Working Capital Management in Project Paper in a Degree

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1
PROJECT REPORT
ON
WORKING CAPITAL MANAGEMENT
AT
KIRLOSKAR PNEUMATICS CO. LTD, HADAPSAR.
Submitted By:
Rajesh Menon (M.B.A
-
II
)
In Partial Fulfillment for Degree of Master of Business
Administration during the year 2006
-
07
VISHWAKARMA INST
ITUTE OF MANAGEMENT, PUNE.
2
ACKNOWLEDGEMENT
It is a matter of great satisfaction and pleasure to present this report o
n
W
o
r
k
i
n
g
C
a
p
i
t
a
l
M
a
n
a
g
e
m
e
n
t
o
f
K
I
R
L
O
S
K
A
R
P
N
U
E
M
A
T
I
C
C
O
.
L
T
D
.
(KPCL), Pune
411013. I take this opportunity to owe my thanks to all
t
hose involved in my training.
This project report could not have been completed without the guidance of our director, Dr. SHARAD L. JOSHI & project guide Prof. SMITA SOVANI. Their timely help & encouragement helped me to complete this project successfull

y.
I thank Mrs. VINEETA KAPOOR (SR. OFFICER
HRD) for giving
me opportunity to work at KPCL, as a FINANCE TRAINEE.
I am th
ankful to Mr. R.B. SHALIGRAM (SR. FINANCE MANAGER)
and MR. R.R. TAVERGIRI (DGM, FINANCE)
for their encouragement and
able guidanc
e at every stage of my training work.
I express my gratitude towards staff of KPCL, those who have helped me directly or indirectly in completing the training. 3
INDEX:
-
No.
Particu
lars:
Page No:
1
Executive Summary
1
2
Objective & Scope of Project
3
3
Company Profile
4
4
Theoretical Background
7
5
Research Methodology
60
6
Data Analysis
61
7
Findings
92
8
Recommendations
93
9
Bibliography
94
4
EXECUTIVE SUMMARY
Company being established as Kirloskar pneumatic company
limited in 1958, made an entry with manufacture of air compressor and pneumatic tools & soon diversified by including air conditioning & transmission equipments.
At Kirloskar Pneumatic up to da
te manufacturing facilities, including
CNC machines, Stringent quality control procedures and systems, research & development, foundry, heat treatment facilities, screw rotor machines, gear grinding machines, metallurgical laboratories, tool room and integ rated

computer system, have all been set up with sole idea of achieving the highest standards of quality & performance.
My Project is
the study of working capital management.
The study was conducted at the head office of Kirloskar Pneumatic Co. Ltd. Pu
ne.
The project was of 2 months duration. During the project I
interviewed the executives & staff to collect the data, & also made use of company records & annual reports. The data collected were then compiled, tabulated and analyzed.
Working Capital M
anagement is a very important facet of financial
management due to:
Investments in current assets represent a substantial portion of total investment.
Investment in current assets & the level of current liabilities have to be geared quickly to change sales
.
Some the points to be studied under this topic are:
How much cash should a firm hold?
What should be the firms credit policy?
How to & when to pay the creditors of the firm?
How much to invest in inventories?
5
B
y
s
t
u
d
y
i
n
g
a
b
o
u
t
t
h
e
c
o
m
p
a
n
y
s
d
i
f
f
e
r
e
n
t
a
r
e
as I came to know
certain things like:
Acid test ratio is more than one but it does not mean that
company has excessive liquidity.
S
t
a
n
d
a
r
d
c
u
r
r
e
n
t
r
a
t
i
o
i
s
2
:
1
a
n
d
f
o
r
i
n
d
u
s
t
r
y
i
t
i
s
1
.
3
3
:
1
.
K
P
C
L
s
ratios satisfactory.
Debtors of the company were high; th
ey were increasing year by
year, so more funds were blocked in debtors. But now recovery is becoming faster.
Working capital turnover ratio is continuously increasing that shows increasing needs of working capital.
6
OBJECTIVES:
1)
To iden
tify the financial strengths & weakness of the company.
2)
Through the net profit ratio & other profitability ratio, understand the profitability of the company.
3)
E
v
a
l...
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