A Project Report on Working Capital Management

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

SL.NO.

CONTENTS

1

PAGE NO.

CHAPTER 1 EXECUTIVE SUMMERY •

• • • • • • •

3 TO 7

INDUSTRY PROFILE. COMPANY PROFILE NEED FOR STUDY OBJECTIVE OF THE STUDY RESERCH METHDOLOGY FINDING SUGGESTION CONCLUSION

2

CHAPTER 2 INTRODUCTION OF INDUSTRY

8 TO 14

INDUSTRY PROFILE 3

CHAPTER 3 INTRODUCTION OF COMPANY • • • • • • •

4

15 TO 34

COMPANY PROFILE VISION, MISSION AND GOAL. BOARD OF DIRECORS. OBJETIVE OF SDT&TPL. PRODUCT & SERVICE PROFILE ORGANIZATION FLOW CHART OF SDT&TPL. DEPARTMENT STUDIES OF SDT&TPL

CHAPTER 4 RESEARCH METHDOLOGY • • •

35 TO 39

SCOPE OF STUDIES. OBJECTIVE OF STUDIES METHDOLOGY

Babasabpatilfreepptmba.com

1

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

CHAPTER 5 5

WORKING CAPITAL MANAGEMENT • • • • • • • • •

40 TO 52

INTRODUCTION MEANIG OF CAPITAL. FORM OF CAPITAL MEANING OF WORKING CAPITAL NEED OF WORKING CAPITAL NATURE OF WORKING CAPITAL FACTORS DETERMINING WORKING CAPITAL REQUIREMENTS. FINANCING OF WORKING CAPITAL WORKING CAPITAL COMPOSITION.

6

CHAPTER 6 DATA ANANLYSIS AND INTERPRETATION

7

53 TO 70

CHAPTER 7 • • •

FINDINGS SUGGESTIONS CONCLUSIONS

71TO 77

ANNEXURE BALANCE SHEET BIBLOGROPHY

Babasabpatilfreepptmba.com

2

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Babasabpatilfreepptmba.com

3

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

EXECUTIVE SUMMARY TITLE OF THE PROJECT “WORKING CAPITAL MANAGEMENT” Organization: SHREE DAYAL TOURS & TRAVELS PRIVATE LIMITED. INDUSTRY PROFILE:In the 3500 BC fixed wheel chart are invented first wheel vehicles in history .Other early wheel vehicles included the carious. The wheel vehicles were used for the traveling purpose. Littleton area first began to be settled in 1862, there were two principal forms of transportation available: walking and either riding or being pulled by a horse. There were no roads to speak of, only old Indian trails which had been widened and packed hard by the increased usage of white men. Their after in air India has came in 19th century. Air Indian has first Government sector company in India .It was introduced long year ago in India And there after many private air lines comes in India .The airlines has developing the service sector in India by providing tours and traveling facility to the customer. In 19 th century many tours & Travels Company introduce in India. Air Deccan is continues to be one of the faster growing commercial passenger airlines today .Air Deccan company has developed tours & travels sectors to provide various facility to the tours & travels facility company.

Company profile:SHREE DAYAL TOURS & TRAVELS PRIVATE LIMITED (SDT&TPL) is situated at Makwana Road Andheri (East) in Mumbai; State – Maharashtra .Shree Dayal Tours & Travels Pvt Ltd is a medium scale of Tours & Travels service providing company. Shree Dayal Tours & Travels Pvt Ltd was incorporated in the year 2001. Shree Dayal Tours & Travels Pvt Ltd was set up in the year of 2001, 17 August. The Registration number is U 63040 MH 2001 PTC 133094. The registered office of the company will be situated in the state of Maharashtra i.e. within the jurisdiction of registrar of companies at Mumbai. Shree Dayal is a Tours &

Babasabpatilfreepptmba.com

4

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Travels company. I have undertaken my study in area of working capital in order to get the basic understanding and information regarding the tours & traveling company.

Objectives of the study:

•

To study the working capital requirement of a company. To know the progress of working capital in a company To study the efficiency of cash, and receivables management of the company To know the solvency of the company & how the company is managing working



capital.

The objective of study to analyzed the liquidity position of the company.

THE WORKING CAPITAL NEED ARISES FOR THE FOLLOWING PURPOSE.

•

•

For purchasing of Tickets.

•

For paying wages and salaries

•

To increase day-to-day expense and overhead costs like power and office expense etc.

•

To meet selling costs of packages, advertising etc…

•

To provide credit facilities to customers.

SCOPE FOR THE STUDY:This project acts as a reference guide or as a source of information. It gives the idea about the financial analysis and working capital of the firm. The main scope of the study was to put into practical the theoretical aspect of the study into real life work experience. The study deals with analysis and interpretation of the data collected through the sources of primary and secondary data for a period of five financial years. I.e. 2004-2005, 2005-2006, 2006-2007, 2007-2008 and 2008-2009 Graphs, diagrams and tabulation methods are used to analyze and interpret the data collected. It will help to understand the company’s liquidity position.

LIMITATION OF THE STUDY

Babasabpatilfreepptmba.com

5

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

•

This study deals only with the data made available. Hence the result of this study cannot judge the business of the firm in general

•

The study have been influenced by the limitation of the ratio analysis

•

The study extensively uses the data provided is the financial reports of the firm which may also have their own limited perspective

•

The analysis made on the working capital management is for a particular period of time the current assets and current liabilities will change for an analysis made at any other of time.

• .

METHODOLOGY: In preparing of project the information collected from the two sources.  Primary Sources: Primary sources include information collected through discussion with the concerned

departmental persons i.e. Mr. Parihar and Mr. Manoj.R  Secondary Sources: I was used secondary sources also for collecting the data. They are: • Information from the text sources • Information form the internet sources •Information from the materials provided by the concern

SAMPLING DESIGN 0

Sampling unit

: Financial Statements

1

Sampling Size

:Last five years financial statements

•

Finding and Suggestion: Finding:

The net working capital has declined in the year 2007-2008 and but the profit of the

company was increased in the year 2007-2008

Babasabpatilfreepptmba.com

6

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

The Shree dayal tours & Travels Pvt Ltd has abled to repay the liability & loan of the creditors or not. 

Suggestion: In the year 2007-2008 the current assets of the Shree Dayal tours and travels Pvt Ltd has declined and current liability of the company has increases there for the net working capital declined. There for the current ratio has declined. The net working capital of the company has increased remaining year .But profit has increased because the sales has increased in the year 2007-2008. 

The company has abled to repay the liability of the creditors because of the current

ratio of SDT&TPL is above the standard of current ratio i.e. 2:1. The profit of the company has increased every year. •

Conclusion:The Shree Dayal tours & travels Pvt Ltd has profit orient company and company has to able to the repay of his lability.The company have sufficient reserve and surplus and reserve and surplus has increases every year. After going through the different aspects of the industry departments and the awards it has received in different fields. There is good relationship between the directors and employee. The management concerned about employees complete health and wealth.

Babasabpatilfreepptmba.com

7

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

 INDUSTRY PROFILE.

Babasabpatilfreepptmba.com

8

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

INDUSTRY PROFILE .

HISTORY:Littleton area first began to be settled in 1862, there were two principal forms of transportation available: walking and either riding or being pulled by a horse. There were no roads to speak of, only old Indian trails which had been widened and packed hard by the increased usage of white men. This did not change for nearly a decade. As farfetched as it may sound, the early South Platte valley settlements had a legacy of steamboat travel. The Rocky Mountain News regularly published the arrivals and departures of various river boats, and saw to it that major east coast newspapers reprinted them. Was the South Platte River deeper then? No. This was just one of many schemes dreamed up by News editor William Byers to boost settlement in Colorado Territory -- by the time greenhorns discovered the deception, they were in St. Louis, more than half-way here. The only "real" traffic on the South Platte, then or since, were shallow-draft barges and canoes carrying beaver and buffalo hides to Missouri markets. Steam-powered transportation did reach Littleton in 1871, when tracks of the Denver and Rio Grande Railroad were completed to a siding at Richard little’s farm. On August 24, the engine Montezuma brought the Mayor of Denver and assorted dignitaries to the end of the line. The striking beauty of the area elicited such enthusiasm that the railroad added a public excursion two days later, a Sunday, and sold out at $2.50 for the round trip. This began a long relationship between the citizens of Denver and the "resort" community of Littleton. Three years later, the Denver, South Park and Pacific Railroad laid tracks on the west bank of the South Platte River, putting Littleton on the most direct route to the Leadville mining district. In 1887 the Atchison, Topeka and Santa Fe pulled into town from Pueblo, joining several

Babasabpatilfreepptmba.com

9

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

smaller and/or short-lived lines. In 1889, one observer along the tracks wrote, "...we counted twelve trains as they passed to and fro inside an hour. No one has any idea of the monster traffic on these two roads until they go and look for themselves." At its peak, Littleton boasted twentyfour scheduled stops a day for passengers and freight.

D. & R.G. "Uncle Sam," c. 1916.

The star of the railroads was the D&RG's Uncle Sam, a special excursion between Denver and Littleton, with a stop at Fort Logan that ran as many as six trips a day. Begun in 1888 and terminated in 1924, it was considered one of the country's finest passenger operations, and was the D&RG's most profitable route, despite a round-trip fare of just 25 cents. Between 1906 and 1923 the Uncle Sam boasted a "Theater Train" once or twice a week.

