WORKING CAPITAL MANAGEMENT OF SOUTH EASTERN COALFIELD LIMITED Presented By:Aman Jaiswal On 19th November 2011

Introduction of coal India ltd. History Milestone Vision and Mission

SECL is the largest coal producing company in the country. It is one of the eight subsidiaries of CIL (A Govt. undertaking under Ministry of Coal). SECL Indias premier coal company is operating its coal mines in the state of Madhya Pradesh and Chhattisgarh state which is also geographically located at the heart of the country. It is having 89 coal mines situated in the state of Madhya Pradesh and Chhattisgarh.

Mission of coal India ltd.

To produce and market the planned quantity of coal and products efficiently and economically with due regard to safety conservation and quality.

Vision of coal India ltd.

To be the leading energy supplier in the country through best practice from mine to market.

Vision of south eastern coalfield ltd.

To be the leading energy supplier in the country through best practice from mine to market.

Working Capital Management Working capital management is concerned with the problems arise in attempting to manage the current assets, the current liabilities and the inter relationship that exist between them. Working capital = current assets current liability There are two concepts of working capital management:

Gross working capital Net working capital

Ratio Analysis: Ratio analysis is the one of the powerful tools of the financial analysis.

Accounting ratios can be expressed in various ways such as:

A pure ratio, say ratio of current assets to current liabilities is 2:1. A ratio, say current assets are two times of current liabilities. A percentage, say current assets are 200% of current liabilities.

1. Current Ratio

2. Working Capital Turnover Ratio

.

3. Net Profit Ratio

Interpretation:

The increase in the ratio shows the better performance of the company in the year 09-10 as compared to 08-09.

The study of working capital management of south eastern coalfield ltd. has revealed that the current ratio was as per the standard industrial practice but the liquidity position of the company showed an increasing trend.

Working capital of the company was increasing and showing positive working capital per year. Positive working capital indicates of the company. Companys current assets were always more than requirement.

Current assets are more than current liabilities.

On study and analysis of working capital. I would like to recommend.

Company should raise funds through short term sources Company has to take control on cash balance. Company should reduce the inventory holding period with use of zero inventory concepts.

Over all company has good liquidity position and sufficient funds to repayment of liabilities. Company has accepted conservative financial policy and thus maintaining more current assets balance. Company is increasing sales volume per year.