This document is an internship report submitted by Prof. Varimna Singh Kushangi on the topic of working capital management at Arvind Mills. It includes an introduction to the textile industry and Arvind Ltd, analyzing the company's financial performance, working capital management principles, and the methodology used for analyzing and comparing the working capital management of Arvind Ltd and Mafatlal Industries Ltd. The findings indicate that minimum capital is required to run an entity and working capital is essential for liquidity and smooth business operations.

1. Submitted to: Submitted
By:
Prof. Varimna Singh Kushangi
Summer Internship Report
on
Arvind Mills
tTopic : Working Capital Management
Topic : Working Capital Management

2. REASONS FOR TAKING UP THE
PROJECT
 Selecting finance as a specialization subject helped
me to study in depth about its sub parts of finance.
 Understand the company’s financial aspect and give
solution for further study of project.

3. INTRODUCTION TO TEXTILE
INDUSTRY
 2nd rank in India.
 14% contribution to industrial production
 4% contribution to GDP
 17% contribution to export earnings
 Direct employment to more than 35 million people

4. SEGMENTS
 Readymade garments
 Cotton textiles including handlooms
 Man-made textiles
 Silk textiles
 Woollen textiles
 Handicrafts including carpets
 Coir
 Jute

5. Introduction of Arvind Ltd
 Type : Public
 Industry : Conglomerate
 Founded : 1931
 Headquaters : Ahmedabad India
 Key People :
 Sanjay Lalbhai (Chairman & Managing Director)
 Punit Lalbhai (Executive Director)
 Kulin Lalbhai (Executive Director)

6.  Products :
 Denim
 Knits
 Woven
 Engineering
 Retail
 Telecom
 Advanced material
 Agri Business
 Real Estate
 The Arvind Store

7.  Revenue : Rs. 52.35 Billion
 Net income : Profit Rs. 4.36 Billion
 Number of Employees : 25,620

8. Compititiors
 Arvind Ltd
 Raymond Ltd
 Reliance Textile
 Vardhman Spinning
 Century Textile
 Mafatlal Textiles
 Ashima Sybtax
 Bombay Dyeing limited
 Alok Textiles

9. vision
 ‘We will enable people to experience a better quality of
life by providing enriching and inspiring lifestyle
solutions’.
MISSION:
 BUSINESS EXCELLENCE WITHOUT COMPROMISE
 “THEIR MISSION IS TO PROVIDE CLOTHING FOR
THE FAMILY, FROM EVERY WALK AND STAGE OF
LIFE, FOR EVERY OCCASION, WITH A WIDE VARIETY
OF EXCELLENT QUALITY FABRICS AND GARMENTS”.

10. Business Divisions

11. Arvind Brands
 OWN BRANDS:
1. MAINSTREAM:-
 EXCALIBUR
 FLYING MACHINE
2. POPULAR:-
 RUFF & TUFF
 NEW PORT UNIVERSITY

12. LICENSED BRANDS:-
1. BRIDGE TO LUXURY
 GANT,USA 1949
2. PREMIUM
 USPA
 SansaBelt
 Izod
 Pier Cardin Paris
 Arrow
3. POPULAR
 CHEROKEE

13. JOINT VENTURE BRANDS:-
1. BRIDGE TO LUXURY
 TOMMY HILFIGER
 NAUTICA
2. PREMIUM
 LEE
 WRANGLER
3. POPULAR
 WRANGLER HEROS
 RIDERS

14. Strength :
Abundant Raw Material Availability
Low Cost Skilled Labour
Presence across the value-chain
Reduced Lead-times
Super Market
Growing Domestic Market
Weaknesses:
Fragmented industry
Effect of Historical Government Policies
Lower Productivity and Cost
Competitiveness
Technological Obsolescence
Opportunities:
Research and Development and Product
Development
Cheap labour
Changing retail scenario
Price competitiveness
Threats :
Decline in exports
Rise in raw material price
Competition from global player
Swot
Analysis

15. Financial performance FY2015-
16
7851
8450
7500
7600
7700
7800
7900
8000
8100
8200
8300
8400
8500
2014-15 2015-16
• Revenue Growth increased from last year by 8 %.

