Chandu PRJ

Working Capital Management
DORA
PLASTICS PVT LTD
INTRODUCTION
INTRODUCTION
Finance is the life blood of any business organization. Just as Circulation of blood is
necessary in the human body to maintain life finance is very essential to the business
organization for smooth running of the business
Financial management involves Managerial activities concerned with the
acquisition of Fund for the business purpose.
The Finance Function does with
procurement of money taking in to consideration of today as well as future need and

finance is required to purchase need and finance is required to purchase a machinery
and raw materials, to pay salaries and wages and also for day to day expenses.
Financial Management is an appendage to the Finance function. With the
Creation of complex industry structure, the finance function has grown to very great
heights. One cannot think of any business activity in isolation from its financial
implication.
Financial Management
Meaning:Financial Management refers to that part of Management activity, which is
concerned with planning and controlling of firms financial resources, Financial
Management is applicable to every type of organization, irrespective of size, kind of
nature.
Objectives of Financial Management
Financial Management evaluates how funds are produced and used. In all
cases, it involves a sound judgment combined with logical approach of decision
making. Financial management provides a framework for selecting a course of action
and deciding an economically viable strategy.
B.E.S GROUP OF INSTITUTIONS (GVIC COLLEGE) ANGALLU,

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The Main objective of a business is to maximize the owners welfare. This objective
can be achieved by
(1) PROFIT MAXIMIZATION
(2) WEALTH MAXIMIZATION
PROFIT MAXIMIZATION:
Profit earning is the primary of every economic activity. Business can service
only it earns profit; profit is the measure of the efficiency of a business enterprise. It
is remuneration for innovation. The survival of the firm depends upon it ability to
earn profit but from the experience it is learn that concept of maximization is a myth.
WEALTH MAXIMIZATION
Wealth maximization is the appropriate objective for an enterprise.
The concepts of wealth maximization tell value of assets in terms of benefits it
can produce. The concept of wealth maximization universally accepted in financial
decision-making.
FINANCIAL DECISIONS
Investment decisions
Financing decisions
Dividend decisions
Liquidity decisions (Working capital Management)
INVESTMENT DECISIONS:

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The decisions relates to the determination of the total amount of assets to be

held by the firm, their composition, the business risk and the image of the firms
perceived by the investors.
FINANCING DECISION:
After taking the Investment decision, the firm commits itself to the new
investment, and hence it must decide upon the best means of Financing these
commitments. The cost of raising funds for investing is very crucial in making the
financial decisions.
DIVIDEND DECISIONS
This refers to the reimbursement of profit to the investors who have supplied
funds.

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WORKING CAPITAL MANAGEMENT

INTRODUCTION:
Working capital may be regarded as the life blood of a business. Working
capital Management is one of the most important aspects of Financial Management.
It forms a major function of the finance manager and accountant.
The term working capital stands for that part of the capital which is required
for the financial working of the company in simple words; we can say that working
capital is the investment needed for carrying out day to day operations of the business
smoothly.
MEANING AND DEFINATION

Working Capital management nor administration of all aspects of working
capital, which manage the firms current assets and current liabilities in such a way
that a satisfactory level of working capital is maintained.
According to smith working capital Management is concerned with the
problems that arise in attempting to manage the current assets, current liabilities, and
the inter-relationship that exists between them.

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According to gerstenberg Circulating capital means current assets of a

company that are changed in the ordinary course of business from one form to
another, as for example from cash to inventories, inventories to receivables,
receivables into cash.
INDUSTRY PROFILE
PLASTICS MATERIALS INDUSTRY IN INDIA
India has witnessed a substantial growth in the consumption of plastics and an
increased production of plastic waste. Polyolefins account for the major share of 60%
in the total plastics consumption in India. Packaging is the major plastics consuming
sector, with 42% of the total consumption, followed by consumer products and the
construction industry. The relationship observed between plastic consumption and the
gross domestic products for several countries was used to estimate future plastics
consumption(master curve). Elastic ties of the individual material growth with
respect to GDP were established for the past and for the next three decades estimated
for India there by assuming a development comparable with that of western Europe.
On this basis, the total plastics consumption of various end products is combined with
these corresponding life times to calculate average lifetime of plastic products was
calculated as 8 years.
Forty-seven percent of the total plastics waste generated is currently recycled
in India. This is much higher than the share of recycling sector alone employs as
many people as the plastics processing sector, which employs about eight times more
people than the plastics manufacturing sector. To the increasing share of long life
products in the economy, and consequently in the volume of waste generated, the
share of recycling will decrees to 35% over the next three decades to. The total waste
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available for disposal(excluding recycling)will increase at least 10 fold up to the year

2030 from its current level of 1.3 million tones.
OVERVIEW:
Plans can be classified in many ways, but most commonly by their polymer
backbone (polyvinyl chloride, polyethylene, polymethyl mathacrylate and other
acrylics, silicones, polyurethanes, etc.). Other classifications include thermoplastic,
thermoset, elastomer, engineering plastic, addition or condensation or polyaddition
(depending on polymerization method used), and glass transition temperature or Tg.
Some plastics are partially crystalline and partially amorphous in molecular
structure, giving them both a melting point (the temperature at which the attractive
intermolecular forces are overcome) and one or more glass transitions (temperature
above which the extent of localized molecular is substantially increased). So-called
semi-crystalline plastics include polyethylene, polypropylene, poly (vinyl chloride),
polyamides (nylons), polyesters and some polyurethane. Many plastics are completely
amorphous, such as polystyrene and its copolymers, poly (methylmethacrylate), and
all thermosets.
Plastics are polymers long chains of atoms bonded to one another. Common
thermoplastics range from 20000 to 500000 in molecular weight, while thermosets are
assumed to have infinite molecular weight. These chains are made up of many
repeating molecular units, known as "repeat units", derived from "monomers "; each
polymer chain will have several 1000's of repeat units. The vast majority of plastics
are composed of polymers of carbon and hydrogen alone or with oxygen, nitrogen,
chlorine or sulfur in the backbone. (Some of commercial interests are silicon based.)
The backbone is that part of the chain on the main "path" linking a large number of
repeat units together. To vary the properties of plastics, both the repeat units with
different molecular groups "hanging" or "pendent" from the backbone, (Usually they
are "hung" as part of the monomers before linking monomers together to form the
polymer chain). This customization by repeat unit's molecular structure has allowed
plastics to become such an dispensable part of twenty first-century life by fine tuning
the properties of the polymer.
ABOUT THE INDIAN PLASTIC INDUSTRY:
The plastics industry in India has made significant achievements ever since it
made a modest but promising beginning by commencing production of polystyrene in
1957. The chronology of manufacture of polymers in India is summarized as under.
*1957- POLYSTERENE
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*1959- LDPE
*1961- PVC
*1968- HDP*1978- POLYPROPYLENE
The potential Indian market has motivated Indian entrepreneurs to acquire
technical expertise, achieve high quality standards and build capacities in various
facets of the booming plastic industry. Phenomenal developments in the plastic
machinery sector coupled with matching developments in the petrochemical sector,
both of which support the plastic processing sector, have facilitated the plastic
processors to build capacities to service both the domestic market and the markets in
the overseas.
The plastic processing sector comprises of over 30000 units involved in
producing a variety of items through injection moulding, blow moulding, extrusion
and calendaring. The capacities build in most segments of this industry coupled with
inherent capabilities have made us capable of servicing the overseas markets.
The economic reforms launched in India since 1991, have added further fillip
to the Indian plastic industry. Joint ventures, foreign investments, easier access to
technology from developed countries etc have opened up new vistas to further
facilitate the growth of this industry.
EXPORTS:In the calendar year 2006, the value of world plastic export was US$ 375
billion. However the share of India was less than 1% with exports of worth US$
3.187billon. The percentage of growth in export was 21%. During this trend of growth
in exports of plastics raw material increased from 55% to 60% of the total export of
plastic goods, while the export of processed plastic goods has registered a negative
growth from 45% to 9%. According to recent reports, the industry is said to be losing
an opportunity of USD 300 million through value addition on the raw materials that
are exported.
THE TOP 10 TRADING PARNERS OF INDIAN PLASTIC INDUSTRY ARE:"
USA
"
UAE
"
ITALY

