Working Capital Management

A
SUMMER INTERNSHIP PROJECT
ON
WORKING CAPITAL MANAGEMENT
AT
JIVAN COMMERCIAL CO-OPERATIVE BANK LTD.
PREPARED BY:-
BHARADVA JAYDEEP B.
(ENROLLMENT NO: - 167590592008)
MBA BATCH: - 2016 18
UNDER THE GUIDANCE OF:-
ASST.PROF.AYUBKHAN YUSUFJAY
ACADEMIC YEAR:-
2016-17
SUBMITTED TO:-
SHREE H.N.SHUKLA COLLEGE OF MANAGEMENT STUDIES
AFFILIATED TO:-
GUJRAT TECHNOLOGICAL UNIVERSITY

CERTIFICATE OF INSTITUTE
2
COMPANY CERTIFICATE
3
DECLARATION
I undersigned BHARADVA JAYDEEP student of department of management 3rd

semester hereby declare that the report for Summer training project entitled
WORKING CAPITAL MANAGEMENT from 13th June to 27th July,2017 is my
own work and has been carried out under the guidance of Prof. Ayubkhan Yusufjay of
DEPARTMENT OF MANAGEMENT, H.N.SHUKLA COLLEGE RAJKOT.
This has not been submitted to any other university for securing in any examination.
Date: Signature
Place:
4
AKNOWLEDGEMENT
First of all I would like to thank BOARD OF DIRECTORS.
I am thankful to general manager D.S.VYAS to give me permission for the summer

training.
I want to express my sincere obligation to MR. D.N.KIKANI (Manager), MR. DAVE

(Accountant).
RAJESH BHAI PARASANA (Cashier), and all the staff members of JCC where I
worked so long in a homely pleasant atmosphere.
Especially, I would like to thank Asst. Prof. Ayubkhan Yusufjay my mentor who guided
me in my work.
5
PREFACE
I am pleasure to submit my project report to Gujrat Technological University as an

important part of paper of entrepreneurship and management of smallscale business as
well as the constructive of my career.
To be successful manager in the field of management not only theoretical educational but
also practical knowledge is of eqal important. The main aim of preparation of project
report is obtain practical knowledge and experience to face while starting a new small
scale industry. In the preparation of this project report financial capabilities, marketing
activities, sources of finance etc.,are given important. In connection with this I have
prepared a project report on JIVAN COMMERCIAL CO-OPERATIVE BANK
RAJKOT.
6
TABLE OF CONTENT
SR. NO. PARTICULAR PAGE
NO.
1. EXCUTIVE SUMMARY
2. BANKING INDUSTRY OVERVIEW

BASIC OVERVIEW
MAJOR PLAYERS
3. OVERVIEW OF JCC BANK LTD.

HISTORY
MISSION,VISION
ORGANIZATION CHART
EXECUTIVE COMMITTEE
SERVICE
OVERVIEW OF DIFFERENT DEPARTMENT
4. REVIEW OF LITERATURE
5. WORKING CAPITAL MANAGEMENT
6. RESEARCH METHODOLOGY
RATIONAL FOR THE STUDY
STATEMENT OF PROBLEM
RESEARCH OBJECTIVES
SCOPE OF THE STUDY
RESEARCH DESIGN
DATA SOURCES
TOOLS OF DATA ANALYSIS
LIMITATIONS OF THE PROJECT
7. DATA ANALYSIS AND INTERPRETATION

