WORKING CAPITAL MANAGEMENT OF

NALCO
Summer Internship Project Report Submitted in partial fulfilment of the requirement For the award of the degree Masters in Business Administration in Finance By SMITA DAS 11BSPHH010815

Under the guidance of Mrs Rajya Lakshmi Prasad Professor

Department Of Finance ICFAI BUSINESS SCHOOL

ACKNOWLEDGEMENT

Words are indeed inadequate to convey my deep sense of gratitude to all those who have helped me in completing this summer project to the best of my ability. Being a part of this project has certainly been a unique and a very productive experience on my part.

I am really thankful to Mr. Satyabrata Dash, Manager (Finance), at corporate office,NACO, Bhubaneswar, for making all kinds of arrangements to carry the project successfully and for guiding and helping me to solve all kinds of quarries regarding the project work. His systematic way of working and incomparable guidance has inspired the pace of the project to a great extent.

I would also like to thank my mentor and project coordinator, Mrs Rajyalaksmi Prasad, Professor(Finance & Accounts) for his extended guidance, encouragement, support and reviews

without whom this project would not have been a success.

This project would not have been successful without the help of Shri B.L.Bagra, Director(Finance) of NALCO.

Last but not least I would like to thank all the employees of NALCO, who have directly or indirectly helped me with their moral support for the completion of my project. I also thank my parents and friends who aided me in completing the project.

Smita Das 11BSPHH010815

Table of Contents
1. Introduction
1.1 1.2 1.3 1.4 1.5 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3.1 3.2 3.3 3.4 Background Objectives Of Study Research Methodology Scope Of Study Limitations Of Study Major Demand Drivers Of Alumunium Industry Global Economic Environment Domestic Economic Conditions(India) Major Players Type Of Market Porters Competitive Force Challenges Ahead Macro Economic Outlook Background Production Performance Of NALCO At a glance Financial Performance Of NALCO At a glance Capital Structure And dividend Policy Of NALCO At a Glance

2. Economic Industry Analysis

3. Company Analysis

4. Review Literature 5. Analysis Of Working Capital Management Of NAlCO

5.1 5.2 5.3 5.4 5.5 5.6 Analysis Through Working capital of NALCO Analysis Through Components Of Current Assets Analysis Through Components Of Current Liabilities Analysis Through Opearting Cycle Of NALCO Analysis Through Working Capital Ratios Analysis On The Basis Of Schedule Changes In NALCO

6. Working Capital Management At NALCO

6.1 Inventory Management At NALCO 6.2 Cash Management At NALCO 6.3 Recievables Management At NALCO

7. Conclusion & Suggestions 8. Regression Analysis 9. Bibliography 10. Appendix

Executive Summary
The project on Working Capital Management has been a very good experience. Every manufacturing company faces the problem of Working Capital Management in their day-to-day processes. An organizations cost reduced and the profits increased only if it is able to manage its Working Capital efficiently. At the same time, the company can provide customer satisfaction and hence can improve their overall productivity and profitability. The project entitled Working Capital Management and its Appraisal in NALCO deals in this segment. The term of study was kept limited to make the title true. This project is a sincere effort to study and analyze the Working Capital Management of National Alumunium Company Limited, a Navratna Company . The project focused on making a financial overview of the company by conducting a Working Capital analysis of NALCO group for the years 2007 to 2012 and Ratios & various components of working capital & format emphasizing on Working Capital. The internship is a bridge between the institute and the organization. This made me to be involved in a project that helped me to employ my theoretical knowledge about the myriad and fascinating facets of finance. Moreover, in the process I could contribute substantially to the organizations growth. The experience that I gathered over the past two months has certainly provided the orientation, which I believe will help me in shouldering any responsibility in future.

1. Introduction
1.1 BACKGROUND
The management of working capital is very important. It involves the study of day-to-day affairs of the company. The motive behind the study is to develop an understanding about the working capital management in the running business organization and to help the company in developing the efficient working capital management. Therefore, it helps in future planning and control decisions.

1.2 OBJECTIVES OF THE STUDY

The objectives of the study are as follows: To analyze the working capital management of the company. To determine the gross and net operating cycle of the unit. To know the future need of working capital in the running organization.
To render recommendations for the effective management of working capital.

1.3 RESEARCH METHODOLOGY

The term research refers to the systematic method consisting of enunciating the problem , formulating a hypothesis collecting the data , analyzing the facts and reaching the certain conclusions either in the form of solution towards the concern problem or in certain generalization for some theoretical formulation.Research Methodology is a way to solve systematically the research problem .It may be understood as a science of studying how research is done scientifically. Time Period of the study: The present study was undertaken during twelve weeks from 12.03.2012 to 02.06.2012 .

Research Design: Descriptive research procedure is used for describing the recent situations in the
organization and analytical research to analyze the results by using research tools. It is, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who, what, where, when and how. Although the data description is factual, accurate and systematic, the research cannot describe what caused a situation. Thus, Descriptive research cannot be used to create a causal relationship, where one variable affects another. In other words, descriptive research can be said to have a low requirement for internal validity.

Data Source & Collection Methods: Secondary Data: Secondary data are those which have already been collected by someone else and which have already been passed through the statistical process. The Secondary data consist of reality available compendices already complied statistical statements. Secondary data consists of not only published records and reports but also unpublished records. Here we done the analysis on basis of secondary data, which included Balance sheet of company
Profit and loss A/C of NALCO

Cost sheets, & Trail balance of five years Purpose: The purpose of this paper is to properly analysis of the working capital management of NALCO,Bhubaneswar over the period 2007-2010. Tools used: I used the different tools to analyze the working capital management of NALCO Analysis through Working capital ratios Analysis through Schedule change in working capital Analysis through Gross operating cycle & Net operating cycle

 Analysis through Various components of working capital

1.4 SCOPE OF THE STUDY

The study is conducted at National Alumunium Corporation, Bhubaneswar for 12 weeks duration. The study of Working.Capital. management is purely based on secondary data and all the information is available within the company itself in the form of records. To get proper understanding of this concept, I have done the study of the balance sheets, profit and loss A/Cs, cash accounts, trial balance, and cost sheets. I have also conducted the interviews with employees of accounts and finance department and stores department. So, scope of the study is limited up to the availability of official records and information provided by the employees. The study is supposed to be related to the period of last five years.

1.5 LIMITATIONS OF THE STUDY

As central purchase office, purchase raw material and central marketing yarn make sales. Information that is so more detailed cannot be received about these.
Cash from debtors a collected by the corporate office through commission agents. So

efforts for collection of debtors cannot be clearly known from NALCO, Bhubaneswar. Investment of funds are also made by corporate office, so it becomes difficult to know that how much investment is made in different ways for continuous availability of funds.

2. Economic Industry Analysis

Aluminum is one of the most versatile and essential materials for our dynamic global economy. Its strength, conductivity, recyclability, and light weight make it ideally suited to the needs of a highly mobile and technologically sophisticated world. Above all, aluminum has emerged as the most environmentally sustainable material available to our increasingly resource-conscious planet. It offers customers a clear advantage through its ability to be repeatedly recycled without loss of quality and with only five percent of the original process energy use and emissions. On a life-cycle basis, aluminum exceeds the energy and environmental performance of competing materials in virtually all applications and will totally offset the environmental footprint of its original manufacturing.

2.1 MAJOR DEAMAND DRIVERS OF ALUMUNIUM INDUSTRY

Growing demand for the lightweight metal is fuelled largely by the booming Chinese economy which already consumes a quarter of the worlds aluminium production. Analysts predict an annual growth rate of 7 to 14% in the Chinese automotive industry up to 2011, a 12% increase in construction expenditure in 2007 and a minimum of plus 16 million annual growth in urban population during the next 8 years. According to analysts these factors will combine to see China consume 36% of worlds aluminium production as early as 2010.In addition, the EU is discussing the possibility of introducing stricter CO2 emission requirements for automobiles which will inevitably boost demand for aluminium. Aluminium is lighter than steel, so its wider use in the automotive industry will make cars much more efficient. A kilo of aluminium, used as a substitute for heavier metals in car industry, reduces gas consumption by 8.5 litres and produces 20 kg less CO2 emissions. A 10% reduction of car weight results in a 9% increase of fuel consumption efficiency. Finally, rising prices for substitute metals, such as zinc and copper, stimulate a direct increase of demand for aluminium in the power, transportation and construction sectors in particular. The main end users of aluminium are the transportation, power, packaging,consumer

durables and construction sectors. The usage pattern for aluminium in the sectors mentioned is different in India as compared with the rest of the world. While globally, the transportation and construction sectors are the major consumers of aluminium, in India, the bulk of the demand is accounted for by the

power sector, followed by transportation. This anomaly can be attributed largely to the Government regulations that were in force till as late as 1991.

Power sector: Around 80% of aluminium demand in power sector is accounted for by bare conductors used for the transmission and distribution of electricity. The 12th five year plan (2012-2017) has laid an ambitious target of generating 100,000 megawatt (MW) of power which is double of what was planned in the 11th five year plan. This additional capacity augments well for aluminium demand. Transportation Sector: The auto industry has been growing at 18% for the past two years and is expected to grow even faster in the coming years. Aluminium is increasingly being used in the transportation sector and is replacing steel because of its high strength to weight ratio, which leads to better fuel efficiency. Also, while the use of aluminium in rail wagons in India is almost negligible at present, there is a possibility that aluminium would be used in significant quantities in the manufacture of rail wages and coaches in future Construction sector: Aluminium is being used in the construction industry because of its properties like corrosion resistance, malleability, ductility and strength. The metal finds extensive use in corrugated sheets (for roofing), latches, tower bolts, handles etc. The Indian construction industry has grown at a fast pace over the last few years, but rising interest rates could see a slowdown in investments in this sector.