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"
UK
"
BELGIUM
"
GERMANY
"
SINGAPORE
"
SAUDI ARABIA
"
HONG KONG
FINANCIAL CONCLUSION:
The consumption of plastics will increase about six-fold between 2000 and
2030. The share of polyolefins in India will remain at about 60%, a percentage
comparable to that of Western Europe. In 2030, plastics waste for
disposal (excluding recycled plastics) will increase 10 times compared to the
situation in the year 2000/2001; this model result assumes that the plastics recycling
rates will remain at the current level for the next three decades. Nevertheless, it is
more likely that the recycling rates will decrease with the increasing level of wealth:
in this case, plastics waste for disposal will grow by more than a factor of 10between
2000 and 2030.

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Waste for disposal is increasing relatively faster than the plastics consumption
because of the higher share of long -life products in waste and the lower recycling
rates of these products.
Plastic is the general term for a wide range of synthetic or semi synthetic
polymerization products. They are composed of organic condensation or addition
polymers and may contain other substances to improve performance or economics.
There are few natural polymers generally considered to be "plastics". Plastics can be
formed into objects or films or fibers. Their name is derived from the fact that many
are malleable, having the property of plasticity.
COMPANY PROFILE
"Dora plastics private limited" was incorporated as a private limited company on 2311-1998 at Tirupati. The company is promoted by Sri T.Kesavulu Naidu with the
inspiration of Sri. Y.Reddy -M.P, Nandyal and MD, Nandi pipes, Nandyala.
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The company started its operations in 1999. The company done its operation
in the financial year of 1999-2000 at 135 days only. The company started with an
authorized capital of Rs.40, 00,000/- and issued & paid up capital of Rs. 37, 00,000/-.
The company started. The paid-up capital of the concern is Rs.39.02lakhs. The
outside sources of funds to the company are loans & Term loans from SBI, Tirupathi.
The company started with a workforce of 15 members. Now it is increased to
90 members. The company having 4 lakhs shares @ Rs.10 each. At present the
company is paying interest @ rate of 14.754% on loans quarterly rest.
PRODUCTION:The company starts with an initial quantity of 50,000/-kgs, as the production.

The company used poly propylene as the raw material to produce disposable plastic
cups. The raw material is imported from Reliance.
The company maintains 15 tons inventory in stores and the production process
time is 6 hours. Raw material is purchased once in 10 days i.e. 3 times in a month.
3% input is loss in production as process loss. Monthly turnover of the company is 30,
00,000/- approximately and 1, 00,000/- sales per day.
The cost of the product depends on size & gauge. The method of price fixation
is based on value addition price-20% of value addition. Value addition means
differences between input cost & cost of sales.
At present, the company is producing 250 boxes with various sizes and
various gauges. The concern is releasing the financial goods to the market after doing
through quality checking/tests.
FINANCIAL STATEMENT ANALYSIS

MARKETING:
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The company markets their products in Andhra Pradesh & Tamil Nadu (some
regions).They are getting the advertisement through paper. They are using the field
staff for distributing the products. By producing the qualitative products and fixing
the competitive price the companies overcome the competition.
OBJECTIVE:
Provide employment to people and increase sales with cheaper rate.
MISSION VALUES & BENEFITS:
We believe in trading each other with honesty, fairness, dignity, and respect
We help each other work in terms and hold each other accountable to ensure
contribution towards goals.
We believe in innovative and optimum use of our resources to ensure better
productivity.
SOCIAL RESPONSIBILITY:
Quality of the product to the customers.
Enhancement of knowledge and skills of employees through training
Passing benefit of cost cutting in construction, finance and operation
to the customers.
Term loan Rs.60, 00,000/-from
STATE BANK OF INDIA

Settipalli Branch,
Renigunta Road,
Settipalli (post),
Tirutathi-517501

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PLASTICS PVT LTD
REGISTERED OFFICE:
Plat No. 30,
Industrial Estate,
Renigunta Road,
Settipalli (post)
BOARD OF DIRECTORS:
Managing Directors :
T.Kesavulu Naidu
Director
T.Doraswami Naidu
Auditor
E.Palguna Kumar
PRODUCT ADVANTAGES:
The main advantage of this product is use and through and also very cheap in
cost.
The company produces 10 to 15 times based on size and gauges
following are the various types of products.
The
Our Vision
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PLASTICS PVT LTD
Providing world class quality, services and offering most

competitive prices to earn customer satisfaction and
preferences. To earn trust and building corporate image of the
company
by
constant
growth
and
transparency
to all the stake holders including share holders, employees,
customers,
vendors
and
society
as
a
whole.
Keeping pace with the technological development, training of
the employees and benchmarking world class management
systems and there by achieving excellence in corporate
governance
Our Mission
Provide excellent services to our customers in all means
Ensure the timely execution in all our endeavors
Learn new strategies to identify niche markets
Create Opportunities to achieve our highest potentials
Strive hard to enhance our values
Quality
As an Organisation and individual we are committed to:
Satisfy customer's requirement
Continual improvement on product, process and quality

management systems
Optimum use of resource
Keshava Plastics Infrastructure

Keshava Plastics has a large manufacturing unit, spread over
an area of 95000 square feet with latest technology, complete
manufacturing is almost automatic and entire process is
backed by highly skilled, quality and trusted professionals.
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ORGANISATION CHART
BOARD OF DIRECTORS
MANAGING DIRECTOR
GM.FINANCE
GM PRODUCTION
MARKETING
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MARKETING
ACCUONTS TAXATION
CASH&BANK
MANAGER MANAGER
MANAGER
FIELD STAFF
QUALITY
GENERAL
MANAGER
MANAGER GENERAL
MANAGER
H.R.
PRODUCTION
MANAGER
MANAGER
SUPERVISOR
OPERATOR
PACKING/MACHINE
OATOR
REVIW OF LITERATURE
WORKING CAPITAL MANAGEMENT
INTRODUCTION
Working capital may be regarded as the life blood of a business. Working capital
Management is one of the most important aspects of Financial Management. It forms
a major function of the finance manager and accountant.
DEFINITION
1. Working Capital Represents the Excess of Current Assets over current
Liabilities and identify the liquidity position of total enter prizes Capital
Written by Aswathappa
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2. According to smith working capital Management is concerned with the

problems that arise in attempting to manage the current assets, current
liabilities, and the inter-relationship that exists between them.
MEANING:
Neither Working Capital management nor administration of all aspects of working
capital, which manage the firms current payment of wages and other day to day
expenses etc, These funds are also known as working capital. Mainly the organization
used working capital day to day business obligations purposed used. The main goal
of working capital is to mange current assets and current liabilities. The following
formula is used calculation of working capital.
Net Working Capital = Current Assets -------
Current Liabilities
According to genstenberg Circulating capital means current assets of a

company that are changed in the ordinary course of business from one form to
another, as for example from cash to inventories, inventories to receivables,
receivables into cash.
I. TYPES OF WORKING CAPITAL

