!on o% cas# %rom sa$es3 T#ere !s an

operat!n( cyc$e !n o$ e" !n sa$es an" rea$!Gat!on o% cas#3 T#ere are t!me (aps !n purc#ase o%

ra' mater!a$ an" pro"uct!on pro"uct!on an" sa$es an" rea$!Gat!on o% cas#3

T#us 'orB!n( cap!ta$ !s nee"e" %or t#e %o$$o'!n( purposes

For t#e purpose o% ra' mater!a$@ components an" spares3

To pay 'a(es an" sa$ar!es

To !ncur "ay-to-"ay e penses an" o er$oa" costs suc# as o%%!ce e penses3

To meet t#e se$$!n( costs as pacB!n(@ a" ert!s!n(@ etc3

To pro !"e cre"!t %ac!$!t!es to t#e customer3

To ma!nta!n t#e !n entor!es o% t#e ra' mater!a$@ 'orB-!n-pro(ress@ stores an" spares

an" %!n!s#e" stocB3For stu"y!n( t#e nee" o% 'orB!n( cap!ta$ !n a us!ness@ one #as to stu"y t#e us!ness un"er

ary!n( c!rcumstances suc# as a ne' concern re&u!res a $ot o% %un"s to meet !ts !n!t!a$

re&u!rements suc# as promot!on an" %ormat!on etc3 T#ese e penses are ca$$e" pre$!m!nary

e penses an" are cap!ta$!Ge"3 T#e amount nee"e" %or 'orB!n( cap!ta$ "epen"s upon t#e s!Ge

o% t#e company an" am !t!ons o% !ts promoters3 0reater t#e s!Ge o% t#e us!ness un!t@

(enera$$y $ar(er '!$$ e t#e re&u!rements o% t#e 'orB!n( cap!ta$3

+ACT'& A++%CT!"2 '&1!"2 CAP!TA$ -A"A2%-%"T

T#e amount o% 'orB!n( cap!ta$ re&u!re" "epen"s upon a num er o% %actors '#!c# can e

state" as e$o'

E "ATU&% '+ BU !"%


53/115

Some us!nesses are suc#@ "ue to t#e!r ery nature@ t#at t#e!r re&u!rement o% %! e" cap!ta$ !s

more rat#er t#an 'orB!n( cap!ta$3 T#ese us!nesses se$$ ser !ces an" not t#e commo"!t!es an"

not t#e commo"!t!es an" t#at too on cas# as!s3 As suc#@ no %un"s are $ocBe" !n p!$!n(

!n entor!es an" a$so no %un"s are $ocBe" !n rece! a $es3 E3(3 2u $!c ut!$!ty ser !ces $!Be

ra!$'ays@ e$ectr!c!ty oar"s@ !n%rastructure or!ente" projects etc3 T#e!r re&u!rement o% 'orB!n(

cap!ta$ !s $ess3 On t#e ot#er #an"@ t#ere are some us!ness $!Be tra"!n( act! !ty@ '#ere t#e

re&u!rement o% %! e" cap!ta$ !s $ess ut more money !s $ocBe" !n !n entor!es an" "e tors3

T#e!r re&u!rement o% t#e 'orB!n( cap!ta$ !s more3

$%"2T '+ P&'DUCT!'" C*C$%

In some us!ness $!Be mac#!ne too$ !n"ustry@ t#e t!me (ap et'een t#e ac&u!s!t!ons o% ra'

mater!a$ t!$$ t#e en" o% %!na$ pro"uct!on o% %!n!s#e" pro"uct !tse$% !s &u!te #!(#3 As suc# more

amounts may e $ocBe" e!t#er !n ra' mater!a$s@ or 'orB !n pro(ress or %!n!s#e" (oo"s or

e en !n "e tors3 Natura$$y@ t#e!r nee"s o% 'orB!n( cap!ta$ are #!(#er3 On t#e ot#er #an"@ !% t#e

pro"uct!on cyc$e !s s#orter@ t#e re&u!rement o% 'orB!n( cap!ta$ !s a$so $ess3

!H% A"D 2&' T '+ BU !"%

In ery sma$$ compan!es t#e 'orB!n( cap!ta$ re&u!rements are &u!te #!(# o er#ea"s@ #!(#er

