SUMMER TRAINING REPORT

ON

“ WORKING CAPITAL ANALYSIS OF VERKA

MILK PLANT”

Submitted in partial fulfillment of the requirements for the

degree of Masters of business administration(2016-
2018)affiliated to Punjab Technical university Jalandhar

Supervised by Submitted by
Mr.D.P, Sharma

Project guide
Mr. vishal thakur
(lab Attendant)
 Acknowledement

At the level of learning, it is often difficult to understand

the wide spectrum of knowledge without proper
guidance.Guidance and encouragement are the two ways
that leadsto the path of success..

I would like to thank Mr.D.P.Sharma accounts manager

of verka milk plant,jalandhar,for providing me this
wonderful opportunity to work “jalandhar Distt”..Milk
production union cooperative Ltd”..
I am extremely thankful in charge (Accounts department)
for their invaluable support and inputs in this
project..Their timely suggestions and novel ideas
provided a better insight for the organizations study of the
company..

Kuljit kaur
 CERTIFICATE OF COMPLETION

This is to certify that KULJIT KAUR MBA (3rd semester) has

successfully completed her project titled “WORKING
CAPITAL ANALYSIS THROUGH BALANCE
SHEETS”under the guidance of Mr.vishal thakur. This is the
partial fulfillment of her MBA(2016-2018)

DATE:
 DECLARATION

I undersigned hereby declare that the summer training project

report submitted to my college C.T Group of Institution,
Maqusudan. Impartial fulfillment for the degree of Master
of Business Administration on “Working capital Analysis of
Doaba Milk Union is a result of my own work under continuous
guidance and kind co-operation of our college faculty member.
I have not submitted this training report to any other university
for the award of degree.

Kuljit kaur
(Student)
 contents

Chapter No. Contents Page No.

1). Introduction to Milkfed 7 - 20

2). Review of litrature 21 - 23
3). Objective of the study 24 - 25
4). Research methodology 26 - 27
5). Introduction to working 28 - 34
captial
6). Calculation of working 35 - 40
capital
7). Analysis of comparative 41 - 46
balance sheet
8). Limitations of the study 47 - 48
9). Conclusion 49 – 50
 Executive Summary
The Organisation study was conducted at Doaba Milk Union,
Jalandhar, Punjab. The objective of the study is:
 To study the fluctuation in working capital over previous 5
years.
 To study the cause of such fluctuation.
 To study current position of firm from working capital.

The organization deals in Milk and Milk products. The

Milkfed was incorporated in 1973.
Verka is a leadin brand in milk and milk products providing
more than 30 different products.
Plant can hold upto 1 lakh liter of milk at a point of time.
Being a leading brand in milk products, it forces other
brands to provide better quality of products at reasonable
price to survive in the market.
 Such a huge plant with branches in different cites need
huge funds to manage its activities, in this report we will
discuss what was the working capital of the firm from last 5
year, how much it changes and what were the reasons for
such a change.

Working capital may be defined as capital invested in

current assets.
Working capital is very important aspect for a every
business to study and control. Success of every business
depends on the effective use of its working capital.
Working capital has 2 concepts . These are:
 Gross working capital: (Total Current Assets).
 Net Working Capital: (Total Current Assets – Total
Current Liabilities).
Study of working capital of a firm is very important as is tell the
business that how much funds are needed to smoothly operate
the its activities, and how to manage current finance that a
business holds with it.
Chapter 1 - Introduction

9|Page
 MILKFED-PUNJAB

The Punjab State Cooperative Milk Producers’ Federation

Limited popularly known as Milkfed Punjab, came into
existence in 1973 with a twin objective of providing
remunerative milk market to the milk producers in the state by
value addition and marketing of produce on one hand and to
provide technical inputs to the milk producers for enhancement
of milk production on the other hand.
Although the federation was registered much earlier, but it came
to real self in the year 1983 when all the milk plants of the
erstwhile Punjab Dairy Development Corporation Limited were
handed over to cooperative sector and the entire state was
covered under operation flood to give the farmers a better deal
and our valued customers better products.
The setup of the organization is a three tier system, milk
producers cooperative societies at the village level, Milk Unions
at district level and federation as an apex body at state
level. Milkfed Punjab has continuously advanced towards its
coveted objectives well defined in its byelaws.
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Milkfed deals in milk, milk products & seeds for agriculture
assistance. Milkfed also provide cattle feed to its member
societies.
First Milkfed Plant of the State was setup near the Amritsar.
The brand name of milk and milk Products was adopted as
Verka. Commissioning of the plant was done by Dairy
Development Corporation in 1974.