There are two types of working capital. They are

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I) ON THE BASIS OF CONCEPT:

1) Gross working capital.
2) Net working capital.
1. Gross Working Capital
Refers to the firms investment in current assets are the assets, which can be
concerned into and within an accounting year (or operating cycle) and include cash,
short-term securities, debtors (accounts receivables or book debts) bills receivable and
stock (inventory)Gross working capitals points to the arranging of funds to finance
current assets.

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2. Networking Capital
Refers to the difference between current assets and current liabilities. Currents
liabilities are those claims of outsiders, which are expected to nature for payment
within accounting years and include creditors (accounts payable). Bills Payable and
outstanding expenses. Networking capital can be positive or negative. A positive
networking capital will arise when current assets, exceed current liabilities and a
negative working capital will arise when current liabilities are in excess of current
assets.
II) ON THE BAIS OF TIME
1) Permanent/fixed/fluctuating working capital
2) Temporary working capital
1) Permanent Working Capital
The need for current assets arises because of the operating cycle. The operating cycle
is a continuous process and therefore, the need for the current assets is felt constantly.
But the magnitude of current assets needed is not always a minimum level of current
assets, which is continuously required by the firm to carry on its business operations.
This minimum level of current assets is referred to as permanent or fixed working
capital.
EXAMPLE: - Every firm has to maintain a minimum level of raw materials, workin-progress, finished goods and cash balance. This minimum level of current assets is
called permanent or fixed working capital as this part of capital is permanently
blocked in current assets. As the business grows, the requirements of permanent
working capital also increase due to the increase in current assets.
Amount
Temporary w c
of w c
Or
Fluctuating w c
permanent w c
Time

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Note:
W C where =working capital
2.Temporary Working Capital

Depending upon the changes in production and sales, the need for working capital
over and above permanent working capital, will have in be maintained to support the
peak proceeds of sale and investment in receive may also increase during such
periods. On the other hand, investment in raw material, working in progress and
finished goods will fall if the market is slack.
The extra working capital needed to support the changing production and sales
activities is called fluctuating, or variable or temporary working capital. The firm to
meet liquidity measurement that will last only temporarily creates temporary working
capital.
Amount
Temporary w c
Of w c
or
Fluctuating w c
Time
permanent W c

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II. DETERMINATES OF WORKING CAPITAL OR FACTORS AFECTING

The working capital requirement of a firm affected by a number of factors.
The various factors, which affect the working capital requirement of a concern, are as
follows:
INTERNAL FACTORS
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1. Nature of Business
The working capital requirements of enterprises are basically related to the conduct of
business. Public utilities have certain features which have a bearing on their working
capital needs. They do not maintain big inventories arid have, therefore, probably the
least requirement of working capital. On the other hand trading and manufacturing
concern required large amount of working capital to maintain a sufficient amount of
cash inventories and book debts.
2. Production Cycle
The term production or manufacturing cycle refers to the span between the
procurement of raw materials and completion of the manufacturing process leading to
the production of finished goods. In other words, there is a sometime gap before raw
materials become finished goods. Therefore the longer the time span, the larger will
be the working capital needed and vice versa.
3. Business cycle
The business fluctuations influence the size of working capital mainly during updated
phase when boom conditions prevail, the need for working capital is likely to cover
the lag between increases sales and receipt of cash as well as invest in plant and
machinery to meet the increased demand. The down swing an opposite effect on the
level of working capital requirement.
4. Credit Policy
The credit policy relating to sales and purchases also affects the working capital. The
credit policy in influences the requirements of working capital in two ways:
Though credit terms granted by the firm to its customers/buyers of goods
credit terms available to the firm from its creditors. A firm, which more credit sales
and cash purchase required high working capital than a firm having more credit
purchase and cash sales.
5. Scale of Production
A concern carrying on activities on a small scale of needs less working capital. On the
other hand a concern undertaking activities on large scale
Needs large amount of working 0capital.
6. Growth and Expansion of Business

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The growth and expansion of business also affect the working capital requirement.
When there is growth and expansion in the business of a firm the working capital
needs of the firm will also increase.
7. Operating Efficiency
The operating efficiency of the management is also important determinant of the level
of working capital. A firm enjoying operating efficiency can eliminate wastage and
use its resources efficiently and thereby reduce its working capital needs considerably.
EXTERNAL FACTORS
1. Business Fluctuations
Business enterprises usually experiences fluctuations in demand for their products and
services because of changes in economic conditions. In view of this, working capital
requirements of these enterprises are affected. Thus, in the event of economic
prosperity, general demand of the goods and services tends to shoot up. To cope with
increased demand and consequently increased production, the firm will require
additional working capital.
2. Technological Developments
Technological developments in the area of production can have sharp effects on the
need for working capital. If a firm switches over to new manufacturing process and
installs new equipments with which it is able to cut period involved in converting raw
materials into finished goods, permanent working capital requirements of the firm will
decrease.
3. Transport and Communication Developments
Where the means of transport and communication in a country are not well developed,
industries may need additional funds to maintain big inventory of raw materials and
other accessories which would otherwise not be needed where the transport and
communications systems are highly developed.
4. Import Policy
Import policy of the government may also have its bearing on the levels of working
capital of the enterprises since they have to arrange funds for importing goods at
specified times.
5. Taxation Policy

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Working capital needs of business enterprises are affected sharply by taxation policy
of the government. In the event of regressive taxation policy of the government, as it
exists today in India, imposing heavy tax burdens on business enterprises leaves very
little profits for distribution and retention purposes.
III. SOURCES OF WORKING CAPITAL

Among the various sources available for financing working capital needs finance
manager has to select the best suitable source depending on working capital need of
company
The need of working capital is increased by raising prices of end products and
relative inputs. On the other hand the government and monetary authorities play their
own role to curd the malice in periods of inflation. The control measures often take
the firm of dear money policy and restriction credit. Financing of additional working
capital in such an amusement 0becomes a real problem to finance manager of a
concerned unit. Commercial banks play the most significant role in providing
working capital finance, particularly in Indians context. In view of mounting
inflation, the R.B.I has taken up certain social measures to check the money supply in
the economy. The balancing need has to be managed either by long-term borrowings
or by issuing equity or by earning sufficient profits and retaining the same of coping
with the additional working capital requirements. The first choice before a finance
manager, where banks do not provide a part of additional working capital, is to take
the long-term sources of fianc.
Long Term Financing