uy!n( an" se$$!n( costs etc3 As suc#@ t#e me"!um s!Ge" compan!es pos!t! e$y #a e an e"(e

o er t#e sma$$ compan!es3 1ut !% t#e us!ness starts (ro'!n( a%ter a certa!n $!m!t@ t#e 'orB!n(

cap!ta$ re&u!rements may e a" erse$y a%%ecte" y t#e !ncreas!n( s!Ge3

BU !"% IT&AD% C*C$%

I% t#e company !s operat!n( !n t#e per!o" o% oom@ t#e 'orB!n( cap!ta$ re&u!rements may e

more as t#e company may $!Be to uy more ra' mater!a$@ may !ncrease t#e pro"uct!on an"

sa$es to taBe t#e ene%!ts o% %a oura $e marBets@ "ue to t#e !ncrease" sa$es@ t#ere may e more

an" more amount o% %un"s $ocBe" !n stocB an" "e tors etc3 S!m!$ar$y@ !n case o% "epress!on

a$so@ t#e 'orB!n( cap!ta$ re&u!rements may e #!(# as t#e sa$es !n terms o% a$ue an" &uant!ty

may e re"uc!n(@ t#ere may e unnecessary p!$!n( up o% stocBs '!t#out (ett!n( so$"@ t#e

rece! a $es may not e reco ere" !n t!me etc3


54/115

E &AT% '+ T'C1 TU&"'V%&

T#ere !s an !n erse co-re$at!ons#!p et'een t#e &uest!on o% 'orB!n( cap!ta$ an" t#e e$oc!ty

or spee" '!t# '#!c# t#e sa$es are a%%ecte"3 A %!rm #a !n( a #!(# rate o% stocB turno er 'u!$$

nee"s $o'er amt3 o% 'orB!n( cap!ta$ as compare" to a %!rm #a !n( a $o' rate o% turno er3

E C&%D!T P'$!C*

T#e %!rm s cre"!t po$!cy "!rect$y a%%ects t#e 'orB!n( cap!ta$ re&u!rement3 I% t#e

%!rm #as $! era$ cre"!t po$!cy@ #ence t#e more cre"!t per!o" '!$$ e pro !"e" to t#e "e tors so

t#!s '!$$ $ea" to more 'orB!n( cap!ta$ re&u!rement3 W!t# t#e $! era$ cre"!t po$!cy

operat!n( cyc$e $en(t# !ncreases an" !ce ersa3

E %A '"A$ VA&!AT!'"

In certa!n !n"ustr!es $!Be ra' mater!a$ !s not a a!$a $e t#rou(#out t#e year3 T#ey #a e to uy

ra' mater!a$ !n u$B "ur!n( t#e season to ensure an un!nterrupte" %$o' an" process t#em

"ur!n( t#e year3 0enera$$y@ "ur!n( t#e usy season@ a %!rm re&u!res $ar(er 'orB!n( cap!ta$ t#an

!n s$acB season3

E %A&"!"2 CAP!C!T* A"D D!V!D%"D P'$!C*

Some %!rms #a e more earn!n( capac!ty t#an ot#er "ue to &ua$!ty o% t#e!r pro"ucts@ monopo$ycon"!t!ons@ etc3 Suc# %!rms may (enerate cas# pro%!ts %rom operat!ons an" contr! ute to t#e!r

'orB!n( cap!ta$3 T#e "! !"en" po$!cy a$so a%%ects t#e re&u!rement o% 'orB!n( cap!ta$3 A %!rm

ma!nta!n!n( a stea"y #!(# rate o% cas# "! !"en" !rrespect! e o% !ts pro%!ts nee"s 'orB!n(

cap!ta$ t#an t#e %!rm t#at reta!ns $ar(er part o% !ts pro%!ts an" "oes not pay so #!(# rate o% cas#

"! !"en"3

E P&!C% $%V%$ C A"2%

C#an(es !n t#e pr!ce $e e$ a$so a%%ect t#e 'orB!n( cap!ta$ re&u!rements3 0enera$$y r!se !n

pr!ces $ea"s to !ncrease !n 'orB!n( cap!ta$3

E P&'DUCT!'" P'$!C*

I% t#e po$!cy !s to Beep pro"uct!on stea"y y accumu$at!n( !n entor!es !t '!$$ re&u!re #!(#er