In the 1890s, during the height of railroad popularity, another transportation craze swept the country -- bicycling. Although bicycles, or velocipedes as they were originally called, had been around since the 1860s, the invention of pneumatic rubber tires and friction brakes made it a household item. Denver led the craze, boasting the highest per capita bicycle ownership in the country. Among the many popular bike paths constructed was south from Denver along the city ditch to Littleton. Once there, many cyclists picnicked in the shade surrounding the Sunshine and Shadow Inn or watched the bike races around the Inn's track, while the more adventurous continued south to Palmer Lake and back, completing a "century" ride, or 100 miles in a day. The next improvement was the electric trolley car, which was extended from Denver into Littleton in 1907. The line came down south Broadway, went cross-country at Big Dry Creek to enter the town on Prince Avenue and then turned onto Main. Eventually, the line was extended across the South Platte River, south of Bowles Avenue. For a time, the Littleton route included the famous "Cherrelyn" street car on south Broadway, where a horse assisted the motors going up a steep grade, then climbed Littleton's street car, c. 1910. aboard and rode on the car during the descent. The streetcar line was abandoned in 1926 in favor of cheaper o run and more flexible buses. The final improvement in personal transportation began just after the turn of the century and continues to today. In 1904, Rude Chandler's "benzine buggy" automobile cruised onto Littleton's streets. Within two years there were eight of the infernal contraptions buzzing about and the city was besieged by calls to license the machines and ticket those exceeding "an immoderate speed". The city responded with a speed

Babasabpatilfreepptmba.com Dr. and Mrs. Crysler in their first automobile, 1909.

10

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

limit for all conveyances of 8 miles an hour. Now, of course, Littletonites could hardly imagine their city without wide boulevards, super highways and the automobile. Air Indian has first government sector company in India .It was introduced long year ago in India And there after many private air lines comes in India .The airlines has developing the service sector in India by providing tours and traveling facility to the customer. In 19th century many tours & Travels Company introduce in India. Air Deccan is continues to be one of the faster growing commercial passenger airlines today .Air Deccan company has developed tours & travels sectors to provide various facility to the tours & travels facility company. The airlines company has given registration to the tours & travels company to sell his air ticket and developing the tourisms in country. All airline operators and the competition continue to be stiff among all operators putting pressure on yields. The future growth of air travels within to and from India will continue to depend on the growth of the Indian economy. The company’s scheduled airlines business continued to grow in all areas of its operations and your company is a significant player in the Indian domestic aviation and tours & travels sectors. It has also achieved the distinction of becoming the carrier with the widest reach covering more destinations then any other domestic carrier.

An

Indian airline has succeeded in changing the face of the aviation and tours and travels sectors in India. It has succeeded in enlarging the market for air travels and has turned air travels into a mass commodity. Passengers traveling with tickets not issued from the departure station on the below classes will be entitled for hotel accommodation, if available.



Business Class Fares booked and ticketed in C, J, Z and I class.



Economy Class Fares booked and ticketed in Y and M class.

The Tours & Travels Company has continuance of positive economic factors and strong performance of the service and retails sectors should lead to sustained growth in passenger traffic. The aviation market has witnessed a shift growing aspirations. The unprecedented growth in passenger traffic in India has attracted several airlines already to set up operations resulting in a highly competitive environment.

Babasabpatilfreepptmba.com

11

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

A major development within the industry has been the recent trend of consolidation. This has resulted in three major market share leaders, viz., Air IndiaIndian, Jet Airways-Jetlite and Deccan-Kingfisher which control more than 85% of the market. It is expected that may result in a reduction in cut-throat pricing leading to improved yields and, consequently, a road to profitability the combined group of Kingfisher-Air Deccan will be in a better position to offer air travel options across a wider network and to all segments of the traveling population. An all new livery and colures and a complete makeover of the frontline staff and executives will provide a whole new experience to both the existing traveler and a new traveler. The Company’s operations, sales, marketing and distribution, front line and support services and the completion of these are vital to achieve a profitable growth in the future. India – the land to travel to, a haven of tourism delights, a civilization to tour through. Tourists come to India for its wealth of sights, cultural exuberance, diversity of terrain and in search of that special something, an extra punch that only India promises and delivers. Teeming with over a billion people who voice over a million concerns in fifteen hundred different languages, India is where people live with variety, thrive on diversity and are too familiar with largeness to let it boggle them. Mud huts and mansions face off across city streets. Lurid luxury and limp living are inhabitants of the same lane.

Babasabpatilfreepptmba.com

12

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

History of Transportation

3500 BC

Fixed wheels on carts are invented - the first wheeled vehicles in history. Other early wheeled vehicles include the chariot.

3500 BC

River boats are invented - ships with oars

2000 BC

Horses are domesticated and used for transportation.

181-234

The wheelbarrow is invented.

770

Iron horseshoes improve transportation by horse

1492

Leonardo da Vinci first to seriously theorize about flying machines - with over 100 drawings that illustrated his theories on flight

1620

Cornelis Drebbel invented the first submarine - an human oared submersible

1662

Blaise Pascal invents the first public bus - horse-drawn, regular route, schedule, and fare system

1740

Jacques de Vaucanson demonstrates his clockwork powered carriage

1783

First practical steamboat demonstrated by Marquis Claude Francois de Jouffroy d'Abbans - a paddle wheel steamboat

1783

The Montgolfier brothers invent the first hot air balloons

1787

Steamboat invented

1769

First self-propelled road vehicle invented by Nicolas Joseph Cugnot

1790

Modern bicycles invented

1801

Richard Trevithick invented the first steam powered locomotive (designed for roads)

1807

Isaac de Rivas makes a hydrogen gas powered vehicle - first with internal combustion power - however, very unsuccessful design

1807

First steamboat with regular passenger service - inventor Robert Fulton's Clermont

1814

George Stephenson invents the first practical steam powered railroad locomotive

1862

Jean Lenoir makes a gasoline engine automobile

Babasabpatilfreepptmba.com

13

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

1867

First motorcycle invented

1868

George Westinghouse invents the compressed air locomotive brake - enabled trains to be stopped with failsafe accuracy

1871

First cable car invented

1885

Karl Benz builds the world's first practical automobile to be powered by an internal combustion engine

1899

Ferdinand von Zeppelin invents the first successful dirigible the Zeppelin

1903

The Wright Brothers invent and fly the first engined airplane

1907

Very first helicopter - unsuccessful design

1908

Henry Ford improves the assembly line for automobile manufacturing

1908

Hydrofoil boats co-invented by Alexander Graham Bell & Casey Baldwin - boats that skimmed water

1926

First liquid propelled rocket launched

1940

Modern helicopters invented

1947

First supersonic jet flight

1956

Hovercraft invented

1964

Bullet train transportation invented

1969

First manned mission (Apollo) to the Moon

1970

First jumbo jet

1981

Space shuttle launched

Babasabpatilfreepptmba.com

14

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD



COMPANY PROFILE.



VISION, MISSION AND GOAL  BOARD OF DIRECTORS  OBJECT OF SDT&TPL  PRODUCT & SERVICE PROFILE

 DEPARTMENT STUDIES.  ORGANIZATION FLOW CHART

Babasabpatilfreepptmba.com

15

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

PROFILE OF THE COMPANY COMPANY HISTORY OF THE PLACE The Shree Dayal Tours & Travels Private Limited was established in August 2001 at Mumbai, Maharashtra State.

REGD. OFFICE & WORKS OF THE COMPANY Shree Dayal Tours & Travels Private Limited Corporate Office:

207, ARK Industrial Estate, Makwana Road, Marol Naka, Andheri (East) Mumbai -400059.India Tel: 91-228501786/2686/ 2489 Fax: 91-228504947

DIRECTOR OF THE COMPANY Mrs.Roli P. Choudhery, Ms.Babita Choudhary. Mr. Suresh S.Choudhary

PRODUCT AND SERVICE LINE OF THE COMPANY •

Tours Product.

•

Domestic and international Flight booking services.

•

Hotel Booking services.

•

Provided Bus facility services.

•

Provided Car facility services.

•

Provided Cruises services.

•

Railways ticket booking services.

Babasabpatilfreepptmba.com

16

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

•

Foreign exchange services.

CLIENTS OR CUSTOMERS •

Aditya Birla Groups

•

Johnson & Johnson Pvt Ltd

•

Siyaram textiles Pvt Ltd

•

Other People

MARKET CHANNELS • On the basis of Clients, they make Direct Sales to the Customers.

COMPETITORS

The main competitors of the Company are: •

Akbar Tours & Travels Pvt Ltd

•

Riya Tours & Travels Pvt Ltd

•

Kesari Tours & Travels Pvt Ltd.

NUMBER OF SHIFTS General Shift: 9-00 AM to 6-00 PM

No. Of Working Days: 300 Days in a year

Babasabpatilfreepptmba.com

17

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

SHREE DAYAL TOURS & TRAVELS PRIVATE LIMITED (SDT&TPL) is situated at Makwana Road Andheri (East) in Mumbai; State – Maharashtra .Shree Dayal Tours & Travels Pvt Ltd is a medium scale of Tours & Travels service providing company. Shree Dayal Tours & Travels Pvt Ltd was incorporated in the year 2001. Shree Dayal Tours & Travels Pvt Ltd was set up in the year of 2001, 17 August. The Registration number is U 63040 MH 2001 PTC 133094. The registered office of the company will be situated in the state of Maharashtra i.e. within the jurisdiction of registrar of companies at Mumbai. Shree Dayal is a Tours & Travels company .This company has booking the aero planes ticket and booking, reserving accommodations seats, compartments and berths on railways, Steam ships motor ships boats ,omnibus ,Motorbus and carriages of all descriptions and to issue tickets international & Domestics for the same and to hire taxies ,Motor car and all kind of Public vehicles and transports and to charter services and to book reserve and secure for and on behalf of the constituents of the company ,Room and boarding and lodging accommodations in hotels ,restaurants and boarding’s houses and to handle cargoes ,goods ,luggage or baggage’s and

also to book ,and secure accommodations including boarding and lodging

accommodations in resorts on behalf of guests or customers of the company. There is another industry in the Campus of Shree Dayal Tours & Travels Pvt Ltd which is a husband concern Dayal Impax private Limited was established in the year 2003. Dayal Impax private Limited has cloth stitching company .This company has taking order from the supplier and prepare a cloth. This company has provided many offer more than 15 leisure tour product to Singapore and Europe, more than 10 to south East Asian and is the Domestic and international tour operator in Indian tours. Shree Dayal tours & Travels Pvt Ltd also takes pride in being consistently innovation in the tourisms industry.