TABULAR REPRESENTATION
WORKING CAPITAL RATIOS
7
8. SWOT ANALYSIS
9. FINDING
10. SUGGESTION
11. CONCLUSION
12. BIBLIOGRAPHY
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LIST OF TABLE
TABLE NO. PARTICULAR PAGE NO.
1 Rent Of Locker 24
26 P & L A/C OF 2012-13 to 2016-17 41 45
7 11 Balance Sheet Of 2012-13 To 2016-17 46 50
12 Working Capital Statement 51
13 Working Capital 53
14 Current Ratio 54
15 Quick Ratio 56
16 Absolute Liquid Ratio 58
17 Total Assets Turnover Ratio 60
18 Debtors Turnover Ratio 62
19 Average Collection Period Ratio 64
20 Creditors Turnover Ratio 66
21 Working Capital Turnover Ratio 68
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LIST OF CHART
Chart No. Particular Page No.
13.1 Working Capital Chart 53
14.1 Current Ratio Chart 54
15.1 Quick Ratio Chart 57
16.1 Absolute Liquid Ratio Chart 59
17.1 Total Assets Turnover Ratio Chart 61
18.1 Debtors Turnover Ratio Chart 63
19.1 Average Collection Period Ratio 64
20.1 Creditors Turnover Ratio 66
21.1 Working Capital Turnover Ratio Chart 68
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1. EXECUTIVE SUMMARY
The role of banking industry is ever expanding and is becoming inseparable part of the
growth of the country. There are many financial products coming every day in to the pool
of banking sector. Some are old and some are new from Indian context. Thats why in the
fast moving culture people are using and simply accepting new technology. All around the
world retail banking has been an established market; however its rise in emerging
economies likes India has been of recent origin.
In first part of this project I highlight brief introduction of industry and general
introduction of JCCB. This includes history of the bank, bank profile, strength and etc. In
second part of the project, I highlight detailed knowledge about the different products and
services of the JCCB regarding saving A/c, current A/c etc. plus I highlight different
products of the JCCB in addition to this I presented different value added services
provided by the bank. In last, most important part research analysis made by me on the
topic WORKING CAPITAL MANAGEMENT with help of analytical data.
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2. BANKING INDUSTRY OVERVIEW
BASIC OVERVIEW OF BANKING INDUSTRY
Indian banking is the lifeline of the nation and its people. In the Indian Banking System,
Cooperative banks exist side by side with commercial banks and play a supplementary
role in providing need-based finance, especially for agricultural and agriculture-based
operations including farming, cattle, milk, hatchery, personal finance etc. along with some
small Industries and self-employment driven activities.
Generally, co-operative banks are governed by the respective co-operative acts of state
governments. But, since banks began to be regulated by the RBI after 1st March 1966,
these banks are also regulated by the RBI after amendment to the Banking Regulation Act
1949. The Reserve Bank is responsible for licensing of banks and branches, and it also
regulates credit limits to state co-operative banks on behalf of primary co-operative banks
for financing SSI units.
As the banking institutions expand and become increasingly complex under the impact of
deregulation, innovation and technological up gradation, it is crucial to maintain balance
between efficiency and stability. During the last 30 years since nationalization tremendous
changes have taken place in the financial markets as well as in the banking industry due to
financial sector reforms. The banks have shed their traditional functions and have been
innovating, improving and coming out with new types of services to cater emerging needs
of their 5 customers. Banks have been given greater freedom to frame their own policies.
Rapid advancement of technology has contributed to significant reduction in transaction
costs, facilitated greater diversification of portfolio and improvements in credit delivery of
banks. Prudential norms, in line with international standards, have been put in place for
promoting and enhancing the efficiency of banks. The process of institution building has
been strengthened with several measures in the areas of debt recovery, asset reconstruction
and
Securitization, consolidation, convergence, mass banking etc.
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INDUSTRY SCENARIO OF INDIAN BANKING INDUSTRY
The Indian Banking industry, which is governed by the Banking Regulation Act of India,
1949 can be broadly classified into two major categories, nonscheduled banks and
scheduled banks. Scheduled banks comprise commercial banks and the co-operative
banks. In terms of ownership, commercial banks can be further grouped into nationalized
banks, the State Bank of India and its group banks, regional rural banks and private sector
banks (the old/ new domestic and foreign). These banks have over 67,000 branches spread
across the country.
The Public Sector Banks(PSBs), which are the base of the Banking sector in India account
for more than 78 per cent of the total banking industry assets. Unfortunately they are
burdened with excessive Non Performing assets (NPAs), massive manpower and lack of
modern technology. On the other hand the Private Sector Banks are making tremendous
progress. They are leaders in Internet banking, mobile banking, phone banking, ATMs. As
far as foreign banks are concerned they are likely to succeed in the Indian Banking
Industry.
According to a report by ICRA limited, a rating agency, the public sector bank holds over
75% of total assets of banking industry, with the private and foreign bank holding 18.5%
and 6.5% respectively.
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CURRENT SCENARIO
The industry is currently in a transition phase. On the one hand, the PSBs, which are the
mainstay of the Indian Banking system are in the process of shedding their flab in terms of
excessive manpower, excessive non Performing Assets (Naps) and excessive
governmental equity, while on the other hand the private sector banks are consolidating
themselves through mergers and acquisitions.
Private sector Banks have pioneered internet banking, phone banking, anywhere banking,
mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various
other services and integrated them into the mainstream banking arena, while the PSBs are
still grappling with disgruntled employees in the aftermath of successful VRS schemes.
Also, following Indias commitment to the W To agreement in respect of the services
sector, foreign banks, including both new and the existing ones, have been permitted to
open up to 12 branches a year with effect from 1998-99 as against the earlier stipulation of
8 branches.
Talks of government diluting their equity from 51 percent to 33 percent in November 2000
has also opened up a new opportunity for the takeover of even the PSBs.
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MAJOR PLAYERS
1. Raj Co-Operative Bank

