CHAPTER I INTRODUCTION

Working Capital Management is concerned with problems that arise in attempting to manage the current assets, the current liabilities and the interrelationship that exist between them. The term current assets refer to those assets which in ordinary course of business can be, or will be converted into cash within one year without undergoing a diminution in value and without disrupting the operations of the firm. The major current assets are cash, marketable securities, accounts receivable and inventory. Current liabilities are those liabilities which are intended, at their inception, to be paid in the ordinary course of business, within a year, out of current assets or earnings of the concern. The basic current liabilities are accounts payable, bills payable, bank overdraft and outstanding expenses. The goal of Working Capital Management is to manage the firm s current assets and current liabilities in such a way that a satisfactory level of Working Capital is maintained. This is so because if the firm cannot maintain a satisfactory level of Working Capital, it is likely to become insolvent and may even be forced into bankruptcy. The current assets should be large enough to cover its current liabilities in order to ensure a reasonable margin of safety. !evertheless the level of current assets should not be too high since in that case it will affect the overall profitability of the firm. The interaction between current assets and current liabilities is, therefore the main theme of Working Capital Management.

Conceptual Framework
"nderstand #evel $f Current %ssests %nd Current #iabilities Working Capital Cycle $f &C# '!($)*)T+M) Cash Management 'nventory Management ,eceivables Management (inancial Condition $f &C# '!($)*)T+M ,')-.,+T",! %!%#*)') (inancial /erformance 1.3Indu rt!"Compan! Pro#$le

&C# 'nfosystems #td. 's one of the pioneers in the 't market, with its origin in 0123. The company has been in the forefront in introducing new technologies and solutions. 't has drawn its strength since 45 years of experience in handling the ever changing 'T scenario, strong customer relationships, ability to provide the cutting edge technology at best value for money and on the top of it, an excellent service and support infrastructure. Today &C# is the country s premier information enabling company. 't offers one stop shop convenience to its diverse customers having a diverse set of re6uirements. )ince, last 45 years &C# has been continuing the relationship with the customer, thereby increasing customer confidence in it. The strengths of the company are7 %bility to understand customers business and offer right technology. #ong standing relationship with customers. 8est value for money offerings.

%COPE OF THE %TUD& (rom this project we have a broad knowledge on different aspects of working capital management. )ome of the aspects of working capital management are7 To -now Concepts of working capital management. What 's The !eed of working capital What 's $perating cycle or working capital cycle9 What are (actors affecting working capital re6uirements9

CHAPTER II OPERATIN' C&C(E

TRADE)OFF *ET+EEN PROFITA*I(IT& AND RI%,The level of net working capital has a bearing on profitability as well as risk. &ence in evaluating firms working capital position an important consideration is the trade.off between profitability and risk. /rofitability refers to the net profits and risk refers to the probability of being insolvent so that the firm will not be able to meet its obligations when they become due for payment.

DETER.ININ' FINANCIN' .I/$ne of the most important decisions involved in the management of working capital is how current assets will be financed. There are broadly two sources from which funds can be raised for asset financing7 i; short.term sources <current liabilities; ii; long.term sources, such as share capital, long term borrowings, internally generated resources like retained earnings and so on. !ow what portion of current assets should be financed by current liabilities and how much by long.term resources9 There are basically three approaches to determine an appropriate financing mix7 &edging approach <or Matching approach; Conservative approach Trade.off between these two.

%0ort)Term 1" (on2 Term F$nanc$n2

F$nanc$n2 .atur$t! A et .atur$t!

%0ort)Term

(on2)Term

%0ort)Term 3Temporar!4

.oderate R$ k)Pro#$ta5$l$t!

(ow R$ k)Pro#$ta5$l$t!

(on2)Term 3Permanent4

H$20 R$ k)Pro#$ta5$l$t!

.oderate R$ k)Pro#$ta5$l$t!

