1. WORKING CAPITAL Prepared By : - PARAG VORA MANISH AGHASIYA MILAN DAVE

4. INTRODUCTION

7. TYPES OF WORKING CAPITAL WORKING CAPITAL BASIS OF CONCEPT BASIS OF TIME Gross Working Capital Net Working Capital Permanent / Fixed WC Temporary / Variable WC Regular WC Reserve WC Special WC Seasonal WC

9. WORKING CAPITAL CYCLE Work in progress Raw-material stock Finished goods stock Wages and overheads Trade creditors Taxation sale Trade debtors Shareholders cash Fixed assets Loan creditors Lease payment Selling expenses

10. Thank You

11. REQUIREMENTS OF WORKING CAPITAL IN BUSINESS

15. OPERATING CYCLE Accounting receivable finished Goods WIP RAW material cash

16. Nature & Importance of WC Short term financial requirement Reduce the financing cost Helpful in expansion Success of a firm

17. Working capital management (WCM)

18. Management of the WC

19. MEASUREMENT OF WORKINGCAPITAL REQUIREMENT

23. OBJECTIVES OF WORKING CAPITAL MANAGEMENT

42. BALANCE SHEET OF ZELLET STEEL COMPANY AS ON 31-3-2006 Liabilities Rs.(in lakhs) Assets Rs.(in lakhs) Share capital 200 Land & Building 60 Reserve & Surplus 160 Plant & Machinery 200 Term Loans 160 Inventories 200 Surplus creditors 120 Receivables 220 Provisions of tax 60 Cash & Bank 20 700 700

44. ESTIMATE OF W.C. REQUIREMENTS FOR THE YEAR 2006-07 PARTICULARS % OF SALES BASED ON 2005-06 FIGURES ACTUAL (2005-06) ESTIMATSE (2005-06) Sales 100.00 1200 1800 Current assets Inventories 16.67 200 300 Receivables 18.33 220 330 Cash & bank 1.67 20 30 TOTAL(A) 36.67 440 660 Current Liabilities Sundry creditors 10.00 120 180 Provision of tax 5.00 60 90 TOTAL(B) 15.00 180 270 Working capital (A-B) 21.67 260 390

46. TABLE 2.6 YEAR SALES CURRENT ASSETS 2001 64 44 2002 88 54 2003 104 63 2004 114 87 2005 138 90

47. ESTIMATE WORKING CAPITAL REQUIREMENTS FOR THE YEAR 2006 YEAR SALES(x) CU.ASSETS(y) xy X2 2001 64 44 2816 4096 2002 88 54 4752 7744 2003 104 63 6552 10816 2004 114 87 9918 12996 2005 138 90 12420 19044 N = 5 X = 508 Y = 338 XY = 36458 X2 = 54696

54. Any Questions