'orB!n( cap!ta$3


55/115

P$A""!"2 '+ '&1!"2 CAP!TA$

WorB!n( cap!ta$ !s re&u!re" to run "ay to "ay us!ness operat!ons3 F!rms "!%%er !n t#e!r

re&u!rement o% 'orB!n( cap!ta$ )WC/3 F!rm s a!m !s to ma !m!Ge t#e 'ea$t# o% s#are #o$"ers

an" to earn su%%!c!ent return %rom !ts operat!ons3 WCM !s a s!(n!%!cant %acet o% %!nanc!a$

mana(ement3 Its !mportance stems %rom t'o reasons

In estment !n current asset represents a su stant!a$ port!on o% tota$ !n estment3In estment !n current assets an" $e e$ o% current $!a !$!ty #as to e (eare" &u!cB$y to

c#an(e !n sa$es3

1us!ness un"ertaB!n( re&u!re" %un"s %or t'o purposes

To create pro"uct! e capac!ty t#rou(# purc#ase o% %! e" assets3

To %!nance current assets re&u!re" %or runn!n( o% t#e us!ness3


56/115

T#e !mportance o% WCM !s re%$ecte" !n t#e %act t#at %!nanc!a$ mana(ers spen" a (reat "ea$ o%

t!me !n mana(!n( current assets an" current $!a !$!t!es3 T#e e tent to '#!c# pro%!t can e

earne" !s "epen"ent upon t#e ma(n!tu"e o% sa$es3 Sa$es are necessary %or earn!n( pro%!ts3

Ho'e er@ sa$es "o not con ert !nto cas# !nstant$y t#ere !s !n ar!a $y a t!me $a( et'een sa$e

o% (oo"s an" t#e rece!pt o% cas#3 WC mana(ement a%%ect t#e pro%!ta !$!ty an" $!&u!"!ty o% t#e

%!rm '#!c# are !n erse$y proport!ona$ to eac# ot#er@ #ence

proper a$ance s#ou$" e ma!nta!ne" et'een t'o3

To con ert t#e sa$e o% (oo"s !nto cas#@ t#ere !s nee" %or WC !n t#e %orm o% current asset to

"ea$ '!t# t#e pro $em ar!s!n( out o% !mme"!ate rea$!Gat!on o% cas# a(a!nst (oo" so$"3

Su%%!c!ent WC !s necessary to susta!n sa$es act! !ty3 T#!s !s re%erre" to as t#e operat!n( or cas#

cyc$e3

INVENTORY MANAGEMENTInventories constitute the most important part of the current assets of large majority

of companies. On an average the inventories are approximately 60% of the current

assets in public limited companies in India. Because of the large size of inventories

maintained by the firms a considerable amount of funds is committed to them. It is

therefore imperative to manage the inventories efficiently and effectively in order to

avoid unnecessary investment.

Nature of Inventories

Inventories are stoc! of the product of the company is manufacturing for sale and

components ma!e up of the product. "he various forms of the inventories in the

manufacturing companies are#


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&a9 -aterial It is the basic input that is converted into the finished

product through the manufacturing process. $a materials are those units

hich have been purchased and stored for future production.

E or=.in.8rogress Inventories are semi&manufactured products. "hey

represent product that need more or! they become finished products for

sale.

+inishe# 2oo#s Inventories are those completely manufactured productshich are ready for sale. 'toc!s of ra materials and or!&in&progress

facilitate production hile stoc! of finished goods is re(uired for smooth

mar!eting operations. "hus inventories serve as a lin! bet een the

production and consumption of goods.

Inventory Management Techniques

In managing inventories the firm)s objective should be to be in consonance ith the

shareholder ealth maximization principle. "o achieve this the firm should determine

the optimum level of inventory. *fficiently controlled inventories ma!e the firm

flexible. Inefficient inventory control results in unbalanced inventory and inflexibility&

the firm may sometimes run out of stoc! and sometimes pile up unnecessary stoc!s.