Consumer Durable sector: Aluminium is used in variety of consumer durables like air conditioners, water coolers, refrigerators, utensils and pressure cookers. This sector is also witnessing trends towards weight reduction which augurs well for demand for aumunium. Packaging sector: In packaging, aluminium is used in foils, cans and bottle caps. Hence, globally, the growth of the packaging industry hinges on growth in sectors like foods, beverages, and medicines. In India, the foils segment is expected to grow faster than the rest because of its wide use in food packaging. As public awareness of the advantages of foil use increases, the demand for aluminium is also increasing. Conclusion : The outlook for most of the demand drivers is positive but the recent slowdown witnessed in construction and transportation sector due to high inflation and rising interest rates could play spoil sport for domestic demand. The power generation target is also too ambitious which could further lower aluminium demand. Critical Success Factors Competitive and long term energy Supply Reliable long term alumina and raw materials supply Capital Proven Technology Project execution Operationg know how Global reputation for performance and sustainable development

2.2 GLOBAL ECONOMIC ENVORONMENT

Global society faces a great challenge to shift human economic activity and lifestyles on to a sustainable path in the 21st century, including meeting threats from climate change. The story of the aluminium industry over the decades ahead must be one of how it is part of the solution for a sustainable future. The metal aluminium has a vital role to play in successfully addressing this sustainability challenge. Global production of primary aluminium rose from 32 million tons (MT) in 2005 to 34 MT in 2006, a jump of 6%. In 2007, it further increased to 38 MT, an increase of 12% YoY. China alone accounted for

29% of global primary aluminium production. As far as global consumption is concerned, it increased by 8.2% in 2006 and touched 34.7 MT. In 2007, the corresponding figures were 10% and 37.8 MT respectively. During the year 2008, the world consumption of primary aluminium was 37.668 million MT against world supply of 39.909 million MT, showing an impulsive surplus of 2.241 million MT. The world supply grew by approximately 4.7% while the consumption declined by 0.4% respectively during 2008 as compared to 2007. In China, consumption is estimated to have risen by 4.5% and production by 7.3% during 2008. During the year 2009, the world consumption of primary aluminium was 34.41 million MT against world supply of 37.781 million MT, showing an impulsive surplus of 3.440 million MT. The world consumption declined drastically by approximately 8.2% while the supply declined by 5.9% respectively during 2009 as compared to 2008.During the year 2010, the world consumption of primary alumunium was 41.011 million MT against world supply of 41.998 million MT, showing a surplus of 0.97 million MT. the world supply grew by approximately 10.3%while the consumption grew by 16.4% respectively during 2010 as compared to 2009.In China, consumption was estimated to have raisen 17.3% and production by 19.6% duing 2009. Primary aluminium production is concentrated in relatively few countries. China alone produced 26 percent of the world total in 2006.The top five producersChina, Russia, Canada, the United States, and Australiaaccounted for 59 percent of world output that year. Production is found where energy is cheap because making aluminium uses large quantities of electricity. The worlds largest aluminium smelter, now being planned for construction in Dubai, will have its own 2,600-megawatt power plant. MT Global Production Global Consumption 2007 38 million 37.8 million 2008 39.909 million 37.668 million 2009 37.78 million 34.41 milion 2010 41.998 millon 41.01 millon

2.3 DOMESTIC ECONOMIC CONDITIONS(INDIA)

Aluminium production in India commenced in 1938 with the commissioning of Aluminium Corporation of India's (Indal) plant in technical and financial collaboration with Alcan, Canada having a capacity of 2,500 ton per annum. The plant started with sheet production using imported aluminium ingots. In 1959, Hindustan Aluminium Corporation (Hindalco) was set up at Renukoot in UP with an initial capacity of 20,000 ton per annum. Malco, a public sector undertaking was commissioned in 1965 with a capacity of 10,000 ton per annum. This was followed in 1975 by Balco, a PSU with a similar capacity of 10,000 ton. Finally in 1987, National Aluminium Company (Nalco) with a capacity of 0.218mn ton was commissioned in technical collaboration with Pechinery of France. In the 1970s, the government regulated and controlled the aluminium industry through price distribution controls and barriers to entry. The 1970 Aluminium Control Order compelled the Indian companies to sell 50 % of the aluminium produced for electrical purposes. The government decontrolled the industry in 1989 with the removal of the Aluminium Control Order. The industry was de-licensed in 1991 and was allowed liberal import of capital goods and technologies.The demand for aluminium grew 6 % in the 1980. Aluminium demand post liberalization registered a growth rate of 12%. This coupled with the increase in the global aluminium prices ($1800/ ton in 1994) led to increased investments in this sector. The downstream capacity in the aluminium industry spurted due to sufficient duty differential between aluminium ingots

or primary metal and value added downstream products. In March 1993 while the duty on aluminium ingots was 25% the duty on downstream products was 70%. However with the change in the tariff structure undertaken in the 1997 budget, duty on semi-fabricated metal was lowered to 25%. This change adversely affected the fortunes of the downstream producers.

Features of Indian Aluminium Industry

Highly concentrated industry with only five primary plants in the country. Controlled by two private groups and one public sector unit. Bayer-Hall-Heroult technology used by all producers. Electricity, coal and furnace oil are primary energy inputs. All plants have their own captive power units for cheaper and un-interrupted power supply. Energy cost is 40% of manufacturing cost for metal and 30% for rolled products. Plants have set internal target of 1 2% reduction in specific energy consumption in the next 5 8 years. Two plants have declared formal energy policy and each plant has an Energy Management Cell.

2.4 MAJOR PLAYEERS

India is considered to be the fifth largest producer of Aluminium in the world. It accounts to around 5% of the total deposits and produces about 0.8 million tons of aluminium. It is estimated that if the countrys aluminium consumption rate maintains, itd be having the reserves for over 350 years. India has confirmed 3 billion tonnes of Bauxite reserves out of the global reserve of 65 billion tonnes. The worldwide alumina production competence is around 58 million tonnes in which India has 2.7 million tonnes. Most of the bauxite mines lie in Bihar, Karnataka and Orissa. The Indian aluminium sector is characterised by large integrated players like Hindalco and National Aluminium Company (Nalco). The other producers of primary aluminium include Indian Aluminium (Indal), now merged with Hindalco, Bharat Aluminium (Balco) and Madras Aluminium (Malco) the erstwhile PSUs, which have been acquired by Sterlite Industries. Consequently, there are only three main primary metal producers in the sector namely Balco (Vedanta), National Aluminium Company (Nalco) and Hindalco (Aditya Birla Group).

Capacity

Market

HINDALCO Sterlite Industries NALCO

(Ktpa) 471 385 345

Share 39% 32% 29%

National Aluminium Company (NALCO)

NALCO is one of the largest integrated aluminium producers in Asia. The Government of India (GoI) holds 87.15 per cent stake in the company. The company has an alumina refinery at Damanjodi and a smelter at Angul in Orissa. Currently, NALCO has undertaken a capex programme of Rs.41 billion to increase aluminium production capacity to 460,000 tonnes from 345,000 tonnes, and also to enhance the capacity of its mining, refining and power generation operations.

Hindustan Aluminium Company (HINDALCO)

Hindalco Industries Limited, a flagship company of the Aditya Birla Group, is structured into two strategic businesses aluminium and copper with annual revenue of US $14 billion and a market capitalization in excess of US $ 23 billion. Established in 1958, Hindalco commissioned its aluminium facility at Renukoot in eastern U.P. in 1962 and has today grown to become the country's largest integrated aluminium producer and ranks among the top quartile of low cost producers in the world. The aluminium division's product range includes alumina chemicals, primary aluminium ingots, billets, wire rods, rolled products, extrusions, foils and alloy wheels. It enjoys a domestic market share of 42 per cent in primary aluminium, 63 per cent in rolled products, 20 per cent in extrusions, 44 per cent in foils and 31 per cent in wheels.

Sterlite Industries Ltd (Vedanta)

Sterlite Industries Aluminium business comprises of two operating companies, BALCO and MALCO. BALCO is a partially integrated aluminium producer with two bauxite mines, one refinery, two smelters, a fabrication facility and two captive power plants at Korba in central India. MALCO is a fully integrated producer with two bauxite mines, a captive power plant and refining, smelting and fabrication facilities at Mettur in southern India. The primary products are aluminium ingots, rods and rolled products.The smelters at BALCO and MALCO produced 380,000 tonnes in FY 2007, marginally higher than the rated capacity. The parent company Vedanta is coming up with a 5 lakh ton smelter in Jharsuda, Orissa. The project is in advance state and is expected to be operational by the year 2009.

2.5 TYPE OF MARKET

The primary Aluminium production market in India is an oligopolistic market. The primary aluminium is a homogenous product. As the product is homogenous we can term the market as Pure Oligopoly. Though there are some grades in aluminium based on aluminium concentration like EC (Electrical conductivity) Grade, etc but there are very less difference in the quality of the product. There is little or no gap between the demand and supply as the supply just matches the demand. Moreover there is a huge demand from countries like china hence there is not constraint on the number of consumers.There are only 3 players in the aluminium market in India with total production of 1250 KT in 2008. The entry into market is possible but not easy due to the heavy initial capital that is required to setup the plant. As aluminium is a homogenous product there is no price war between the three players and these firms are price takers. Though the company sells the product at price which is decided by them, the firms mostly go by the price on the London Metal Exchange (LME). In the Indian aluminium industry all the firms are price takers and there is no clear leader as all the 3 firms have almost equal market share. The price is decided by demand and supply in the commodity market.