17. Percentage contribution to Total
Power Brands Revenue
Arrow
44%
US Pollo
30%
Tommy
15%
Flying
machine
11%

18. Denim sold (mmt)
0 0 0 0 0 0 0 0 0
71 67
88
96 96
89
102 106 110
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9

19. MAFATLAL INDUSTRIES
LIMITED
 Type : Public Company
 Sector : Apparel and Fashion
 Founded : 1913
 Employees : 3407
 Revenue : 12.95 billion
 Profit margin : 1.32%
 Gross profit : 4.30 billion

20.  Founded by : Mr. Mafatlal Gagalbhai
 1905 – founded in Ahmedabad named as
Shorrock mills.
 Initial equity capital of Rs.3.25 Lacs

21. Mission
 BUSINESS EXCELLENCE WITHOUT
COMPROMISE
 “THEIR MISSION IS TO PROVIDE CLOTHING FOR
THE FAMILY, FROM EVERY WALK AND STAGE OF
LIFE, FOR EVERY OCCASION, WITH A WIDE
VARIETY OF EXCELLENT QUALITY FABRICS AND
GARMENTS”.

22. Products

23. Products
Men’s wear include:
•Suiting
•Treasuring
•shirting
•ready made
Women’s Wear include:
•voiles
•sarees
•night wear
•prints
•rubia

24. Brands

25. Working Capital Management
 Working capital refers to that part of the firm’s
capital, which is required for financing short term
requirements or day-to-day transactions.
 Working capital reflects the results of a host of
company activities, including inventory
management, debt management, revenue
collection and payment to suppliers.

28. Working Capital Cycle

29. Objectives
 To improve profitability by keeping the investment in
working capital to the minimum required
 To strike a balance between FINANCIAL STABILITY
AND PROFITABILITY.

30. Importance
 Important for all business.
 Manages both current assets and current liabilities.
 Maintaining optimal cash balances.
 Effectively managing accounts receivable and
inventory.
 Maintaining an appropriate level of short term
financing in the least expensive and most flexible
manner.

31. Factors affecting Working
Capital

32. Sources of
Working Capital

33. Long term sources
[Fixed working
capital]
Loan from
financial
institution
Floating of
debentures
Accepting
public
deposit
Issue of
shares
Cash credit
Commercial
paper
Short term sources
[Temporary
working capital]
Trade credit
Bank
borrowings
Factoring of
receivables
Inter
corporate
deposits
Bill
discounting
Factoring

34. Principles of Working Capital
Management

35. RESEARCH METHODOLOGY
 Analysis and comparison will be done between on
two leading textile companies of India that is Arvind
Ltd and Mafatlal Industries Ltd.

36. RESEARCH DESIGN
 The type of research for the analysis is an analytical
research because in analytical research data
,information are being provided and analysis is being
done on the basis of given information to make a
critical evaluation of the material.
 In the same manner, for this project, data has been
gathered from various sources and available data
such as newspaper, journals and websites is used to
make analysis based on the concept of working
capital management.

37. EXPECTED CONTRIBUTION OF
STUDY
• Financial position of the company can be known and
studied better way.
• Efficient ratio analysis has been done so as to classify
company’s financial data.
• Performance of cash management is also studied.
• By studying working capital management, one can
come to know the day to day cash requirements.

38. BENEFICIARIES
 Practical knowledge about Working Capital
 The company’s position of funds maintenance and
setting the standards for working capital inventory
levels, current ratio level, quick ratio, current asset
turnover ratio etc.
 it is useful in further expansion decisions to be taken
by management.

39. LIMITATION OF THE STUDY
 The study is mainly carried out based on the
secondary data provided in the financial statements
of last five years only.
 As the study is based only on the concept of working
capital management, the overall financial position of
the company cannot be determined.

40. FINDINGS
 It is found from the research that minimum capital
is required to run any entity.
 Working capital is an essential part of the
company.
 Liquidity is an important factor which is to be
maintained by the company for which the
company will require to have sufficient liquid cash
for the smooth running of the operation.

41. Conclusion
 Working caapital is inevitable for conducting the
operation of the business.
 Good cashflow is always an asset to the
company.
 The successful working capital management can
face emergencies cost by market changes and
competitior activities.