CHAPTER – 1

INTRODUCTION
EXECUTIVE SUMMARY

Exide Life Insurance Company Ltd was started in February 2008. The
company was formerly known as ING Vysya Life Insurance and was started in
2001-02. The company distributes its products through multi-channels viz. Agency,
Banc assurance, Alliances and Direct Channels. The company has also large
manufacturing of Exide Batteries.

The main objective is to study working capital analysis of this company. The data
was collected from the secondary sources and balance sheet was taken from
company’s website. The working capital analysis was calculated taking 5 years
balance sheet that is 2010-2011 to 2014-2015. The analysis was done on current
asset ratio, working capital turnover ratio & proprietor’s ratio. The working capital
of the company is increased year after year except in the year 2012. The company
has a positive working capital because it has increased working capital in 4 years
except 1 year in 2012.

Majority of the respondents (69.6 per cent) lived in urban areas, where the business
potential was high. The company should educate the customers to go in for
products by highlighting the advantage of insurance. The Company’s vision is to
be the number one insurer for creating shareholder value and mission is to help
customers to prepare financially for a long and happy life. Exide Life Insurance
Company is one of the growing insurance companies in India which has a lot of
scope for future growth and expansion.
OBJECTIVES OF STUDY:

1. To study the organization.

2. To evaluate the concepts of ratio analysis.

3. To know the yearly profit of the company.

4. To study its operations.

5. To know the products & services offered by the company.

6. To give our own suggestion for the betterment of the company.

IMPORTANCE OF STUDY:

1. Family’s Financial Requirements


If you are the only person in your family who is earning, then the
family’s income will cease when you are no more. With no steady source of
income, the standard of living will fall and they may not be able to meet
even basic needs like education. Therefore, your life insurance Policy will
come to your family’s aid during such phases of life. 


2. Loans and Expenses Repayment 


You may have taken a loan along with your spouse. Or you may have
borrowed money from a friend for starting a business. Also, you may have
just started your family and your child is still very young. In all these cases it
is your spouse who will have to bear the heavy burden of paying off the loan
and managing your child’s education. These are major expenses and you can
help your spouse by buying a life insurance Policy early in life.

3. Draw Loans Against Insurance


Besides using your life insurance Policy amount to repay your loans,
you can also use your Policy to draw a loan against it.
 4. Diverse Investment Options

You can also use your life insurance Policy as a good investment
option. There are various kinds of insurance policies and you can use them
for different purposes. For example, retirement plans, child insurance
plans, whole life insurance plans, Term life insurance plans etc. are all
good life insurance policies. Except Term plans, which don’t have an
investment component, all others are good investment options too.

5. Illnesses and Accidents


Life insurance policies are always a good protection tool against the
financial pressure that you will face during a serious illness or accident. You
can get treatment from the best hospitals without worrying about the
financial burden. Ideally, all insurance policies should be purchased when
you are young and free of illnesses.

6. Tax Benefits

Life insurance policies are a good way of saving tax too. Under
Section 80C of the IT Act, many of the insurance schemes in India including
the life insurance schemes offer tax deductions on Premium payments.

RESEARCH METHODOLOGY:

This project acts as a reference guide or as a source of information. It gives

the idea about the financial analysis of the firm. The main objective of the study
was to put into practice the theoretical aspects of the study into real life work
experience.

METHOD OF DATA COLLECTION:

 • Primary Data: The primary data is the first hand data collected for the
first time. Data was collected through face to face interaction with
manager and the person consult or guide.
• Secondary Data: The secondary data is the second hand data collected by
some other & which have been processed. Data was collected from last
year’s balance sheet and other various information through company
website, books etc.

SCOPE OF THE STUDY:

1. To analyze various ratios of the company.

2. Assessing the company’s growth & stability of its annual sales by following
the various ratios.

3. Assessing the present trend of ratios in order to measure whether the

performance is good or bad.

4. To know the profits and losses of the company.

5. To review various ratios relating to liquidity, turnover & profitability.

LIMITATION OF STUDY:

1. The time period given was only 30 days.

2. As the sources collected from primary data were limited, so more of the
information was collected from secondary data.