2. Citizens Co-Operative Bank Ltd.
3. Vijay Commercial Co-Operative Bank Ltd.
4. Shree Dharti Co-Operative Bank Ltd.
5. Rajkot Peoples Co-Operative Bank Ltd.
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3. OVERVIEW OF JCCB LTD.
HISTORY
Jivan commercial co-operative bank is leading co-operative bank in Rajkot. Bank was
established on 7th august 1972 with share capital of Rs. 78,200 and membership of 11,017
persons under the leadership of late Harsukhbhai Raval.
The data up to the current year shows that the bank has got Deposits of Rs. 1,37,80,53,000
and has given away Loans Rs. 8,59,50,00,000. Bank is successfully working for last 37
year. During past year bank has played vital and leading role for the development of
industry, business and economy of Rajkot city.
Bank has developed in manifold with time. Membership of bank is now 24,049, which
provide an of how a mass movement can be turn end in to the instrument for social
upliftment. Today bank has more than 59,710 Deposit accounts with a deposit base of Rs.
105 crore of advances. Bank has Rs. 22 crore reserve fund.
Now bank share capital is Rs. 4, 37, 82,500. Bank has 2,500 safe Deposit Walt.
Being in service sector, with a vision of current and future trends, bank started automation
and modernization way back in 2005 all the branches was computerized.
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JCCB PROFILE
Name of bank :- JIVAN COMMERCIAL CO-OPERATIVE BANK

LTD.
Year of establishment :- 7th August,1972
Registered office :- Jivan commercial co-operative bank ltd.
Vittalay, Dhabar road , Rajkot-360005
Phone no. :- (1) 028-12240876 ,

(2) 028-12240877
Fax no. :- 02812233168
E-mail :- Jivanbank@yahoo.in
Bank category :- Co-operative Bank
Register no. :- 6106
Authorized capital :- 4,00,00,000
Initial share capital :- 78,200
Initial member :- 1017
Current member :- 24,049
Chairman :- Bhagwanjibhai parasana
General manager :- D.s.vyas
Managing director :- Narendrashing jadeja
Auditor :- Gaurangbhai sanghvi
Working day :- Monday to Friday
Saturday half day
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Working time :- Monday to Friday :- 10:00 Am to 05:00 P.m
Saturday :- 10:00 Am to 01:00 P.m
Week off :- Sunday & Public holiday
Branches :- Head office Vittalay Dhabar road,
Bhaktinagar branch,
Ranchodnagar branch,
Raiya road branch,
Sorathiyavadi branch,
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MISSION
WE ALWAYS WTH YOU
The above slogan has been accepted due to the well performed of the bank. Bank has
always tries to give support to all members. The regular payment of dividend over 42 year
on an average of 12% p.a. is a good sign of the implication of the slogan. More over bank
provides loan facilities to member for short term, medium and long term financial
requirements at reasonable rates. The bank also provides ATM facility, Easy cleaning of
cheques.
VISIONS
MAXIMUM PROFIT AT MAXIMUM SERVICES
Jivan commercial co-operative bank limiteds philosophy is based on four core value such
as operational excellence, customer focus, services leadership and welfares of people. All
these helps to provide its target market members a full range of financial product and
banking service.
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ORGANIZATION CHART
Chairman
Vice Chairman
Managing Director
General Manager
Main Branch Other Branch
Manager Manager
Deputy Manager Assi. Manager
Assistant manager Clark
Clark Peon
Peon
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EXECUTIVE COMMITTEE OF JCC BANK
Sr. no. Particular Name