Reasons for Indian Aluminium Industry being an Oligopoly (Barriers to Entry) The reasons for the aluminium industry to be an oligopoly is
Economies of Scale:The major input in producing primary aluminium is alumina and power which constitute about70% of the cost in producing. Although the requirement of alumina does not vary much with the size of the plant but the consumption of power varies drastically. Hence with higher production

capacity the cost of production goes down. For a new player producing aluminium and low cost will be very difficult. Huge capital investments:The capital required to setup an aluminium production plant is huge. E.g.: BALCO spent about $1 billion to set up a 2.45 lakh ton capacity with 540MW power plant. Time to setup:It requires around 3 years to setup a plant of the size mentioned in the above example. The new player would require about 3 years to start manufacture primary aluminium and the market demand supply equation can change by the time the firm starts manufacturing. Control over the Bauxite mines: As the raw material for manufacturing aluminium is bauxite the existing players have control over the bauxite mines in India and it would be difficult for a new player to get new bauxite mines. Scarcity of power: About 30-40% of the cost of producing is power. As producing primary Aluminium requires a large amount of electricity they need to have captive power plants. Setting up of captive power plants requires huge capital investment and also requires a lot of time. The basic raw material to generate power is coal. Hence the firms also would need to have coal mines. Most of the coal blocks are owned by independent power producers and hence the coal blocks are scarce. Government Factor:The other major hurdles are getting environmental clearance from the government. The other factor would be in getting bauxite mines allotted to the firm. Hence in these two cases the government acts as a barrier. Land: Existing players can expand as setting up a new brown field project is easy than getting land allocated for a new green field project considering the political situations in India. Geographical factors:The bauxite ore is abundant only in the states like Orissa and hence the firms entering into the market need to setup the plant in these states.

2.6 PORTERS COMPETITIVE FRAMEWORK

It represents the strategic challenges facing firm managers as they seek to maximise profit in oligopolistic markets. Porters five structural determinants of the intensity of competition and of the profitability of the firms in oligopolistic industry (Indian Primary Aluminium Industry) are

Threat from substitute product: Copper can replace aluminum in electrical applications; magnesium, titanium, and steel can substitute for aluminum in structural and ground transportation uses. Composites, wood, and steel can substitute for aluminum in construction. Glass, plastics, paper, and steel can substitute for aluminum in packaging. Threat of Entry: Though there are lot of barriers to enter into the aluminium market, other major metal players who are not into Aluminium business can enter seeing the rate of growth of the aluminium market. Bargaining power of buyers: Even though there are few players in the primary aluminium industry the price is determined by the demand and supply and the buyer has an upper hand and the bargaining power of the buyer is significant. Intensity of rivalry among existing competitors: All the three players have almost equal market share in India. Looking at the global demand growth driven by china the players are eyeing the growing global market and hence increasing the production capacity.

2.7 CHALLENGES AHEAD

1. A long-term decline in the real price of Aluminium will erode margins of the firms manufacturing primary aluminium. 2. Pressures to improve return on investment. 3. Maturing of terminal markets such as the London Metals Exchange (LME) as the firms are price takers and have little scope to decide the price. 4. Technological changes particularly on the upstream side. There has been no alternate method developed to extract metal from the ore. 5. Intense competition from other materials such as steel and plastics which are the substitutes to aluminium. 6. Need to respond to the changing demands of global customers, such as automakers and can manufacturers. 7. Reduce the consumption of electricity consumed in producing aluminium i.e. increase the energy efficiency. 8. Reducing the greenhouse gas emissions and PFC from the production process

2.8 MACRO ECONOMIC OUTLOOK

GDP Of India:

:
The GDP of India ranged from 9.3% to 9.5% from 2006-2008, but in the year 2009it fell down sharply 6.3 while the GDP again moderated to 8.0 % to 8.8% for the year 2010 , 2011 and 2012.

Inflation in India:

Inflation in India was at moderate till the year 2008, it rose sharply in the year 2009 to 8.0% and even in the year 2011 it was very high till 9.1%.In the year 2012 it is expected to fall, maybe because of the various monetary and fiscal policies adopted by the government.

The private consumption was moderated from 8.3% in the year 2007 and rose to 9.1% for the year 2008. But the consumption fell down sharply to 7.6% and 7.4% for the year 2009 and 2010, it was due to inflation in the year 2011. It moderated again to 8.2% in the year 2011.

Bank Credit:

The credit given by bank to companies and public has shown a decresing trend, It was very low in the year 2009 and 2010(due to inflation), but it has again risen for the year 2011 and 2012.

Outlook:

2007 Real GDP CPI(Inflation) Unemployment rate Tax Rate Intrest Rate 9.6 5.925 7.8 41.82 6

2008 9.3 8.31 8 33.99 5.5

2009 6.3 10.88 9.7 33.9 3.5

2010 8.5 12.11 9.4 30 4.3

2011 8.8 8.86 9.8 30 6.2

In the current dynamic economic scenario the risk to growth are many and varied. The global economic crisis of 2008 and the nature of economic recovery thereafter provide much evidence that Indian economy cannot be insulated from development in the world economy. One of the key concerns for growth is related to inflation given the significant upside risks to inflation are already visible. While the upside risks to inflation outlook are expected to recede going forward, any shocks to oil prices (in the event of aggravation of ongoing geo-political tensions) could stoke price pressures on crude oil. Moreover,shocks in global oil prices could fan inflationary pressure in the domestic economy and deteriorate current account deficit, which again continues to remain a major risk factor. Secondly, in the event of poor monsoons, agricultural growth will be impacted to a large extent. Apart from the significant (and lagged) effect on industrial sector performance, the monsoon effect could feed into WPI figures through higher food and primary articles prices. On the external front, any untoward development regarding the European countries debt issues could impede the global economic revival. These concerns could lead to escalation of financial stress, waning business and consumer confidence, and volatility in the currency markets. Given Indias growing integration with the global economy, turbulence in global financial conditions could adversely impact the economys growth momentum through financial and trade channels.While the government has reiterated its commitment on fiscal consolidation by placing the fiscal

deficit target for FY12 at 4.6%, any spillovers on this front could emerge as a major risk to growth. Moreover, with high crude oil prices, roll back of certain taxes (service tax on healthcare) are likely to add to the fiscal deficit going forward. Inability to limit the fiscal deficit might put pressures on interest rates thereby increasing the risk of crowding out of private investment.

3. COMPANY ANALYSIS

VISION: To be a reputed global company in the metal and energy sector.

MISSION: To achieve growth in business with global competitive edge providing satisfaction to the customers, employees, share holders and community at a large. HISTORY:
The discovery of 1000 million tons of Bauxite reserves in the Eastern Ghats, made the govt. of India on 28th March, 1978, to authorize Aluminum Pechiney of France to prepare a feasibility report on the industrial exploration of bauxite for the establishment of an integrated Aluminum complex. The result of this study led to sifting of focus of attention to Panchpattermali, 30km.East of Koraput District of Orissa. Nalco was incorporated in 1981as a public sector Unit. The newly founded NALCO signed an agreement of collaboration with aluminum Pechiney, the world leader in this field for incorporation of technical know-how to set up Asias largest integrated aluminium complex.

3.1 BACKGROUND
National Aluminium Company Ltd. (Nalco) is considered to be a turning point in the history of Indian Aluminium Industry. In a major leap forward, Nalco has not only addressed the need for self-sufficiency in aluminium, but also given the country a technological edge in producing this strategic metal to the best of world standards. Nalco was incorporated in 1981 in the Public Sector, to exploit a part of the large deposits of bauxite discovered in the East Coast. The Captive Power Plant (CPP) & Smelter Plant are situated near Angul. Nalco is one of the biggest and Asias largest integrated complex, encompassing Bauxite mining, Alumina refining, Aluminium smelting and casting power generation, rail and port operations. NALCO was established in 1981 as a public sector enterprise of the Govt.of India. It is considered a truing point in the 50-yearold history of the Indian aluminum industry. In Orissa, for setting up Asia's largest integrated alumina-aluminium complex in 1981, National Aluminium Company Limited (Nalco) acquired 7263 acres of land at Damanjodi in Koraput district and 4057 acres at Angul. During the inception of the company, 635 families in 51 villages were displaced - 600 families in Damanjodi sector and 35 families in Angul sector. From these 635 displaced families, employment has been provided to 625 nominees. Besides, 1495 families were substantially affected (i.e. parting with one third or more land) in Angul sector. Even from these, jobs have been provided to 1060 persons. Nalco has also been

sponsoring ITI training to such persons and 543 have been technically trained so far. Apart from financial compensation, employment and rehabilitation packages, Nalco has also spent more than Rs. 100 crore towards various social sector development activities. Creation of infrastructure in the surrounding villages for communication, education, health care and drinking water gets priority in the periphery development plans of the company. Community participation in innovative farming, pisciculture, social forestry and sanitation programmes apart, encouragement to sports, art, culture and literature are all a part of Nalco's deep involvement with the life of the community. Successful operations of the company have led to employment and income generation for the local people in many significant ways.

Organisation Structure:
Registered office.Bhubaneswar Bauxite mine..Panchpatmali Aluminium refinery..........................Damonjodi Captive power power plant.Angul Aluminium smelter..Angul Port facilities..Visakhapatnam Rolled product unitAngul

3.1.1 Manufacturing Process at NALCO:

Raw Materials: The main raw material for the manufacture of aluminium includes Bauxite

Caustic soda Calcined petroleum coke Coal tar pitch and LS/FS furnace oil.