3. Information provided was not sufficient.

4. Financial aspects was not provided hence should be collected from company
website.
 CHAPTER
– 2
 COMPANY
PROFILE

About Exide Life Insurance:

Exide Life Insurance Company Limited (formerly ING Vysya Life Insurance
Company Limited) commenced operations in 2001 and is head quartered in
Bangalore (now Bengaluru). The company is profitable and serves over 10lakh
customers across India and manages over INR 8000 crores in assets. The company
is 100% owned by Exide Industries Limited and is proud to be part of a 100 year
old brand heritage in India.

Exide Life Insurance distributes its products through multi-channels viz.

Agency, Banc assurance, Alliances and Direct Channels. The Agency channel
comprises of over 35,000 advisors who are attached to over 200 company offices
and customer care centers across the country. The Banc assurance and Alliances
business includes distribution relationships with banks, corporate Agents, Brokers
& Referral Partners.

Exide Life Insurance, one of the leading life insurance companies in South
India, is now growing its franchise in other parts of the country. The company is
focused on providing long term protection and savings solutions and has a strong
traditional product portfolio with a consistent bonus track record. Exide Life
Insurance has the ISO 9001:2008 quality certificate for all customer service
processes.

About Exide Industries Limited:

Exide is India’s largest manufacturer of electric storage batteries and its

biggest power-storage solutions provider with a market capitalization of over INR
10,000 crores*. Since its introduction in India more than a hundred years ago,
Exide remains the foremost and the most trusted battery brand in India. The
century old brand equity is backed by a robust nation-wide network of 18000-plus
dealers. (*As on 31st March 2014)

With 7 world-class battery manufacturing factories across India, the range of

products offered by the company covers everything from the smallest batteries
required in motorcycles to the giant batteries powering submarines. After all India
moves on Exide.

New Logo of Exide Life Insurance:

The new logo of Exide Life Insurance combines the bold 'Exide' word
mark, with softer, more contemporary forms of the word 'Life' and the 'Exide
Life Sun' symbol. The colour red and the letterforms of the 'Exide' word mark
create an instant visual connect with the parent brand 'Exide'. The colour red
denotes solidity & dynamism. The word 'Life' is used in the colour blue to denote
stability and security and reflect caring, and human cues. The sun is the most
universally recognized visual expression of 'life' and 'optimism' and reinforces the
brand's philosophy of preparing people for a long and happy life.
COMPANY PROFILE

Exide Life Insurance Company Ltd was started in February 2008. The
company was formerly known as ING Vysya Life Insurance and was started
in 2001-02. The place where company is located is;

Address: USKV COMPLEX, KAIKINI ROAD, PB 36, KARWAR

581301, UK DIST, KARNATAKA

The company is taken on lease basis by the company with a lease for 9 years with
deposit of Rs. 6 lakhs and monthly rent of Rs.28000/-. The company was in profit
for 3 years continuously after its commencement. This company distributes its
products through multi-channels via; agency, Banc assurance, alliances and direct
channels. The Banc assurance and Alliances business includes distribution
relationships with banks, Corporate Agents, Brokers & Referral Partners.

About the Proprietor:

The present Branch Manager of Exide Life Insurance Company Ltd is Mr.
Raghavendra. Kulkarni, he finished his MBA in the field of finance. Since, one and
half year he is been handling this company as a branch manager and he’s found
very active in his service.

VISION:

➢ To be the number one insurer for creating shareholder value.

➢ To be the first choice insurer for customers.

➢ To be the preferred employer for staff in the insurance industry.

MISSION:

We help our customers to prepare financially for a long and happy life!

In the course of creating our brand identity we came across a

simple truth that we all knew about but have not acted on it. The
simple truth is that we are living longer than before and life
expectancy is continuing to increase. Since independence, life
expectancy has almost doubled.

And this has led us to a simple yet effective brand positioning. In our messages, we
will tell our customers that “You are going to live longer”. To make sure this live
longer life is also a happy one, you need to financially prepare for the long-term
and we are the brand that understands this best.

OBJECTIVES:

Exide Life Insurance Company Ltd (Exide Life) is committed to set the
highest standards in helping our customers manage their financial future. We are
also committed to look into and resolve grievances if our prospective or existing
customers have any issues regarding our products and/or services before, during
and/or after the term of their relationship with us. We shall endeavor to resolve the
complaints in a speedy and a fair manner.