Doaba Milk Union

Doaba Milk Union is a branch of Milkfed situated in Jalandhar
with head office in Chandigarh. Doaba Milk Union is one of the
plants which earns profits at present. Being a branch its
investment decisions are monitored by head office. Working of
the plant is similar to the others
Doaba Milk Union includes about 500 milk producers’
cooperative societies at village level which as distributed under
12 zones. Milk plant has a capacity to provide upto 2 lakh liters
of milk per day to consumers. Milk procurement increases
gradually @ 5% per annum.
Milk Plant, Jalandhar is located near Guru Amardas colony, G.T
Road. It is located on the National Highway No.1 joining
Ludhiana, Jalandhar, Amritsar and Chandigarh. There is a great
advantage as it is directly connected to National Highway which
is facilitating all transportation and allied facilities.

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 History of Doaba Milk Union

The Punjab state verka milk producers federation popularly

known as MILKFED Punjab came into existence in 1973 with a
twin objective :-

 To providing remunerative milk market to the milk

producers in the state by value addition and marketing of
produce on one hand.

 To provide technical inputs to the milk producers for

enhancement of milk production on the other hand.

Although the federation was registered much earlier, but it came

to real self in the year 1983 when all the milk plants of the
erstwhile Punjab dairy development corporation limited were
handed over to cooperative sector and the entire state was
covered under operation flood to give the farmers a better deal
and our valued customers better products. Today, when we look
back, we think we have fulfilled the promise to some extent. The
setup of the organization is a three-tier system, milk producers
cooperative societies at the village level, milk unions at district
level and federation as an apex body at state level. Milk fed
Punjab has continuously advanced towards its coveted
objectives well defined in its bylaws.

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 Objectives
Milkfed has various objectives, Some of them are mentioned
below:-
 To bring prosperity to milk producers in the state through
assured market and remunerative prices all round the year.
 To provide fresh hygienic milk to urban consumers at
reasonable rates.
 To ensure viability and growth of Milk Unions by
converting surplus milk into products and ensure their
marketing.
 To modernize existing plants and upgrade technology from
time to time.

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 Mission Statement
 To Support the milk producers in uplifting their rural
economy, make all the Milk Unions viable and ensure
quality milk & milk products to consumers.

Vision Statement
 The vision for the next five years is to triple the turnover
the federation from level of Rs. 1742 crores in 2011-12 to
Rs. 5000 crores in 2016-17.
 Ensure grass root level presentation of the cooperative
movement.
 Increase economies of scale in Milk Unions
 Capacity expansion and modernization of the dairy plants.
 Serious thrust on increasing marketing orientation.

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 Products of Verka

Milk :-
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Verka offer 5 different types of milk to consumers.

1). Skimmed Milk:

Nutrition Facts per 100

Specifications
ml.
0.5% Milk Fat 100 m
Milk Fat
min.
Milk 8.7% Protein 0.5 g
SNF min.
Carbohydrates 4.6 g
Minerals 0.8 g
2). Double Toned Energy 37.0 K.Cal
Milk (DTM):

Nutritio
n Facts
Specifications
per 100
ml.
1.5% Milk Fat 1.5 g
Milk Fat
min.
Milk SNF 9% min. Protein 3.1 g
Carbohydrates 4.7 g
Minerals 0.7 g
3). Toned Milk: Energy 71.7
K.Cal
Specifications Nutritio
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 n Facts
per 100
ml.
Milk Fat 3% min. Milk Fat 3.0 g
8.5% Protein 3.1 g
Milk SNF
min.
Carbohydrates 4.7 g
4). Standard Milk: Minerals 0.7 g
Energy 71.7
K.Cal
Nutrition Facts per
Specifications
100 ml.
Milk Fat 4.5% min. Milk Fat 4.5 g
Milk SNF 8.5% min. Protein 3.1 g
Carbohydrates 4.7 g
5). Full Cream
Minerals 0.7 g
Milk:
Energy 71.7
K.Cal
Nutrition Facts per 100
Specifications
ml.
Milk Fat 6% min. Milk Fat 6.0 g
Milk SNF 9% min. Protein 3.3 g
Carbohydrates 5.0 g
Minerals 0.7 g
Energy 90.0 K.Cal

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Cheese & Paneer :-
1).Cheese Spread:
2).Processed Cheddar Cheese:
3).Raw Cheddar Cheese:

4).Paneer:

Fresh Drinks:-
1).Sweetened Flavoured Milk: 2).Raseeela:

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3).Lassi:

Ghee:- Butter:

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Ice Cream:- Kulfi and F/N Chocolate:-

Milk Powde:- Skimmed Milk Powder:-

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Curd:- Kheer:-

Special Pinni:-

Organisation Chart

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22 | P a g e
23 | P a g e
Staff Members of Accounts Department

Staff Members of Accounts Department:-

D.P Sharma

(Manager)
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D.P Sharma
(Deputy Mgr.)
 D.P Sharma

(Accountant)

Mr.Ashok Mr.C.M Puri Mr.Dinesh Mrs.Satwind

Kumar (Jr. Kumar (Jr. er Kaur (Jr.
Accountant) (Jr. Accountant) Accountant)
Accountant)

Mrs.Kamaljit J.S Methew

Kaur (Accountant
(Accountant Clerk)
Clerk)

Mr.Ram
Lubhaya
Cashier – R.G.S Chaun (Bill Clerk)

Clerk Typist – Mrs.Neelam Handa, Mr.Dalvir Dingh,

Mr.Palvinderjit Singh & Mr.Jaspal Singh

Chapter 2 – Review of Literature

25 | P a g e
 Review of literature
Padach(2006) A well designed and implemented working capital
management is expected to contribute positively to the creation
of a firm’s value The purpose of this paper is to examine the
trends in working capital management and its impact on firms’
performance. The trend in working capital needs and
profitability of firms are examined to identify the causes for any
significant differences between the industries. The dependent
variable, return on total assets is used as a measure of

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profitability and the relation between working capital
management and corporate profitability is investigated for a
sample of 58 small manufacturing firms, using panel data
analysis for the period 1998 – 2003. The regression results show
that high investment in inventories and receivables is associated
with lower profitability. The key variables used in the analysis
are inventories days, accounts receivables days, accounts
payable days and cash conversion cycle. A strong significant
relationship between working capital management and
profitability has been found in previous empirical work. An
analysis of the liquidity, profitability and operational efficiency
of the five industries shows significant changes and how best
practices in the paper industry have contributed to performance.
The findings also reveal an increasing trend in the short-term
component of working capital financing.

Teruel & Solano(2007) The objective of the research presented

here is to provide empirical evidence about the effects of
working capital management on the profitability of a sample of
small and medium-sized Spanish firms. With this in mind, we
collected a panel of 8,872 SMEs covering the period 1996-2002.
The results, which are robust to the presence of endogeneity,
demonstrate that managers can create value by reducing their
firm’s number of days accounts receivable and inventories.
Equally, shortening the cash conversion cycle also improves the
firm’s profitability.

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J P Singh & Shishir Pandey(2008) For the successful working
of any business organization, fixed and current assets play a
vital role. Management of working capital is essential as it has a
direct impact on profitability and liquidity. An attempt has been
made in this paper to study the working capital components and
the impact of working capital management on profitability of
Hindalco Industries Limited. The paper also makes an attempt to
study the correlation between liquidity, profitability and Profit
Before Tax (PBT) of Hindalco. The study is based on secondary
data collected from annual reports of Hindalco for the study
period 1990 to 2007. The ratio analysis, percentage method and
coefficient of correlation have been used to analyze the data.
Multiple regressions were used to check the significant impact
on the profitability of Hindalco.

Mathuva, D.(2009) This study examined the influence of

working capital management components on corporate
profitability. A sample of 30 firms listed on the Nairobi Stock
Exchange (NSE) for the period of 1993 to 2008 was used. Both
the pooled OLS and the fixed effects regression models were
used. The key findings from the study were: (1) there exists a
highly significant negative relationship between the time it takes
for firms to collect cash from their customers (accounts
collection period) and profitability (p<0.01). This means that
more profitable firm takes the short time to collect cash from
their customers. (2) there exists a highly significant positive

28 | P a g e
relationship between the period taken to convert inventories into
sales (the inventory conversion period) and profitability
(p<0.01). This means that firm which maintain sufficient high
inventory level reduce cost of possible interruption in the
production process and loss of business due to scarcity of
fluctuations. (3) there exists a highly significant positive relation
between the time it takes the firm to pay its creditors (average
payment time) and profitability (p<0.01). This implies that the
longer a firm takes to pay its creditors, the more profitable it is.