The mined bauxite ore is mixed with caustic liquor and is refined to produce alumina. This is then smelted (through electrolysis in a smelter) to obtain aluminium. Depending on the quality of bauxite, 2.5 3 tonnes are required for manufacture of 1 tonne of alumina. In turn, 2 tonnes of alumina are required for manufacture of 1 tonne of aluminium.

Bauxite : Indian bauxite reserves at 3 bn tonnes, are the 5th largest in the world, and account for 6% of total world reserves. Most alumina refineries are designed around the bauxite reserves to reduce transportation costs. Cost per tonne of bauxite varies for players depending on the location of the refinery and bauxite mines. Nalco has an estimated 1,600 m tonnes of bauxite reserves only 20 kms from its alumina refinery, enabling it to become one of the most economical bauxite producers in the world. Power: Power constitutes the single largest cost component for aluminium manufacturers (3540% of operating costs). Almost all the major Indian companies have captive power plants thus giving them access to cheap power. This makes India one of the most competitive low cost aluminium producers in the world. Nalcos production costs are amongst the lowest in the world and it has the advantage of 100% captive power, vital in a power intensive industry and in a power deficit country like India.

3.1.2 Alumunium Smelter Plant Of NALCO

The 2, 30,000 tpa capacity Aluminium Smelter is located at Angul in Orissa.Based on energy efficient state-of-the-art technology of smelting and pollution control, the Smelter Plant is in operation since early 1987. Presently, the capacity is being expanded to 3, 45,000 tpa. The salient features: Advanced 180 KA cell technology

 Micro-processor based pot regulation system Fume treatment plant with dry-scrubbing system for pollution control and fluoride salt recovery Integrated facility for manufacturing carbon anodes, bus bars, anode tems etc.

4 x 35 tone and 4 x 45 tone furnaces and 2 x 15 tph and 2 x 20 tph ingot casting machines 4 x 45 tonne furnaces and 2 x 9.5 tph wire rod mills 2 x 45 tonne furnaces and 60/42 per drop billet casting machine 2 x 1.5 tonne induction furnace with a 4 tph alloy ingot casting machine 26,000 tpa strip casting machines With the acquisition and subsequent merger of International Aluminium Products Limited (IAPL) with Nalco, the 50,000 tpa export-oriented Rolled Products Unit is all set to produce foil stock, fin stock, can stock, circles, coil stock, cable wraps, standard sheets and coils

3.1.3 Captive Power Plant Of NALCO

Close to the Aluminium Smelter at Angul, a Captive Power Plant of 720 MWcapacity, comprising 6 x 120 MW clusters, has been established for firm supply of power to the Smelter. Presently, the capacity is being expanded to 960 MW. The salient features: Micro-processor based burner management system for optimum thermal efficiency Computer controlled data acquisition system for on-line monitoring Automatic turbine run-up system Specially designed barrel type high pressure turbine Electrostatic precipitators with advanced intelligent controllers Wet disposal of ash The water for the Plant is drawn from River Brahmani through a 7 km long double circuit pipeline. The coal demand is met from a mine of 3.5 million tpa capacity opened up for Nalco at Bharatpur in Talcher by Mahanadi Coalfields Limited. The Power Plant is inter-connected with the State Grid.

3.1.4 NALCO Products

Aluminum Metal

Ingots Sows Billets Wire rods Alloy wire rods Cast strips

Alumina & Hydrate Calcined Alumina Alumina Hydrate

Zeolite-A

3.1.5 Recent Achievements of Nalco:

2000: Icra has retained the Laaa rating for the Rs 642.58-crore Non-convertible debenture issue of the company, while it has assigned an A1 rating to the Rs 5-crore CP issue of Narmada Chematur Petrochemicals. 2001: A public sector Aluminium Company making a foray into detergent business sounds out of place. But if senior officials of National Aluminium Company (Nalco) are to be believed, the countrys second largest aluminium company will be doing that at its zeolite plant scheduled to start operations in July end. 2002: S Behuria appointed as part time official Director of Nalco. Nalco's alumina refinery capacity increased to 15.75 lakh tone 2003: Commissions one unit of Captive Power Plant with a capacity of 120 MW and 120 pots of Smelter with a capacity to produce 57,500 MT of Aluminium per year. Nalco members okay delisting of securities from stock exchanges of Bhubaneshwar,Delhi, Calcutta & Madras. 2004: National Aluminium Company Limited (NALCO) has informed that Madras Stock Exchange Limited vide its letter dated December 22, 2003 have withdrawn the admission granted to dealings on their exchange for the securities of NALCO. Nalco open offer to acquire 20% stake for Ondeo Nalco India 2005:Nalco inks agreement with NMDC.

3.2 PRODUCTION PERFORMANCE OF NALCO AT A GLANCE

3.3 FINANCIAL PERFORMANCE OF NALCO AT A GLANCE

PARTICULARS
1.NET SALES 2.TOTAL INCOME 3.TOTAL EXPENDITURE 4.OPERATING PROFIT 5.INTREST 6.PFOFIT BEFORE TAX 7.PROFIT AFTER TAX 8. EPS

2007
4988.80 5575.22 281.10 249.98 84.74 2466.59 1631.52 25.33

2008
5094.52 5616.80 3763.45 1913.35 84.33 1927.16 1272.27 19.75

2009
5085.6 5548.61 319.39 1143.15 2.28 1154.86 814.22 3.16

2010
5958.98 6417.50 430.06 1525.72 0.05 1524.70 1069.30 4.15

The sales and income has increased from the year 2007 t0 2008 , but simultaneously the profit has shown a decreasing trend from 2007 to 2008. In the year 2009,the sales decreased by Rs 100cr, similarly profit decreased by more than Rs 100cr. But in the year 2010 sales along with profit also increased.

3.4 CAPTAL STRUCTURE AND DIVIDEND POLICY OF NALCO

There is no particular capital structure of NALCO. Major of its investments are made through retained earnings, even there is no particular dividend policy for NALCO.

Dividend Payment: Dividend Payment for the last 5 years are

Shareprice Movement Of NALCO At a glance: For Year 2008-09

For Year 2009-2010

For Year 2010-2011

For the year 2008-09 the share price movement was more than the market, but for the year 2009-10 and 2010-11 the share price movement was low than the market movement

4. REVIEW LITERATURE

1- The research done by Pass C.L., Pike R.H., An overview of working capital management and corporate financing,(1984) describes that over the past 40 years major theoretical developments have occurred in the areas of longer-term investment and financial decision making. Many of these new concepts and the related techniques are now being employed successfully in industrial practice. By contrast, far less attention has been paid to the area of short-term finance, in particular that of working capital management. Such neglect might be acceptable were working capital considerations of relatively little importance to the firm, but effective working capital management has a crucial role to play in enhancing the profitability and growth of the firm. Indeed, experience shows that inadequate planning and control of working capital is one of the more common causes of business failure.

2- The research done by Herrfeldt B., How to Understand Working Capital Management describes thatCash is king--so say the money managers who share the responsibility of running this country's businesses. And with banks demanding more from their prospective borrowers, greater emphasis has been placed on those accountable for so-called working capital management. Working capital management refers to the management of current or short-term assets and short-term liabilities. In essence, the purpose of that function is to make certain that the company has enough assets to operate its business. Here are things you should know about working capital management.

3- The research done by, Samiloglu F. and Demirgunes K., The Effect of Working Capital

Management on Firm Profitability: Evidence from Turkey (2008) describes that the effect of working capital management on firm profitability. In accordance with this aim, to consider statistically significant relationships between firm profitability and the components of cash conversion cycle at length, a sample consisting of Istanbul Stock Exchange (ISE) listed manufacturing firms for the period of 1998-2007 has been analysed under a multiple regression model. Empirical findings of the study show that accounts receivables period, inventory period

and leverage affect firm profitability negatively; while growth (in sales) affects firm profitability positively.

4- The research done by, Appuhami, Ranjith B A, The Impact of Firms' Capital Expenditure on Working Capital Management: An Empirical Study across Industries in Thailand , International Management Review,(2008), The purpose of this research is to investigate the impact of firms' capital expenditure on their working capital management. The author used the data colleted from listed companies in the Thailand Stock Exchange. The study used Shulman and Cox's (1985) Net Liquidity Balance and Working Capital Requirement as a proxy for working capital measurement and developed multiple regression models. The empirical research found that firms' capital expenditure has a significant impact on working capital management. The study also found that the firms' operating cash flow, which was recognized as a control variable, has a significant relationship with working capital management.

5- The research done by, Hardcastle J., Working Capital Management,(2007) describes that

Working capital, sometimes called gross working capital, simply refers to the firm's total current assets (the short-term ones), cash, marketable securities, accounts receivable, and inventory. While long-term financial analysis primarily concerns strategic planning, working capital management deals with day-to-day operations. By making sure that production lines do not stop due to lack of raw materials, that inventories do not build up because production continues unchanged when sales dip, that customers pay on time and that enough cash is on hand to make payments when they are due. Obviously without good working capital management, no firm can be efficient and profitable.