E %conomic 'r#er :uantity (%':) "he major problem to be resolved is

ho much the inventory should be added hen inventory is replenished. If

the firm is buying ra materials it has to decide lots in hich it has to

purchase on replenishment. If the firm is planning a production run the issue

is ho much production to schedule. "hese problems are called order

(uantity problems and the tas! of the firm is to determine the optimum or

economic lot size. +etermine an optimum level involves t o types of costs#&


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• 'r#ering Costs "his term is used in case of ra material and

includes all the cost of ac(uiring ra material. "hey include the costs

incurred in the follo ing activities#

• $e(uisition

• ,urchase Ordering

• "ransporting

• $eceiving

• Inspecting

• 'toring

Ordering cost increase ith the number of orders placed- thus the more

fre(uently inventory is ac(uired the higher the firm)s ordering costs.

On the other hand if the firm maintains large inventory)s level there

ill be fe orders placed and ordering costs ill be relatively small.

"hus ordering costs decrease ith the increasing size of inventory.

Carrying Costs5 /osts are incurred for maintaining a given level of

inventory are called carrying costs. "hese include the follo ing

activities#

arehousing /ost

1andling

2dministrative cost

Insurance

+eterioration and obsolescence

/arrying costs are varying ith inventory size. "his behavior is contrary

to that of ordering costs hich decline ith increase in inventory size.


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"he economic size of inventory ould thus depend on trade&off

bet een carrying costs and ordering cost.

ABC System

2B/ system of inventory !eeping is follo ed in the factories. 3arious items

are categorized into three different levels in the order of their importance. 4or

e.g. items such as memory high capacity processors and royalty are placed

in the 52) category. arge number of firms has to maintain several types of

inventories. It is not desirable the same degree of control all the items. "he

firm should pay maximum attention to those items hose value is highest.

"he firm should therefore classify inventories to identify hich items should

receive the most effort in controlling. "he firm should be selective in approach

to control investment in various types of inventories. "his analytical approach

is called 72B/ 2nalysis8. "he high&value items are classified as 72 items8 and

ould be under tightest control. 7/ items8 represent relatively least value and

ould re(uire simple control. 7 B items8 fall in bet een the t o categories and

re(uire reasonable attention of management.


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CASH MANAGEMENT

Sources of Cash:

ources of a##itional 9or=ing ca8ital inclu#e the follo9ing5

*xisting cash reserves

,rofits 9 hen you secure it as cash:;

,ayables 9credit from suppliers;


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=anagement pre&occupation ith surviving rather than managing

4re(uent short&term emergency re(uests to the ban! 9to help pay ages

pending receipt of a che(ue;.

CASH MANAGEMENT IN AIRSOFT INFOSYS

/ash =anagement 'ystem involves the follo ing steps#

"he branch offices of the company at various locations hold the collection of

che(ues of the customers.

"hose che(ues are either handed over to the /=' agencies or ban! of the

particular location ta!e charge of hole collection.

"hese /=' agencies or ban! send those che(ues to the clearing house to

ma!e them realized. "hese che(ues can be local or outstation.

"he /=' agencies or ban! send information to the central hub of the

company regarding realization>che(ue bounced.

"he central hub passes on the realized funds to the company as per the

agreed agreements.

"he /=' agencies or concerned ban! provides the necessary =I' to the

company as per re(uirement.

In cash management the collect float ta!en for the che(ues to be realized into cash

is irrelevant and non&interfering because ban!s such as 'tandard /hartered 1+4/

and /itiBan! ho give credit on the basis of these che(ues after charging a very


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small amount. "hese credits are given to immediately and the maximum time ta!en

might be just a day. "he amount they charge is very lo and this might cover the

threat of the che(ue sent in by t o or three customers bouncing. *ven other ise the

time ta!en for the che(ues to be processed is instantaneous. "heir /ash

=anagement 'ystem is (uite efficient.

RECEIVABLES MANAGEMENT

/ash flo can be significantly enhanced if the amounts o ing to a business are

collected faster. *very business needs to !no .... ho o es them money.... ho

much is o ed. ho long it is o ning. 4or hat it is o ed.

Late payments erode profits and can lead to bad debts.

'lo payment has a crippling effect on business- in particular on small businesses

hom can least afford it. If you don?t manage debtors they ill begin to manage

your business as you ill gradually lose control due to reduced cash flo and of

course you could experience an increased incidence of bad debt.

The following measures will help manage debtors:

@. 1ave the right mental attitude to the control of credit and ma!e sure that it

gets the priority it deserves.

A. *stablish clear credit practices as a matter of company policy.

. =a!e sure that these practices are clearly understood by staff suppliers and

customers.