Computat$on o# Operat$n2 C!cle $perating Cycle > ,?W?(?@.C ,> ,aw material storage period W> Work.in.progress period (> (inished goods storage period @> @ebtors collection period C>Creditors deferral /eriod

The various components of operating cycle may be calculated as shown below7

%verage stock of raw material %verage cost of raw material consumed per A day

,aw Material )torage /eriod >

%verage work.in.progress inventory

Work.in.progress holding period >

%verage cost of production per day %verage stock of finished goods

(inished goods storage period >

%verage cost of goods sold per day %verage book debts

@ebtors collection period >

%verage credit sales per day %verage trade creditors

Credit collection period >

%verage credit purchases per day

Trade Cred$tTrade credit refers to the credit extended by the supplier of goods and services in the normal course of transactionBbusinessBsale of the firm i.e., cash is not paid immediately for purchases but after an agreed period of time. Thus, deferral of payment represents a source of finance for credit purchases. There is however, no formal formalBspecific negotiation for trade credit. 't is an informal arrangement between the buyer and seller without any legal instruments or acknowledgements of debts. )uch credit appears in the record of buyer of goods as sundry creditorsBaccounts payable.

CHAPTER III
3

CA%H .ANA'E.ENT

Introduct$on to t0e concept o# Ca 0 .ana2ement

Cash management is one of the key areas of working capital management. %part from the fact that it is the most current li6uid assets, cash is the most common denominator to which all the current assets can be reduced because the other major li6uid assets, that is, receivables and inventory get eventually converted into cash. This underlines the significance of cash management.

RECEI1A*(E% .ANA'E.ENT
Introduct$on to t0e concept o# Rece$6a5le .ana2ementThe receivables represent an important component of the current assets of any firm. The term receivables are defined as Cdebt owe to the firm by the customers arising from sale of goods and services in the ordinary course of business . When a firm makes an ordinary sale of goods or services and does not receive payment, the firm grants trade credit and creates accounts receivable. 't is also referred as trade credit management. Management should way the benefits as well as the costs to determine the goal of receivables management.

IN1ENTOR& .ANA'E.ENT
Introduct$on to t0e concept o# In6entor! .ana2ement The term inventory refers to the stock of the products a firm is offering for sale and the components that make up the product. That is, inventory is composed of assets that will be sold in future in the normal course of business operations. These assets are i; ,aw materials, ii; Work.in.progress and iii; (inished goods. The views concerning the appropriate level of inventory would differ among the different functional areas. 2

,sB#acs

:504

:50:

:500

:505

:551

(ive *ear (inancial $verview

F& 78

F& 79

F&7:

%pril 5D :5504

:50:

F& 78 :500

F& 79 F&7: :505

:551

,sB#akhs :504 :50: :500 :505 :551

%ssets E #iabilities

CHAPTER I1 FINANCIA( PERFOR.ANCE

1. 'ro Re6enue-

,evenue grew by 23F from ,s. ==0: crores in the previous year to ,s. 22D= crores in the current year. ,evenue for the /arent Company grew by :1F from ,s. 0A:: crores in the previous year to ,s. 0132 crores in the current year.

;. Ot0er Income$ther 'ncome for the current year is ,s. A0 crores as against ,s. :1 crores in the previous year. 't includes income from investment in Mutual (unds ,s.00 crores </revious *ear ,s. 0: crores;, 'nterest income of ,s. 0: crores </revious *ear ,s. 1 crores; and gains from foreign exchange fluctuation ,s. 0= crores </revious *ear ,s. = crores;.

3. 'ro

.ar2$n -

Gross margins for the current year are at ,s. 354 crores as against ,s. ==A crores in the previous year. Gross margins for the /arent Company are at ,s. 44: crores as against ,s. :D: crores in the previous year.

05

<. Per onnel Co t )taff cost for the current year increased to ,s. 0=A crores from ,s. the previous year. Manpower increased from 4:D2 as at Hune :552 to 4D21 as at Hune :55D. )taff cost is 0.1F of sales for the current year as against previous year. )taff cost for the /arent Company for the current year is ,s. 05: crores ,s. 2D crores in the previous year.

=. Adm$n$ trat$6e> %ell$n2> D$ tr$5ut$on and ot0er +xpenses amounted to ,s. 015 crores, as against ,s. 0:2 crores in the previous year. The expenses as a F to sales declined to :.=F from 4.5F.

8. Operat$n2 Pro#$t 3E*IDT4$perating profit excluding C$ther income grew by :DF from ,s. :51 crores in the previous year to ,s. :3D crores. 9. F$nance C0ar2e (inance charges for the year is ,s. D crores as against ,s. 1 crores in the previous year. :. Pro#$t *e#ore Ta?/8T grew by =5F from ,s. :0: crores in the previous year to ,s. :13 crores in the current year. /8T for /arent Company grew by 03F from ,s. 0:D crores in the previous year to ,s. 0=1 crores in the current year. @. Pro#$t A#ter Ta?00

/rofit after tax grew by 45F from ,s. 02A crores in the previous year to ,s. ::D crores. The profits for the current year are after a provision for ,s. 3A crores for current tax expenses, ,s. : crores for deferred tax expenses and ,s. 0 crore for (ringe 8enefit Tax applicable from %pril 5A. /rofit after tax for the /arent Company grew by 05F from ,s. 0:0 crores in the previous year to ,s. 044 crores.