1 Chair Man Bhagwanjibhai parasana
2 Vice Chairman Kashyapbhai Raval
3 M.D Narendrasinh Jadeja
4 Director Rudradattbhai raval
5 Director Vasantbhai kamdar
6 Director Harkishanbhai mazni
7 Director Natvarlal khakhar
8 Director p.t.mankadia
9 Director Babubhai dabhi
10 Director Jaydevsinh jadeja
11 Director Vajubha zala
12 Director Devanbhai maheta
13 Director Rameshbhai patel
14 Director Sureshbhai pathak
15 Director Hasmukhbhai buddhdev
16 Director Nitinbhai chauhan
17 General manager Dharmendrabhai vyas
18 Loan manager Dhirenbhai vyas
19 Auditors Gaurangbhai sanghvi
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SERVICE
JCCB are providing many types of services there are as a under:
1. DEPOSITS
One of the important functions of bank is the concept of deposits from the public for the
purpose of lending. These transactions are recorded as a liability for bank, and represent
the amount charges fees for services, while other many pay the customer interest on the
funds deposits.
(1.) Saving Deposit

(2.) Recurring Deposit
(3.) Fixed Deposit
(4.) Current Deposit
(1.) SAVING DEPOSIT
These are simplest of deposits. You deposit money into your account and you can
withdraw it anytime. There would be a small limitation on the number of times you can
withdraw you can withdraw money from your account. The interest given on this type of
A/c by JCCB is 4% in current year.
(2.) RECURRING DEPOSIT
These are similar to fixed deposit with a difference being, you deposit a small amount of
money every month this account for a specified duration of time and the bank would
compound the interest every month and pay you in lump at the end of the tenure.
(3.) FIXED DEPOSIT
The same as term deposit money may be place with a bank, merchant bank, building
society or credit union for fixed term at a fixed rate of interest which remains unchanged
during the period of the deposit. Deposit may have to accept an interest penalty if they
break the deposit, i.e. ask to take the money out before the agree period has expired.
Deposit whish are repayable after six month or more are called fixed deposit interest there
on is calculate on the basis of 365 days in a year of actual month.
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Rate Of Fixed Deposit :-
30 days to 45 days - 4.75%
46 days to 90 days - 5.50%
91 days to 179days - 5.75%
180 days to 365 days - 6.25%
Above 1 year up to 2 year - 7.00%
Above 2 year up to 5 year - 8.00%
Above 5 year - 8.70%
(4.) CURRENT DEPOSIT
These are similar to savings accounts with two small differences. One is, the money in a
current account does not earn interest and two is, you can withdraw any number of times.
This account is for business people who would have high number of transactions in one
single day.
2. LOAN AND ADVANCE
Legally, a loan is contract between a borrower and a lender enforceable under the uniform
commercial code in the most states. The terms and conditions for repayment of loan,
including the finance charge or interest rate, are specified in loan agreement.
A loan may be payable on demand, in equal monthly installment, or they may be good
until further notice or due at maturity.
Loan provided by JCCB
Housing Loan
Vehicle Loan
Industrial Loan
Machinery Loan
Loan against F.D
Loan against N.S.C and L.I.C
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3. OTHER SERVICE
JCCB provides services other than the loan & deposits are as follow:
(1.) Locker system

(2.) Bank Over Draft (B.O.D.)
(3.) Demand draft
(1.) LOCKER SYSTEM
Locker facility is available at ground floor of the bank in dhebar road branch. There are
2,833 Locker in the main branch.
The locker holder has a key and password for use of the locker given by the bank. One
duplicate key is held by the bank. The rent is charged on such lockers are as under:
Table no. - 1
RANT OF LOCKER
LOCKER SIZE RENT (RS.)

SMALL 250
MEDIUM 500
LARGE 1,000
(2.) BANK OVER DRAFT
An overdraft occurs when withdrawn from a bank account exceed the available balance. In
this situation a person is said to be overdraft.
(3.) DEMAND DRAFT
Section 85-A of the negotiable instrument act define a demand draft as An order to pay
money, drawn by one office of a bank upon another office of the same bank for a sum
of money payable to order on demand. A JCCB provides demand draft service the city
where any of the bank branch like, state bank, Dena bank, and central bank. A JCCB
charged the 15 paisa/100 RS. For the draft.
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OVERVIEW OF DIFFERENT DEPARTMENT
1. HUMAN RESOURCE DEPARTMENT
Employees hold a key place of business. Business enterprise cannot exist and functions do
without employment. The success of enterprise depends to a large extent on the quality of
its human resource.
Human resource is very important to run any types of business. Human resource
management deal with human resource and if they are satisfy they will certainly perform
their task enthusiastically and achieving the goal of business.
RECRUITMENT
Any organization may depend upon two source of recruitment
(1) Internal sources