Padachi Kesseven D & Carole Howorth(2014) This study

investigated into working capital management (WCM) practices
of small to medium sized manufacturing firms operating in
diverse industry groups of the Mauritian economy. Previous
studies have revealed that SMEs tend to neglect this area and are
often credited as the main reason for their poor performance.
Therefore the purpose of this paper is to investigate into the
SMEs’ approach to WCM routines. The research objectives
were met using a survey based approach. The findings
consistently highlighted that Mauritian SMEs are not a
homogenous group with regard to WCM routines. Exploratory
factor analysis identified three underlying dimensions in the take
up of WCM routines, namely stock review, debtor review and
finance review of Mauritian SMEs. The education level and the
field of study consistently showed that financial knowledge
gained in accounting related field make a difference. The results
also showed that firms which claimed a more severely late
payment focused more on credit management and pay more

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attention to working capital financing. Interestingly, the smaller
firms may not be adopting formal analysis of WCM, not only
because of resource constraint, but due to a lack of need.
Financial institutions and policy makers need to focus on
educating such owner-managers with necessary WCM
knowledge.

Chapter 3 – Objective of the Study

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 Objective of the Study

 To study the fluctuation in working capital over previous 5

years.

 To study the cause of such fluctuation.

 To study current position of firm from working capital.

 To analyze comparative balance sheet of the company.

Chapter 4 – Research Methodology

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 Research Methodology

Secondary data is used in the research. The data has been

collected from the balance sheets and profit & loss accounts of
the company. Data was analyzed to find the working capital for
5 years (2010-2015) and analyze the comparative balance sheet
of the company. Fluctuations in working capital of each year are

32 | P a g e
calculated and cause for such fluctuation is figured out. Also
find the current position of the company.

Chapter 5 – Introduction to Working Capital

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 Working Capital:-

In financial management, two important decisions are very vital

and crucial. They are decision regarding fixed assets/fixed
capital and decision regarding working capital/current assets.

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Both are important and a firm always analyzes their effect to
final impact upon profitability and risk

Fixed capital refers to the funds invested in such fixed or

permanent assets as land, building, and machinery etc. Whereas
working capital refers to the funds locked up in materials, work
in progress, finished goods, receivables, and cash etc. Thus, in
very simple words, working capital may be defined as “capital
invested in current assets.” Here current assets are those assets,
which
can be converted into cash within a short period of time and the
cash received is again invested into these assets. Thus, it is
constantly receiving or circulating. Hence, working capital is
also known as circulating capital or floating capital.

Capital is what makes or breaks a business, and no business can

run successfully without enough capital to cover both short- and
long-term needs. Maintaining sufficient levels of short-term
capital is a constantly ongoing challenge, and in today’s
turbulent financial markets and uncertain business climate
external financing has become both harder and more costly to
obtain. Companies are therefore increasingly shifting away from
traditional sources of external financing and turning their eyes
towards their own organizations for ways of improving liquidity.
One efficient but often overlooked way of doing so is to reduce
the amount of capital tied-up in operations, that is, to improve
the working capital management of the company.

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A positive working capital position is required for the
continuous running of a company’s operations, i.e. to pay short
term debt obligations and to cover operational expenses. A
company with a negative working capital balance is unable to
cover its short-term liabilities with its current assets.

Concept of Working Capital

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 Concept of Working Capital:-
There are two concepts of working capital.
These are:
1. Gross working capital: (Total Current Assets).
2. Net Working Capital: (Total Current Assets – Total
Current Liabilities).

1. Gross working capital: (Total Current Assets)

The gross working capital, simply called as working capital

refers to the firm’s investment in current assets. Current assets
are the assets, which can be converted into cash within an
accounting year or operating cycle. Thus, Gross working capital,
is the total of all current assets. It includes
1. Inventories (Raw materials and Components, Work-in-
Progress, Finished
Goods, Others)
2. Trade Debtors
3. Loans and Advance

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4. Cash and Bank Balances
5. Bills Receivables.
6. Short-term Investment

3. Net Working Capital: (Total Current Assets – Total

Current

Net working capital refers to the difference between current

assets and current liabilities. Current liabilities are those claims
of outsiders, which are expected to mature for payment within
an accounting year. Net working capital may be positive or
negative. A positive net working capital will arise when current
assets exceed current liabilities and a negative net working
capital will arise when current liabilities exceed current assets
i.e. there is no working capital, but there is a working capital
deficit. It includes
1. Trade Creditors.
2. Bills Payable.
3. Accrued or Outstanding Expenses.
4. Trade Advances
5. Short Term Borrowings (Commercial Banks and Others)
6. Provisions
7. Bank Overdraft

“Working Capital is the excess of current assets that has been

supplied by the
long-term creditors and the stockholders.”