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Loans from financial institution the option is normally rules out, because financial
institutions do not provide finance for working capital requirements. Further this
facility is not available to all companies
This option is not practical.
Floating of Debentures
The profitability of a successful floating of debentures seems to be rather merging. In

Indian capital market, floating of debentures has still to gain popularly debentures
issues of companies in private sector not associated with certain reputed groups
generally failed to attract investors to invest their funds in companies. In this context
the mode of raising funds by issuing convertible debenture/bonds is also gaining.
Accepting Public Deposits
The issue of tapping deposits is directly to the image of the company seeking to invite
public deposits.
Issue of Shares
With a view of financing additional capital needs, issue of additional equity share
could be considered. Many Indian company have still to go ahead to command
respect of investors in the context low profit margin as well as lack o knowledge
about company make the success of a capita Issue very dim.
Raising Funds by Internal Financing
Raising funds from operational profit poses problems for many companies, because
price of their end products are controlled and do not permit companies to earn profit
sufficient requirements to finance additional working assets, still a largely feasible
solution lies in increase profitability through cost control and cost reduction measures
managing the cash operating cycle, rationalizing inventory stock and so on.
IV. METHODS FOR ESTIMATING WORKING CAPITAL REQUIRMENTS

Three widely used methods for determining working capital requirements of a firm
are
Percentage of sales method
Regression analysis method

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Operating cycle method
1. Percentage of Sales Method

In this method, level of working capital requirements is decided on the basis of past
experience. The past relationship between sales and working capital is taken as a base
for determining the size of working capital requirements for future. It is, however,
presumed that the relationship between sales and working capital that has existed in
the past has been stable. This may be explained with the help of the following
illustration.
Percentage of sales method is a simple and easily understood method and
practically used for ascertaining short-term changes in working capital in future.
However this method lacks reliability inasmuch as its basic assumption of linear
relationship between sales and working capital does not hold true in all the cases. As
such, this method cannot be recommended for universal application.
2. Regression Analysis Method

This is a statistical method of determining working capital requirements by
establishing the average relationship between sales and working capital and its
various components in the past years. In this regard the method of least squares is
employed and the relationship between sales and working capital is expressed by the
equation:
Y=a+bx
The values of a and b is obtained by the solution of simultaneous linear equations
given as under:
Where a=fixed component
b=variable component
x=sales
y=inventory
n=number of observation
3. Operating Cycle Approach
Operating cycle refers to the length of time necessary to complete the following cycle
of events.
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Conversion of cash into inventory.

Conversion of inventory into receivable
Conversion of receivable into cash
If the operating cycle is length than the working capital requirement will be more on
the other hands, if the operating cycle is shorter than the working capital requirement
will be less.
According to this approach, size of working capital requirements of a firm is
determined by multiplying the duration of the operating cycle by cost of operations.
The duration of the operating cycle may be found with the help of the following
formula:
O=R + W + F + A P
Where, O=Duration of operating cycle
R=Duration of raw materials
W=Duration of work-in-process
F=Duration of finished goods
A=Duration of accounts receivable
P=Duration of accounts payable
Duration of raw materials

It reflects the number of days for which raw materials remain in inventory before they
are issued for production. The following formula can be used to determine duration
of raw materials.
Average stock of raw materials
R= ---------------------------------------------------Per day consumption of raw materials
Duration of the work-in-process
It denotes the number of days required in the work-in-process stage. It may be
ascertained with the help of the following formula:
Average work-in-process inventory
W= -------------------------------------------------B.E.S GROUP OF INSTITUTIONS (GVIC COLLEGE) ANGALLU,
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Average production per day

Duration of finished goods
It refers to the number of days for which finished goods remain in inventory before
they are sold. This can be computed by the following formula
Average finished goods inventory
F= ---------------------------------------------Per day sale of goods
Duration of the accounts receivable
It represents the number of days required to collect the accounts receivable. This may
be calculated as under:
Average book debts
A= --------------------------------------------Average credit sales per day
Duration of accounts payable
It refers to the number of days for which the suppliers of raw materials offer credit.
This may be measured with the help of the following formula:
Average trade creditors
P= ----------------------------------------------Average credit purchases per day
V. OPERATING CYCLES

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Debtors
Cash
Sales
Raw materials
Finished goods
Work in
progress
RECEIVABLES MANAGEMENT
Finished goods sold on credit get converted (from the point of view of the
selling firm) into receivables (book debts) which realized generate cash. The average
balance in the receivable account would approximately be average daily credit sales
multiplied by average collection period.
OBJECTIVES OF RECEIVABLE MANAGEMENT
The main objectives of receivable management are:

To obtain the optimum value of sales.
To control the cost of credit and keep it at minimum.

To reduce the average collection period.
ASPECTS OF RECEIVABLE MANAGEMENT
Determining the credit policy.
Determining the credit terms.

Evaluating the credit applications.
Determining collection policies and methods.
Control and analysis of receivables.
DETERMINING CREDIT POLICY

MADANAPALLI
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DORA
PLASTICS PVT LTD
The first decision area of receivable management is determining credit policy.

In developing an optimum credit policy, the financial manager should compare the
benefits of credit extension with the cost of credit. The major considerations in costs
are liquidity and opportunity cost. The credit policy of a firm provides the frame
work to determine.
Whether or not extent to a customer
How much credit to extend.
INVENTORY MANAGEMENT
Inventory management involves the control of assets being produced for the
purpose of sale in the normal course of companys operations. Inventories include
raw material inventory, work-in-progress inventory and finished goods inventory.
The goal of effective inventory management is to minimize the total costs direct and
indirect those are associated with holding inventories. However the importance of
inventory depends on the extent or investment inventory.
CASH MANAGEMENT
Cash is the most important factor in financial management. It is also the most
important of all the current assets, for the operations of the business.
Need for and objective of cash management
Larger cash and bank balances indicating high liquidity position of a company
which will result in lower profitability as idle cash fetches
No return, while the same when invested in the assets of the company will result in
profits. The need for holding cash arises from a Varity of reason such as:
Transaction motive
Precautionary motive
Speculation motive
Lack of proper synchronization between cash inflows & cash outflows
1) Transaction motive

MADANAPALLI
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DORA
PLASTICS PVT LTD
A company is always entering in to transactions with other entities, which may

cause immediate cash inflows and out flows. So, firms always keep a certain amount
as cash to deal with routine transactions where immediate cash payment is required.
2) Precautionary motive
A company has to be prepared to meet such contingencies like a sudden fire
may break out, accidents, employees strike etc, to minimize its losses. For this
purpose companies generally maintain some amount in the form of cash.
3) Speculation motive
Firms also maintain cash balance in order to take advantage of opportunities
that do not take place in the course of routine business activities.

