Working Capital Management
A REPORT
ON
AT
CADILA HEALTHCARE LTD
Submitted By:
GURDIT SINGH KHALSA
10BSPHH010260
IBS HYDERABAD
A REPORT
ON
“THE STUDY OF WORKING CAPITAL MANAGEMENT”
By
GURDIT SINGH KHALSA
10BSPHH010260
A Report submitted in partial fulfillment of the requirements of MBA Program of the IBS Hyderabad
Distribution List:
Mr. Mukesh Savai : Deputy General Manager, CADILA HEALTHCARE LTD.
Mr. T.Koti Reddy : Professor, IBS HYDERABAD
CADILA HEALTHCARE LTD.
13TH MAY 2011
Table of Contents S No. PARTICULARS | PAGE NO. | Executive summary | Iii | 1.Introduction | | 1.1 Purpose and scope of the project | 6 | 1.2 Methodology | 7 | 1.3 Limitation of study | 8 | 1.4 Literature Review | 8 | 2.Industry profile | | 2.1 The Global Pharma market | 9 | 2.2 The Indian Pharma market | 9 | 3.Ratio Analysis | 11 | 4.Working capital management | 12 | 5.Phase І : Net Operating Cycle | | 5.1 Operating cycle Ankleshwar unit | 13 | 5.2 Operating cycle Dhabasa unit | 15 | 5.3 Major API Companies | 16 | 5.4 Operating cycle of API companies | 20 | 6.Phase II : Inventory Management | 22 | 6.1 Procurement Cycle | 24 | 7.Phase III : Recievables Management | 25 | 7.1 Distribution system | 26 | 7.2 Credit Control Policy Cadila | 27 | 8.Phase IV : Cash Management | 28 | 8.1 Collection System | 29 | 8.2 Fund Transfer System | 30 | 9.Learnings | 34 | 10.Recommendation | 35 | 11.Conclusion | 35 | 12.References | 36 | | | ANNEXURE | | 13.Projected operating cycle ankleshwar | 30 | 14.Balance sheet | 32 | 15.Projected cost of equity | 31 | 16.Projected WACC | 33 |
LIST OF ILLUSTRATION S.NO. PARTICULARS | PAGE NO. | 6. Procurement cycle | 25 | 8. Distribution Channel | 27 | 12. Procedure after collection | 29 |
ABSTRACT
Working capital management refers to all
ON
AT
CADILA HEALTHCARE LTD
Submitted By:
GURDIT SINGH KHALSA
10BSPHH010260
IBS HYDERABAD
A REPORT
ON
“THE STUDY OF WORKING CAPITAL MANAGEMENT”
By
GURDIT SINGH KHALSA
10BSPHH010260
A Report submitted in partial fulfillment of the requirements of MBA Program of the IBS Hyderabad
Distribution List:
Mr. Mukesh Savai : Deputy General Manager, CADILA HEALTHCARE LTD.
Mr. T.Koti Reddy : Professor, IBS HYDERABAD
CADILA HEALTHCARE LTD.
13TH MAY 2011
Table of Contents S No. PARTICULARS | PAGE NO. | Executive summary | Iii | 1.Introduction | | 1.1 Purpose and scope of the project | 6 | 1.2 Methodology | 7 | 1.3 Limitation of study | 8 | 1.4 Literature Review | 8 | 2.Industry profile | | 2.1 The Global Pharma market | 9 | 2.2 The Indian Pharma market | 9 | 3.Ratio Analysis | 11 | 4.Working capital management | 12 | 5.Phase І : Net Operating Cycle | | 5.1 Operating cycle Ankleshwar unit | 13 | 5.2 Operating cycle Dhabasa unit | 15 | 5.3 Major API Companies | 16 | 5.4 Operating cycle of API companies | 20 | 6.Phase II : Inventory Management | 22 | 6.1 Procurement Cycle | 24 | 7.Phase III : Recievables Management | 25 | 7.1 Distribution system | 26 | 7.2 Credit Control Policy Cadila | 27 | 8.Phase IV : Cash Management | 28 | 8.1 Collection System | 29 | 8.2 Fund Transfer System | 30 | 9.Learnings | 34 | 10.Recommendation | 35 | 11.Conclusion | 35 | 12.References | 36 | | | ANNEXURE | | 13.Projected operating cycle ankleshwar | 30 | 14.Balance sheet | 32 | 15.Projected cost of equity | 31 | 16.Projected WACC | 33 |
LIST OF ILLUSTRATION S.NO. PARTICULARS | PAGE NO. | 6. Procurement cycle | 25 | 8. Distribution Channel | 27 | 12. Procedure after collection | 29 |
ABSTRACT
Working capital management refers to all
References: al. 1986, Weinraub and Visscher 1998). Working capital management is important because of its effects on the firm’s profitability and risk, and consequently its value (Smith, 1980) investment in current assets, the lower the risk, but also the lower the profitability obtained. In contradiction, Carpenter & Johnson (1983) provided empirical evidence that there is no linear