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The two concepts of working capital, gross working capital and
net working
capital are exclusive. Both are equally important for the efficient
management
of working capital. The gross working capital focuses attention
on two aspects
How to optimize investment in current assets? and How should
current assets
be financed? While, net working capital concept is qualitative. It
indicates the liquidity position of the firm and suggests the
extent to which working capital
needs may be financed by permanent sources of funds.

Importance of Working Capital

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 Importance:-
Working capital is the life blood and nerve center of business.
Working capital is very essential to maintain smooth running of
a business. No business can run successfully without an
adequate amount of working capital. The main advantages or
importance of working capital are as follows:

1. Strengthen The Solvency

Working capital helps to operate the business smoothly without
any financial problem for making the payment of short-term
liabilities. Purchase helps in maintaining of raw materials and
40 | P a g e
payment of salary, wages and overhead can be made without
any delay. Adequate working capital solvency of the business by
providing uninterrupted flow of production.
2. Enhance Goodwill
Sufficient working capital enables a business concern to make
prompt payments and hence helps in creating and maintaining
goodwill. Goodwill is enhanced because all current liabilities
and operating expenses are paid on time.
3. Easy Obtaining Loan
A firm having adequate working capital, high solvency and good
credit rating can arrange loans from banks and financial
institutions in easy and favorable terms.
4. Regular Supply Of Raw Material
Quick payment of credit purchase of raw materials ensures the
regular supply of raw materials fro suppliers. Suppliers are
satisfied by the payment on time. It ensures regular supply of
raw materials and continuous production.
5. Smooth Business Operation
Working capital is really a life blood of any business
organization which maintains the firm in well condition. Any
day to day financial requirement can be met without any
shortage of fund. All expenses and current liabilities are paid on
time.

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6. Ability To Face Crisis
Adequate working capital enables a firm to face business crisis
in emergencies such as depression.

Chapter 6 – Calaulation of Working Capital

Calculation of Working Capital for Year 2012-2013

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Current Amount Current Assets Amount
Liabilities (Rs.) (Rs.)
a). Current 28486843.00 a). Closing 111797676.00
Liabilities Stock
b). 2014871.00 b). General 21657394.48
Outstanding to Stores
Employees
c). Emp. 3158528.00 c). Sundry 11005050.64
Statutory Debtors &
Liabilities Recoverables
d). Supplier & 47610014.09 d). Loan Recov. 2163132.45
cont. From
outstanding employees
e). Statutory 1130330.96 e). Prepaid Exp. 506272.60
Tax Liabilities
f). Other Non 12890901.21 f). Cash & Bank 32525206.61
Statutory Balance
Liabilities
g). Provisions 14493947.61

Total 109785436.77 Total 179654732.78

Working Capital = Total Current Assets – Total Current

Liabilities
= 179654732.78 – 109785436.77

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 = Rs.69,869,296.01
Note: Working Capital is positive that means current assets of
the firm are more than is current liabilities, as outstanding
expenses, unpaid salaries, unpaid bonus and tax liabilities
decreased where as current assets and provisions increased,
stock increased, debtors, cash and bank of the firm also
increased.

Calculation of Working Capital for Year 2013-2014

Current Amount Current Assets Amount

Liabilities (Rs.) (Rs.)
a). Current 37087038.00 a). Closing 202625861.00
Liabilities Stock
b). 15402251.90 b). General 16764315.00
Outstanding to Stores
Employees
c). Emp. 2992434.00 c). Sundry 20688603.29
Statutory Debtors &
Liabilities Recoverables
d). Supplier & 63841483.32 d). Loan Recov. 2129162.90
cont. From
outstanding employees

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e). Statutory 3208270.00 e). Prepaid Exp. 10443720.60
Tax Liabilities
f). Other Non 5998230.23 f). Cash & Bank 31745997.07
Statutory Balance
Liabilities
g). Provisions 11357820.61

Total 139887528.06 Total 284397659.86

Working Capital = Total Current Assets – Total Current

Liabilities
= 284397659.86 – 139887528.06
= Rs.1,44,510,131.8
Note: Working Capital is positive that means current assets of
the firm are more than is current liabilities, as outstanding
expenses, unpaid salaries, unpaid bonus and tax liabilities
decreased where as current assets and provisions increased,
stock increased and debtors of the firm also increased.