MADANAPALLI
`Page 30
DORA
PLASTICS PVT LTD
RESEARCH METHODOLOGY
NEED FOR STUDY
The company major problem is inventory mishandling, so in that time
Losses increases.
This is an indication of defective credit policy and stock collection
Period.
Finance is the life blood and nerve system of any business organization. Just as
Circulation of blood is necessary in the human body to maintain life finance is very
essential to the business organization for smooth running of the business.
Financial management involves Managerial activities concerned with the
acquisition of Fund for the business purpose. The Finance Function does with
procurement of money taking in to consideration of today as well as future need and
finance is required to purchase need and finance is required to purchase a machinery
and raw materials, to pay salaries and wages and also for day to day expenses.
Financial Management is an appendage to the Finance function. With the
Creation of complex industry structure, the finance function has grown to very great
heights. One cannot think of any business activity in isolation from its financial
implication.

MADANAPALLI
`Page 31
DORA
PLASTICS PVT LTD
SCOPE OF THE STUDY

The prime objective of the company is to obtain maximum profit thought the
business. The amount of profit largely depends up on the magnitude of sales.
However the sale does not convert into cash instantaneously. There is always a time
gap between the sales and their actual realization in cash is technical termed as
operating cycle. Additional capital required to have uninterrupted business
operations, and the amount will be locked up in the current assets. Regular
availability of advocate working capital is inevitable for sustained business
operations, if the proper fund is not provided for the purpose, the business operations
will be effected, and hence this part of finance managed well.

MADANAPALLI
`Page 32
DORA
PLASTICS PVT LTD
OBJECTIVES OF THE STUDY

To evaluate the performance of Dora plastics (Pvt) Ltd. by analyzing
The liquidity position of the company.
To study the changes and identify the problems in net working
Capital position of the organization from 2010-14.
To identify and analysis the relationship between credit sales and
Debtors and to analyzing the profitability position of the company.
To identify and analysis the relationship between credit sales and debtors and to
analyzing the profitability position of the company.
To ascertain the financial position of the company.
The need for working capital to run day- to-day business activity in transaction.

MADANAPALLI
`Page 33
DORA
PLASTICS PVT LTD
LIMITATIONS OF THE STUDY
Availability of time is a serious constant in the proposed survey, since project
will be completed within a period of 45days.

The members of financial department are very busy with the audit
Work, hence they are not be able to spend more for me

In the case of inter firm comparison two firms should have uniform
accounting practices.
Inflation makes the comparative study complicated and measuring.
The ratios are calculated from past five years financial statement and these
are not indicators of future.

The study is based on only on the past records.
The short span of the time provides also one of limitation.
Locke of Availability of accurate financial information and completed up so
of the company may limits so the Analysis of the study.

MADANAPALLI
`Page 34
DORA
PLASTICS PVT LTD
RESEARCH METHODOLOGY
Research design:
The main aim of this study is to know the working capital Management with
respect to Renigunta Dora plastics Pvt Ltd Research is a carful investigation or
enquiry through search for new facts in any branch of knowledge.
Research Methodology:
Research methodology is a way to systematically solve the research problem.
It may be understand as a science done identifiably. In it study the various steps that
are generally adopted by a research in studying his research problem behind them.

MADANAPALLI
`Page 35
DORA
PLASTICS PVT LTD
SOURCE OF DATA COLLECTION

1 Primary data
The data is collected from in two ways one is primary data another one is
secondary data. The primary data is not available from the company, but in the
secondary data is collected from various sources these are given below.
1.
Secondary Data
The secondary data collected from the financial reports, previous records,
published records and other statements provided by finance department of DORA
PLASTICS PVT LTD.
Sample design:
Availability of the Dora plastics Pvt ltd in the balance sheets 2007-08
MADANAPALLI
`Page 36
DORA
PLASTICS PVT LTD
Availability of the Dora plastics Pvt

ltd in the balance sheets

2008-09
2009-10
2010-11
2011-12
DATA ANALYSIS AND INTERPRETATION

SCHEDULE OF CHANGES IN WORKING CAPITAL 2009-2010
Particulars
As on
As On
31/3/09
31/3/10
Change OF Working Capital
Increase
Rs/-
Decrease Rs/-
a. Current Assets
Inventories
2,041,876
4,248,167
2,206,291

MADANAPALLI
`Page 37
DORA
PLASTICS PVT LTD
Sundry Debtors
1919143
2,868,464
9,49,321
Cash & Bank balance
3,31,011
1,129,883
7,98,872
Other current assets
4,198,396
3,475,187
A. Total Current Assets
8,490,426
11,721,701
Current Liabilities
4,166,255
5,921,877
Provisions
3,093,435
1,255,379
B. Total Current Liabilities
7,259,690
7,177,256
Net Working Capital(A-B)
1,230,736
4,544,445
Increase in Working Capital
3,313,709
7,23,209
b. Current Liabilities
4,544,445
1,755,622
1,838,056
3,313,709
4,544,445
5,792,540
5,792,540
INFERENCE:
From above the table current assets more than current liabilities so that working
capital is increase (i.e 3,313,709).
Particulars
As on
As On
Change OF Working
Capital
31/3/10
31/3/11
Increase Rs/-
Decreases
Rs/-
a. Current Assets
Inventories
4,248,167
6,439,331
2,191,164

MADANAPALLI
`Page 38
DORA
PLASTICS PVT LTD
Sundry Debtors
2,868,464
1,731,308
1,137,156
Cash & Bank balance
1,129,883
3,826,802
5,37,797
3,475,187
3,826,802
3,51,615
11,721,701
13,665,121
Current Liabilities
5,921877
5,337,950
5,83,927
Provisions
1,255,379
1,41,826
1,113.553
B. Total Current Liabilities
7,177,256
5,478,776
Net Working Capital(A-B)
4,544,445
8,185,345
increase in Working Capital
3,640,900
8,185,345
8,185,345
23,35693
3,640,900
4,778,056
4,778,056
INFERENCE:
From above the table current assets more than current liabilities so that working capital
is increase (i.e 3,640,900).

Particulars
As on
As On
31/3/11
31/3/12
Change OF Working
Capital
Increase
Rs/-
Decrease
Rs/-
a. Current Assets
MADANAPALLI
`Page 39
DORA
PLASTICS PVT LTD
Inventories
6,439,331
6,511,970
72,639
Sundry Debtors
1,731,308
3,487,689
1,756,381
Cash & Bank balance
3,826,802
5,18,089
3,826,802
5,898,110
13,665,121 16,415,858
1,149,591
2,071,308
Current Liabilities
5,337,950
9,553,947
Provisions
1,41,826
11,050
B. Total Current
Liabilities
5,478,776
9,564,997
NetWorking Capital(A-B) 8,185,345
6,850,861
Decrease in Working
Capital
1,334,484
1,334,484
8,185,345
5,365,588
8,185,345
4,215,997
1,30,776
5,365,588
INFERENCE:
From above the table current assets more than current liabilities so that
working capital is Decrease (i.e 1,334,484).
Particulars
As on
As On
31/3/12
31/3/13
Change OF Working
Capital
Increase
Rs/-
Decrease
Rs/-

MADANAPALLI
`Page 40
DORA
PLASTICS PVT LTD
a. Current Assets
Inventories
6,511,970
8,660,820
2,148,850
Sundry Debtors
3,487,689
8,242,878
4,755,189
Cash & Bank balance
5,18,089
1,831,888
1,313,799
5,898,110
3,574,204
2,323,906
16,415,858 22,309,790
Current Liabilities
9,553,947
12,390,306
2,836,359
Provisions
11,050
5,022,46
4,911,96
B. Total Current
Liabilities
9,564,997
12,892,552
Working Capital(A-B)
6,850,861
9,417,238
Increase in Working
Capital
2,566,377
9,417,238
2,566,377
9,417238
8,217,839
8,217,838
INFERENCE:
working capital is increase (I.e 2,566,377).