(2) External sources
JCCB uses both internal and external sources of recruitment. When any employee having
qualification, ability and experience work in the unit at lower level and if the place is
vacant, the place is filled by the promotion.
SELECTION
Selection is the next after recruiting the person objective of selection is the determine
whether an applicant meets qualification for a specific job and to choose the applicant who
is most likely to perform well in that job.
JCCB gives first chance to the internal sources by the reference of the workers and staff
members. They give advertising in magazines and receive applications. From that
application interview is taken, and then the person is selected in interview. Finally salary
is decided as per the qualification and ability for the job.
TRAINING AND DEVELOPMENT
JCCB gives proper training to the employees. Normally the bank takes one or two month
to train the employees. The supervisor of the company gives both practical and theoretical
knowledge. So that the employees can work efficiently.
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PROMOTION
In JCCB promotion is given as per the efficiency, ability, capacity and merits of the
employees and also experience and seniority of the employee.
TRANSFER
In JCCB employees are transferred from one department to another and from one branch
to another branch and from one position to another position.
2. FINANCE DEPARTMENT
INTRODUCTION
It is universally accepted thing that all economic activity is based on the purpose of
earning. So by considering this we can say money or finance is in centre of the world.
The finance in a modern business world is the life blood of a business. It is impossible to
imagine business without finance. So, it is said that business man takes money to make
money.
MEANING
The field of finance refers to the concept of time, money, risk and how they are
interrelated managerial or corporate finance is the task of providing the funds for a
corporations activities.
FINANCIAL PLANNING
The purpose of financial planning is to make sure that adequate funds are raised at
minimum cost and they are used widely.
The financial planning includes the following..
1. Determination of financial objectives.

2. Formation of financial policy.
3. Development of financial procedure.
In JCC bank the financial planning has been done through proper management in various
area like Liquidity planning, profit planning, cash management etc.
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FUNCTION OF FINANCE DEPARTMENT
Finance department is mainly concerned with the inflow and outflow of funds. It gives
various accounting effects of the funds like debit, credit, advances etc.
Following function of finance department.
Deposit:-
The money deposited by the customers of the banks into their respective accounts is
known as deposits.
Withdrawal:-
Money taken by the customer from their respective accounts is known as withdrawal.
Money can be withdrawal by using cheques, DD, ATM card etc.
Recovery:-
Recovery management consist of the functions and activities the bank carries out acquire
back what the bank has advanced with principle amount as well as interest on the same.
3. MARKETING DEPARTMENT
At JCCB bank thought there is no specific marketing department for marketing of

different services but providing vest service to their customers and getting good customers
satisfaction, and doing such effort of marketing like promotion activities they are in
directly getting benefits of the marketing. Today they also planning for such continuous
marketing efforts. And within the few years they will have aggressive marketing
department.
PROMOTION ACTIVITIES
As far as it concerned with promotion activities than JCCB is not doing any personal
selling but bank is believe in very strong goodwill and also best customer satisfaction they
are using advertise they are giving their advertisement in the news paper like Sandesh
Gujarat Samachar etc.
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4. REVIEW OF LITRATURE
The purpose of chapter is to present a view of literature relating to the working capital
management. Although working capital is an important ingredient in the smooth working
of business entities, it has not attracted much attention of scholars. Whatever studies have
conducted, those have exercised profound influence on the understanding of working
capital management good number of these studies which pioneered work in this area have
been conducted abroad, following which Indian scholars have also conducted research
studies exploring various aspects of working capital.
K.V.Kamath (Chairman & CEO, ICICI Bank )
The biggest opportunity for the Indian banking system today is the Indian Consumer.
Demographic shift in term of income levels and cultural shift in term of lifestyle
aspirations are changing the profit of the foreword.
The Indian banking sector is at an exciting point in its evolution. The opportunity are
immense-to enter new business and new markets, to develop new ways of working, to
improve efficiency, and to deliver higher levels of consumer service.
JOGINDER SINGH DUTTA (2001)
Working Capital is regarded as the lifeblood of a business. It plays a pivotal role in

keeping the wheels of a business enterprises running. However, the management of
working capital is a delicate area in the field of financial, involving frequent decision
making concerned with all those acts that influence the size and effectiveness of working a
capital. A business firm size must maintain a satisfactory level of working capital.
The inadequacy or mismanagement of working capital is one of the leading causes of

