Working Capital Management

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1.1 INTRODIUCTION

The need for working capital to run the day-to –day business activities has become essential for business firms. The firm’s aims at maximizing the wealth of shareholders, for which it should be efficient return from its operations. Earning a study amount of profit require successful sales activity. The firm has to invest funds in current assets for success of its sales activity.

As it is the one of the biggest chemical industry in south India, working capital become necessary to support various stages in its operating cycle. Trichy Distilleries Chemical ltd., Trichy follow as a centralized cash management system where in the individual units transfer all the cash collection to the corporate office will allocate funds to each unit.

Thus management of current assets is vital aspect of financial management in enterprises. Its individual components like inventory, receivable etc ., are the most important segment of current assets for the capital intensive industry like Trichy Distilleries and Chemical Ltd ., The research has realized the important of efficient management of working capital and has undertaken her project in ‘Working capital management’ in Trichy distilleries and chemical Ltd., Trichy. Die suggestion are given for betterment of the project.

1.2OBJECTIVE
The objectives of the study are:
1. To understand and acquire knowledge about working capital in trichy Distilleries and Chemical Ltd. 2. To analyses the working capital position of unit through the computation working capital ratio. 3. To analyses the individual components of working capital and management of these components. 4. To find out the best way by which the operating cycle can be improved. 5. To suggest better ways for receivable management as well as inventory management.

1.3Significance of the study:
Serious deliberation is needed in the cases of working capital management due to its significance nature in carrying out business operations. Hence working capital management plays role in any business operation. Working capital management can be defined as administration of all aspect of current assets and current liability. In the recent, efficient and careful management of working capital has assumed importance due to the policy decision followed by the government of India and fast changing operational and financial environment. This study would be useful both for the management to the academicians.

1.4RESEARCH METHODOLOGY
Introduction:
For the purpose of those study details of a ratio analysis in Trichy distilleries and chemical Ltd The date required for the study has been collected from the secondary sources. The relevant figures are taken from the management information reports, statistical material from finance department files and manuals of finance department.

MEANING
RESEARCH comprises defining and redefining problems, formulating hypothesis or suggest solution collecting organization and evaluation data making deduction and researching conclusion and at last carefully testing the conclusion to determining the formulating hypothesis.

AREA OF THE STUDY:
Trichy Distilleries and Chemicals Ltd., Trichy.

DATA COLLECTION:
The study based on secondary data which are collected from annual reports.

PERIOD OF STUDY:
The study was confined for a period of 5 years and therefore 5 years data (2005-2010) has been considered for analysis. The studies give a clear picture of growth of Trichy distilleries and Chemical Ltd.,

STATICAL TOOLS:
The collected data have been analyzed by using various tools and techniques with a view of evaluating financial performance of the study audit. To analyze the financial performance of the company the following tools were used:-...
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