5. ANALYSIS OF WORKING CAPITAL MANAGEMENT OF NALCO

Working capital may be regarded as the life blood of business. Working capital is of major importance to internal and external analysis because of its close relationship with the current day-to-day operations of a business.Every business needs funds for two purposes. Long term funds are required to create production facilities through purchase of fixed assets such as plants,machineries,lands,buildings Short term funds are required for the purchase of raw materials, payment of wages, and other day-to-day expenses. It is other wise known as revolving or circulating capital. It is nothing but the difference between current assets and current liabilities. i.e. Working Capital = Current Asset Current Liability. Businesses use capital for construction, renovation, furniture, software, equipment, or machinery. It is also commonly used to purchase inventory, or to make payroll. Capital is also used often by businesses to put a down payment down on a piece of commercial real estate. Working capital is essential for any business to succeed. It is becoming increasingly important to have access to more working capital when we need it. Gross Working Capital = Total of Current Asset Net Working Capital = Excess of Current Asset over Current Liability

5.1 ANALYSIS

THROUGH NET WORKING CAPITAL OF NALCO:

Current Assets- Current Liabilities PARTICULARS 2007-08 NWC 3499.45 2008-09 2595.57 2009-10 2998.32 2010-11 3304.67 2011-12 3873.192717

The Net Working Capital has increased and decreased year by year, but it has increased by just 10% from 2007 to 2011.Though there was an increase in sales in 2008 the net working capital decreased because the company tried to invest low in current assets. In the year 2009 , 2010, and 2011 increase in current assets

was more than current liabilities, because the company decided to follow a conservative approach for financing the current assets. Long Term Sources Of Financing Working Capital Reserves and surpulus Equity share capital Long Term Loans and Funds

Short Term Sources Of Financing Working Capital Cash Credit Sundry Creditors Bank Balances

5.2 ANALYSIS THROUGH VARIOUS COMPONENTS OF CURRENT ASSETS

5.2.1 Inventory Analysis Inventory is total amount of goods and materials. Inventory means stock of three:1. Raw materials 2. Semi finished goods. 3. Finished goods. PARTICULARS Raw material W.I.P Finished goods Inventory 2007
65.59 81.48 102.04
685.65

2008
68.38 114.74 131.91
841.9

2009
64.57 146.2 142.06
944.92

2010
92.16 141.5 214.72
1058.47

2011
108.0149 165.8431 251.6596
1220.086

Inventories forms 16% to 18% of working capital for all the 5 years.By analyzing the 5 years data we see that the inventories has increased year by year. By looking at the graph, we can say that inventories has grown by 77% from 2007 to 2011. By this growth we can say that NALCO is growing very rapidly in alumunium sector. A company uses inventory when they have demand in market and NALCO is having a great demand in alumunium sector. There was a great demand for alumunium globally in the year 2008 due to which here was an increasing trend in sales which was the biggest reason for increase in inventories. From other point of view we can say that the liquidity of firm is blocked in inventories but to stock is very good due to uncertainty of availability of raw material in time. This has been proved because in the year 2009 , due sharp fall in global economy there was a decrease in demand for alumina and alumunium and thus 122% increase in inventories from pevious year 2008. Economic Conditions and markets for most of commodities improved considerably in comparision to pre-global recession levels in 2009 showing an increase in demand for alumunium and alumina.

5.2.2. Position of Sundry Debtors in NALCO

Debtors or an account receivable is an important component of working capital and fall under Current assets. Debtors will arise only when credit sales made.

PARTICULARS Sundry Debtors

2007
60.5

2008
26.5

2009
181.78

2010
112.4

2011
69.50028

Sundry debtors occupy very small portion of the working capital. It is nearby 1% to 2% for the last 5 years.In the table and figure, we see that there are continuous variations in the debtors of NALCO in five (5) successive years. A simple logic is that debtors increase only when sales increase and if sales increases it is good sign for growth. We can see that in the year 2008 the Debtors are at minimum level and the company has invested this money in 2nd and third expansion. We can say that it is a good sign as well as negative also. Company policy of debtors is very good as a risk of bad debts is always present in high debtors Moreover, in next year in 2009 the debtors has increased more than 500%, .this was because of slowdown in global economy and inability of consumers to pay money. Although the company is able to decrease its debtors in the next successive years which is very good forNALCO.

5.2.2. Position of Cash And Bank Balances in NALCO

Cash called the liquid asset and vital current assets; it is an important component of Working capital.

PARTICULARS Cash & Bank

2007
3516.46

2008
2869.04

2009
3152.35

2010
3795.23

2011
4374.716

Cash and bank balances occupy a major part of the working capital. It is 70% of the working capital in the year 2007,63% in the year 2008,it is 61% in the year 2009&it is 63% in the year 2010 that is.NALCO maintains a centralized cash management system so the cash management is very good in NALCO. NALCO has a certain good amount of cash and bank balances at hand throughout 5 years, and the company is utilizing this fixed cash for exploding the Projects of 2nd and third in the year that is good for growth.

5.2.2. Position Of Loans And Advances in NALCO

Loans and Advances here refers to any to amount given to different parties, company, employees

PARTICULARS LOANS & ADVANCES

2007
541.1

2008
616.02

2009
785.59

2010
915.23

2011
1054.975

If we analyze the table and the chart we can see that it follows an increasing trend which is a good sign for the company.The increasing pattern shows that company is giving advances for the expansion of plants and machinery which is good sign for better production of cement and other goods. Although companys cash is blocked but this is good that company is doing modernization of plants In time to compete with other competitors in market. Nalco, apart from strengthening its business as usual, its major thrust is on diversification both sectoral and geographical and capacity addition.Nalco is planning to set up smelter plants internationally and locally. Apart from this Nalco is also planning to set up new power plants and other development prjrcts. In the year 2008 it tried to venture into Independent Power production.

5.3 ANALYSIS THROUGH VARIOUS COMPONENTS OF CURRENT LIABILITIES

5.3.1. Position Of Sundry Creditors Of NALCO
PARTICULARS SC 2007-08 2008-09 2009-10 2010-11 2011-12 162.59 306.14 1588.5 2062.42 2677.731

The Creditors of the company has increased year by year, and the increment is more than 100%.. This shows that the company is having a good will near the suppliers side, they have confidence on the company. In working Capital management the buying firms do not have to pay cash immediately for the

purchases made. This deferral of payments is a short term financing called trade creit, and it is mostly an informal agreement and is granted on an open account to pay cash immediately for the purchases made. This deferral of payments is a short term financing called trade creit, and it is mostly an informal agreement and is granted on an open account basis. This open account trade credit appears as sundry creditors on the companys balance sheet. Hence this shows that the company is having a good name in the market, but it is loosing in terms of Cash discount.

5.3.2. Provision Analysis Of NALCO

PARTICULARS Provisions 2007-08 2008-09 2009-10 2010-11 2011-12 222.557 329.84 369.98 386.49 403.7367

From the above table we can see that provision shows an increasing trend and the huge amount is being kept in these provisions. In the year 2007 and 2008 there was a huge provision for bad debts, it can be due to economic slowdown in the year 2009. But for the year 2010 and 2011, provisions was kept for income tax and employee and public benefits which shows that the company is earning profits and trying to earn goodwill in the market. Still it being a liability it should be kept in control.

5.4 ANALYSIS THROUGH OPERATING CYCLE OF NALCO

Operating cycle refers to the time period which starts from the raw material purchases and ends with realization of receivable. So it is total time gap between raw material purchases to total debtors collection. This is also known as working capital cycle.. The higher the operating cycle period, higher the working capital requirement. The basic reason for calculating operating cycle is

to find out the means for reducing the duration of operating cycle because if duration of operating cycle will be less than working capital requirement will be less.

CASH

RAW MATERIAL

DEBTORS & BILLS RECEIVABLES

OPERATING CYCLE

WORK IN PROGRESS

SALES

FINISH GOODS

OC = R + W + F + D C Where, R = raw material conversion period F = finished goods conversion period C = creditors payment period W = work in process period D = debtor collection period

5.4.1 Raw Material Conversion Period (RMCP) Average Raw Material Stock Average Raw Materials consumed during the year

PARTICULARS 2007-08 Average raw 65.59 material stock Raw material 574.36 consumed during the year RMCP 41.68

2008-09 66.985 696.76

2009-10 66.475 782.3

2010-11 78.365 766.12

2011-12 100.0874 97.9203

35.09

31.02

37.33

40.68

For the last 5 years the company is taking 35-40 days to convert raw materials to work in progress goods. For the projected year 2011 the conversion period has increased because of the the decrease in raw material consumption increase ininventory, the decrease in raw material consumption being more than increase in inventory. 5.4.2 Work in Progress Conversion Period (WIPCP)

Average stock in progress Average Cost of Production/365

PARTICULARS 2007

2008

2009

2010

2011

Average stock in progress Avg. Cost production WICP of

81.48 1753.15 16.96387

98.11 2159.63 16.58161

130.47 2905.95 16.3876

143.85 3159.39 16.61879

153.67 16 3702.9 19 15.147 54

The Work in progress conversion period which signifies the days required to convert work in progress to finished goods is 15-16 days for the last 5 years.

5.4.3 Finished Goods Conversion Period (FGCP)

= Average finished goods inventory Average Cost of goods sold/365 X 360 X 360

PARTICULARS 2007 2008 2009 2010 2011 102.04 116.975 136.985 178.39 233.1898 Average finished goods inventory Cost of goods sold FGCP 1956.76 19.03381 2394.16 17.83334 3189.81 15.67477 3589.9 18.13765 4207.493 20.22922

The finished goods conversion period hasranged from15-20days for thelast5 years.

5.4.4 Debtors Conversion Period (DCP) = Average Debtors Credit Sales/365

PARTICULARS Average Debtors Credit Sales DCP

2007 60.5 3990.4 5.533906

2008 43.5 4075.616 3.89573

2009 104.14 4068.48 9.342826

2010

2011 147.09 90.95014 5587.312 4767.184 11.26196 5.941462

The time taken by debtors to repay money to company is 3-11 days for the past 4 years. This is a good sign because the time taken by debtors is very low.