business failure. Inadequacy of working capital is one of the symptoms of sickness of a
business and if timely and corrective action is not taken, that may become a major threat to
financial liability and hence, to its survival. On the other hand, more working capital might
mean dumped stocks, inefficient storekeeping, excessive receivables, surplus cash and less
coordination and control over overall performance. Further, the profitability and liquidity
of a firm are directly influenced by the way its working capital is managed. Therefore, the
by the way its working capital management is to arrange sufficient funds from the best
sources, at the right time and maintain it consistently can be achieved.
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SRINIVATSAVA SANJAY (2004)
Working Capital is the fuel that powers global business operations, but too often an
unnecessarily high percentage of this fuel is continuously stuck in the pump : Locked up in
aging invoices and lengthy DSO (Days sales Outstanding) cycles, Companies looking to
improve cash flow have typically focused on collections. But traditionally, Collection has
always been a reactive process picking up on aging invoices after they are already late in
payment, and then resolving the underlying issues in an effort to collect. Because its
difficult to go up stream and systematically uncover and resolve the root causes of issues
that actually drive the delayed payments, most of the collections effort ends up squarely
focusing on dealing with symptoms, instead of addressing the real issues. Approaching
this problem after the fact, as always, exacts its cost in penalty in time, effort, customer
satisfaction and even employee morale. Meanwhile, corporate performance and
shareholder value added suffer.
SINGARAVEL, P. (1999)
Focuses on the interdependency among working capital, liquidity and profitability, of

which sufficiency of liquidity comes in the first preference followed by sufficiency of
working capital and profitability. The article is an in-depth analysis of liquidity and its
interrelationship with working capital and profitability. As the working capital, liquidity
and profitability are in triangular position, none is dispensable at the satisfaction of the
other. Excess of stock-in-trade over bank over-draft and excess of liquid assets over
current liabilities other than bank over-draft generate working capital for the business.
Alternatively working capital requirements are made for long-term funds which affect the
profitability.
29
NATARAJAN SUNDAR (1980) is of the opinion that working capital is important at
both, the national and the corporate level. Control on working capital at the national level
is exercised primarily through credit controls. The Tendon Study Group has provided a
comprehensive operational framework for the same. In operational terms, efficient
working capital consists of determining the optimum level of working capital, financing it
imaginatively and exercising control over it. He concludes that at the corporate level
investment in working capital is as important as investment in fixed assets. And especially
for a company which is not growing, survival will be possible only so long as it can match
increase in operational cost with improved operational efficiency, one of the most
important aspects of which is management of working capital.
RAO K.V. AND RAO CHINTA (1991)
Observe the strong and weak points of conventional techniques of working capital
analysis. The result has been obviously mixed while some of the conventional techniques
which could comprehend the working capital behavior well; others failed in doing the job
properly. The authors have attempted to evaluate the efficiency of working capital
management with the help of conventional techniques i.e., ratio analysis. The article
concludes prodding future scholars to search for a comprehensive and decisive yardstick
in evaluating the working capital efficiency.
PATHANIA
Studied WORKING CAPITAL MANAGEMENT IN HIMACHAL PRADESH STATE

CO OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK for the
period starting from 1990-91 to 1994-95 with the help of ratio analysis. The study reveals
that the bank under study has not used cash efficiently and effectively which resulted in
decrease in profitability.
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DR. BHAIRAV H. DESAI and RAMESH B. DARJEE had made a study on
WORKING CAPITAL FINANCING BY PUBLIC SECTOR BANKS (The
Management Accountant, May 1986) of cotton textile mills managed by N.T.C. for the
period of 1979-80 to 1983-84. The analyses of working capital gap and bank financing
have been based on method I, II and III of bank financing suggested by the Tendon
Committee. The conclusions were; the management of N.T.C. ltd. could have checked the
large under financing by banks. It could have obtained substantial additional finance from
banks even with the help of inventory. The management must make immediate attempts to
reduce inventory, particularly finished goods inventory and the amount of working capital
locked up in debts.
31
5. WORKING CAPITAL MANAGEMENT
Working capital helps in maintaining the profitability of the firms and also helps in
fulfilling of the Day to Day requirement of any firms. It helps determining the working
capital appropriate level of any firms.
Working capital has been described as the life blood of any business which is apt because
it constitutes a cyclically flowing stream through the business.
Working capital involves fundamental decision requirements firms liquidity and the trend
of firms between risk and return. The amount of working capital will be the risk of
running out side of capital to day to day requirement will be more.
DEFINITION OF WORKING CAPITAL