Babasabpatilfreepptmba.com

18

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

The Shree Dayal Tours & Travels Private Limited is customer focused and Quality oriented Service unit, which is continuously strive to services to meet its external customer’s requirements. The main goal of the company is to giving full satisfaction to the customer and providing good quality of service, enhancing to improve the services and make company more competitive.

The Shree Dayal Tours & Travels Private Limited has specialized divisions to cater to the needs of all types travelers, whether it is a guest looking for the safety and security of escorted group tours, or someone seeking exclusive customized holidays or the business traveler .We offer our guests a range of allied travel services such as air ticketing, Visa, Foreign exchange and hotel booking at one stop for their convenience. Company has issue domestic and also international flight ticket booking to the people on the basis of the commission. The company has issue more flight ticket booking of that company those who are give high commission to The Company .The Company has issued or booking of the Domestic air ticket railway ticket, booking of hotel and give rent on car The Company has also provided helicopter service facility to the people. The company has also sold many tours product to the people for his tour convenience purpose. The company has offered many tours product to the people. The company was offered world tours as well as Indian tours to the people. The company has offered tours product like Second Inning tours, Sport tours, Honeymoon tours, Education tours, and Business tours to the people. The different Air lines company has given different commission rate to the company. If the company has ticket booked of Jet Air ways, Spice jet and go air Airline Company then SDT&TPL Company will get 6% transaction fees. And remain Air ways like kingfisher, Indian airlines; indigo and air Deccan air ways will get 3% transaction fees on booking of flight ticket.

Babasabpatilfreepptmba.com

19

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

World Tour

Indian Tour

Tashken t - WA 4 Days 3 Nights

Bali - WB 4 Days 3 Nights

Dubai WD 4 Days 3 Nights

Hong Kong WH 4 Days 3 Nights

Bangkok - WK 4 Days 3 Nights

London WL 4 Days 3 Nights

Mauritiu s - WM 4 Days 3 Nights

Amsterda m –WN 4Days 3Nights

Paris WP 4 Days 3 Nights

Srilanka WR 4 Days 3 Nights

Singapor e - WS 4 Days 3 Nights

Turkey WT 4 Days 3 Nights

Maldives - WV 4 Days 3 Nights

Samarkan d Bukhara - WX 4 Days 3 Nights

Mt. Abu W1

4 Days 3 Hotel Nights

Nilgiri Hills-W3

4 Days 3 Hotel Nights

Goa-W5

4 Days 3 Hotel Nights

Varanasi Allahaba d - W2 4 Days 3 Hotel Nights

Bhubanes war Konark Puri-W4

4 Days 3 Hotel Nights Khajuraho Jabalpur BedaghatW6

4 Days 3 Hotel Nights

Katra Vaishnode vi-W7

Jaipur-W8

Pondicher ry Mahabalip uram-W9

Cochin MunnarWC

4 Days 3 Hotel Nights

4 Days 3 Hotel Nights

4 Days 3 Hotel Nights

4 Days 3 Hotel Nights

Name of Domestic Airlines:-

Babasabpatilfreepptmba.com

20

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD



Kingfisher Red.



Jet Airways



Indian Airlines.



Spice Jet.



Indigo



Go Air



Air Deccan

Name of International Airlines:-

Babasabpatilfreepptmba.com

21

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Sr.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

AIRLINE NAME Singapore Airline Silk Air Continental Airline Sri Lankan Airline Dragon Air Royal Dutch Airline Kenya Airways Air Canada Korean Air Thai Airways Northwest Airlines American Airlines Qatar Airways Air India Air One Bangkok Airways Gulf Air Air Mauritius Jet Airways LAN Chile LAN Peru LAN Argentina Austrian Philippine Airlines Swiss Airline Royal Jordanian South African Airways Virgin Atlantic Saudi Airlines Egypt Airlines Japan Airlines Air China British Airways Indian Airlines China Airlines Turkish Airlines Air New Zealand Kuwait Airlines Air France

PREFIX SQ MI CO UL KA KL KQ AC KE TG NW AA QR AI AP PG GA MK 9W LA LP 4M OS PR LX RJ SA VS SV MS JL CA BA IC CI TK NZ KU AF

Babasabpatilfreepptmba.com

CODE 618 629 005 603 043 074 706 014 !80 217 012 001 !57 098 867 829 084 239 589 045 544 469 257 079 724 512 083 932 065 077 131 999 125 297 297 235 086 229 057 22

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

40 41 42 43 44 45 46 47 48 49 50

China Southern Kingfisher Oman Air EVA Air Biman Airlines Air Portugal Iran AIR Air Astana Delta Airlines Pakistan Airlines Virgin Blue

CZ IT WY BR BG TP IR KC DL PK DJ

784 090 910 695 997 047 096 465 006 214 856

Details about Fair Rate of the Airline 

Business Class.



Economic class. 1:-BUSINESS CLASS FLIGHT FAIR

Sr.no

STATE

AIRLINES

CODE

Included TAX Total

1

America

Delta Airline

BOM/JFK/EWR

738188

2 3 4 5 6 7 8 9 10 11 12 13

Australia Sri Lanka Canada Newzland South Africa

Qantas Air Srilanka Jet Airways Singapore Kenya Airlines

BOM /SYD/ MEL/ BOM/ CMB/BOM BOM/ YYZ/BRU BOM/AKL/BOM BOM/JNB/BOM

242710 49398 242769 207534 122155

England Mexico Saudi Arabia Nepal Etly China Russia

Luptansa Delta Airline Air India Jet Airways KU 9W Aeroflot

BOM/LHR/MAN BOM/ MAX /BOM BOM/ RUH/BOM BOM/ KTM /BOM BOM/ RWI/ ROM/ BOM/PVG/BOM BOM/ SVO /BOM

274005 572192 44181 71545 221434 120193 104055

Babasabpatilfreepptmba.com

23

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

14 15 16 17 18 19 20

Sr.no

France Germany Kolalampur Singapore Dubai Turkey

Air France Luptansa Malaysia Singapore Emirates Turkey

BOM/CDG /BOM BOM/ FRA/ MAM BOM/KUL/BOM BOM/ SIN/BOM BOM/DXB/BOM BOM/IST/BOM

Bangkok Bk BOM/BKK/Bom 2:-ECONOMY CLASS FLIGHT FAIR STATE

AIRLINES

CODE

234146 236212 86602 83709 86758 226453

62894

Included Total

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

America Australia Sri Lanka Canada Newzland South Africa England Mexico Saudi Arabia Nepal Etly China Russia France Germany Kolalampur Singapore Dubai Turkey Bangkok

Delta Airline Qantas Air Srilanka Jet Airways Singapore Kenya Airlines Luptansa Delta Airline Air India Jet Airways KU 9W Aeroflot Air France Luptansa Malaysia Singapore Emirates Turkey Bk

BOM/JFK/EWR BOM /SYD/ MEL/ BOM/ CMB/BOM BOM/ YYZ/BRU BOM/AKL/BOM BOM/JNB/BOM BOM/LHR/MAN BOM/ MAX /BOM BOM/ RUH/BOM BOM/ KTM /BOM BOM/ RWI/ ROM/ BOM/PVG/BOM BOM/ SVO /BOM BOM/CDG /BOM BOM/ FRA/ MAM BOM/KUL/BOM BOM/ SIN/BOM BOM/DXB/BOM BOM/IST/BOM BOM/BKK/Bom

Babasabpatilfreepptmba.com

110138 183545 28534 144482 63152 83592 78690 271088 28867 29199 82320 42068 79061 91781 72044 39377 27324 47123 50696 40060

24

TAX

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Vision S.exe

“Spreading Smiles Happiness and Joyful life to People and Developing the

Business in a country”. Mission

“Shree Dayal Tours & Travels is passionately committed to quality travel, with continual delivery of value added services .We upholds the highest ethical standards and believes in creating new benchmarks in the industry”.

Goals Main goal of company 

To earn a profit.



To providing good quality of services to people.



To attracting new and new customer.



To service can not stop any boundary.

SHREE DAYAL TOURS & TRAVELS PRIVATE LIMITED Babasabpatilfreepptmba.com

25

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

BOARD OF DIRECTORS  Ms.Roli Choudhary.  Ms.Babita Choudhary.  Mr. Suresh S.Choudhary.

MANAGING OF DIRECTOR  Mr.Pawan S.Choudhary

STATUTORY AUDITORS  N.B Shetty & co Mumbai

BANKERS  Oriental Bank of Commerce.

RIGISTER OFFICE 207 –ARK Industrial Estate Makwana Road, Marol Naka Andheri (East) Mumbai-400058.