Calculation of Working Capital for Year 2014-2015

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Current Amount Current Assets Amount
Liabilities (Rs.) (Rs.)
a). Current 35186225.00 a). Closing 83332717.00
Liabilities Stock
b). 9767358.90 b). General 20167306.00
Outstanding to Stores
Employees
c). Emp. 3065266.00 c). Sundry 14988227.04
Statutory Debtors &
Liabilities Recoverables
d). Supplier & 87290947.78 d). Loan Recov. 1849669.90
cont. From
outstanding employees
e). Statutory 1016246.00 e). Prepaid Exp. 925413.93
Tax Liabilities
f). Other Non 8095743.30 f). Cash & Bank 93490249.74
Statutory Balance
Liabilities
g). Provisions 2339889.61

Total 146761676.59 Total 214753583.61

Working Capital = Total Current Assets – Total Current

Liabilities
= 214753583.61 – 146761676.59
= Rs. 67,991,907.02

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Note: Working Capital is positive that means current assets of
the firm are more than is current liabilities, as outstanding
expenses, unpaid salaries, unpaid bonus provisions and tax
liabilities decreased where as no current asset increased.

Calculation of Working Capital for Year 2015-2016

Current Amount Current Assets Amount

Liabilities (Rs.) (Rs.)
a). Current 47968057.00 a). Closing 70249761.00
Liabilities Stock
b). 9628873.90 b). General 24839075.05
Outstanding to Stores
Employees
c). Emp. 3980988.00 c). Sundry 9144834.98
Statutory Debtors &
Liabilities Recoverables
d). Supplier & 42213677.29 d). Loan Recov. 1895350.90
cont. From
outstanding employees
e). Statutory 2105376.00 e). Prepaid Exp. 673846.60
Tax Liabilities
f). Other Non 4008406.95 f). Cash & Bank 81421518.53
Statutory Balance

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Liabilities
g). Provisions 0.00

Total 109905379.14 Total 188224387.06

Working Capital = Total Current Assets – Total Current

Liabilities
= 188224387.06 – 109905379.14
= Rs. 78,319,007.92
Note: Working Capital is positive that means current assets of
the firm are more than is current liabilities, as outstanding
expenses, unpaid salaries, unpaid bonus and other non statutory
liabilities decreased where as general store increased,
loan/recoverable increased.

Calculation of Working Capital for Year 2016-2017

Current Amount Current Assets Amount

Liabilities (Rs.) (Rs.)
a). Current 54203511.00 a). Closing 234810324.00
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Liabilities Stock
b). 1323146.90 b). General 20622577.42
Outstanding to Stores
Employees
c). Emp. 3701689.00 c). Sundry 20203966.23
Statutory Debtors &
Liabilities Recoverables
d). Supplier & 130774300.98 d). Loan Recov. 1471319.90
cont. From
outstanding employees
e). Statutory 2519865.00 e). Prepaid Exp. 661404.23
Tax Liabilities
f). Other Non 4066561.10 f). Cash & Bank 40897420.61
Statutory Balance
Liabilities
g). Provisions 0.00

Total 196589073.98 Total 318667012.39

Working Capital = Total Current Assets – Total Current

Liabilities
= 318667012.39 – 196589073.98
= Rs. 122,077,938.41
Note: Working Capital is positive that means current assets of
the firm are more than is current liabilities, as outstanding
expenses, unpaid salaries, unpaid bonus where as current assets
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and provisions increased, stock increased and debtors of the firm
also increased.

Chapter 7 - Analysis of Comparative Balance

Sheet

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 Comparative Balance Sheet of Year 2012 – 2013
Particulars 31-3-2012 31-3-2013 Change in Change
Absolute in
Figures Percenta
ge
a). Fixed 163023953. 166563012. 3539059.40 2.17%
Assets 48 88
b). 12520825.0 12520825.0 Nil -----
Investment 0 0
c). Total 114935984. 179654732. 64718748.4 56.3%
Current 38 78 0
Assets
d). Net 144222529. 115999332. (28229198. (19.5%)
Deficit 96 04 00)
TOTAL 434703292. 474737903. 40034610.0 9.20%
ASSETS 96 00 0

a). Paid-up 13304667.0 13487561.0 182894.00 1.37%

& 0 0
Subscribed
Share
Capital
b). 7334224.36 5982500.36 (1351724.0 18.43%
Reserves & 0)
Surplus
c). Secured 35452780.0 ----- ----- -----
Loan 0
51 | P a g e
d). Current 176414135. 109785436. (66628699. 37.7%
Liabilities 50 77 00)
e). Inter 66104428.9 206114427. 140009998. 211.8%
Unit 4 15 21
Balance
f). 136093057. 139367977. 3274920.42 2.40%
Depreciatio 00 42
n Reserve
Fund
TOTAL 434703292. 474737903. 40034610.2 9.20%
LIABILITI 80 00 0
ES