VALUES of Co

✓ Dependable:
We are trustworthy and do what we say.
✓ Dynamic :
We are active and strive for constant improvement.
✓ Responsive :
We are quick to respond with a caring attitude.
✓ Foresighted:
We focus on the long term with a prudent view of the future.
FINANCIAL PERFORMANCE:

AUM (Asset Under Management) growth

 AUM
9000

6750

(IN CRORES)
4500

2250

0
! 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

PRODUCTS:

✓ Protection Plans
• Life

Exide Life My Term Insurance Plan

Exide Life Term Rider

 • Health

Exide Life Critical Illness Rider

• Accident

Exide Life Accidental Death, Disability & Dismemberment Rider

✓ Savings & Investments

• Child

Exide Life Wealth Maxima - Maxima Child

Exide Life Mera Aashirvad

Exide Life New Creating Life Insurance Plans

• Inheritance

Exide Life New Fulfilling Life

• Life Goals

Exide Life Wealth Maxima

Exide Life Guaranteed Income Insurance Plan

Exide Life Secured Income Insurance Plans

Exide Life Jeevan Uday

Exide Life Nirmal Jeevan Insurance

• Surplus for Investments

Exide Life Wealth Maxima

 Exide Life Assured Gain Plus

Exide Life Secured Income Insurance Plus

Exide Life Prospering Life Plus

✓ Retirement & Pension

• Retirement Corpus

Exide Life Golden Years Retirement Plan

QROPS
• Pension
Exide Life Immediate Annuity

DEPARTMENT OF CO:

DEPARTMENT

FINANCE OPERATING HR SALES COMPLIANCE AUDITING

DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT

MARKETING
DEPARTMENT
ORGANISATIONAL STRUCTURE:

CHIEF EXECUTIVE
OFFICER

CHIEF DISTRIBUTION
OFFICER

CHIEF OPERARTING
OFFICER

DIRECTOR OF
SALES

ELECTIVE VICE
PRESIDENTS

AREA MANAGER

SALES MANAGER
Under each Area Manager there will be 10 branches and in 10 branches there will
be 10 or 12 Sales Manager

SWOT analysis:

STRENGTH:

1. Integrated approach to banking. Asset management and insurance.

2. Rise in per capita income.

3. International expertise of ING group.

4. Spread of 230 offices across India.

5. Serving over 10lakh customers in over 200 cities in India.

6. Serves over 1 million policy holders in India.

WEAKNESS:

1. Less penetration in rural areas.

2. Mediocre publicity.
3. Insurance companies have a poor image when it comes to payment of dues.
4. Dominance of public sector.
5. Low investment.

OPPORTUNITIES:

1. Growing rural market.

 2. Earning Urban Youth.

3. Cross selling through financial services such as banking.

4. Creation of stronger demand.

5. Rise in income and awareness.

6. Strong future growth.

THREATS:

1. Stringent Economic measures by Government and RBI.

2. Entry of new NBFCs in the sector.

3. The political environment is not conducive to constructive change.

COMPETITORS:

✓ Bajaj Allianz

✓ Sahara Life Insurance

✓ Reliance Life Insurance

AWARDS OR ACHIEVEMENTS:

❖ Winner at the NHRD (National Human Resource Development) showcase

2015.

❖ Exide Life Insurance wins prestigious DMA Asia Echo awards.

❖ Exide Life Insurance declared as a winner at recertified for ISO 9001:2008

Quality Management System.

❖ Top 100 ISO award.

❖ Exide Life Insurance wins IRDA’S India Insurance Quiz 2015.

❖ The Infosec Maestros Award 2015.
 CHAPTER – 3
CONCEPTUAL
FRAMEWORKS

WORKING CAPITAL:

Meaning of working capital:

Working Capital is a measure of both a company's efficiency and its short-

term financial health. Working capital is calculated as:
Working Capital = Current Assets - Current Liabilities
The working capital ratio (Current Assets/Current Liabilities) indicates whether a
company has enough short term assets to cover its short term debt. Anything below
1 indicates negative W/C (working capital). While anything over 2 means that the
company is not investing excess assets. Most believe that a ratio between 1:2 and
2.0 is sufficient. Also known as “net working capital".