Babasabpatilfreepptmba.com

26

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Object of Shree Dayal Tours & Travels Pvt Ltd The main Objects of the Company as set out in the Memorandum of Association of the Company are as follows:  To run manage or carry on the business of taxi cars, deluxe coaches ,lorries , cars ,trucks, airships wagons ,rail , motors vessels, ferries ,boats and other vehicles propelled by electricity, gas ,gasoline compressed air steam ,manned power ,mechanized power, oil ,crude oil, automatic or other energy or by whatsoever means and from any place or another whether within India or otherwise for the purpose of carrying conveying ,transportation goods , materials produce ,machinery ,animals passengers, merchandise , mail ,freight ,and all such things which may be conveniently carried on with the aforesaid object of the company.  To insure with any persons or company, against losses, damages, risks and liability of any kind which may effect the company either wholly or partially and if thought fit to effect any such insurance by joining or becoming members of any mutual insurance, protection or indemnity association federation or society and to accept any such insurances or any thereof for the account of the company.  To procure information for as to the standing and responsibility of parties with whom they propose to transact business.  To provide clear ,comfortable and inexpensive sleeping accommodation for workmen and others and in connection their with to the afford to such persons facilities and convenience for washing ,bathing ,cooking , reading, writing , and finding employment and for the purchase ,sale and consumption of provisions both liquidity and solid.

Babasabpatilfreepptmba.com

27

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Product & Service Profiles The Shree Dayal Tours and Travels Pvt Ltd have provided many tours product to the people .The company has also provided service to the people. The totally honest policy, excellent service and perfect tours planning are the hallmarks of company success. The company has perfected our tour itineraries to meet the special needs of the discerning tourist.

Product Profile: - (Tour Products) 1. Second Innings Tours 2. Educational Tours. 3. Honeymoon Tours. 4. Holiday after Holiday Tours. 5. Sports Tours. 6. Chillax Tours. 7. Business Tours. 8. Thrillax Tours.

1)

Second Inning Tours:An exclusive tour for senior citizens is fully of masti mazz & magic .its a great way to discover a holiday experience that is truly unique and great opportunity to meet seniors from different walks of life.

2)

Educational Tours:Educational tours take teaching out of the textbooks. its gives wonderful opportunity to learn about various historic event and key location.

3)

Honeymoon Tours:Honeymoon tours will give the wonderful happy moment for life time and that make happy to the life partner.

4) Holiday after Holiday Tours:Holiday after holiday tours will give advance tours information to the people those who again enjoy to holiday.

Babasabpatilfreepptmba.com

28

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

5) Sports Tours:Sport tours just for the vacationer who want s to combine holiday cheer with edge of the seat sporting encounter.

6) Chillax Tours:This tour is perfect respite from work stress and the daily grind. Specially tailored to put the spring back into your stride, itsyour chance to let your hair down and indulge in the unexpected. Just make sure your boss hasn’t. 7) Business Tours:This tours facility sports enthusiasts this one will have you cheering SDT&TPL introduces sports tours tailored just for the vacationer who want to combine holiday cheer with edge of the seat sporting encounter.

8) Thrill ax adventure tours:Thrill ax vacation a new SDT&TPL special tours product and life will never be the same again. Feel your adrenaline pumping as you hurtle over white water Rapides. The discovery skill you never knew you possessed, climbing rock faces because it’s about time you stopped existing and started living.

SERVICE PROFILE: Domestic and international Flight booking services.  Hotel Booking services.  Provided Bus facility services.  Provided Car facility services.  Provided Cruises services.  Railways ticket booking services.  Foreign exchange services.  Provide tours & travels services

Babasabpatilfreepptmba.com

29

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

DEPARTMENT STUDIES  Finance Department.  Marketing Department.  Air Ticket Booking Department.  Hotel Booking Department.  Billing Department.  Forex Department.

1) Finance Department Finance is an essential component of the business to maintain its operations effectively. This dept. is concerned with day-to-day activities like purchases, sales salary etc. and proper management and maintenance of accounts of concerned year. Factions  Day to day/ bank transactions.  Bill passing and payment  Recovering all transactions in books of accounts  Preparations of cash Balance statement.  Bank Reconciliation.  Preparation of Inflow and out flow of cash statement.

Babasabpatilfreepptmba.com

30

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

 Providing various types of management Information system reports required by management from time to time  Carry out auditing.

2) Marketing Department :Among all the functional areas of management marketing are play vary important t role for selling product of the company. The with marketing Department the company can sold product to the customer or public. Factions  Selling of Tours Product.  Increasing sales of the company.  Awareness about product and service to the customer.  Advertising of company product.

3) Air Ticket Booking Department:The main function of air ticket booking department is to flight ticket booking .The Company has ticket booking as per the order of the customer. The department is booking of national as well as international ticket of flight. Factions  Booking of Ticket.  To give the information regarding the Air lines.  To give the information regarding the fair price or low price airlines.

4) Hotel Booking Department:-

Babasabpatilfreepptmba.com

31

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Hotel booking department is important because the people booking through the tours & travels company .The hotel booking department has given full information regarding the hotel to the customer .Hotel booking department has knowledge about each hotel and which types of service provide to the customer. Factions  Booking of Hotel as per order.  To give the information regarding the Hotel.  To give the information regarding the fair price and better service providing hotel.

5) Billing Department:Billing department has prepared a bill of airline & hotel. The billing department has prepared the day to day booking of airline, hotel and other service provided by company .to the customer.

Factions  Preparing Bill of airline ticket booking per day.  Preparing Bill of hotel booking per day.

6) Forex Department:Forex department is doing transaction of foreign exchange. The forex department is handling day to day transaction of foreign exchange .The forex department has prepared the visa and also change the currency of tourist those who want go other country for tourism purpose. Factions  Exchange currency with bank.  Day to Day rate fluctuation record of each country.

Babasabpatilfreepptmba.com

32

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

 Preparing visa.  Providing foreign currency required customer.  Handling foreign currency trading activity.

ORGANISATIONAL FLOW CHART OF SDT&TPL DIRECTORS

MANAGING DIRECTOR

____________________________________________________

____________ ___ Forex Department

Finance Department

Senior. Finance Manager

Marketing Department

Ticket Booking Department

Hotel Booking Department

Hotel Ticket Booking Manager

Marketing Manager

Billing Department

Billing Prepare Manager

Forex Department Foreign Exchange Manager Foreign Exchange Manager

____________________ Assistant. Finance Manager

Domestic Air Ticket Booking

International Air Ticket Booking

Air Ticket Booking Manager

Babasabpatilfreepptmba.com

33

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

.

 SCOPE OF THE STUDY  OBJECTIVE OF THE STUDY  RESEARCH METHODOLOGY

Babasabpatilfreepptmba.com

34

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Scope and limitations of the study This project acts as a reference guide or as a source of information. It gives the idea about the financial analysis of the firm. The main scope of the study was to put into practical the theoretical aspect of the study into real life work experience. The study deals with analysis and interpretation of the data collected through the sources of primary and secondary data for a period of five financial years. I.e. 2004-2005, 2005-2006, 2006-2007, 2007-2008 and 2008-2009 Graphs, diagrams and tabulation methods are used to analyze and interpret the data collected. It will help to understand the company’s liquidity position. Since the decision regarding working capital are of an operating nature not one time decision, the scope of the study is geared towards identifying important areas of control and to establish model for better control of the various components of working capital The study would also attempt to identify the various sources available for financing of working capital. The study gives a fair idea of improvement in efficiency of working capital management and also to have proper control over the components of working capital and managing of efficiency.

LIMITATION OF THE STUDY •

This study deals only with the data made available. Hence the result of this study cannot judge the business of the firm in general

Babasabpatilfreepptmba.com

35

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

•

The study have been influenced by the limitation of the ratio analysis

•

The study extensively uses the data provided is the financial reports of the firm which may also have their own limited perspective

•

The analysis made on the working capital management is for a particular period of time the current assets and current liabilities will change for an analysis made at any other of time.

Objectives of the study

To study the working capital requirement of a company. To know the progress of working capital in a company To study the loan & advances and repayment of loan of company.



To know the solvency of the company & how the company is managing working capital.



The basic objective of the study is to see the liquidity position of the company



To study the efficiency of working capital management of the company.



To study the efficiency of cash, and receivables management of the company

Babasabpatilfreepptmba.com

36

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Methodology The data in this project is enabling in secondary in nature. Financial reports, company records were referred for data analysis. The study has been undertaken by collecting relevant data from the balance sheet, profit and loss a/c, annul report & Audit report of the shree Dayal tours & travels Pvt ltd. the company is used financial tools for the analyzing and interpretation data. However primary data is also collected by observation discussing with company officials. This primary data is used to fill in the gaps while preparing this report and to know the latest procedures adopted by the company. This has helped to draw inferences and conclusions.

Sources of data There are two types of data

Primary Data  Secondary Data

Primary Data:-

Babasabpatilfreepptmba.com

37

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

The primary data are those, which are collected fresh for the first time and thus happen to be original in character. The primary data collection involves the collecting of information for the first time by observation, experimentation, and questionnaire and through interview schedules in the original form by the researcher himself or his nominees.

Plan of action The primary data was collected through discussion with the finance manager using the interview schedule. This data was obtained to study the latest procedures relating to working capital management and ratio analysis system followed by the company

Secondary data:The secondary data are those, which have been collected by some other and which have been processed. Generally speaking secondary data are information, which have been previously collected by some organization to satisfy his own need. But the department under reference for an entirely different reason is using it. I was used secondary sources also for collecting the data. They are: •

Information from the text sources

•

Information form the internet sources

•

Information from the materials provided by the concern

SAMPLING DESIGN 2

Sampling unit

: Financial Statements & Audit Reports

3

Sampling Size

:Last five years financial statements

.

Babasabpatilfreepptmba.com

38

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

 MEANING OF CAPITAL  FORM OF CAPITAL  MEANING OF WORKING CAPITAL  TYPE OF WORKING CAPITAL

Babasabpatilfreepptmba.com

39

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

 NATURE OF WORKING CAPITAL  FACTORS DETERMINING WORKING CAPITAL REQUIREMENTS  FINANCING OF WORKING CAPITAL  COMPONENTS OF W.C  WORKING CAPITAL COMPOSITION

CAPITAL Introduction:Capital is the keynote of economic development. In this modern age, the level of economic development is determined by the proportion of capital available.