17. D$6$dendThe company continued with the practice of declaring 6uarterly dividend accordingly. 't distributed dividends I 25F in each of the first three 6uarters. The company proposes to pay a final dividend of ,s 055F per fully paid up e6uity share ,s. :B. each. The interim dividends paid together with proposed final dividend total to 405 F for the current year, entailing an outflow of ,s. 002 crores including distribution tax. 11. Earn$n2 Per %0areConsolidated 8asic +/) grew from ,s 05.1 in the previous year to,s. 04.2 in the current year. @iluted +/) grew from ,s. 05.: in the previous year to ,s. 0:.1 in the current year. 8asic +/) of the /arent Company grew from ,s. 2.A in the previous year to ,s. D.5 in the current year. @iluted +/) grew from ,s. 2.5 in the previous year to ,s. 2.A in the current year.

0:

CHAPTER 1 FINANCIA( CONDITION%

1. Net +ort0" %0are0older Fund - !et Worth as on 45th Hune :505 is ,). AAA crores. )hare capital as at 45th Hune :505 is ,s. 44.= crores divided into 03.2 crores share of ,s. :B. each. ,eserves E surplus as at 45th Hune :505 is ,s. A5 Crores after appropriating ,s. 002.4 crores for three 6uarterly interim and final dividends.

!et worth of the /arent Company is ,s. =4A crores. The book value per ,s :B. share of the /arent Company increase from ,s. := as on 45th Hune :505 to ,s. :3 as on 45th Hune :505.

@uring the year, the Company allotted A.=3 lakh share of ,s. 05B. each <sub divided into :2.4: lakh share ,s. :B. each 5 "!@+, T&+ +mployee )tock $ptions realiJing ,s. :0.A crores. The increase in share capital on account +)$/ is ,s 5.A crores and increase in reserves is ,s. :0.5 crores.

;. *orrow$n2 - *earKend loan balances marginally increased from ,s. 2: crores as on 45th Hune :505 to ,s. D0 crores as on 45 th Hune :504. The @ebt7 +6uity dropped from 0AF to 04F. F$?ed A et - !et block as on 45th Hune :504 is 23 crores. @uring the current year the Company made capital expenditure of ,s. :2 crores mainly for ac6uisition of #and in "ttaranchal expanding customer support network. $ne time license fee to @$T for 'nternet 8usiness and additions to /lants E Machinery. The Company retired various assets with a Gross block of ,s. :A crores and a net book value of ,s . 5.0 crores. !et block of /arent Company as on 45th Hune :504 is ,s. A4 crores. 04

3. In6entor$e - 'nventories increased from ,s. :D5 crores as on 45 th Hune :551 to ,s 4=1 crores as on 45th Hune :505 . The inventory turn over on sales grew from 0A.2 times in the previous year to ::.4 times in the current year. 'nventories of /arent Company increased from ,s. 030 crores as on 45 th Hune :551 to ,s. 0DD crores as on 45th Hune :505. The inventory turn over on sales grew from 1.= times in the the previous year to 05.A in the current year.

<. De5tor 7 @ebtors increased from ,s. =03 Crores as on 45 th Hune :551 to ,s. A4: crores as on 45th Hune :505. @ebtors as number of days of sale stands reduced to :A days as on 45th Hune :551 from 4= days as on 45th Hune :505.

@ebtors of the /arent Company increased from ,s. :1A crores as on 45 th Hune :551 to ,s. 425 crores as on 45th Hune :505. @ebtors as number of days of sale stands reduced to 31 days as on 45th Hune :551 from 20 days as on 45th Hune :505.

=. ($Au$d A et 3In6e tment $n .utual Fund and F$?ed Depo $t w$t0 *ank 4#i6uid %ssets as on 45th Hune :505 are at ,s. :A4 crores as against ,s. :A= crores as on 45th Hune :551. These +xcludes cash in hand E balance with bank in collection E disbursement accounts.