5.4.5 Credit Deferral Period (CDP) Average Creditors COGS/365 PARTICULARS Average Creditors COGS Avg. consumption period OR CCP 2007 162.59 1956.76 30.32837 2008 234.365 2394.16 35.72995 2009 947.32 3189.81 108.3989 X 2010 2011 1825.46 2370.076 3589.9 185.6021 4207.493 205.6041

The Creditors Deferral period is the length of time the firm is able to defer payments on various resources purchases. Since it is seen from the increase trend of sundry creditors that NALCO has a good name near the suppliers side, they are giving ample time to defer the payment.

5.4.6 GROSS OPERATING CYCLE FOR NALCO: RCP+WIPCP+FGCP+DCP

PARTICULARS RCP WIPCP FGCP DCP GOC

2007 2008 2009 2010 2011 41.68178 35.09031 31.01544 37.33518 40.68502 16.96387 19.03381 5.533906 83.21337 16.58161 17.83334 3.89573 73.401 16.3876 15.67477 9.342826 72.42063 16.61879 18.13765 11.26196 83.35358 15.14754 20.22922 5.941462 82.00324

The Gross Operating Cycle is the average length of time for a company to acquire materials, produce the products, sell the products and collect the proceeds from customers. The Gross operating cycle for NACO is following an uneven trend, and has ranged between 72-83 days. During the year 2008 and 2009 the Gross operating Cycle had fallen down to 72-73 days, due to decrease in raw materials conversion period, debtors conversion period and finished goods conversion period. This happened because the company tried to improve its efficiency with the help of SAP technology. But in the year 2010 the GOC increased because of economic slow down in 2009, decrease in demand andin turn increase of inventory in year 2010. Even for the projected year 2011 the GOC is 82 days showing that the company is consistent with its policies.

5.4.7 CASH CYCLE FOR NALCO:

GOC-CDP
PARTICULARS RCP 2007 2008 2009 2010 2011 41.68178 35.09031 31.01544 37.33518 40.68502

WIPCP FGCP DCP GOC CDP Cash Cycle

16.96387 19.03381 5.533906 83.21337 30.32837 52.88499

16.58161 17.83334 3.89573 73.401 35.72995 37.67104

16.3876 15.67477 9.342826 72.42063 108.3989 -35.9782

16.61879 18.13765 11.26196 83.35358 185.6021 -102.248

15.14754 20.22922 5.941462 82.00324 205.6041 -123.601

The operating cycle is the length of time or a company to acquire materials, produce the product, sell the products and collect the proceeds from customers.Working Capital is required to meet the time gap between the raw materials and actual realization of stocks. NALCO is able to decrease the cash cycle by applying techniques like inventory contol through SAP and latest technology in production.Majorly the negative cash cycle for the period 209-2011 is due to increase in creditors deferered payments. This is a good sign for the company because if the operating cycle requires a longer time span between cash to cash, the requirement of working capital will be more because of huge funds required in all the process Hence NALCO has to make less investment in working capital.

5.5 ANALYSIS THROUGH WORKING CAPITAL RATIOS

Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making decisions. It only means of better understanding of financial strengths and weaknesses of a firm. The main emphasis has been on calculating the ratios related to a working capital management.

5.5.1 CURRENT RATIO

It may be defined as the relationship between current assets and current liabilities. This ratio is also known as working capital ratio and measures the ability of the firm to meet current liabilities. High current ratio indicates firm is liquid and has the ability to pay its current obligations in time as and when they become due. A ratio equal or near to the rule of thumb of 2:1 i.e. current assets double the current liabilities is considered to be satisfactory. Current Ratio = Current Assets Current Liabilities PARTICULARS Current Assets Current Liabilities Current Ratio 2007
5040.33 1540.88

2008
4528.81 1933.24

2009
5209.64 2211.32

2010
6045.17 2740.5

2011
6968.195 3158.941

3.271072

2.342601

2.355896

2.205864

3.271072

The current ratio of NALCO for 5 years is above the industry average, showing safety.ich means it is liquid and has the ability to pay its current obligations in time as and when they become due and it is a comfortable situation for creditors.But for the concern, it indicates idle funds and lack of enthusiasm.

5.5.2 Quick Ratio

This ratio is also known as quick ratio or acid test ratio. It is a more rigorous test of liquidity than the current ratio. It is based on those current assets which are highly liquid. Inventory and prepaid expenses are excluded because they are deemed to be least liquid component of current assets. A high quick ratio is the indication that the firm is liquid and has the ability to meet its current liabilities in time and on the other hand low ratio represents liquidity position is not good.

Quick Ratio

Quick or Liquid Assets Current Liabilities

Quick Assets = Current Assets Inventory Prepaid Expenses

PARTICULARS Current Assets Inventories Liquid Ratio

2007
5040.33 685.65

2008
4528.81 841.9

2009
5209.64 944.92

2010
6045.17 1058.47

2011
6968.195 1220.086

2.826099

1.907114

1.928586

1.81963 1

2.82609 9

According to rule of thumb, it should be 1:1. For NALCO, the quick ratio has been above standard for last 4 years, which means NALCO is insufficiently liquid i.e the companys liquidity position is good and it has the ability to meet the current liabilities in time. But high ratio is recommendable. .

5.5.3 WORKING CAPITAL TURNOVER RATIO

Working capital turnover ratio indicates the velocity of the utilization of net working capital. This ratio measures the efficiency with which the working capital is being used by a firm. This ratio indicates whether the investments in current assets or net current assets ( i.e., working capital ) have been properly utilized. In order words it shows the relationship between sales and working capital. Higher the ratio lower is the investment in working capital and higher is the profitability. But too high ratio indicates over trading. Working Capital Turnover Ratio= COGS OR Sales Net Working Capital

PARTICULARS Sales NWC WCTR

2007 4988
3499.45

2008 5094.52
2595.57

2009 5085.6
2998.32

2010 5958.98
3304.67

2011 6984.14 3873.193 1.425367

1.425367

1.962775

1.69615

1.8032

This ratio is an important indicator about the working capital position. Now if we analyze the four years data, we find that it is nearby same which means that its investment in working capital is high, and the working capital is not being utilized properly. A turnover of 1.4-1.8 is not appreciable since it indicates the working capital is not efficiently utilized.

5.5.4 Stock Turnover Ratio

This ratio tells the story by which stock is converted into sales. A high stock turnover ratio reveals the liquidity of the inventory i.e., how many times on an average, inventory is turned over or sold during the year. STOCK OR INVENTORY TURNOVER RATIO = COGS OR SALES AVERAGE STOCK PARTICULARS Sales Average Inventory 2007 4988 249.11 2008 2009 2010 5094.52 5085.6 5958.98 282.07 333.93 400.605

Inventory Turnover ratio

2.853876

2.843758

3.375746

3.391594

Stock velocity is an indicator of firms activeness. It directly influences the profitability of firm. The calculated ratio of NALCO for the last 4 years is very poor when compared to industry average wich is 9.5 which signifies excessive inventory or over investment in inventory. It may be result of inferior quality goods, over valuation of closing inventory, stock of obsolete goods.

5.5.5 Debtors Turnover Ratio

DEBTORS TURNOVER RATIO = CREDIT SALES AVERAGE DEBTORS PARTICULARS Credit Sales Average debtors Debtors Turnover ratio 2007 2008 2009 2010 2008 5587.312 3990.4 4075.616 4068.48 4767.184 43.5 93.69232 104.14 39.06741 147.09 32.40998 90.95014 61.43269

60.5 65.95702

The Debtors turnover ratio indicates the speed with which debts are being collected. NALCOs debtors turnover ratio of more than 60 times for the year 2007 and 2008 is very appreciable. This shows that NALCOs trade credit management and liquidity of debtors is quite good.

5.5.6 Creditors Turnover RatioActually this ratio reveals the ability of the firm to avail the credit facility from the suppliers throughout the year. Generally a low creditors turnover ratio implies favorable since the firm enjoys lengthy credit period. CREDITORS TURNOVER RATIO = NET CREDIT PURCHASE AVERAGE CREDITORS PARTICULARS COGS Average Creditors Creditors Turnover ratio 2007 1956.76 162.59 12.03493 2008 2394.16 234.365 10.21552 2009 3189.81 947.32 3.367194 2010 3589.9 1825.46 1.966573 2008 4207.493 2370.076 1.775257

Now if we analyze the five years data we find that in the year 2007 the ratio was high which means that creditors are being paid 12 times a year which was a good sign for the creditors and hence is not able to utilize credit facilities available to the NALCO, but in the next four years it is seen that it has followed a decreasing trend which is not good sign for the company. So we can say it enjoys a very good credit facility from the from the suppliers, and generating short term funds from them.

PARTICULARS CURRENT ASSETS: Inventories S. debtors Cash & Bank Balances Loans & Advances Other Current Assets Total current assets (A) CURRENT LIABILITIES: S. creditors Provisions Security deposits & Retention money Total current liabilities (B) Working capital (A-B) Net decrease in working capital

2007
685.65 60.65 3516.46 541.1 236.47 5040.33

2008
841.9 26.5 2869.04 616.02 175.35 4528.81

INCREASE 156.25

DECREASE

-34.15 -647.42 74.92 -61.12 -511.52

162.59 222.557 162.69

306.14 329.84 306.14

143.55 107.283 143.45

1540.88 3499.45

1933.24 2595.57

392.36 903.88 903.88

5.6 ANALYSIS ON THE BASIS OF SCHEDULE OF CHANGES IN WORKING CAPITAl

PARTICULARS CURRENT ASSETS: Inventories S. debtors Cash & Bank Balances Other C.A Loans & Advances Total current assets (A) CURRENT LIABILITIES: S. creditors Provisions Security deposits & Retention money Total current liabilities (B) Working capital (A-B) Net Decrease in working capital

2009
944.92 181.78 3152.35 145 785.59 5209.64

2010
1058.47 112.4 3795.23 163.84 915.23 6045.17

INCREASE 113.55

DECREASE

-69.38 642.88 18.84 129.64 835.53

1588.5 369.98 252.84

2211.32 2998.32

2062.42 386.49 292.04

2740.5 3304.67

473.92 16.51 39.2 529.18 306.35 306.35

FOR YEARS 2007 AND 2008:

As we have a look on the schedule of changes in working capital for the NALCO over the years 2007 and 2008, we find that, among current assets, inventories, loans and advances have shown increment from year 2007 to year 2008. The sundry debtors and cash & bank balances have decreased in the same years. Among the current liabilities, the sundry creditors, other liabilities and provisions have increased. Therefore, the overall net working capital has decreased.