Note: There is increase in percentage of total assets and

liabilities.
There is increase in fixed and current assets by 2.17% and
56.3% respectively.
Liabilities increased by 9.20%
There is a net deficit of 19.5%.

Comparative Balance Sheet of Year 2013 – 2014

Particulars 31-3-2013 31-3-2014
Change in Change
Absolute in
Figures Percenta
ge
a). Fixed 166563012. 169252983.8 2689951.00 1.61%
52 | P a g e
Assets 88 8
b). 12520825.0 12520825.00 Nil -----
Investment 0
c). Total 179654732. 284397659.8 104742927. 58.30%
Current 78 6 08
Assets
d). Net 115999332. 84386622.66 (31612709. (27.25%
Deficit 04 38) )
TOTAL 474737903. 550558071.4 75820168.4 15.97%
ASSETS 00 0 0

a). Paid-up 13487561.0 13716079.00 228518.00 1.69%

& 0
Subscribed
Share
Capital
b). 5982500.36 5271511.36 (710989.00) (11.88)
Reserves & %
Surplus
c). Secured ----- 7000000.00 ----- -----
Loan
d). Current 109785436. 1398875528. 30102091.3 27.41%
Liabilities 77 96 0
e). Inter 206114427. 241923245.5 35808819.4 17.37%
Unit 15 6 0
Balance
f). 139367977. 142759706.4 35808819.4 2.43%
Depreciatio 42 2 0
n Reserve
Fund

53 | P a g e
TOTAL 474737903. 550558071.4 75820168.4 15.97%
LIABILITI 00 0 0
ES

Note: There is increase in percentage of total assets and

liabilities.
There is increase in fixed and current assets by 1.61% and
58.30% respectively.
Liabilities increased by 15.97%
Net deficit increased from 19.5% to 27.25%.

Comparative Balance Sheet of Year 2014– 2015

Particulars 31-3-2014 31-3-2015 Change in Change
Absolute in
Figures Percenta
ge
a). Fixed 169252983. 171135413. 1882450 1.11%
Assets 88 88
b). 12520825.0 12522025.0 1200 0.009%
Investment 0 0
c). Total 284397659. 214753583. (69641076) 24.48%
Current 86 61
Assets
d). Net 84386622.6 31406373.4 (529202.49) (62.72%
Deficit 6 6 )
TOTAL 550558071. 429817396. (120740675. (21.93)
54 | P a g e
ASSETS 40 00 00) %

a). Paid-up 13716079.0 14011070.0 294991.00 2.15%

& 0 0
Subscribed
Share
Capital
b). 5271511.36 5335483.36 103972.00 1.97%
Reserves &
Surplus
c). Secured 7000000.00 50000000.0 43000000.00 6.14.2%
Loan 0
d). Current 1398875528 146761676. 6874148.53 4.91%
Liabilities .96 59
e). Inter 241923245. 67859443.5 (174063803. 71.95%
Unit 56 8 00)
Balance
f). 142759706. 145809722. 3050016.00 2.13%
Depreciatio 42 42
n Reserve
Fund
TOTAL 550558071. 429817396. (120740675. (21.93)
LIABILITI 40 00 00) %
ES

Note: There is decrease in percentage of total assets and

liabilities.
Net deficit increased from 27.25% to 62.72%.

55 | P a g e
 Comparative Balance Sheet of Year 2015 – 2016
Particulars 31-3-2015 31-3-2016 Change in Change
Absolute in
Figures Percenta
ge
a). Fixed 171135413. 172923909. 1788496.00 1.04%
Assets 88 88
b). 12522025.0 12522025.0 ----- -----
Investment 0 0
c). Total 214753583. 188224387. (26529197. (12.35)%
Current 61 06 00)
Assets
d). Net 31406373.4 ----- ----- -----
Deficit 6
TOTAL 429817396. 373670322. (56147074. (13.06%)
ASSETS 00 00 00)