Working capital refers to a firms investment in short term assets, such as cash amounts
receivables, inventories etc.
-According to Weston & Brigham
Working capital means current assets of a company that are changes in the ordinary cost
of business from one firm of another firm.
CONCEPT OF WORKING CAPITAL
There are basically two concept of working capital:
(1.) Gross working capital

(2.) Net working capital
(1.) GROSS WORKING CAPITAL:-
Gross working capital refers to the total funds invested in current assets. The amount of
current liability is not deducted from the total of current assets. The gross working concept
is financial concept were net working capital is accounting concept of working capital
both the concept of working capital are important assets working capital management.
32
(2.) NET WORKING CAPITAL:-
Net working capital refers excess of current assets over current liabilities. It refers to the
difference between current assets and current liabilities. The net working capital is a
quantitative concept which indicates the liquidity position of the firm and the extent to
which working capital needs may be financed by permanent source of funds. A position of
net working capital should be financial with permanent sources of funds.
Gross Working Capital = Current Assets
Net Working Capital = Current Assets Current liability
TYPES OF WORKING CAPITAL
TYPES OF WORKING CAPITAL
Permanent or Temporary or
fixed working variable
capital working capital
Regular Margin Seasonal Special

Working Working working working
Capital Capital capital capital
Capital
(1.) PERMANENT OR FIXED WORKING CAPITAL
It represents that part of capital which is permanently locked up in the current assets. To
carry out in current assets smoothly is investments in current is the presents nature and
will increase as the size of business expands example of such as investment is minimum
stock of maintain the minimum stock of cash, work-in-progress, finished products, loops
and equity products tools and equipments it also requires minimum cash balance to be
kept in reserve for the payment of wages and salaries.
33
The permanent or fixed working capital can again be subdivided in to two type parts:
(a) Regular working capital:-
It is minimum amount of liquid capital needed to kept up the circulations of the capital
from cash to investment to receivables and again cash this would includes sufficient
minimum bank balance to all maintain adequate supply of cash.
(b) Margin working capital:-
It is excess over the needs or regular working capital that should be kept in reserve for
Contingencies that may be arise at any time these contingency includes rising prices of
business.
(2.) TEMPORARY OR VARIABLE WORKING CAPITAL
Variable working capital charges with the increase or decrease in the volume of business it
many also be sub divided into two parts:
(a) Seasonal working capital

(b) Special working capital
(a) Seasonal working capital:-
Temporary working capital can expect its return during off season when it is not required
by the firm. Hence, temporary working capital is generally financed from short term
sources of finance such as bank credit.
(b) Special working capital:-
The working capital required to meet the seasonal liquidity of the business is seasonal
working capital on the other hand special working capital is that part of the variable
working capital part of the business which is required for financial the special operation
such as extensive marketing companies experiments with product or method of carrying of
special job etc.
34
SOURCES OF WORKING CAPITAL
The main sources of working capital are as under:
Shares and Debentures:-
The funds for working capital can be obtained through the issue of shares to meet the
initial requirements or to make up the sudden and unexpected decline in working capital.
The funds for working capital can be also obtained through the debenture.
Retain earning:-
A part of revenue is used to meet acts of production only the net sales proceed in available
for working capital profit retained with the company and its can used as working capital.
Commercial bank:-
Commercial banks are an important source of working capital for the business enterprise
they provide current finance and short term funds to the business enterprise.
Other sources:-
Trade creditors
Public deposits
35
6. RESEARCH METHODOLOGY
MEANING
Research has been defined by various authors in different in different ways it always
begins with a question or a problem. Its purpose is to find answers to questions through the
application of systematic and scientific approach towards purposeful investigation. This
need formulate hypothesis, collection of data on relevant variables analyzing and
interpreting the result and reaching conclusion, either in the form of a solution or certain
generalization.
Research is an academic activity and a systematized effort to gain new knowledge.
DEFINITION
Financing research as the systematic design, collection analysis and Reporting of data
relevant to a reporting of data relevant to a specific situation facing the company.
Research is defined as human activity based in the intellectual application in the