FOR YEARS 2009 AND 2010:

Among the current assets, sundry debtors have decreased and other current asssets like cash & bank balances, inventories and loans & advances have shown increment. The total current assets have increased. Among the current liabilities, sundry creditors, other liabilities, security deposits have increased. Therefore, the net working capital has also increased.

6. WORKING CAPITAL MANAGEMENT AT NALCO

6.1 INVENTORY MANAGEMENT IN NALCO
NALCO is a large scale manufacturing company involved in mining of Bauxite and production of Aluminum. Therefore, it has to maintain large quantity of inventories at production units for its smooth running and functioning. In the mine sector, annual Bauxite transportation and excavation of 48,24684 MT have been the highest since inception exceeding the previous best of 48,79,278 MT during the year 2009.Allumina production is 9,34,874MT are highest ever since inception exceeding the previous best of MT achieved during 2007-2008.However the power generation for the year is little reduced because of the Ash Pond debacle during the year 2007 December. The major inventory items in NALCO include: Raw material The raw material that consist of CP coke, CT pitch, Aluminum fluoride, Pig iron, HFO Alumina and anodes for SMELTER & COAL, HFO, LDO for CPP & Caustic Soda, Alum, Lime, CGM etc.for Alumina Plant & it has not faced the situation like out of stock of raw materials during the recent part. Stores and Spares At the time of Procurement of the machinery, generally some spares procured for immediate maintenance that directly linked with different equipments. These spares are known as instance spares and most of these items of High Value.Besides for day-to-day maintenance some spares, tools, Consumable etc are procured from the near by available market. This also requires involvement of

High Value and these items are consumed on regular basis for observation and maintenance.Some items required on regular basis are also procured as AP items i.e. Automatic Procurement basis, once this stock is reduced below minimum level. Attempt is made to deproparietise and gets the same from indigenous sources for some reputed spare. Intermediary Goods - Which consist of Green Anodes, Baked Anodes, Rodded Anode, and Anode stem, etc. for which NALCO has installed its own plant for producing the Green & Baked Anodes and imports them only when there is a shortage. Finished Goods- That consists of Bauxite, Aluminum Hydrate,Alumina, Aluminum Ingots, Sow Ingots, Billets, Wire rod Sheets etc.The finished Products of NALCO move fast and hence the stock of Finished Goods is very less in company. The company also effectively reduces the rejected inventory. The rejected inventory in NALCO comprises of anode butts and rejected finished products. Anode rejects are recycled and reused in the process while finished stocks rejects are either recycled or sold at a lower price.The company is exercising goods control of minimize the rejects.

Inventory Norms
Insurance Items: Broadly the insurance items are those items which are installed with equipments on the critical path of the production chain, which do not normally wear out, which are not easily available, have long lead time and failure or damage or break down of the items will lead to stoppage of the unit and production loss.NORM- 1.26% of the cost of plant & machinery. The value limited to be adjusted at the end of financial year applying RBI index for plant & machinery. Raw Materials: Caustic Soda- 3 months Consumption (1 month at Damanjodi and 2 months at Vizag) C.T. Pitch - 2 months consumption. Other 1 month consumption Stores & Spares: Imported and Proprietary items 17 months consumption. Others spares- 14 months consumption. Consumables Stores 6 months consumption.

6.2 CASH MANAGEMENT OF NALCO.

NALCO has been accumulating huge cash surpluses over last several years, which enables the organization to maintain adequate cash reserves and to generate required funds from within the organization i.e. from internal sources . The key areas of effective cash management in NALCO are: 1. Identifying the requirements of funds at various units 2. Investment of surplus funds productively. 3. Repayment of loans. 4. Proper capital expenditure. 5. Standardized reporting system Control on cash flows: NALCO, a multi-core Organization, exercises food control over its cash flows by adopting centralized cash management system and strict reporting system. Centralized Cash Management system:For centralized cash management system, NALCO has chosen State Bank of India (S.B.I) as its sole banker and the control cash account of the company is maintained at the S.B.I. main branch,Bhubaneswar under direct control of NALCOs Corporate Office. About ten branches of the company, including manufacturing units, spread across the country, are converted under the centralized cash management system.No cash is maintained at the branches and the TM branches have been authorized to honor the cheque presented by the company without any upper limit TM the transactions are transmitted to the central cash account at Corporate Office on a day to day basis. Similar account is also maintained by NALCOs corporate office for proper reconciliation. The information regarding daily cash flows different branches is monitored simultaneously by the S.B.I. as well as by NALCOs corporate office. Besides, NALCO also has cash collection center at different branches and realization of sale are credited and transferred to the central cash account daily. The encores time and quick realization of cash. Moreover, optimum level of funds is readily available with the company, by not maintaining any balances at different branches of S.B.I.Similarly, NALCO is exercising strict control over the payments made by its various branches. Through the manufacturing units are authorized to issue cheques, they are required to obtain clearance from the corporate office for all payments exceeding a prescribed limit, before the actual realization of such cheques. Further, the units are required to make forecast of cash flow on a routine basis and intimate the same to the corporate office to ensure prompt availability of funds. The cash flow projections submitted by different branches at the corporate office are consolidated. Accordingly, the corporate office chalks out effective cash flow strategy to ensure minimum holding of cash as well as avoiding deficit at the same time.NALCO being cash rich company

by nature, the extent of success lies in how quick the company has identified its surplus funds and invested the same in short term investment for optimization of wealth.

The Reporting system in NALCO: Proper reporting or management information system is one or the key factors for the success of an organization. NALCO has introduced a strict management information system to ensure proper functioning of controlmechanism of fulfillment of objectives. The reporting system in NALCO mainly includes:1) Forecasting of monthly cash flow/Operating performance. 2) Reporting of actual vis--vis forecasted cash flow on weekly basis 3) Reporting of receipts and payment at different units of daily basis. The monthly forecasts of cash flows are flexible in nature. While reporting the weekly cash flows; the units have a scope to revise the forecasted and submitting them to the corporate office before the beginning of every month. Based on these, the corporate office prepares a consolidated cash flow statement. This consolidated cash flow statement from the main basis to plan the funds flow for the coming month, and this is a continuous process. On the other hand the daily report enables the company to know the latest surplus cash balance available and thus helps the company in taking various investment decisions. In case of any crises, special reports are made to identify the resources where the funds are to be realized. NALCO even has a cash credit arrangement with State Bank of India (S B I), though there has never been any excess withdrawal during the last five years. This clearly indicates the effective and efficient management of cash in NALCO. Maintainance Bill Payments Section: For awarding work order on contractual basis to a local party three rates are taken into consideration. These are:Zero Base Budgets,Last Year Rate + Some percentage (%) due to inflation,Delhi Subsidiary Rate

6.3 RECEIVABLE MANAGEMENT IN NALCO

NALCO has set up its marketing office at all metro cities in India i.e.Mumbai, Kolkata, New Delhi, Chennai, Bangalore, and Pondicherry.This marketing office obtains sales order from Aluminum users in India as well as globally. On the basis of order received for different products it marks production planning of different i.e. Ingot sow ingot, Billets,Wire etc. and accordingly advices product ion planning at Production Units Marketing office also sends dispatch instruction to dispatch section, which indicates various commercial terms i.e. product requirement, mode of dispatch, payment terms etc.The function of Dispatch department is to receive finished product from production department and segregate it on the basis of its laboratory analysis and grade. It keeps account of the various grade of finished product

received by them. As per the sale order/dispatch instruction received from marketing office for export /domestic sale the dispatch departments segregates and prepares the materials for dispatching the same by Rails/Roads/Trucks. The materials are handed over to the transporter. On completion of dispatch of the consignment as per dispatch advice, the dispatch department sends all the dispatch documents which delivery invoice and a copy of L.R to finance department .on the basis of this the finance department makes a commercial invoice in which takes care of Taxes and other duties over and above the cost of product and sends it to the Marketing office may be in the form of Banker cheque ,bank draft or in the from of letter of the credit opened by the buyer .The buyer opens a letter of credit with its banker. On completion of dispatch, on the basis of commercial invoice and proof of dispatch the money is realized by the Nalcos banker from the buyers bank.

The study involves practical and conceptual over view of decisions concerning current assets of NALCO.. By conducting the study about working capital management, I found out that working capital management of NALCO is good. NALCO has sufficient funds to meet its current obligation every time, which is due to sufficient profits and efficient management of NALCO Raw material for all the units of NALCO purchased by corporate office in bulk, which is a major problem for the company as it increases the inventory cost. Company is cash rich but as there are expansion and diversification plans under the pipeline, company is not utilizing these funds. For meeting the working capital needs and capacity expansion needs, it has borrowed from banks. Lack of advertisement can be considered to be a weak point for the NALCO. The amount of stock is increasing per year, which is a good sign, as it would help them in the tough competition coming ahead. Firm profitability can be increase by shortening accounts receivables and inventory periods.