8. Ot0er Current A et $nclud$n2 loan B Ad6ance - $ther current assets increased from ,s 25 crores as on 45th Hune :551 to ,s 0A= crores as on 45th Hune :505.

0=

$ther current assets of the /arent Company increased from ,s. =5 crores as on 45 th Hune :551 to ,s 000 crores as on 45 th Hune :505. #ease rent recoverable as on 45th Hune :505 is ,s. 35 crores.

9. Current ($a5$l$t$e B Pro6$ $on - Current #iabilities E /rovisions increased from ,s. 312 crores as on 45th Hune :551 to ,s. D34 crores as on 45th Hune :505. Current liabilities and provisions of the /arent Company increased from ,s . 41D crores as on 45th Hune :551 to =3D crores as on 45th Hune :505.

:. Ca 0 Flow- The Cash generation from operating activities in the current year is ,s. 0:2 crores. The cash generation of /arent Company from operating activities in the current year is ,s. :2 crores.

0A

*alance %0eet #or t0e &ear Ended a on 31 t .arc0 ;713

;713 ;71;

8alance )heet for the *ear +nded as on March 04

03

CA%H F(O+ %TATE.ENT FOR THE &EAR ENDED 31%T .ARCH> ;713
:504 :50:

02

CA%H F(O+ %TATE.ENT FOR THE &EAR ENDED 31%T .ARCH> ;713
;713 ;71;

. Cash (low )tatement for the *ear +nded 40st March :50:

0D

+OR,IN' CAPITA( PO%ITION3$n crore 4

;713 CURRENT A%%ET% NET FI/ED A%%ET% TOTA( A%%ET% CA " TA NET CURRENT A%%ET% Working Capital /osition D0A44 A4:1 11041 D:.:= 4=2=:

;71; A=510 =1:A D2523 3:.00 0=450

;711 =A5=: =1A= 20:DA 34.0D 0D2A:

;717 AA1DA AAA: 2A:5A 2=.== :253A

The 0=4 percent increase in !et Current %ssets is due to the fact that there has been an increase in the Current %ssets by A5.24F and increase in Current #iability has been only 02.A5F over that of the previous year. The firm s level of li6uidity being high we need a check on whether it affects the return on assets. !ow there is a substantial increase in the current assets to total assets. This could be less profitable on the assumption that current assets generate lesser return as compared with return on fixed assets.

01

RI%,)RETURN ANA(&%I% %A(E% E*IT RETURN ON IN1E%T.ENT 3C4 ,isk.,eturn %nalysis 'n case instead of !et Current assets and net block if total assets had been used in computation of ,$' then TOTA( A%%ET% RETURN ON IN1E%T.ENT 3C4 A:4=D 35.43 =2:D3 45.4 ;713 011DD3 0A34= 41 ;71; 0A=:1A 0=A:4 2A.A ;713 03335= 00=10

CURRENT A%%ET %CENARIO CO.PONENT '!L+!T$,* )"!@,* @+8T$,) C%)& %!@ 8%!- %))+T) $T&+, C",,+!T %))+T) #$%! %!@ %@L%!C+) ;713 :4.52 =A.42 02.DD 1.2= 4.14 ;71; :1.D0 A=.=A D.:A :.3D =.21

While there has been increase in the value of all components of the Current %ssets the proportion of inventory debtors and loans and advances to the current assets have declined. Whether this proportionate decline to current assets is as a result of reduced lead time and better operating cycle9 This might directly implicate better receivables management and inventory control.

IN1ENTOR& .ANA'E.ENT CO.PO%ITION ;713 ;71; C INC :5

,%W M%T+,'%# )T$,+) %!@ )/%,+) ('!')&+@ G$$@) W$,- '! /,$G,+))

=0.=4 0A.DD 4D.A0 =.03

4D 03.:A =5.4= A.=

:2.: 04.1= 00.43 .05.54

'nventory Management

The increasing component of raw materials in inventory is due to the fact that the company has gone for bulk purchases and has increased consumption due to a fall in prices and reduced margins for the year. To the 6uestion as to whether the increasing costs in inventory are justified by the returns from it the answer could be found in the &C# retail expansion. They are more into it than earlier and at present more than 3A5 retail outlets branded with &C# signages and more are in the pipeline. This also ensures availability of products to meet the increasing sales.

