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A study on working capital management in Visaka Industries Limited

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indian project
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  1. Introduction
  2. Objectives of the study
  3. Nature of working capital
  4. Methodology of the study
  5. Review of literature: Working capital theory
    1. Concept and definition
    2. Need for working capital
    3. Importance of adequate working capital
    4. Factors influencing working capital requirements
  6. Company profile
  7. Analysis
    1. Comparitive balance sheet
    2. Statement of changes in working capital
    3. Ratio analysis
  8. Findings and suggestions
  9. Conclusion
  10. Bibliography

The company was incorporated under the Indian Company's Act 1956 on 18th June 1981 as Visaka Asbestos Cement Product ltd and promoted by Dr.G.Vivekananda with investment of Rs 4 crores to set up cement asbestos plant in Medak district of Andhra Pradesh. It has grown in to multiple folds and now has a turnover of Rs 195 crores and asset of about Rs 98 crores by April 2009. In 1991 the company started working on synthetic yarns. Today the company is one of the leading manufacturers in asbestos cement sheets and synthetic yarns. The company is also regular in paying the dividends to their shareholders every year in their annual general meeting. Asbestos cement products industry in India comprises of about 13 players with about 41 manufacturing plants situated in different parts of the country. The products are marketed under their respective brand names mainly through dealers for the retail market and directly for products and government departments. The retail market is expected to grow significantly due to its semantic advantage over the other substitutes in the form of cost fire and heat resistant and durability. Many state governments are encouraging AC sheet to thatched roofs, which will help in the industry due to the continuous innovations, and the bottle necking efforts coupled with penetrative marketing efforts productions and sales are continually growing over the years. The capacity at the Patancheru plant has been increased by 25% during 2001-2002 with appropriate investment in the equipments.

[...] MARKET CONDITIONS: The degree of competition prevailing in the market place has an important bearing on working capital needs when competition is keen, a larger inventory of finished goods is required promptly to serve customers who may not be inclined to wait because other manufacturers are ready to meet their needs. Further, generous credit terms may have to be offered to attract customers in a highly competitive market. Thus, working capital needs tend to be high because of greater investment in finished goods, inventory and accounts receivable. [...]

[...] For the purchase of raw material, components and spares To pay wages and salaries To incur day to day expenses and overhead costs To meet the selling cost as packing, advertising etc To provide credit facility to the customers To maintain the inventories of raw material, work in progress, stores For studying the need of working capital in a business, one has to study the business under varying circumstances such as new concern, as a growing concern and as one, which has attained maturity. [...]

[...] RESEARCH METHODOLOGY The study has been conducted in the organization Visaka industries ltd, more especially to examine financial strategies and working capital management in order to enquire in to the issues like liquidity, profitability, timelines and material management. The enquiry has been made in the department of the organization i.e., finance and accounts department. SOURCE OF DATA Most of the data for the study is drawn from secondary data source. The secondary data is collected from company annual reports, financial statements and other available records and statements. [...]

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