Particulars
As on
As On
31/3/13
31/3/14
Change OF Working
Capital
Increase
Decrease

MADANAPALLI
`Page 41
DORA
PLASTICS PVT LTD
Rs/-
Rs/-
a. Current Assets
Inventories
8,660,820
10,587,485
1,926,665
Cash & Bank balance
1,831,888
3,804,141
1,972,253
3,574,204
4,678,019
1,103,815
14,066,912
19,069,645
Current Liabilities
1,239,306
3,900,902
2,661,596
Provisions
5,022,46
16,196
4,860,50
B. Total Current
Liabilities
17,741,552
3,917,098
Working Capital(A-B)
12,325,360
3,917,098
Increase in Working
Capital
2,827,187
2,827,187
5,488,783
5,488,783
15,152,547
15,152,547
INFERENCE:
working capital is increase (i.e 2,827,187).
RATIO ANALYSIS
Meaning of Ratio:

MADANAPALLI
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DORA
PLASTICS PVT LTD
A Ratio is a mathematical relationship between two items expressed in a

quantitative from. A Ratio is a statistical yardstick that provides a measure of the
relationship between variable of figures.
Ratio can be defined as Relationship expressed in quantitative from between
figures which have cause and effect relationship or which are contacted with each
other in some manner other
Types of Ratios
Several ratios calculated from the accounting data can be grouped in to various
classes according to financial activity are function to be evaluated. As stated earlier
the parties interested in financial analysis are short-term and long- term creditors,
owners and management. Short-term creditors.
Main interest in the liquidity position are the short-term solvency of the firm
long-term creditors on the other hand are more interested in the long term solvency
and profitability of the firm.
We may classify them in to the following from important categories
I.
Liquidity Ratios
Turnover Ratios
Profitability Ratios
Liquidity or Financial Ratios

These ratios are calculated to judge the financial position of the concern from long
term as well as short term solvency point of view.
1. CURRENT RATIO
The current ratio establishes the relationship between current assets and
current liabilities. The objective of computing this ratio is to measure the ability of the
firm to meet its short term financial strength/solvency of a firm. If a firm having high
degree of liquidity funds is unnecessarily toed up in current assets. The satisfactory
current ratio is 2:1.In other words, the objective is to measure the safely margin
available for short term indicators. This ratio is expressed as under:
CURRENT RATIO =
CURRENT ASSETS
-------------------------------------CURRENT LIABILITIES

MADANAPALLI
`Page 43
DORA
PLASTICS PVT LTD
CURRENT RATIO
YEAR
CURRENT
ASSETS
CURRENT
LIABILITIES
CURRENT RATIO
2007-08
11721701
5921877
1.97
2008-09
13665121
5337950
2.55
2009-10
16415858
9553947
1.71
2010-11
22309790
12390306
1.80
2011-12
18456187
19363324
0.95
INTERPRETATION:
During 2007-12, the current ratio of the company was 1.97, 2.55, 1.71, 1.80
and 0.95. This indicates for every one rupee of current liability companies has more
than two rupees to pay for it. For all the years of study the current ratio is equal to the
standard ratio of 2:1except 2011-12.

MADANAPALLI
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DORA
PLASTICS PVT LTD
2. QUICK RATIO
In a short period a firm should be able to meet all its short term obligations i.e. current
liabilities and provisions. Current assets are those assets which can be converted into
cash in the short run or with in one year. Current assets should not only yield
suffictint fund to meetr current liabilities as they fall due.
QUICK RATIO
YEAR
CURRENT
ASSETSINVENTORIES
CURRENT
LIABILITIES
QUICK RATIO
2007-08
7473534
5921877
1.2
2008-09
7225790
5337950
1.3
2009-10
9903887
9553947
1.0
2010-11
13648970
12390306
1.1
2011-12
7868702
19363324
0.4
INTERPRETATION:

MADANAPALLI
`Page 45
DORA
PLASTICS PVT LTD
The standard norm for the quick ratio is 1:1. Quick ratio is decreased gradually
from 2007-08 to2009-10 and then it is increased slightly. However the ratio was
above the standard norm. so that the ratio was satisfactory.
3. NET WORKING CAPITAL RATIO (NWC):

NET WORKING CAPITAL RATIO= NET WORKING CAPITAL
NET ASSETS
YEAR
NET WORKING NET ASSETS

CAPITAL
N.W.C RATIO
2007-08
5799824
20113784
0.28
2008-09
8327171
22423358
0.27
2009-10
6861911
31586386
0.21
2010-11
9919484
38813151
0.25
2011-12
4440681
49618631
0.08
INTERPRETATION:
MADANAPALLI
`Page 46
DORA
PLASTICS PVT LTD
The net working capital is 0.28 in 2008 bin 2008 and 0.37 in 2009. Later it is
decreased in 2010 to 0.21 and then it is increased to 0.25 in 2011, and in 2012 it is
decreased 0.08. A condition of business working capital is not shortage. Therefore, it
can conclude that on an average the working capital ratio of DORA PLASTICS is
found satisfactory.
4. FIXED ASSETS TURNOVER RATIO (FAT):

SALES
FIXED ASSETS TURNOVER RATIO =
NET FIXED ASSETS
SALES= GROSS SALES
NET FIXED ASSETS= NET BLOCK
YEAR
SALES
NET
ASSETS
FIXED F.A.T RATIO
2007-08
33156905
8392083
3.95
2008-09
46503000
14238013
3.26
2009-10
56265237
15170528
3.70
2010-11
58860104
16503361
3.56
2011-12
53326842
22022990
2.42

MADANAPALLI
`Page 47
DORA
PLASTICS PVT LTD
INTERPRETATION:
Fixed assets turnover ratio is high in the year 2007-08 that is 3.95. And there is
slight difference in each year comparison. The ratios are 3.95 in 2008, 3.26 in 2009,
3.70 in 2010, 3.56 in 2011and 2.42 in 2012.
5. Working Capital Turnover Ratio
This ratio shows the number of times working capital is turned over in a stated
period, the higher is the ratio, the lower is the investment in working capital and the
greater are the profits. However, a very high turnover of working capital is a sign of
overtrading and may put the concern into financial difficulties. On the other hand, a
low working capital turnover ratio indicates that working capital is not efficiently
utilized. It is calculated as follows.
Sale
Working capital turnover ratio=
Net working capital
Net Working capital = Current Assets Current liabilities
YEARS
SALES
NET WORKING W.C.T RATIO