C. Be professional hen accepting ne accounts and especially largerones.


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D. /hec! out each customer thoroughly before you offer credit. Ese credit

agencies ban! references industry sources etc.

6. *stablish credit limits for each customer and stic! to them.

F. /ontinuously revie these limits hen you suspect tough times are coming

or if operating in a volatile sector.

G. Heep very close to your larger customers.

. Invoice promptly and clearly.

@0./onsider charging penalties on overdue accounts.

@@./onsider accepting credit >debit cards as a payment option.

@A.=onitor your debtor balances and aging schedules and don?t let any debts get

too old.

+ebtors due over 0 days 9unless ithin agreed credit terms; should generally

demand immediate attention. oo! for the arning signs of a future bad debt. 4or

exampleJ..

@. onger credit terms ta!en ith approval particularly for smaller orders.

A. Ese of post&dated chec!s by debtors ho normally settle ithin agreed

terms.

. *vidence of customers s itching to additional suppliers for the same goods.

C.


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MANAGING PAYABLES (Creditors)

Creditors are a vital part of effective cash management and should be

managed carefully to enhance the cash position.

,urchasing initiates cash outflo s and an over&zealous purchasing function can

create li(uidity problems.

Consider the following: -

ho authorizes purchasing in your company & is it tightly managed or spread

among a number of 9junior; peopleM

2re purchase (uantities geared to demand forecastsM+o you use order (uantities hich ta!e account of stoc! holding and

purchasing costsM

+o you !no the cost to the company of carrying stoc!M

1o many of your suppliers have a return policyM

2re you in a position to pass on cost increases (uic!ly through price

increases to your customersM

If a supplier of goods or services lets you do n can you charge bac! thecost of the delayM

"here is an old adage in business that "if you can buy well then you can sell

well". =anagement of your creditors and suppliers is just as important as the

management of your debtors. It is important to loo! after your creditors& slo

payment by you may create ill feeling and can signal that your company is

inefficient 9or in trouble:;.


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$emember that a good supplier is someone ho ill or! ith you to enhance the

future viability and profitability of your company.

Financing Current Assets

the firm has to decide about the sources of funds hich can be availed to ma!e

investment in current assets.

Long term financing:

It includes ordinary share capital preference share capital debentures long term

borro ings from financial institutions and reserves and surplus.

hort term financing:It is for a period less than one year and includes or!ing capital funds from ban!s

public deposits commercial paper etc.

Depending on the mix of short and long term financing, the company can

follow any of the following approaches.

!atching "pproach

In this the firm follo s a financial plan hich matches the expected life of assets

ith the expected life of source of funds raised to finance assets. hen the firm

follo s this approach long term financing ill be used to finance fixed assets and

permanent current assets and short term financing to finance temporary or variable

current assets.

Conservative "pproach

In this the firm finances its permanent assets and also a part of temporary current

assets ith long term financing. In the periods hen the firm has no need for

temporary current assets the long&term funds can be invested in tradable securities

to conserve li(uidity. In this the firm has less ris! of facing the problem of shortage of

funds.

"ggressive "pproach

In this the firm uses more short term financing than arranted by the matching plan.

Ender an aggressive plan the firm finances a part of its current assets ith short

term financing.


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ADVA"TA2% '+ '&1!"2 CAP!TA$ -A"A2%-%"T

E 8ee# an# +le>ibility5 One a" anta(e o% 'orB!n( cap!ta$ %!nanc!n( !s t#at most

e$!(! $e compan!es can o ta!n s#ort-term $oans@ !nc$u"!n( accounts rece! a $e cre"!t

$!nes@ !n entory $oans or anB $!nes o% cre"!t@ !n a s#ort per!o" o% t!me3 T#e $oan

amounts are typ!ca$$y a %ract!on o% re enues an" are t!e" to assets t#at &u!cB$y con ert

to cas#3 WorB!n( cap!ta$ %!nanc!n( !s (enera$$y %$e ! $e@ '!t# ary!n( !nterest rates an"

repayment terms3 T#!s %$e ! !$!ty can #e$p compan!es '!t# seasona$ or per!o"!c

%$uctuat!ons smoot# out cas# %$o'3

E hort.Term '8tions5 Accounts rece! a $e cre"!t $!nes an" %actor!n(@ '#!c# occurs