a). Paid-up 14011070.0 14208112.0 197042.00 1.40%

& 0 0
Subscribed
Share
Capital
b). 5335483.36 6150139.36 774656.00 14.41%
Reserves &
Surplus
c). Secured 50000000.0 50000000.0 ----- -----
Loan 0 0
56 | P a g e
d). Current 146761676. 109905379. (36856297. (25.11%)
Liabilities 59 14 00)
e). Inter 67859443.5 44241782.4 (23617661. (34.8)%
Unit 8 2 00)
Balance
f). 145809722. 148946518. 3136796.00 2.15%
Depreciatio 42 42
n Reserve
Fund
g). Net ----- 218390.67 ----- -----
Profit
TOTAL 429817396. 373670322. (56147074. (13.06%)
LIABILITI 00 00 00)
ES
Note: There is decrease in percentage of total assets and
liabilities.
There is a decrease in current assets by 12.35%.
Current liabilities and inter unit balance is also negative by
25.11% and 34.8% respectively.
There is a profit of 218390.67.
Comparative Balance Sheet of Year 2016 – 2017
Particulars 31-3-2016 31-3-2017
Change in Change
Absolute in
Figures Percenta
ge
a). Fixed 172923909. 182395785. 9471876.00 5.47%
Assets 88 88

57 | P a g e
b). 12522025.0 12522025.0 ----- -----
Investment 0 0
c). Total 188224387. 318667012. 130442625. 69.30%
Current 06 39 00
Assets
d). Net ----- ----- ----- -----
Deficit
TOTAL 373670322. 513584823. 139914501. 37.44%
ASSETS 00 27 00

a). Paid-up 14208112.0 14485112.0 277000.00 1.94%

& 0 0
Subscribed
Share
Capital
b). 6150139.36 13518802.3 7368663.00 119.81%
Reserves & 6
Surplus
c). Secured 50000000.0 57365000.0 7365000.00 14.73
Loan 0 0
d). Current 109905379. 196589073. 86683695.0 78.87%
Liabilities 14 98 0
e). Inter 44241782.4 58504787.7 14263005.4 32.23%
Unit 2 8 0
Balance
f). 148946518. 152201964. 32554467.0 2.18%
Depreciatio 42 42 0
n Reserve
Fund
g). Net 218390.67 20920082.7 20701692.1 9479.20

58 | P a g e
Profit 3 %
TOTAL 373670322. 513584823. 139914501. 37.44%
LIABILITI 00 27 00
ES
Note: There is increase in percentage of total assets and
liabilities.
There is increase in fixed and current assets by 5.47% and
69.30% respectively.
Liabilities increased by 37.44%
Net profit increased by 9479.20%

Chapter 8 – Limitations of the Study

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 Limitations
 Difficult to collect data.
 Shortage of time.

60 | P a g e
Chapter 9 – Conclusion

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Previously in year 2010 working capital of the firm (Doaba Milk
Union) was showing negative figures as the current liabilities of
the firm were exceeding its current assets due to excess of
outstanding expenses as well as creditors, but in later years (in
2013, 2014,2015, 2016 & 2017) the accounts of the firm shows
positive amount for working capital as the current assets started
to increase and current liabilities declined, the firm managed its
fund in a wise manner to gain most out of it and move the
negative figures of working capital to positive.

Due to wise planning and team efforts they achieved their goal
and hence balanced the flow of funds in such a manner so
maintain adequate funds for working capital.
Doaba Milk Union Snap out of losses and started gaining
profits. Working capital of firm is positive from last 4 years, and
will continue as the firm is leading brand and possesses efficient
employees who can overcome any hurdles.

62 | P a g e
 References

Padachi, K. (2006). Trends in working capital management and

its impact on firms’ performance: an analysis of Mauritian small
manufacturing firms.International Review of business research
papers, 2(2), 45-58.
Juan García-Teruel, P., & Martinez-Solano, P. (2007). Effects of
working capital management on SME profitability. International
Journal of managerial finance, 3(2), 164-177.
J P Singh & Shishir Pandey. (2008). The influence of working
capital management components on corporate profitability.

63 | P a g e
Mathuva, D. (2009). The influence of working capital
management components on corporate profitability. : a survey
on Kenyan listed firms. Research Journal of Business
Management, 3(1), 1-11..
Padachi Kesseven D & Carole Howorth, 2014. "Focus on
working capital management practices among Mauritian SMEs:
Survey evidence and empirical analysis," E3 Journal of Business
Management and Economics. ; E3 Journals, vol. 5(4), pages
097-108.
www.Verka.coop

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