CAPITAL

MADANAPALLI
`Page 48
DORA
PLASTICS PVT LTD
2007-08
33156905
5799824
5.71
2008-09
46503000
8327171
5.58
2009-10
56265237
6861911
8.19
2010-11
58860104
9919484
5.93
2011-12
49618631
4440681
11.17
INTERPRETATION:
Working capital turnover ratio is high in the year 2012 that is 11.17 and it is
decreased to 5.58 in the year 2009and again increased to 8.19 in the year 2010, and
then it decreased to5.93 in 2011. The higher the working capital turnover ratio is more
favorable for the company.
6.NET PROFIT RATIO
This ratio establishes the relationship between net profit and sales. This ratio
indicates the portion remaining out of every rupee worth of sales after all operating
costs and expenses have been met. Higher the ratio, the better it is.
Net Profit Ratio =
Net Profit after Tax

-----------------------------Sales
YEAR
NET PROFIT
SALES
NET
PROFIT
RATIO (%)
2007-08
3913074
29754094
13.15

MADANAPALLI
`Page 49
DORA
PLASTICS PVT LTD
2008-09
4507361
41638067
10.82
2009-10
5879596
50069124
11.74
2010-11
6612023
51552215
12.82
2011-12
1221143
48305502
2.52
INTERPRETATION:
During the year 2008 the net profit margin is 13.15 and it is slightly
decreased to 10.82 in the year 2009. In the year 2010 it is increased to 11.74. In the
next year, it again increased to 12.82in the year 2011and it decreased drastically to
2.52 in 2012.
FINDINGS
The current Ratio standard is (2:1) in the year 2007-08,there was a
increase in the years 2007-2008,and current ratio below the
Average in the 2007-09 rapid increase in current ratio.
The quick ratio standard (1:1) in the year 2007-08,increase in the
years 2007-2008,and quick ratio below the average standard in the
2007-2009 rapid increase in quick ratio.
MADANAPALLI
`Page 50
DORA
PLASTICS PVT LTD
The net profit ratio increased in the year 2009-10,and another years
also decreased 2007-08,on the year rapid increase in the profit ratio
in the year.
The working capital management is satisfactory and working
capital turnover ratio shows the efficiency of the in utilization this
working capital.
Fixed assets turnover ratio of the firm indicates the better

utilization of fixed assets.
SUGGESTIONS
The concern may concentrate to improve its profitability because its actual gross
profit ratio and net profit ratio are less than 20%and 5%respectivaly. For this it is
MADANAPALLI
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DORA
PLASTICS PVT LTD
necessary to reduce the cost of production by implementing latest techniques to

reduce production long period.
The liquidity position of the concern is also satisfactory for the betterment it is
necessary to reduce this inventory conversion period. If it was reduced there is a
saving of nearly 20% of the cost of production.
It is better to reduce the long term loans which base high interest charges. If the
concern clears off there loans and so for fresh loans with current interest rates
(lower then the previous interest rates).
CONCLUSION

MADANAPALLI
`Page 52
DORA
PLASTICS PVT LTD
As per completion of may project work in Dora Plastics Pvt Ltd

finally I conclude the company liquidity ratios are below the standard, so
if the company barrow some amount and put it on investment. The
inventory turnover ratio fluctuating in the 5years. The net working capital
ratio decreased in the year 2010-11 (i.e 5.93) the company is not taking
any proper measures to control operating expenses.
Bibliography:
MADANAPALLI
`Page 53
DORA
PLASTICS PVT LTD
Name of the Book
Author
Publications
I.M. Pandey,
Vikas Publishing
House, New
Delhi.
M.Y. Khan & P.K. Jain,
Vikas Publishing
Principles of Management
Dr. S. N. Maheswari,
House, 9thedition,New Delhi
New Accounting
Sultan Chand &Sons,

Delhi.

MADANAPALLI
`Page 54
DORA
PLASTICS PVT LTD
PROFIT & LOSS ACCOUNT FOR YEAR ENDED 2007-08

S.NO
PARTICULARS
SCHEDULES
2008
1.
Sales
Other income
Increase or decrease in stock
12
33182207 21724796
2512124 163132
12165701 (71345)
2.
Expenditure:
Raw materials consumed
Manufacturing expenses
Administrative expenses
Payments &benefits to employees
Rates & taxes
Financial charges
Preliminary expenses write
Depreciation
Profit
Less: provisions for income tax
Provision for deffered tax:
a)Tax effect of timing differences
originating during the year
b)Tax effect of timing differences
reversing during the year
profit from previous year

less : opening deffered tax liability
Profit carried to balance sheet
13
14
15
16
17
18
19
2007
34649991 21816583
19068142
6483298
319227
1110295
4210941
991251
6100
761376
32950630
9973244
4883454
198254
963386
211573
857614
6100
667222
19960847
1699361
172000
1855736
144035
Nil
285490
Nil
Nil
160467
Nil
1081404
1711701
2013499
946431
301798
Nil
2148472
2013499

MADANAPALLI
`Page 55
DORA
PLASTICS PVT LTD

S.NO
1.
PARTICULARS
Income
Sales (Gross)
Less: excise duty
Sales
Other income
Increase or decrease
stock
SCHEDULES
2009
2008
33149158 33182207
4020574 4015392
29128584
13
in 14
420225
(397934)
251214
1223820
29150875 30641849
2.
Expenditure:
Payments
&benefits
to
employees
Rates & taxes
Financial charges
Preliminary expenses write
Depreciation
Profit
Less: provisions for income
tax
a)Tax effect of timing
differences
b)Tax effect of timing
differences
15
16
17
18
19
16793959
7577527
406729
1566551
22100
682264
6100
865184
19004245
6554445
499641
1110295
15135
991251
6110
761376
27920415 28942488
1230460 1699261
205642
172000
174690
285490
(2188)
160467
852316
2148472
6114
1081404
2013499
946431

MADANAPALLI
`Page 56
DORA
PLASTICS PVT LTD
less short provision for tax

and profit
Profit carried to balance
sheet
3390054
2148472

S.NO
1.
PARTICULARS
Income
Sales (Gross)
Less: excise duty
Sales tax
SCHEDULES
2010
2009
28717072 33149158
3409251 4020574
25307821 29128584
Sales
Other income
13
Increase or decrease in 14
stock
215433
(881091)
420225
(29150875)
24642163 29150875
2.
Expenditure:
Payments &benefits to
employees
Rates & taxes
Financial charges
Provisions
for
doubtful
debts
Depreciation
15
16
17
18
19
14203590
6088445
369564
1831698
44008
489302
Nil
963430
16793959
7750418
233838
1566551
22100
684464
6100
865185
23990037 27920415
Profit
tax
differences
652126
276278
1230460
205642
Nil
174690
(49818)
(2188)