% negative growth in W'/ could be because of . 0; 8etter and efficient conversion of raw materials to finished goods i.e. the time taken to convert raw materials after procurement to the end product is very minimal. :; This also is due to capacity being not utiliJed at the optimum which should mean that more of goods are stagnant at the operations. 8ut this is not the scenario witnessed here as could be easily seen from the increased utiliJation of plant capacity. The 31.AF rise in value is primarily due to the increase in the consumption of raw materials in processors. This shifting value has to be traced back to the sales of computers B micro processor based systems i.e. whether sales justify this increase.

:0

The sales in value have increased by 45F <=:AD=.2AB0=:0=D.A3;. This is a marked increase from the previous year where despite the increase in the value of raw materials consumed there was a decline in the value of sales. The current ratio after a decline in :551 has increased which means an increase in li6uidity and solvency position of the firm. This reaffirms what had been stated earlier firms current assets are at an all time high. This they might have done to cover the risk involved in their expanding operations. The present ratio of 0.2=:70 could be claimed to be optimal as the desired ratio of the company is about is about 0.4470. but how far has been the ratio successful in indicating the relative li6uidity of current assets and liabilities have not been answered.

The value of imported and indigenous raw material consumed give a clear picture that if there is a change in the +M'M policy of the government it is bound to affect the company adversely as more than25Fof their consumption is from imports. 8ut this is a scenario witnessed in the industry as a whole and though &C# is into expanding its operations to "ttaranchal it is also bound to be affected by a change in the import duty structure.

CA%H .ANA'E.ENT 'n cash management the collect float taken for the che6ues to be realiJed into cash is irrelevant and non. interfering here because banks such as )tandard Chartered, &@(C and C'T' who give credit on the basis of these che6ues after charging a very small amount. +ven otherwise the time taken for the che6ues to be processed is instantaneous. Their Cash Management )ystem is 6uite efficient. +OR,IN' CAPITA( B %HORT TER. FINANCIN'3$n crore 4 NA.E OF THE *AN, )T%T+ 8%!- $( '!@'% 'C'C' 8%!FUND *A%ED 4355 0:D: NON FUND *A%ED 04555 =215 ::

&@(C 8%!)T%!@%,@ C&%,T+,+@ 8%!)T%T+ 8%!- $( )%",%)&T,% )T%T+ 8%!- $( /%T'%#% C%!%,% 8%!)$C'+T+ G+!+,%#+ T$T%#

0:55 0:55 20A 0455 0:54 0555 00A55

35:A =555 =555 44A5 :44A 0555 4DA55

The consortium of banks provide a fund based limit of 00A crores which comprises of cash credit and working capital demand loans and non fund based limits which has bank guarantee and letter of credit subject to a limit of 4DA crores.%ny issue of the commercial paper in the part of the firm leads to a decline in the limit of fund based limits. Currently the firm having issued commercial papers worth rs45crores for the year :500 has asked the lead bank to deduct the fund based limit from 00A crores to DA crores.

'n terms of desirability the commercial papers are cheaper and advantageous to the firm compared to the consortium financing. 8ut the firm depends on both and for working capital financing is depended on the banks for funds such as working capital demand loans and cash credits.

%ECURED (OAN% )&$,T T+,M #$!G T+,M T$T%# F )&$,T T+,M

;713 =110.:D A45.52 AA:0.4A 15.=

;71; 3154.2 5 3154.2 055

;711 =1D2.A: 4=30.43 D==D.DD A1.54 :4

UN%ECURED (OAN% )&$,T T+,M #$!G T+,M T$T%# F )&$,T T+,M

;711 :A14.41 02 :305.41 11.4=D

;717 34.1= 031.A0 :44.=A :2.4D

;77@ 23.D= 4:30.=: 444D.:3 :.4

The preference of short term financing to long term as such is not the part of any policy employed by the firm but due to the reason that they were cheaper and the interest rates lower.

The other notable feature in &C# statements has been the growing dividend policy of the firm which has meant that the firm doesn t have at its disposal too much cash in hand. That is the firm disburse as dividends profits which could have either been retained in the business for capital expenditure. 8ut rather than investing more in plant and machine which they can at any point in time by adding on a additional line if need be they would like to optimiJe their utiliJation in fixed assets at present.