Concept of working capital:

Generally, there are two concepts of working capital i.e. gross concept and net
concept:-

1. Gross Concept of Working Capital: 

According to gross concept, working capital refers to all the current assets and
represents the amount of funds invested in current assets. Thus, gross working
capital is the capital invested in current assets. Current assets are those assets
which can be converted into cash within the short-time period.



Gross Working Capital = Total current assets

In this way, gross working capital refers to the firm's investment in current assets.
Gross working capital represents total of current assets which includes cash in
hand, cash at bank, inventory, prepaid expenses, bills receivable etc.

2. Net Concept of Working Capital: 


According to the net concept, working capital is the excess of current assets
over current liabilities. In other words, the difference between current assets
and current liabilities is called net working capital.

Net Working Capital = Current Assets - Current liabilities

In this way, net working capital is the difference of current assets and current
liabilities.

Types of working capital:

1. Gross working capital:


Total or gross working capital is that working capital which is used for all
the current assets. Total value of current assets will equal to gross working capital.
In simple words, it is total cash and cash equivalent on hand. But remember, we do
not account of current liabilities in gross working capital. 



2. Net Working Capital:

Net working capital is the excess of current assets over current liabilities.



Net Working Capital = Total Current Assets – Total Current Liabilities 



This amount shows that if we deduct total current liabilities from total current
assets, then balance amount can be used for repayment of long term debts at any
time. It also measure of both a company's efficiency and its short-term financial
health.



3. Permanent Working Capital:

Permanent working capital is that amount of capital which must be in cash
or current assets for continuing the activities of business. It also shows the
minimum amount of all current assets that is required at all times to ensure a
minimum level of uninterrupted business operations.



4. Temporary Working Capital:

Sometime, it may possible that we have to pay fixed liabilities, at that time
we need working capital which is more than permanent working capital, then this
excess amount will be temporary working capital. In normal working of business,
we don’t need such capital.

Need for working capital:

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 of raw
materials and payment of salary, wages and overhead can be made without any
delay. Adequate working capital helps in maintaining 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 from 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.



6. Ability to Face Crisis:

Adequate working capital enables a firm to face business crisis in emergencies
such as depression.

Advantages of working capital:

i) Helps in maintaining goodwill of the firm.

ii) Helps in maintaining solvency of the firm.

iii) Helps the firm in getting regular supply if raw material.

iv) Helps the firm in getting regular return on investment.

v) Helps the firm in getting payment.

vi) Helps the firm to face the crisis.

vii) Helps the firm in getting loan easily from the banks.

viii)Helps the firm in getting cash discount.

Disadvantages of working capital:

i) It leads to excessive debtors.

ii) Spare funds are of no use and earn no profit.

iii) Firm fails to maintain the relationship with the banks due to non requirement of
funds.

iv) Leads to unnecessary purchasing.

v) It may give rise to speculative demand.
vi) It may lead to more production which may not have matching demand.

Ratios relating to working capital management:

• Current ratio

• Absolute liquid ratio

• Quick ratio

• Working capital turnover ratio

a. Current ratio:
Current ratio is also known as working capital ratio. It is a measure of
general liquidity & its most widely used to make the analysis of short term
financial position or liquidity of a firm. It is defined as the relation between current
assets & current liabilities. Thus,
Current assets
Current ratio =
Current liabilities
 b. Absolute liquid ratio:
Although receivables, debtors & bills receivables are generally more liquid
than inventories, yet there may be doubts regarding their realization into cash
immediately or in time. So absolute liquid ratio should be calculated together with
current ratio & acid test ratio so as to exclude even receivables from the current
assets and find out the absolute liquid assets. It includes,

Absolute liquid
Absolute liquid ratio =
Current liabilities

Absolute liquid assets = cash and bank balances

c. Quick ratio:

Quick ratio is more rigorous test of liquidity then current ratio. A high
ratio indicates the firm is liquid & has ability to meet it current liabilities in
time & on the other hand a low quick ratio represents that the firm’s liquidity
position is not good. It includes,

Quick asset
Quick ratio =
Current liabilities
Quick assets = Marketable securities, cash and bank balance, debtors.

d. Working capital turnover ratio:

It indicates the velocity of utilization of net working capital. This ratio
indicates the number of times the working capital is turned over in the course of
the year. This ratio measures the efficiency with which the working capital is used
by the firm. It includes,
Sales
Working capital turnover ratio =
Net working capital

Chapter – 4
 Data analysis &
interpretation

COMPARATIVE BALANCE SHEET:

TOTAL LIABILITIES

PARTICULARS CURRENT LIABILITIES CURRENT ASSETS TOTAL

2010-2011 16, 19,051 11,943 16, 30,994

2011-2012 19, 30,319 26,825 19, 57,144

2012-2013 32, 59,046 52,462 33, 11,508

2013-2014 38, 79,471 52,193 39, 31,664

2014-2015 32, 14,169 56,504 32, 70,673

 Interpretation:
As per financial analysis the total liabilities of the company is fluctuating
year after year. In the year 2014 the total liabilities is been increased to Rs.
39, 31,664 than other financial years.

TOTAL ASSETS

PARTICULARS CASH & BANK ADVANCES & OTHER FIXED ASSETS TOTAL
BALANCES ASSETS

2010-2011 3, 49,418 15, 81,258 85,140 20, 15,816

2011-2012 3, 41,638 18, 24,795 99,988 22, 66,421

2012-2013 3, 39,823 32, 47,099 93,239 36, 80,161

2013-2014 3, 41,680 39, 86,762 90,035 44, 18,477

2014-2015 3, 99,256 51, 51,090 1, 99,457 57, 49,803

Interpretation:
As per the financial analysis the total assets of the company is increasing
frequently. In the year 2011 the total assets was Rs.20, 15,816 and in the year 2015
Rs.57, 49,803. There is increase of Rs.37, 33,987 in 5 years

Determination of working capital requirements of Exide Life Insurance Company

Ltd 2010-2011

PARTICULARS AMOUNT AMOUNT

ADD:- CURRENT ASSETS (A)
CASH & BANK BALANCES 3,49,418
ADVANCES & OTHER ASSETS 15,81,258
TOTAL CURRENT 19,30,676
ASSETS

LESS:- CURRENT LIABILITIES (B)

CURRENT LIABILITIES 16,19,951

PROVISIONS 11,943
 TOTAL CURRENT 16,31,894
LIABILITIES
NET WORKING CAPITAL (A-B) 2,98,782

Determination of working capital requirements of Exide Life Insurance Company

Ltd 2011-2012

PARTICULARS AMOUNT AMOUNT

ADD:- CURRENT ASSETS (A)
CASH & BANK BALANCES 3,41,638
ADVANCES & OTHER ASSETS 18,24,795
TOTAL CURRENT 21,66,433
ASSETS

LESS:- CURRENT LIABILITIES (B)

 CURRENT LIABILITIES 19,30,319
PROVISIONS 26,825
TOTAL CURRENT 19,57,144
LIABILITIES
NET WORKING CAPITAL (A-B) 2,09,289

Determination of working capital requirements of Exide Life Insurance Company

Ltd 2012-2013

PARTICULARS AMOUNT AMOUNT

ADD:- CURRENT ASSETS (A)
CASH & BANK BALANCES 3,39,823
ADVANCES & OTHER ASSETS 32,47,099
TOTAL CURRENT 35,86,922
ASSETS
LESS:- CURRENT LIABILITIES (B)

CURRENT LIABILITIES 32,59,046

PROVISIONS 52,462
TOTAL CURRENT 33,11,508
LIABILITIES
NET WORKING CAPITAL (A-B) 2,75,414

Determination of working capital requirements of Exide Life Insurance Company

Ltd 2013-2014

PARTICULARS AMOUNT AMOUNT

ADD:- CURRENT ASSETS (A)
 CASH & BANK BALANCES 3,41,680
ADVANCES & OTHER ASSETS 39,86,762
TOTAL CURRENT 43,28,442
ASSETS

LESS:- CURRENT LIABILITIES (B)