MADANAPALLI
`Page 57
DORA
PLASTICS PVT LTD

differences

and profit
sheet
425665
2994674
30285
852316
2148472
6114
3733479
3390054

MADANAPALLI
`Page 58
DORA
PLASTICS PVT LTD

S.NO
1.
PARTICULARS
Income
Sales
Less: excise duty
Sales tax
SCHEDULES
sales
Other income
stock
13
14
60017
215433
473188
(881092)
26285379 24642162
15
16
17
18
19
14951429
6809175
254944
1925447
43024
594187
89051
1067978
25735235
14203590
6088445
369564
1831698
44008
489302
--963430
23990037
550144
175000
652125
276278
2104
Nil
(49818)
in
2011
2010
29455716
2570820
1132722
25752174
28717072
-----___Nil___
25307821
2.
Expenditure:
Payments
&benefits
to
employees
Rates & taxes
Financial charges
Provisions for doubtful debts
Depreciation
Profit
tax
differences
differences
and profit
sheet
358040
425665
30285
3390054
14615
3733479
3733479

MADANAPALLI
`Page 59
DORA
PLASTICS PVT LTD

S.NO
1.
PARTICULARS
Income
Sales(Gross)
Less: excise duty
Sales tax
Sales (Net)
Other income
stock
SCHEDULES
13
in 14
2012
2011
31546070
NILL
NILL
31546070
2944576
2570820
1132722
27752174
44767
60017
(742958) (473188)
30847879 26285379
2.
Expenditure:
Payments
&benefits
to
employees
Rates & taxes
Financial charges
Provisions for doubtful debts
Depreciation
15
16
17
18
19
18586452
779927
264727
1933983
50185
981616
1134334
14951429
6809175
254944
1925447
43024
594187
89051
1067978
30731284 25735235
Profit before tax for the year

tax
Provision for fringe
benefits tax
116596
158100
(178577)
5501
44
175000
15000
122443
358041
3733480
3390054
14615
3855922
3733480
Profit after tax

less: short provision for tax
and profit
sheet

MADANAPALLI
`Page 60
DORA
PLASTICS PVT LTD
BALANCE SHEET AS ON 2007-08

NUMBE
RS
1
PARTICULARS
SCHEDU
LES
Sources of funds
Share capital
Share application money
Reserves & surplus
Profit & loss a/c
Loans funds:
Secured loans
Deferred tax liability
Total
2
3
4
Application of funds
1.fixed assets(gross Block)
Less :depreciation
2. current assets loans &

advances
a) Inventories
b) Sundry debtors
c) Cash & Bank
d) Other assets
6
7
8
9
2008
2007
36,7800
285000
3617800
285000
2148472
2013499
6187874
1392388
13631534
5887740
nill
11804039
12115285
2348377
10124031
1587000
9766908
8537031
3687397
1725586
106219
3049181
8568383
1245692
1540993
313174
2367210
5467069
Less: Current Liabilities&

provisions
a)Liabilities
b)provisions
10
11
4040301
834934
3693148
1648288
563973
3254808
Miscellaneous expenses
12
171478
12200
13,631534
11804039

MADANAPALLI
`Page 61
DORA
PLASTICS PVT LTD

NUMBE
RS
PARTICULARS
Sources of funds
Share capital
Reserves & surplus
Loans funds:
Secured loans
Total
Less: depreciation
2. current assets loans &
advances
a) Inventories
b) Sundry
debtors
c) Cash & Bank
d) Other assets
SCHEDU
LES
1
2009
2008
3617800
285000
285000
2994674
3617800
285000
285000
2148472
3
4
4492013
1564890
12954377
6187874
1692388
13631534
13255110
3213560
10041550
12115285
2348377
9766908
6
7
8
9
3155304
505180
197880
2404934
3687397
1725586
106219
4049181
6263299
Less: Current Liabilities&
provisions
a)Liabilities
b) provisions
8568383
10
11
2462499
953299
2847500
4040301
834934
3693158

MADANAPALLI
`Page 62
DORA
PLASTICS PVT LTD
12
65327
171478
12954377
13631534

NUMBERS
PARTICULARS
Sources of funds
SCHEDULES
2010
2009

MADANAPALLI
`Page 63
DORA
PLASTICS PVT LTD
Share capital
Reserves &surplus:
Loans funds:
Secured loans
Total
less depreciation
2.current assets loans
advances
a) Inventories
b) Sundry Debtors
c) Cash & Bank
d) Other assets
2
3
4
&
6
7
8
9
Less:CurrentLiabilities&
provisions
a)Liabilities
b)provisions
10
11
12
TOTAL
3902800
__
3390054
3902800
285000
2994674
3670451 4492013
1515072 1564890
1247837 12954377
7
13255110
1341279 3213560
0 10041550
4168011
9244779
155304
505180
2045587
197880
1311451 2404934
100216 6263299
1972198
5449452
2462499
953299
1546404 2847500
669669
3233599
65327
__
1247837
7
12934377

MADANAPALLI
`Page 64
DORA
PLASTICS PVT LTD
NUMBERS
PARTICULARS
Sources of funds
SCHEDULES
2011
2010
Share capital
Reserves &surplus:
Loans funds:
Secured loans
Total
3902800
2
3
4
less depreciation
2.current assets loans
advances
e) Inventories
f) Sundry Debtors
g) Cash & Bank
h) Other assets
3733474 3390054
1578137 3670451
1517176 1515072
1073159 12478377
2
13412790
1506503
4168011
1 9244779
5231333
983369
8 2045587
1331451
100215
2200699 1972198
2075870 5449451
191891
2126201
6594667 1546404
669449
3233598
3683918
__
2012855
897894
__
Less:CurrentLiabilities&
provisions
a)Liabilities
b)provisions
3
TOTAL
&
6
7
8
9
10
11
12
3902800
1073159 12478377
2

MADANAPALLI
`Page 65
DORA
PLASTICS PVT LTD

NUMBERS
1
PARTICULARS
Sources of funds
Share capital
Reserves &surplus:
Loans funds:
Secured loans
Total
SCHEDULES 2012
less depreciation
2.current
advances
a)
b)
c)
d)
assets
loans
Less:CurrentLiabilities
provisions
a)Liabilities
b)provisions
3902800
3902800
2
3
4
3855922
1594407
1338599
3733474
1578137
1517176
1069172
9
10731592
1582666
1
6365668
15065031
5231333
9460993
9833698
2041876
1919143
331011
4198396
2200699
2075870
191891
2126201
8490426
6594667
41662
55
3093435
1230736
3683918
2012855
897894
5
&
6
7
8
9
Inventories
Sundry Debtors
Cash & Bank
Other assets
2011
&
10
11
12

MADANAPALLI
`Page 66
DORA
PLASTICS PVT LTD
TOTAL
1069172
9
10731592

MADANAPALLI
`Page 67

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Working Capital Management

PLASTICS PVT LTD

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B.E.S GROUP OF INSTITUTIONS (GVIC COLLEGE) ANGALLU,

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available for disposal(excluding recycling)will increase at least 10 fold up to the year

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FINANCIAL STATEMENT ANALYSIS

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Provide employment to people and increase sales with cheaper rate.

MISSION VALUES & BENEFITS:

STATE BANK OF INDIA

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Working Capital Management

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Providing world class quality, services and offering most

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Continual improvement on product, process and quality

Optimum use of resource

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Working Capital Management

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2. According to smith working capital Management is concerned with the

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Working Capital Management