DI1IDEND PO(IC& ;713 @'L'@+!@ /%'@ < '!C#"@'!@ C@T; /,$('T %(T+, T%M @'L'@+!@ /%*.$"T ,%T'$ 002:1.31 04:23.2A DD.4= ;71; 22:4.:: 0:5D1.3= 34.DD ;711 4A11.21 302:.D1 AD.40

:=

The dividend pay.out ratio is increasing tremendously over the years. @ividends imply outflow of cash and lowers future growth. &owever a high dividend pay.out ratio may lead to a rise in prices of shares.

(OAN% AND AD1ANCE%

)+C",+@ #$%!) ;713 T$T%# 8$,,$W'!G) )&$,T.T+,M /+,C+!T%G+ )&$,T.T+,M AA:0.4A =110.:D 15 ;71; 3154.2 3154.2 055 ;711 D==D.DD =1D2.A: A1

"!.)+C",+@ #$%!) ;713 T$T%# 8$,,$W'!G) )&$,T.T+,M /+,C+!T%G+ )&$,T.T+,M :305.41 :A14.41 11.43 ;71; :44.=A 34.1= :2.41 ;711 444D.:3 23.D= :.4

The company is going for more and more shore.term financing, could be because of the fact that it is considered as a cheaper source than long.term financing.

:A

CHAPTER 1I CONC(U%ION

<.1 CONC(U%ION %ale are decrea $n2 dur$n2 t0e !ear ;77@)17. Hence pro#$ta5$l$t! 0a decl$ned o6er t0$ t$me per$od @ue to increase in the time period for the realiJation of debtors, cash and bank balance has decreased. )tock turnover ratio is decreasingN it shows that capital is blocked into the inventory. (ixed asset turnover ratio has decreased this year, which shows that assets have not been used efficiently as they had been used in the previous year.

:3

All t0e a5o6e rat$o topped.

0ow a decrea ed or un#a6ora5le $tuat$on 5ecau e o# t0e work o# 0ad 5een

ent$re replacement o# coolant c0annel> due to w0$c0 t0e product$on proce

<.; RECO..ENDATION% )pecail +fforts )hold 8e Made To %nalyJe #oans %nd %dvances<loans; 'nventory )hould 8e ,eviewed Constantly<inventory Management; % )tudy May 8e Conducted 'f ,e6uired against Customer Marketing +fforts $r other ,easons<customer )atisfaction; Company )hould Try To 'mprove its Current ,atio<,atios; (oan B Ad6ance )pecial efforts should be made to analyJe loans E advances, which are between 4AF to A3F of current assets. This can be classified between production B operation relation related and non. production B operation related. !o production related cases might be financed from other sources like debenture etc. and treated separately. In6entor! 'nventory should be reviewed constantly to identify show B dead B obsolete item and then disposed until :554.5= level is again achieved. $ptimum level should be revised periodically, keeping in view, distance of suppliers, production lead time of supplier, transport problem if any and reliability of suppliers. This will help to avoid obsolesce and dead inventory. De5tor

:2

% study may be conducted if re6uired by experts to pinpoint reason behind &C# '!($)*)T+M #T@. high correction period of 1A days in :505.00 against A5 days of TC) 't is due to 6uality of products, 6uality of customer, the segment of customers marketing effort, distribution pattern or other reasons.

Cred$tor Though high payout days may be apparently beneficial for the company. 't has it very heavy long term cost like high interest cost, bad credit ratings and shyness of good 6uality B standard suppliers.

Ca 0 B *ank This is the most li6uid element in current asset and target shall be fixed most cautiously. Too low a figure of =.=F of total current assets of &C# 'nfosystems #td. in :505.00 as against 0A.AF of TC) may be apparently too good to look at, but this may be lead to payment crisis at various sorts. Rat$o The company should try to improve its current situation. The ratios, which are taken in this research to evaluate the company s position, are Current ratio, Ouick ratio and %ctivity ratio. These ratios show the actual position of the company. The Ouick ratio is declining since :553.52 till now. There is a drastic declining in the working capital turnover ratio. This ratio goes to negative position in current year compared to previous. The @ebts collection period is 4A1 days for +xporters. This shows the poor collection policy. The current ratio is 0.5: in :55D.51, which

:D

is not upto the ideal ratio. This shows that the current assets are e6ual to the current liabilities. !ot satisfactory.

:1

*I*(IO'RAPH&
Re#erred %$te 0. www.google.com :. www.answers.com 4. www.yahoo.com =. www.amaJon.com A. www.hclinfosystems.com Re#erence *ook 3. -han and Hain (inancial Management. 2. 'C%' s Module.

45