Meaning of Capital:In the ordinary sense of the word Capital means money. But in economics, Capital has a special meaning. All those man made goods used in the production process is called capital.

Definition:“Capital consists of all kinds of wealth, other than free gifts of nature which yield income.”

Features of Capital:Capital has the following features.

Babasabpatilfreepptmba.com

40

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

1. Capital is a man made. 2. Capital is a perishable. 3. Capital is a human control possible. 4. Capital is a mobile. 5. Capital is a human sacrifice. 6. Capital is a scarce. 7. Capital is a passive factor.

Forms of capital:The Three Primary Types of Financial Capital 

Equity Capital

 Debt Capital  Specialty Capital 1* Fixed Capital. 2* Working Capital  Equity Capital :Otherwise known as “net worth” or “book value”, this figure represents assets minus liabilities. There are some businesses that are funded entirely with equity capital (cash written by the shareholders or owners into the company that have no offsetting liabilities.) Although it is the favored form for most people because you cannot go bankrupt, it can be extraordinarily expensive and require massive amounts of work to grow your enterprise. Microsoft is an example of such an operation because it generates high enough returns to justify a pure equity capital structure.

Babasabpatilfreepptmba.com

41

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

 Debt Capital

:-

This type of capital is infused into a business with the understanding that it must be paid back at a predetermined future date. In the meantime, the owner of the capital (typically a bank, bondholders, or a wealthy individual), agree to accept interest in exchange for you using their money. Think of interest expense as the cost of “renting” the capital to expand your business; it is often known as the cost of capital. For many young businesses, debt can be the easiest way to expand because it is relatively easy to access and is understood by the average American worker thanks to widespread home ownership and the community-based nature of banks. The profit for the owners is the difference between the return on capital and the cost of capital.  Specialty Capital :This is the gold standard. There are a few sources of capital that have almost no economic cost and can take the limits off of growth. They include things such as a negative cash conversion cycle (vendor financing), insurance float, etc. Negative Cash Conversion (Vendor Financing) Imagine you own a retail store. To expand your business, you need $1 million in capital to open a new location. Most of this is the result of needing to go out, buy your inventory, and stock your shelves with merchandise. You wait and hope that one day customers come in and pay you. In the meantime, you have capital (either debt or equity capital) tied up in the business in the form of inventory. Now, imagine if you could get your customers to pay you before you had to pay for your merchandise. This would allow you to carry far more merchandise than your capitalization structure would otherwise allow. AutoZone is a great example; it has convinced its vendors to put their products on its shelves and retain ownership until the moment that a customer walks up to the front of one of AutoZone’s stores and pays for the goods. At that precise second, the vendor sells it to AutoZone which in turn sells it to the customer. This allows them to expand far more rapidly and return more money to the owners of the business in the form of share repurchases (cash dividends would also be an option) because they don’t have to tie up hundreds of millions of dollars in inventory. In the meantime, the increased

Babasabpatilfreepptmba.com

42

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

cash in the business as a result of more favorable vendor terms and / or getting your customers to pay you sooner allows you to generate more Income than your equity or debt alone would permit. Typically, vendor financing can be measured in part by looking at the percentage of inventories to accounts payable (the higher the percentage, the better), and analyzing the cash conversion cycle; the more days “negative”, the better. Dell Computer was famous for its nearly two or three week negative cash conversion cycle which allowed it to grow from a college dorm room to the largest computer company in the world with little or no debt in less than a single generation.

Float Insurance companies that collect money and can generate income by investing the funds before paying it them out in the future in the form of policyholder payouts when a car is damaged, or replacing a home when destroyed in a tornado, are in a very good place. As Buffet describes it, float is money that a company holds but does not own. It has all of the benefits of debt but none of the drawbacks. His most important consideration is the cost of capital – that is, how much money it costs the owners of a business to generate float. In exceptional cases, the cost can actually be negative; that is, you are paid to invest other people’s money plus you get to keep the income from the investments. Other businesses can develop forms of float but it can be very difficult. Sweat Equity There is also a form of capital known as sweat equity which is when an owner bootstraps operations by putting in long hours at a low rate of pay per hour making up for the lack of capital necessary to hire sufficient employees to do the job well and let them work an ordinarily forty hour workweek. Although it is largely intangible and does not count as financial capital, it can be estimated as the cost of payroll saved as a result of excess hours worked by the owners. The hope is that the business will grow fast enough to compensate the owner for the low-pay, long-hour sweat equity infused into the enterprise

Babasabpatilfreepptmba.com

43

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

. 1. Fixed Capital :Fixed capital is one, which can be used in production again and again for a long period. In other words, fixed capital is the capital, which can be used over and over in the process of production. It is a capital, which is durable and can be used over a long period of time. For example: - Machinery, building, tools, implements etc.

2. Working Capital :Working Capital is the capital which can be used only once in the process of production. In other words, It refers to capital which can be used only once in production. It loses its utility after a single use.E.g: - Raw material, Coal and petroleum, Payment of wages etc.

INTRODUCTION As every enterprise knows that, working capital is the lifeblood and control of nerve center of the business. Just as circulation of blood is the essential for maintaining life, working capital is also essential for maintaining the smooth running of the business.

The importance of working capital management is indisputable; Business liability relies on its ability to effective management of receivables, inventory, and payables. By minimizing the amount of funds tied up in current assets. Firms are able to reduce financing costs or increase the funds available for expansion. Many managerial efforts are put into bringing non-optimal level of current assets and liabilities back towards their optimal levels.

Working Capital refers to the amount of capital which is readily available to an organization that is, working capital is the difference between resources in cash and readily convertible into cash (current assets) and organizational commitments for which cash will soon be required (current liabilities).

Thus, working capital involves activities such as arranging the short-term finance, negotiating favorable credit terms, controlling the movement of cash,

Babasabpatilfreepptmba.com

44

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

administrating accounts receivables and monitoring the investments also a great deal of time.

Meaning of working capital The financing required by a concern for carrying on its day-to day operations is known as the “working capital”.

In Accounting: ‘Working capital is the difference between the inflow and outflow of funds’. In other words, it is the net cash inflow’ Thus it is defined as “The excess of current assets over current liabilities and provisions”. Working capital is a liquidity (cash) concept. A business might show a "profit," but if it cannot maintain a positive cash position (that is, having money in the bank to pay bills each month), the business cannot continue to operate.

Babasabpatilfreepptmba.com

45

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets.

Importance of Working Capital This chapter reveals the importance of working capital management of an organization to carry over its business successfully. Significance of working capital management as follows Normally firm has to employ certain short-term assets & short run sources of financing. The management of such assets, describe as working capital management or Current Assets Management. It is one of the most important aspects of the over all financial management. Working Capital Management is concerned with the problem that arises in attempting to managing the current assets & current liabilities & the inter relationship that exits between them. Working of a firm should neither be too large, too small. If the working capital is large, the liquidity position would improve, but profitability would be advertise affected, as funds will remain idle conversely, if the working capital is too small, the overall profitability, position & make the firm more risky working capital management therefore at aim at striving a balance, such that an enterprise is able to.

Babasabpatilfreepptmba.com

46

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

1. Generate cash in sufficient quantities at the right time & 2. Extract fullest use from each shot term resources used in business. This involves planning & controlling all the items, which drains or augment liquidity. The working capital is the lifeblood business, which circulates through the naves as short-term investment in aforesaid areas. It is also regarded as a heart of business. If it becomes weak the business can hardly prosper & survive. This brightness the opportunity for achieving highs of success.

Type of Working capital Introduction The financial concept of working capital equates it with current assets. According to this view the total of the working capital is the total value of the current assets of the company. This is known as the ‘Gross working capital’. According to the excess of current assets, over current liabilities. In other words, it is the difference between current assets and current liabilities. This concept of working capital is called the Net Working Capital. Hence there two concepts of working capital. 1.

Gross Working capital and

2.

Net Working Capital

1. Gross Working Capital

The Gross Working Capital (also known as circulating capital, operating capital or current capitals) represent the quantitative aspect of Working capital since it concerns with the total value

Babasabpatilfreepptmba.com

47

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

of current assets to be held by the company. The management of Gross working capital is a shortterm phenomenon involving a continuous study of the fluctuation in investment in current assets. The aim is to neither maintain the level of current assets at proper level neither at a high level involving unnecessary costs nor at a low level threatening. Production needs. Current assets include cash in hands, bank balance, bills receivables, sundry debtors, short-term loans advances, inventories and marketable seventies.

Advantages of working capital. a) Financial managers are profoundly concerned with current assets. b) Gross Working Capital provides the current amount of working capital at the right times. c) It enables a firm to realize the greatest retime on it investment. d) It helps the fixation of various areas of financial responsibility.

NET WORKING CAPITAL The net working capital is the difference between current assets and current liabilities. The concept of net working capital enables a firm to determine how much amount is left for operational requirements. The net working capital is financed from long term sources which may includes barrowed funds in the form of term loans, debentures etc. or own funds like plough-back profits, etc, or both. The management of net working capital is a long-term phenomenon current liabilities include bills payable, sundry creditors, short-term loans advances and bank OD. Needles to say that the firm aims at maximizing the wealth of shareholders wealth .They should earn sufficient return from its operations. To earn sufficient amt of profit it requires successful sales utilized to their fullest capacity for this purpose proper management of working capital is essential because fixed assets can’t work without working capital. Various research studies suggest. The Gujarat study team, Gujarat the SBI study team has confirmed that inadequacy of working capital and improper management of working capital has contributed enormously for the ailment of industrial enterprises.