'#en your company se$$s !ts rece! a $es to a t#!r" party at a "!scount@ "!rect$y t!e to

your companyJs accounts rece! a $es3 As your companyJs re enues an" assoc!ate"

rece! a $es (ro'@ t#e cre"!t $!ne !ncreases3 As your company nee"s more money@ t#ese

'orB!n( cap!ta$ opt!ons maBe t#ose %un"s a a!$a $e3 T#ese a$so pro !"e a !a $e

c#o!ce %or sma$$er or ne'er compan!es '!t#out t#e operat!ona$ #!story or a$ance

s#eet stren(t# to &ua$!%y %or a anB term $oan or unsecure" $!ne o% cre"!t3

E -e#ium.Term '8tions5 Your company can a$so %!nance 'orB!n( cap!ta$ '!t# a term$oan3 S#ort-term 'orB!n( cap!ta$ %!nanc!n( a""resses cyc$!ca$ nee"s t#rou(#out t#e

%!sca$ year3 M!"-term 'orB!n( cap!ta$ %!nanc!n( pro !"es t#e %un"s to purc#ase

a""!t!ona$ !n entory an" (enerate t#e rece! a $es t#at !ncrease 'orB!n( cap!ta$3 For

compan!es '!t# (ro't# prospects o er t#e ne t %e' years@ t#!s opt!on pro !"es access

to a stea"y stream o% cap!ta$ to co er (aps create" y (ro't#-re$ate" e penses3


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re !e' o% L!terature on 'orB!n( cap!ta$ mana(ement )conceptua$ an" researc#/3 T#e ma!n

o ject! e o% t#!s paper !s to pro !"e t#e '!"e ar!ety o% re !e's on 'orB!n( cap!ta$

mana(ement !n "!%%erent !n"ustr!es an" %!e$"s to !"ent!%y t#e researc# (ap %or %urt#er stu"!es3

T#e stu"y #as een !"ent!%!e" t#at researc# stu"!es o% (enera$ nature re$at!n( to 'orB!n(

cap!ta$ mana(ement are $!m!te"3 Furt#er@ researc# stu"!es touc#!n( upon %!nance are o%

Automot! e 1attery !n"ustry are a$so ery $!m!te"@ '#!$e 'orB!n( cap!ta$ mana(ement !n

Automot! e 1attery In"ustry !s #!t#er to a muc# ne($ecte" area3

3 Chan#ra @ A3 elvaraj (6746) stu"!e" t#at 'orB!n( cap!ta$ !s t#e acB one o% an

or(an!Gat!on3 It re%ers to a port!on o% t#e tota$ %un" '#!c# %!nances t#e "ay to "ay 'orB!n(

e penses "ur!n( t#e operat!n( cyc$e3 Mana(ement o% 'orB!n( cap!ta$ !s one o% t#e most!mportant %unct!ons o% corporate mana(ement3 It !s r!(#t$y sa!"@ Ina"e&uate 'orB!n( cap!ta$

!s a" anta(eous@ '#ereas re"un"ant 'orB!n( cap!ta$ !s a cr!m!na$ 'asteR3 As a $ar(e

manu%actur!n( !n"ustry@ 'orB!n( cap!ta$ mana(ement !n t#e stee$ !n"ustry !n o$ es a $ar(e

port!on o% t#e companyJs tota$ assets3 T#e opt!mum 'orB!n( cap!ta$ ensures t#e success o% t#e

us!ness@ '#!$e !ts !ne%%!c!ent mana(ement '!$$ $ea" to t#e "o'n %a$$ o% t#e company3 Hence@

t#!s paper ana$yses t#e 'orB!n( cap!ta$ mana(ement o% se$ecte" stee$ compan!es !n In"!a3

Furt#er@ to measure t#e e%%ect! e ut!$!Gat!on o% t#e 'orB!n( cap!ta$@ Operat!n( Cyc$e an" Cas#Con ers!on Cyc$e 'ere use"3 To measure t#e "eterm!nants o% Cas# Con ers!on Cyc$e@ t#e

8!esc#n!cB mo"e$ #as een use"3 F!na$$y@ !t 'as conc$u"e" t#at t#e s!Ge o% a company p$ays a

!ta$ ro$e !n "eterm!n!n( t#e e%%!c!ency o% !ts 'orB!n( cap!ta$ mana(emen

working capital project tcs ion.docx

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