CURRENT LIABILITIES 38,79,471

PROVISIONS 52,193
TOTAL CURRENT 39,31,664
LIABILITIES
NET WORKING CAPITAL (A-B) 3,96,778

Determination of working capital requirements of Exide Life Insurance Company

Ltd 2014-2015
 PARTICULARS AMOUNT AMOUNT
ADD:- CURRENT ASSETS (A)
CASH & BANK BALANCES 3,99,256
ADVANCES & OTHER ASSETS 51,51,090
TOTAL CURRENT 55,50,346
ASSETS

LESS:- CURRENT LIABILITIES (B)

CURRENT LIABILITIES 32,14,169

PROVISIONS 56,504
TOTAL CURRENT 32,70,673
LIABILITIES
NET WORKING CAPITAL (A-B) 22,79,673

Schedule of changes in the working capital for the year ended 2010-2011
 PARTICULARS YEAR YEAR Working capital
2010 2011 Increase Decrease
ADD CURRENT ASSETS

CASH & BANK 4,14,041 3,49,418 64,623

BALANCES
ADVANCES & OTHER 12,16,12 15,81,258 3,20,132
ASSETS 6
TOTAL CURRENT ASSETS 16,75,16 19,30,676
7

LESS CURRENT LIABILITIES

PROVISIONS 10,080 11,943 1,863

CURRENT LIABILITIES 18,75,95 16,19,951 2,56,000
1
TOTAL CURRENT 18,86,03 16,31,894
LIABILITIES 1

NET WORKING CAPITAL -2,10,864 2,98,782

5,76,132 66,486
NET INCREASE IN W.C 5,09,646
5,76,132 5,76,132

Interpretation:
 As per financial analysis on working capital from the year 2010-2011 the
working capital is increased to Rs.5, 09,646. It interprets that there is increase in
the current assets due to which working capital increased.

Schedule of changes in the working capital for the year ended 2011-2012

PARTICULARS YEAR YEAR Working capital

2011 2012 Increase Decrease
ADD CURRENT ASSETS

CASH & BANK 3,49,418 3,41,638 7,780

BALANCES
ADVANCES & OTHER 15,81,25 18,24,795 2,43,537
ASSETS 8
TOTAL CURRENT ASSETS 19,30,67 21,66,433
6

LESS CURRENT LIABILITIES

PROVISIONS 11,943 26,825 14,882

CURRENT LIABILITIES 16,19,95 19,30,319 3,10,368
1
TOTAL CURRENT 16,31,89 19,57,144
LIABILITIES 4
 NET WORKING CAPITAL 2,98,782 2,09,289
2,43,537 3,33,030
NET DECREASE IN W.C 89,493
3,33,030 3,33,030

Interpretation:
As per the financial analysis, working capital has been decreased to Rs.
89,493 in the year 2012 there is decrease in current assets and increases in current
liabilities which results in the decrease in working capital.

Schedule of changes in the working capital for the year ended 2012-2013

PARTICULARS YEAR YEAR Working capital

2012 2013 Increase Decrease
ADD CURRENT ASSETS

CASH & BANK 3,39,823 1,815

BALANCES 3,41,638
ADVANCES & OTHER 18,24,79 32,47,099 14,22,304
ASSETS 5
 TOTAL CURRENT ASSETS 21,66,43 35,86,922
3

LESS CURRENT LIABILITIES

PROVISIONS 52,462 25,637

26,825
CURRENT LIABILITIES 19,30,31 32,59,046 13,28,727
9
TOTAL CURRENT 19,57,14 33,11,508
LIABILITIES 4

NET WORKING CAPITAL 2,75,414

2,09,289
14,22,304 13,56,174
NET INCREASE IN W.C
66,125
14,22,304 14,22,304

Interpretation:
In the financial analysis, the working capital in the year 2013 has been
increased to Rs.66, 125 from the previous year decrease and it has gained more
current assets than current liabilities.
Schedule of changes in the working capital for the year ended 2013-2014

PARTICULARS YEAR YEAR Working capital

2013 2014 Increase Decrease
ADD CURRENT ASSETS

CASH & BANK 3,41,680 1,857

BALANCES 3,39,823
ADVANCES & OTHER 32,34,03 39,86,762 7,52,731
ASSETS 1
TOTAL CURRENT ASSETS 35,73,85 43,28,442
4

LESS CURRENT LIABILITIES

PROVISIONS 52,193 269

52,462
CURRENT LIABILITIES 32,45,97 38,79,471 6,33,494
7
TOTAL CURRENT 32,98,43 39,31,664
LIABILITIES 9

NET WORKING CAPITAL 3,96,778

2,75,415
7,54,857 6,33,494
NET INCREASE IN W.C 1,21,363
7,54,857 7,54,857

Interpretation:
 As per the financial ratio of working capital there is still increase in the
working capital by Rs.1, 21,363 in the year 2014 which results in high increase in
current assets of the company.