Babasabpatilfreepptmba.com

48

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Working capital management refers to the administration of all aspects of current assets. If has been observed that a creation of financial manager time is utilized in the management of working capital. It is devoted for raising working capital and managing it efficiently.

Factors determining working capital Requirements Factors Determining Working capital Requirements

Nature of Business Seasonality of operations Market Condition Supply condition C.A C.L .

Financing of working capital Introduction: This chapter put forth the discussion on the sources available for financing the working capital of an organization. Funding of working capital is continuous problem for all management. Basically sources of financing working capital are broadly bifurcated into two sources they are as follows.

Sources of financing of working capital

1. Short Term Finance

2.Long Term Finance

Babasabpatilfreepptmba.com

49

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Trade Credit

Share Capital

Bank Credit

Borrowing from Bank

Bank Financing of Accounts Receivables

Public Deposits.

Factoring Bank Financing of Inventory Working Capital Financing

COMPONENTS OF WORKING CAPITAL The components of working capital are:





Cash management



Receivables management

CASH MANAGEMENT Cash is the liquid form of an asset. It is the ready money available in the firm or with the business, essential for its operations. A firm needs the cash for the following three purposes: Transaction Motive: The firm must and should keep the funds for transactions like

purchase, sales etc. These activities, which are not known in advance, are not considered while preparing a cash budget. Precautionary motive:

The firm also keeps funds for the safeguard against uncertainties, which are an integral part of business operations. Speculative Motive: To tap profits from opportunities arising from fluctuations in

commodity prices, security prices, interest rates etc. The company with surplus cash is in a better position to exploit such situations.

Babasabpatilfreepptmba.com

50

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD



RECEIVABLES MANAGEMENT Receivable represents amounts owed to the firm as a result of sale of goods or

services on the ordinary course of business. These are claims of the firm against its customers and form part of its current assets.

These receivables are carried for the

customers. The period of credit and extent of receivables depends upon the credit policy followed by the firm. The main purpose of maintaining or investing in receivables is to meet competitors, to increase sales, and to maintain a cordial relationship with the clients. Receivables management is the process of making decisions relating to investment in trade debtors. However, at the same time, investment in this current asset involves cost considerations also. Therefore, there is always a risk of bad debts too.

Credit Evaluation There are three approaches used for credit evaluation. These are: •

Traditional Credit analysis

•

Numerical Credit Scoring

Working capital composition Introduction: This part unfolds the discussion on the composition of the working capital i.e. the proportion different current assets is determined by the trade of between the two seemingly opposite objectives of liquidity and portability. Liquidity refers to the ability of an asset get convert into cash at short period and without loss in value .A Company is said to liquid when they arise. This ability is also known as technical solvency of the company. The creditors and other lenders of the company would like to have the ability of meet their dues on their due dates this means much of the current assets should be held in the form of cash and near near-cash items like marketable. Securities, But cash is a nonearning asset and yield on marketable seethes will affect the profitability of the concern. The consideration of the profitability requires that the level of current assets is kept low and also such a form as will aid production and generate surplus. Thus the objectives of liquidity (solvency) and profitability seem to operate in opposite to directions. While liquidity requires large we current assets to be kept and of that mostly in cash and near-cash form

Babasabpatilfreepptmba.com

51

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

profitability requires that the current assets should be kept at low levels and that too in form, which will contribute to production. By proper planning the opposing objectives can be recognized and made to compliment each other. Keeping liquidity at adequate levels helps the managers to concentrate on production in a congenial atmosphere and by increase the efficiency of functioning. This leads to greatly profitability, since the profits ultimately constitute the sources of repayment of the company’s dues, higher profits increase the liquidity of the concern. Conclusion:Thus the chapter states that the objectives of liquidity and profitability seem to operate in opposite directions, while liquidity requires large current assets to be kept and profitability requires the current assets should be kept at low levels, which will contribute to production.

Babasabpatilfreepptmba.com

52

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Ratio Analysis 1) Net Working Capital:Net working capital is the difference between current assets and current Liabilities. Years 2004-05 2005-06 2006-07 2007-08 2008-09

Current Asset 26352381.81 30087971.00 46858833.00 44389218.00 62495041.00

Current Liabilities 6122630.12 6843164.00 9979106.00 12123368.00 11527167.00

Babasabpatilfreepptmba.com

NWC 20229751.69 23244807.00 36879727.00 32265850.00 50967874.00

53

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Ratio 60000000.00 50000000.00 NWC

40000000.00 30000000.00

Ratio

20000000.00 10000000.00 0.00 2004-05

2005-06

2006-07

2007-08

200809

year

INTERPRETATIO:In The year 2004-05 the company has 20229751.69 N.W.C. In the year 2005-06 the N.W.C is 23244807.00 and in the year 2006-07 the company has 36879727.00.NW.C But in the year 2007-08 the company has 32265850.00 N.W.C but the N.W.C has decline drastically compared to the previous years, but in the year 2008-09 the company has 50967874.00 N.W.C that means the company in a favorable position & N.W.C has improved vary fast as compared to the previous years which show liquidity Position of the Shree Dayal Tours & Travels Pvt Ltd has always more & sufficient working capital available to pay off its current liabilities.

2. Current Ratio:Current ratio is a measure of firm’s short-term solvency. This ratio is also known as working capital Ratio. Current ratio is a measure of general liquidity and is most widely used to check the relationship of the current assets and current liability. The standard current ratio is 2:1. Current Ratio = Current Assets Current Liabilities Years

Current Asset

Current Liabilities

Babasabpatilfreepptmba.com

Ratio

54

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

2004-05 2005-06 2006-07 2007-08 2008-09 Diagram:

26352381.81 30087971.00 46858833.00 44389218.00 62495041.00

6122630.12 6843164.00 9979106.00 12123368.00 11527167.00

4.304 4.397 4.696 3.661 5.422

Ratio 6

Ratio

5 4 3

Ratio

2 1 0 2004-05

2005-06

2006-07

2007-08

2008-09

year

INTERPRETATION :The current ratio was 4.304 in the year 2004 – 2005 and the year 2005-2006 the current ratio was 4.397 and in the year 2006 -2007 the current ratio was 4.696 this show the current ratio has increase every year but in the year 2007-2008 the current ratio was decreased to 3.661.in the year 2008 – 2009 the current ratio has increases 5.422 .The current ratio is above the standard of 2: 1 ratio and hence it can be said that there is enough working capital in Shree Dayal Tours & Travels Pvt Ltd to meet its current liabilities.

3. Absolute Liquidity Ratio:Concept: Absolute liquidity ratio is a ratio of cash in hand and cash at bank to current liabilities. The standard ratio is 0.5: 1. Absolute liquidity Ratio = Cash in hand + Cash at bank Current Liabilities Years 2004-05

Cash in hand 322305.70

Cash at bank 600000.00

Current Liabilities 6122630.12

Babasabpatilfreepptmba.com

Absolute Liquidity Ratio 0.15 55

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

2005-06 2006-07 2007-08 2008-09

151478.00 125254.00 95663.00 64627.00

600000.00 600000.00 600000.00 600000.00

6843164.00 9979106.00 12123368.00 11527167.00

0.10 0.07 0.05 0.05

Diagram: Absolute Liquidity Ratio 0.16 0.14

ABR

0.12 0.1 0.08

Absolute Liquidity Ratio

0.06 0.04 0.02 0 2004-05

2005-06

2006-07

2007-08

2008-09

Year

INTERPRETATION:The absolute liquidity ratio was 0.15 in the year 2004-2005 and decreased to 0.10 in the year 2005 – 2006 and it does not increase further up to 2008-2009.But in the year 2007 -2008 and 2008-2009 it was same. The absolute liquidity ratio is below the standard of 0.5: 1 ratio. It shows that the liquidity position of the concern is unsatisfactory

4. Liquidity Ratio or Liquid ratio:Concept: This ratio indicates very short term or immediate or very instant financial position. Liquidity Ratio = Quick Assets Quick Liabilities Years 2004-05 2005-06 2006-07 2007-08

Current Assets 26352381.81 30087971.00 46858833 44389218.00

Current Liabilities 6122630.12 6843164.00 9979106.00 12123368.00

Babasabpatilfreepptmba.com

Liquidity Ratio 4.30 4.40 4.70 3.66 56

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

2008-09

62495041.00

11527167.00

5.42

Diagram: liqudity ratio

LiquidityR atio

6 5 4 3

Liquid ity R atio

2 1 0 2004-05

2005-06

2006-07

2007-08

2008-09

y ear

INTERPRETATION:The absolute liquidity ratio was 4.30 in the year 2004-2005 and increases to 4.40 in the year 2005 – 2006 and 4.70 in the year 2006-07, 3.66 in the year 2007-2008 it was decrease due to increase of labilities.But in the year 2008 -2009 the L.R has increased 5.42 because the C.L has decreased. The liquidity ratio is above the standard of 1: 1 ratio. It shows that the liquidity position of the company is satisfactory.