Management should make the proper use of inventory control techniques like fixation of minimum, maximum and ordering levels for all the items for less blockage of money.

 The company should also adopt proper inventory control like ABC analysis etc. This inventory system can make the inventory management more result oriented. The EOQ should also follow in stores. The company should train its work force properly, which would enable the company to utilize its resources properly and in the interim help in minimizing wastage, and hence result in the expansion of its market share. Due to competition, prices are market driven and for earning more margin company should give the more concentration on cost reduction by improving its efficiency. The investments of surplus funds made by the corporate office and the units are not generally involved while taking decisions with regard to structure of investment of surplus funds. The corporate office should involve the units to better ascertain the future requirements of funds and accordingly the investments made in different securities. The company is losing its overseas customers due to decrease in exports so; the sufficient amount of exports should the maintained.
Companys Average debtor collection period of company is 19 days. Therefore, it would be the one of the positive point for company and company should maintain it for future The recommendation & suggestion for effective management of working capital at NALCO are given below: 1) For inventory, in order to improve the position, NALCO can reduce the level of stocks by resorting to phased production i.e. producing according to requirement and disposing off or recycling the unserviceable inventories.However, the low turnover of stock may also be due to problems with generation of sales Inventory management is a great concern for NALCO especially stores and spares. The purchase manager should take proper steps for procurement of inventories. 2) The plant must take certain steps to decrease the working capital cycle. One way can be better management of inventories.

3) The plant is suggested to maintain a balance in capacities, synchronization of various inputs availability of some materials or parts which are not easily available. 4) Short term credit period availed must be reduced and sundry creditors should be paid faster.

5) The plant should maintain inventory at an optimum level rather than a very optimistic level. 6) The procurement for materials requisition processing should be reduced so as to minimize the lead time.

7) Plant should given freedom in deciding the credit policies, cash discount or credit ratings.NALCO can also consider negotiating its creditors for relaxing the debt repayment period and repaying only on or just before the expire of the credit period.

REGRESSION ANALYSIS TO ANALYZE THE EFFECT OF WORKING CAPITAL MANAGEMENT ON FIRMS PROFITABILITY
The aim of this analysis is to analyze the effect of working capital management on firm profitability. In accordance with this aim, to consider statistically significant relationships between firm profitability and the components of cash conversion cycle at length, a sample consisting of BSE listed manufacturing firms for the period of 2007-2011 has been analysed under a multiple regression model. Empirical findings of the study show that accounts receivables period, inventory period and leverage affect firm profitability negatively; while growth (in sales) affects firm profitability positively. Regression Analysis This study investigates the effects of accounts receivables period, inventory period, cash conversion cycle, firm size, firm growth, leverage and fixed financial assets on firm profitability. The dependent variable of the regression model is return on assets. Three of totally seven independent variables of the regression model are directly related with working capital management. These are accounts receivables period, inventory period and cash conversion cycle, respectively.

Variables ROA ACRP INVP CCC SIZE LEV FIX

Mean 0.0206 139.078 135.6185 153.1316 17.5674 0.4049 0.0365

Minimum -0.8724 50.5784 50.5120 59.5562 14.1020 -0.5320 0.0002

Maximum 0.6652 299.2946 299.2859 299.3328 19.4990 0.6490 0.1000

Dependent Variable ROA Constant ACRP INVP CCC SIZE LEV FIX Adj R^2 F(sig.0.000) Durbin Watson

B value

t-value 1.709 -4.156 -4.794 -0.427 1.404 -9.979 1.015

sig 0.088 0.000 0.000 0.669 0.160 0.000 0.310

-0.056 -0.67 -0.006 0.018 -0.130 0.013 0.048 42.849 1.745

Regression model is as follows: ROAi = i+i1ACRPi+i2INVPi+i3CCCi+i4SIZEi+i5GROWTHi+i6LEVi+i7FIXi+i where, i is constant; i1-7 are coefficients of variables 1 thru 7 and i is residual term

Result:
Empirical findings of the study indicate that ACRP and INVP, which are -as mentioned before- directly related variables with working capital management, have significantly negative effects on firm profitability. This means that while accounts receivables and inventory periods lengthen, profitability decreases, or vice versa. The other variables that have significant effects on firm profitability are GROWTH and LEV, affecting it positively and negatively, respectively. This means that any increase in sales leads profits to grow, while any increase in debt causes profitability to fall. The other variables included in the regression model (CCC, SIZE and FIX) have no statistically significant effects on firm profitability.

BIBLIOGRAPHY & WEBLIOGRAPHY

WEBSITES:-

www.nalco.co.in www.cma.com www.16anna.com http://papers.ssrn.com/sol3/papers.cfm?abstract_id=931591&rec=1&am

BOOKS AND JOURNALS

Financial Management I.M.Pandey Financial Statement Analysis Dr. Anjan Bhattacharya Financial Management S.N.Maheshwari

Annual Reports of NALCO 07 & 2010.

ANNEXURES

2007 Net Sales

CURRENT ASSETS:
Inventories Sundry Debtors Cash and Bank Balances other Current Assets Loans and advances Total Current Assets

3990.4 5144.1 4
685.65 60.65 3516.46 236.47 541.1 5040.33

4075.6 16 5221.3 5
841.9 26.5 2869.04 175.35 616.02 4528.81

2008

4068.4 8 5814.7 3
944.92 181.78 3152.35 145 785.59 5209.64

2009

4767.1 84 6058.9 8
1058.47 112.4 3795.23 163.84 915.23 6045.17

2010

2011 5587.312

1220.086 129.5621 4374.716 188.8564 1054.975 6968.195

0.77945842 2 5.85962264 2

0.2278 86 1
1.152688

CURRENT LIABILITIES

1540.88

1933.24

2211.32

2740.5

3158.941

2007
Net Working Capital 3499.45

2008
2595.57

2009
2998.32

2010
3304.67

2011 3873.1 93

0.1068

Inventories 108.01 49

Raw Materials

65.59

68.38

64.57

92.16

Worki In Progress Finished Goods

81.48 102.04

114.74 131.91

146.2 142.06

141.5 214.72

165.84 31 251.65 96

Sundry Debtors Sundry Creditors

60.5 162.59

26.5 306.14

181.78 1588.5

112.4 2062.4 2

69.500 28 2677.7 31

0.38167015 1 0.29834435

0.3816 7 1.3816 7 Add Less

Average debtors Average creditors Average inventories Average raw materials Average WIP Average FG

60.5 162.59 249.11 65.59 81.48 102.04

43.5 234.36 5 282.07 66.985 98.11 116.97 5

104.14 947.32 333.93 66.475 130.47 136.98 5

147.09 1825.4 6 400.60 5 78.365 143.85 178.39

90.950 14 2370.0 76 486.94 88 100.08 74 153.67 16 233.18 98

Add Less

RM Conversion Period RM turnover ratio

2007 41.681 78 8.7568 23 16.963 87 21.516 32 19.033 81 19.176 4

2008 35.090 31 10.401 73 16.581 61 22.012 33 17.833 34 20.467 28

2009 31.015 44 11.768 33 16.387 6 22.272 94 15.674 77 23.285 83

2010 37.335 18 9.7763 03 16.618 79 21.963 09 18.137 65 20.123 89

40.685 02 8.9713 6 15.147 54 24.096 32 20.229 22 18.043 21

WIP Conversion Peripd WIP turnoverratio

FG Conversion Period FG turnover ratio

Inventory conversion period Inventory turnover ratio

77.679 46 2.8538 76

69.505 27 2.8437 58

63.077 8 3.3757 46

72.091 62 3.3915 94

76.061 78 3.4485 22

2007 2--8 Current Liabilities Sundry Crediors Security Deposits Provisions

2009

2010

2011

162.59 162.69 222.55 7

306.14 306.14 329.84

1588.5 252.84 369.98

2062.4 2 292.04 386.49

2677.7 31 337.31 75 403.73 67

COST OF SALES STATEMENT

2007 Raw Material Power and fuel Other Mnfg expenses Depriciation Total Opening WIP Closing WIP Cost Of Producion Opening FG Closing FG COGS 574.36 994.69 163.82 30.06 1762.9 3 71.7 81.48 1753.1 5 101.57 -102.04 1956.7 6 2008 2009 2010 766.12 1772.6 4 177.61 430.06 3146.4 3 154.46 141.5 3159.3 9 215.54 -214.97 3589.9

696.76 782.3 1311.5 1601.1 5 4 174.98 210.78 3.23 319.39 2186.5 2913.6 2 1 87.85 138.66 -114.74 -146.32 2159.6 2905.9 3 5 102.63 141.81 -131.9 -142.05 2394.1 3189.8 6 1

Gross Profit Gross Profit PAT Net Profit Margin ROIC EPS margi n

2033.6 4 50.963 31
1,631.52

1681.4 56 41.256 49
1,272.27

878.67 21.597 01
814.22

1177.2 84 24.695 59
1,069.30

40.886 13 18..14
25.32

31.216 63 13.05
19.75

20.012 88 11.08
12.64

22.430 43 12.05
4.15

Working Capital Ratios Current Ratio Liquid Ratio Cash to WC Ratio wctr 3.2710 72 2.8260 99 1.0048 61 1.4253 67 2.3426 01 1.9071 14 1.1053 6 1.9627 75 2.3558 96 1.9285 86 1.0513 72 1.6961 5 2.2058 64 1.8196 31 1.1484 44 1.8032