Schedule of changes in the working capital for the year ended 2014-2015

PARTICULARS YEAR YEAR Working capital

2013 2014 Increase Decrease
ADD CURRENT ASSETS

CASH & BANK 3,41,680 3,99,256 57,576

BALANCES
ADVANCES & OTHER 39,73,63 51,51,090 11,77,460
ASSETS 0
TOTAL CURRENT ASSETS 36,15,31 55,50,346
0

LESS CURRENT LIABILITIES

PROVISIONS 52,193 56,504 4,311

CURRENT LIABILITIES 38,66,33 32,14,169 6,52,170
9
 TOTAL CURRENT 39,18,53 32,70,673
LIABILITIES 2

NET WORKING CAPITAL 3,03,222 22,79,673

18,29,360 61,887
NET INCREASE IN W.C 17,67,473
18,29,360 18,29,360

Interpretation:
The financial ratio of working capital in the year 2015 has increase of
Rs.17, 67,473 from the previous year 2014 that is of Rs. 1, 21,363. There is
increase in the current liabilities of the company which resulted in the increase of
working capital.

Financial Ratio Analysis:

Financial ratios are mathematical comparisons of financial statement
accounts or categories. These relationships between the financial statement
accounts help investors, creditors, and internal company management understand
how well a business is performing and areas of needing improvement.

i. Current asset ratio:

The current asset ratio measures a company’s ability to pay the
Liabilities that it is likely to have to pay soon with those assets that should yield
cash the quickest.

Current assets
Current ratio =
Current liabilities

As a rule of thumb, a current assets ratio of more than two is generally

considered adequate, but this should be considered in the context of the
company: the nature of the assets in question, the company’s ability to borrow
further to meet liabilities and the stability of its cash flows. Generally 2:1 is the
ideal ratio for a concern as follows:

YEAR CURRENT CURRENT RATIO

ASSETS LIABILITIES
2010-2011 19,30,676 16,31,894 1.18
2011-2012 21,66,433 19,57,144 1.10
2012-2013 35,86,922 33,11,508 1.08
2013-2014 43,28,442 39,31664 1.10
2014-2015 55,50,347 32,70,672 1.69
 Current Asset Ratio
1.7

1.28

0.85

0.43

0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Interpretation:
The table shows that in the year 2010-2011 it was 1.18 times and in
the next year 2011-2012 there was sudden decrease of 1.10 and same followed in
the next year that is 12-13 that is 1.08 times. There was increase of 0.2 times in the
year 13-14 that is of 1.10 times and a sudden increase up to 1.69 times in the year
2014-2015.

ii. Working capital turnover ratio:

The working capital turnover ratio is also referred to as net sales to
working capital. It indicates a company's effectiveness in using its
working capital.
Sales
Working capital turnover ratio =
Net working capital
 An extremely high working capital turnover ratio can indicate that a
company does not have enough capital to support it sales growth; collapse of the
company may be imminent. This is a particularly strong indicator when the
accounts payable component of working capital is very high, since it indicates that
management cannot pay its bills as they come due for payment.

YEAR SALES NET WORKING RATIO

CAPITAL
2010-2011 35,000 2,98,782 0.11
2011-2012 30,000 2,09,289 0.14
2012-2013 45,000 2,75,414 0.16
2013-2014 55,000 3,96,778 0.13
 2014-2015 70,000 22,79,675 0.03

Working Capital Turnover Ratio

0.16

0.12

0.08

0.04

0
! 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Interpretation:

As per the financial analysis the working capital turnover ratio is higher in
the year 2013 that is 0.16 compared to other financial years. There is sudden
decrease of 0.03 times in the year 2015 as net working capital is higher i.e.
Rs. 22, 79,675.

iii. Proprietary Ratio:

The proprietary ratio (also known as the equity ratio) is the

proportion of shareholders' equity to total assets, and as such provides a
rough estimate of the amount of capitalization currently used to support a
business.
Proprietary Ratio = Proprietors fund / total assets

The proprietary ratio shows the contribution of stockholders’ in total capital

of the company. A high proprietary ratio indicates a strong financial position
of the company and greater security for creditors. A low ratio indicates that
the company is already heavily depending on debts for its operations.
Having a very high proprietary ratio does not always mean that the company
has an ideal capital structure. A company with a very high proprietary ratio
may not be taking full advantage of debt financing for its operations that is
also not a good sign for the stockholders
YEAR PROPRIETORS TOTAL ASSETS RATIO
FUND
2010-2011 1,46,53,102 19,30,676 7.55
2011-2012 1,46,55,017 21,66,433 6.42
2012-2013 1,50,16,943 35,86,922 4.18
2013-2014 1,60,40,511 43,28,442 3.70
2014-2015 1,75,08,199 55,50,347 3.15
 Proprietors fund
8

(in times)
4

0
! 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Interpretation:

As per the financial analysis the proprietors fund was more in the year
2011 & 2012 further the funds has been decreased to 4.18, 3.70 & 3.15
respectively due to the increase in total assets of the company.
CHAPTER – 5
FINDINGS,
SUGGESTIONS &
CONCLUSION

FINDINGS
1. Graduates including under graduates and post graduates had shown greater
preference for purchasing life insurance policies, than others.

2. Majority of the respondents (69.6 per cent) lived in urban areas, where the
business potential was high.

3. Maximum number of respondents who fell within the monthly income

ranging between Rs. 5,001 to 15,000 invested in life insurance policies in
order to meet all family needs such as education, marriage, illness, housing
facilities and so on.

4. The current asset ratio is fluctuating year after year and in the year 2015 it
has been increased at higher rate i.e. 1.69 times.

5. The working capital of the company is increased in all the years except in
the year 2012 that is Rs. 89,493 due to decrease in current assets and
increase in current liabilities.

6. The shareholders fund is very high in the year 2011 & 2012 that is 7.55 &
6.22 respectively but from the next year i.e.2013 it has been decreasing
which is positive thing for the shareholders of the company.

7. Unlike other private insurance companies some of its products do not fetch
guaranteed returns.

8. When studying about the department the marketing department was not
taken into consideration which I felt important to know how products are
marketed.

SUGGESTIONS
1. Life insurance companies need to priorities customer centricity and this will
lead to a positive effect on corporate performance.

2. It is essential to identify customers with respect to their net worth and

retaining them. Customer demand personalized services across all channels
and organizations must align their resources appropriately to create to the
needs of the customers.

3. It is further suggested that government must increase FDI cap from 26% to
49% to bring more players in market which would help more population to
be covered from life insurance.

4. The company should decrease its proprietary ratio in order to have a smooth
shareholders fund.

5. The net working capital turnover ratio of the company in the year 2015 is
0.03 and to be maintained at that rate to have an equal sales growth.

6. The company should educate the customers to go in for products by

highlighting the advantage of insurance.

7. Its aim should be to provide service matching the best in the insurance sector
so that it can get the most effective publicities.

8. There should be effective advertising of new products and relaunching of

existing one too.
 CONCLUSION

Exide Life Insurance Company Ltd was very helpful as it gave a chance to
understand and learn in depth the insurance sector. The management was very
cooperative and patient to explain the facts.

The departments have good coordination which makes the running of business
throughout the country very efficiently. The employees are dedicated towards their
work. The future plan of the company is to be the number one insurance
companies.

The company should have an effective advertising of new products and

relaunching of existing one too. The company should forward to maintain the
supply of sufficient amount of working capital at the right time to carry out its day
to day activities. The company should try to follow the above suggestions for the
development and to attract more customers.

Complete study understands that the company has better working capital and is
able to pay all the liabilities due to positive working capital. Exide Life Insurance
Company is one of the growing insurance companies in India which has a lot of
scope for future growth and expansion.
 BIBLIOGRAPHY

Financial Management (Industrial finance) - K.D. Basava

Financial Management – Thakur publications

WEBSITES:

www.exidelife.in

www.google.com

www.wikipedia.org