5. Return on Current Assets:Concept: This ratio indicates the amount of current assets employed in the working capital of the assets employed in the working capital of the firm as to run the day to day operations of the firm which helps the firm for its easy flow of goods in the trading activity. Return on Current Assets = Profit after Tax Current Asset Year 2004 – 2005 2005 – 2006 2006 – 2007 2007-2008

Profit After Tax 437894.00 423298.00 592576.00 843910.00

Current Asset 26352381.81 30087971.00 46858833.00 44389218.00

Babasabpatilfreepptmba.com

Ratio 0.016 0.014 0.012 0.019 57

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

2008-2009

1039889.00

62495041.00

0.016

Diagram: -

Return on Assets

Ratio 0.02 0.018 0.016 0.014 0.012 0.01 0.008 0.006 0.004 0.002 0

Ratio

2004-05

2005-06

2006-07

2007-08

2008-09

Year

INTERPRETATION:The Returns on current assets was 0.016 in the year 2004-2005 and it decreased to 0.12 in the year 2006-2007. It further increased to 0.019 in the year 2007-2008 and further decreased 0.016 in the year 2008-2009 .It shows that profit will increase then asset turnover ratio will decline then C.A will increase but in the year 2007-2008 asset ratio was increased 0.19 because C.A has fall that year. Company has profit transferred to the reserve and surplus Account shown in balance sheet..

6. Current Asset Ratio:Concept: This ratio measures sales per rupee of investment in current assets. This ratio measures the efficiency with which current assets are employed a high ratio indicates a high degree of efficiency is asset utilization and a low ratio reflects inefficient use of current assets. Current Asset Ratio = Net Sales Average Current Assets Year

Sales

2004 – 2005

102199181.00

Average Current Asset 19967762.36

2005 – 2006

132858985.00

28220176.41

4.70 time

2006 – 2007

171671451.00

38473402.00

4.46 time

Babasabpatilfreepptmba.com

Ratio 5.11 time

58

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

2007-2008 2008-2009

221246824.00 286246257.00

45624025.5 53442129.5

4.84 time 5.35 time

Diagram: Ratio 5.6 5.4 C.A.R

5.2 5 4.8

Ratio

4.6 4.4 4.2 4 2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

Year

INTERPRETATION:The current asset ratio was 5.11 times in the year 2004-2005 and 4.70 in the year 2005-06 and 4.46 in the year 2006-2007 it was decreased. It further increased to 4.48 in the year 2007-08 & 5.35 in the year 2008-2009. It shows that the current assets are not utilized properly.

7 .Debtors Turnover Ratio:Concept: Debtors are expected to be converted into cash over a short period of time and therefore are included in current assets. It shows how many times debtors are converted into cash in a year. Debtors Turnover Ratio = Net credit sales Average Debtors Year

Credit sales

Average Debtors

Ratio

2004 – 2005

102199181.00

19080194.95

5.35 times

2005 – 2006

132858985.00

27192101.00

4.88 times

Babasabpatilfreepptmba.com

59

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

2006 – 2007

171671451.00

36302837.00

4.72 times

2007-2008 2008-2009

221246824.00 286246257.00

42584634.5 50516905.00

5.19 times 5.66 times

Diagram: Ratio 5.8

Debtors

5.6 5.4 5.2 5

Ratio

4.8 4.6 4.4 4.2 2004-05

2005-06

2006-07

2007-08

2008-09

Year

INTERPRETATION:The debtor’s turnover ratio was very less in the year 2006-07 at 4.72 times, but them it has increased to 5.19, 5.66 times in the year 2007-08 and 2008-09. This shows that the company is making all the offers to speed up the collection process.

8. Creditors Turnover Ratio:Concept: Creditors’ turnover ratio establishes relationship between not credit purchases and average trade creditors and accounts payable. The ratio indicates the velocity with which the creditors are turned over in relation to purchases. Creditors Turnover Ratio = Net Credit Purchases Average creditors Year

Credit Purchases

Average Creditors

Ratio

2004 – 2005

96724469.00

82074994.50

1.17 times

2005 – 2006

127553879.00

112554635.00

1.13 times

Babasabpatilfreepptmba.com

60

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

2006 – 2007

165680148.00

146617013.50

1.13 times

2007-2008 2008-2009

213323185.00 276775674.00

189501666.50 245049429.50

1.12 times 1.12 times

Diagram: -

creditor

Ratio 1.18 1.17 1.16 1.15 1.14 1.13 1.12 1.11 1.1 1.09

Ratio

2004-05

2005-06

2006-07

2007-08

2008-09

Year

INTERPRETATION:The creditors turnover ratio was 1.17 times in the year 2004-05 & it decreased to 1.13 times in the year 2006-2007 but creditor turnover will be remain same two year 2005-06 and 2006-07.Thean it was again declined 1.12 in the Year 2007-08. But it was remain same in the year 2007-08 and 2008-09. Generally lower the ratio better is the liquidity position of the firm and vice versa

9. Net Profit Ratio:Net profit ratio indicates the relation ship between net profit & sales .It is also known as margin on sales ratio. Net Profit Ratio: -

Net profit after Tax x 100 Sales

Year

Net Profit After Tax

Sales

Ratio

2004 – 2005

437894.00

102199181.00

0.43 %

2005 – 2006

423298.00

132858985.00

0.32 %

2006 – 2007

592576.00

171671451.00

0.35 %

2007-2008 2008-2009

843910.00 1039889.00

221246824.00 286246257.00

0.38 % 0.36 %

Babasabpatilfreepptmba.com

61

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Diagram:

profit

Ratio 0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0

Ratio

2004-05

2005-06

2006-07

2007-08

2008-09

Year

INTERPRETATION:The Net profit of the company 0.43% in the year 2004-05,0.32 in the year 2005-06 , 0.35 in the year 2006-07 ,0.36 in the year 2008-09. Net profit ratio was show the net profit after tax in the year 437894 in 04-05 but it was fall in the year 2005-2006 there for net profit ratio is falling.

10. Debt / Equity Ratio:This Ratio indicate how much of the total funds employed are our owned & how much are borrowed there is no standard fixed for this ratio but financial institute favors a ratio of 2:1.

Debt / Equity Ratio: - Long Term Borrowing Share holder fund Year

Long Term Borrowing

Share holder fund

Ratio

2004 – 2005

17020534.74

3281899.00

5.19

2005 – 2006

18599175.00

4705197.00

3.95

2006 – 2007

30650881.00

6297773.00

4.87

Babasabpatilfreepptmba.com

62

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

2007-2008 2008-2009

25230306.00 43831794.00

7141683.00 8181572.00

3.53 5.36

Diagram: Ratio 6

Debt

5 4 3

Ratio

2 1 0 2004-05

2005-06

2006-07

2007-08

2008-09

Year

INTERPRETATION:In The year 2004 -2005 debt equity ratio was 5.19 and 3.59 ,4.87 in the year 2005-06 and 2006-07 .in the year 2005 debt equity ratio fall because shareholder fund was increased. But long term borrowing slow increasing .But in the year debt ratio has decreased 3.53 in the year 2007-08.but in the year 2008-09 the debt equity ratio has increased 5.36. Because long term borrowing and shareholder fund also increases.

11. Working Capital Turnover Ratio:It is taken as one of the primary indicators of the shortterm solvency of the business. It establishes the relationship with the net sales. It measures the efficiency with which the working capital is being used by the firm. WORKING CAPITAL TURNOVER RATIO =

Net Sales Net Working Capital

Year

Net Sales

Net Working Capital

Ratio

2004 – 2005

102199181.00

20229751.69

5.05 TIME

2005 – 2006

132858985.00

23244807.00

5.72 TIME

2006 – 2007

171671451.00

36879727.00

4.65 TIME

2007-2008 2008-2009

221246824.00 286246257.00

32265850.00 50967874.00

6.86 TIME 5.62 TIME

Babasabpatilfreepptmba.com

63

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Diagram: Ratio 8.00 7.00

W.C

6.00 5.00 4.00

Ratio

3.00 2.00 1.00 0.00 2004-05

2005-06

2006-07

2007-08

2008-09

Year

INTERPRETATION: In The year 2004-05 working capital t/o ratio was5.05 time ,5.72 time in the year 20052006.In the year 2005-06 the working capital has increases because sales of the company has increases. in the year 2006-07it was 4.65, 6.86,5.62 in the year 2007-2008 and 2008-09.it show the newly established company because the working capital up and down year to year.

. Statement of changes in working Capital for the year 2004-05

Particular Current Asset Sundry debtors o/s more than 6 month o/s less than 6 month

31-03-2005

31-03-2004

25402556.11

Nil 12757833.79

Cash & Bank Balance Cash in hand Balance with bank

322305.70

Loans & Advance Margin against Bank guarantee

600000.00

Increase ((Sources)

Decrease (Application)

-

12644722.32

119298.12 0.00

650000.00

Babasabpatilfreepptmba.com

203007.58 -

-

-

50000.00

64

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Accrued interest on Margin Money Tax deducted at source

16250.00 11270.00

Total 26352381.81 Current Liabilities Sundry creditors Lalit Bajaj O/D with Bank of Baroda Provision s for exp Mr.Pawan choudhary Mr.Babita Choudhary N.B Shetty Income tax 2002-03 Income tax 2004-05

16250.00

0.00

0.00

39761.00

-

28491.00

12769238.90

-

13583142.91

5366937.12

4909228.79

457708.33

-

10000.00 482193.00

10000 118953.09 20000.00 65500.00 -

4665878.93 1000000.00 500000.00 20000.00

233500.00 6122630.12

0.00 4665878.93 363239.91 1000000.00 500000.00 10000.00 20000.00 168000.00 11636347.63

20229751.69

1946795.28

18282956.41

30000.00

5513717.51

Total Networking Capital (Current Asset – Current Liability)

Statement of changes in working Capital for the year 2005-06 Particular Current Asset Sundry debtors o/s more than 6 month Others Cash & Bank Balance Cash in hand Balance with schedule bank In Current A/C In Fixed Deposit Loans & Advance Unsecured considered

31-03-06

31-03-05

Increase

Decrease

28981646.00

25402556.11

3579089.89

-

151478.00

322306.00

-

170828.00

600000.00

600000.00

0.00

0.00

49243.00

16250.00

32993.00

-

Babasabpatilfreepptmba.com

65

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

goods, subject to recover advance recover in cash or kind or value. T.D.S & Income Tax paid Total Current Liabilities Sundry creditors

305604.00

11270.00

294334.00

-

30087971.00 26352381.81

3735589.19

-

5663415.00

5366937.00

296478.00

-

Other Liabilities

617659.00

522193.12

95465.88

-

Provisions Provisions for taxation Provisions for F.B.T

527500.00 34590.00

233500.00 -

294000.00

-

6843164.00

6122630.12

720533.88

-

23244807.00

20229751.69

3015055.31

-

Total Networking Capital (Current Asset – Current Liability)

Statement of changes in working Capital for the year 2006-07 Particular Current Asset Sundry debtors o/s more than 6 month Others Cash & Bank Balance Cash in hand Balance with schedule bank In Current A/C In Fixed Deposit

31-03-2007 833104.00 42790924.00

31-03-2006

Increase

833104.00 28981646.00 13809278.00

Decrease -

125254.00

151478.00

-

26224.00

600000.00

600000.00

0.00

0.00

Babasabpatilfreepptmba.com

66

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Loans & Advance Unsecured considered goods, subject to recover advance recover in cash or kind or value. Sundry Advances T.D.S & Income Tax paid Total

Current Liabilities Sundry creditors

182081.00

49243.00

132838.00

-

1331945.00 995525.00

305604.00

1331945.00 689921.00

-

30087971.0 16770862.00 0

-

46858833.00

8090866.00

5663415.00

2427451.00

-

Other Liabilities

891150.00

617659.00

273491.00

-

Provisions Provisions for taxation Provisions for F.B.T

927500.00 69590.00

527500.00 34590.00

400000.00 35000.00

-

9979106.00

6843164.00

3135942.00

-

Total Networking Capital (Current Asset – Current Liability)

36879727.0 0

23244807.0 13634920.00 0

Statement of changes in working Capital for the year 2007-08 Particular Current Asset Sundry debtors o/s more than 6 month Others Cash & Bank Balance Cash in hand Balance with schedule

31-03-2008

31-03-2007

Increase

Decrease

386945.00 41158296.00

833104.00 42790924.00

-

446159.00 1632628.00

95663.00

125254.00

-

29591.00

Babasabpatilfreepptmba.com

67

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

bank In Current A/C In Fixed Deposit Loans & Advance Unsecured considered goods, subject to recover advance recover in cash or kind or value. Sundry Advances T.D.S & Income Tax paid Total

Current Liabilities Sundry creditors Other Liabilities Provisions Provisions for taxation Provisions for F.B.T Total

Networking Capital (Current Asset – Current Liability)

600000.00

600000.00

0.00

0.00

276894.00

182081.00

94813.00

-

431945.00 1439475.00

1331945.00 995525.00

443950.00

900000.00 -

44389218.0 0

46858833.00

-

2469615.00

8090866.00 1763531.00

-

9854397.00 801881.00

891150.00

-

89269.00

1362500.00 104590.00

927500.00 69590.00

435000.00 35000.00

-

9979106.00 2144262.00

-

-

4613877.00

12123368.0 0 32265850.0 0

36879727.0 0

Provisional Statement of changes in working Capital for the year 2008-09 Particular Current Asset Sundry debtors o/s more than 6 month

31-03-2009

31-03-2008 378114.00

386945.00

Babasabpatilfreepptmba.com

Increase

Decrease -

8831.00 68

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Others Cash & Bank Balance Cash in hand Balance with schedule bank In Current A/C In Fixed Deposit Loans & Advance Unsecured considered goods, subject to recover advance recover in cash or kind or value. Sundry Advances T.D.S & Income Tax paid Total

Current Liabilities Sundry creditors Other Liabilities Provisions Provisions for taxation Provisions for F.B.T Total

Networking Capital (Current Asset – Current Liability)

59110455.00

41158296.00 17952159.00

-

64627.00

95663.00

-

31036.00

600000.00

600000.00

0.00

0.00

320425.00

276894.00

43531.00

-

431945.00 1589475.00

431945.00 1439475.00

0.00 150000.00

0.00 -

44389218.0 18105823.00 0

-

62495041.00

8916827.00

9854397.00

-

937570.00

418250.00

801881.00

-

383631.00

2012500.00 179590.00

1362500.00 104590.00

650000.00 75000.00

-

11527167.00

12123368.0 0

-

596201.00

32265850.0 18702024.00 0

-

50967874.0 0

Babasabpatilfreepptmba.com

69

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

The working of the company should be positive. It should not be negative. In the year 2004-2005 Rs. 20229751.69 and in the year 2005-2006 Rs. 23244807.00 the working capital has increased and 2006-2007, Rs.36879727.00 the working capital has increased but in the year 2007-2008 Rs.32265850.00 the working capital has decrased.But in the year 2008-2009 the working capital of Shree dayal tours & travels Pvt Ltd has again increased Rs.5067874.00 The Shree Dayal Tours & Travels Pvt Ltd working capital has incrasesed which is favorable position to the company. It clearly shows that the Shree Dayal Tours & Travels Pvt Ltd has profit orient company. So it was not facing shortage of working capital in initial years. So it had to increase its working capital to stand in the business world. Then again in the year2008-2009 the Shree Dayal Tours & Travels Pvt Ltd Net Working Capital has increased Rs.50967874.00, which is a very positive sign of prosperity and it, will help to the Shree Dayal Tours & Travels Pvt Ltd sustain its expansion programs.

Conclusion The Working Capital Management contributes much in the over all management of the organization affairs, efficiency of organization operations depend on how it manages its short term business dealings. Working Capital management contributes for the firm efficiency as well as the finance manager is proper utilizing the available wealth and maintaining the required liquidity.

Babasabpatilfreepptmba.com

70

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Babasabpatilfreepptmba.com

71

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

FINDINGS, SUGGESTION AND CONCLUSION FINDINGS:

The net working capital has declined in the year 2007-2008 and but the profit of the company was increased in the year 2007-2008



The Shree dayal tours & Travels Pvt Ltd has abled to repay the liability & loan of the creditors or not. And also liquidity ratio of shree dayal tours and travels has declined year to year and some year it will remain the same.



The Return on current assets of shree dayal tours & travels Pvt Ltd is vary high in the year 2007-2008 and



Company is able to full the standard ratio of current assets and change in working capital of 2007-2008 has declined.

Babasabpatilfreepptmba.com

72

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

SUGGESIONS:  In the year 2007-2008 the current assets of the Shree Dayal tours and travels Pvt Ltd has declined and current liability of the company has increases there for the net working capital declined. There for the current ratio has declined. The net working capital of the company has increased remaining year .But profit has increased because the sales has increased in the year 2007-2008.  The company has abled to repay the liability of the creditors because of the current ratio of SDT&TPL is above the standard of current ratio i.e. 2:1. The profit of the company has increased every year.  Because of the current assets has declined in the year 2007-2008 but profit of the company has increased in the year 2008-2009. There for the return on current assets is vary high.  Company has able to full fill the standard level of current ratio i.e. 2:1 .There for the company has able to repay the liability and loan of company and the change in working capital declined in the year 2007-2008 due to the sundry creditors has more and Provision of tax has been vary high.

Babasabpatilfreepptmba.com

73

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

Conclusion: After going through the different aspects of the industry departments and the awards it has received in different fields. There is good relationship between the directors and employee. The management concerned about employees complete health and wealth. Working capital may be regarded as lifeblood of a business. Its effective provision can do much to ensure the success of a business Today working capital is considered to be an important tool for progress. Working capital management techniques are playing significant role in assisting the management for decision making. The study of working capital management at Shree Dayal Tours & Travels Pvt Ltd Is found to be very effective. The working capital contains the management of Cash, Debtors, and creditors. The Shree Dayal tours and travels Pvt Ltd has profit oriented company .The profit of the company will be increases every year .The company has able to the repay the amount of the creditor. The company has more working capital and also sale has increases year to year .The company current ratio has above the standard current ratio i.e. 2:1 but company current ratio is above 3:1.The Company has financially soundness. .

Babasabpatilfreepptmba.com

74

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

 Financial Statement

Babasabpatilfreepptmba.com

75

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

FINANCIAL STATEMENT 2008-2009 PROVISIONAL BALANCE SHEET AS AT 31st MARCH, 2009

Particulars

SCHEDULE

As At 31.03.2009

SOURCES OF FUNDS SHAREHOLDERS FUNDS Share capital Reserves and Surplus

A B

45,00,000.00 36,81,572.00 8181572.00

Share Application money Pending allotment Secured Loans Unsecured Loans Deferred Tax Liability (Refer Note No. 10)

C D -

3,73,46,016.00 64,85,778.00 5,146.00

TOTAL

52,018,512.00

APPLICATIONS OF FUNDS Fixed Assets: Gross Block Less: Accumulated Depreciation Net Block

E

10,24,298.00

INVESTMENTS Current Assets, Loans & Advances Sundry Debtors Cash and bank balances Loans and Advances Less: Current Liabilities & provisions Current Liabilities Provisions NET CURRNT ASSETS Miscellaneous Expenditure ( To the extent not written off or adjusted)

12,91,998.00 2,67,700.00

F

0

G H I (A)

5,94,88,569.00 6,64,627.00 23,41,845.00 62,495,041.00

J K (B) (A-B) K

93,35,077.00 21,92,090.00 5,09,67,874.0 0 26,340.00

Babasabpatilfreepptmba.com

76

WORKING CAPITAL MANAGEMENT OF SHREE DAYAL TOURS & TRAVELS PVT LTD

TOTAL 5,20,18512.00

Babasabpatilfreepptmba.com

77