investigation of matter. The primary purpose for applies research is discovering
interpreting and the development of the human knowledge on a wide variety of scientific
matters of word and universe research can use the scientific method but need not do so.
36
RATIONAL FOR THE STUDY
Working capital may be considered as the life blood of a business concern. Its capable
management leads to the achievement of objectives of a business, whereas its
unproductive management can result not only in loss of returns but also in final collapse of
what otherwise might be considered as a profitable concern. Its significance can be
highlighted from the fact that a substantial segment of the assets is blocked up in the
current assets which requires lot of hard work, a lot of time and scarce resources to
manage.
Suitable working capital management helps in maintaining the solvency, goodwill,
liquidity and profitability. It also facilitates availing cash discounts, loans and advances on
favorable terms, regular payment of salaries, wages and other day to day liabilities,
creating the capability to encounter crisis, environment of safety, self-assurance, high
spirits and improves the overall effectiveness of the company. As a result, proper
management of working capital is decisive for the accomplishment of the goal of an
organization.
STATEMENT OF PROBLEM
The problem generally explains that, less attention has been paid to the area of short-term
finance, in particular that of working capital management. Such neglect might be
acceptable were working capital considerations of relatively little importance to the firm,
but effective working capital management has a crucial role to play in enhancing the
profitability and growth of the firm. Indeed, experience shows that inadequate planning
and control of working capital is one of the more common causes of business failure.
37
OBJECTIVES OF THE RESEARCH
The first and for most step of a research is to identify the research objectives. So this it can
become easy for the research to achieve the goal and might solve the research problem
based on the objectives.
To do analysis of financial statement of JCC Bank.

To know the stability and profitability of bank.
To know liquidity position of the bank.
To know net present value of bank.
To know the overall growth of bank and its deposits, loans etc
SCOPE OF THE STUDY
The present study deals with the An Analytical Study of WORKING CAPITAL
MANAGEMENT of the Banking Industry in India. This study is limited only to the
selected public sector and private sector banks in India. The researcher is quite aware of
the fact that there are several other aspects of the bank computerization that could be
studied such as cost benefit analysis of computerized transactions, management related
issues regarding bank computerization, comparative study between banks utilizing
computerization and banks yet to utilize computerization. Our study is limited only to the
An Analytical Study of WORKING CAPITAL vis-a-vis Profitability of the Banking
Industry in India. But there is still scope for the study Working capital management vis-a-
vis Profitability of the Foreign Banks working in as well.
RESEARCH DESIGN
The research design is the conceptual structure within which research is conducted; it
constitutes the blueprint for the collection, measurement and analysis of data.
Descriptive as well as analytical Research Design:
It includes surveys and fact-finding enquiries of different kinds .The major purpose of
descriptive research is description of the state of affairs as it exists at present.
38
The main feature of this method is that the researcher has no control over the variable. The
analytical research design is that analysis of the data.
DATA SOURCES
Data collection is the selection of information and selection of method and producers for
gathering data needed for any research.
There are two sources of data:
(1.) Primary Data:-
Primary data is the information obtained originally by the researcher first time but and it is
personally developed to overcome the limitation of secondary.
(2.) Secondary Data:-
Secondary data is the data used that is combined by the someone else other than the
researcher. It is not personally developed by the researcher. It is already available for
further processing secondary data further classified in two parts.
Research has been done by secondary data collection and secondary data has been
collected from Bank and internet.
TOOLS OF DATA ANALYSIS
Statement of working capital

Ratio analysis
Charts
39
LIMITATION OF PROJECT
(i) The study is based on the secondary data which is collected from the annual reports,
websites and various published reports and as such findings have depend entirely on the
accuracy of such data.
(ii) The present study is based on ratio analysis and it has its own limitation that applies to
this study also. In short, the tools of investigation have their own limitation which could
not be avoided.
(iii) The different views have been applied in the calculation of different ratios.
(iv) There are different approaches to measure the working capital, liquidity, inventory,
receivables management, cash management and financial management of working capital.
In this regard expert views differ from one other.
(v) It is not possible to cover all the Indian banking Industry because of the time
limitation of study period. Thus, the size of sample has been restricted and the limitation
of small sample applies to this study.
40
7. DATA ANALYSIS & INTERPRETATION
Table no. - 2
P & L A/C FOR THE YEAR OF ENDING 2012-13
EXPENSE RS. INCOME RS.

To borrow & on inv. 12,24,34,268 By int. and discount 18,77,94,508
To staff salary & allow. 3,41,42,144
To directors citing fee allow. 3,150 By commission & brokerage 18,24,277
To rent, tax & insu. Exp. 35,17,318
To legal exp. 6,67,675 By other income:-
To stationary & printing 2,93,837
To audit fees exp. 2,65,525 Share transfer
To depreciation & repair fee 22,700
exp. :- 1,09,84,161 Other income 52,15,968 52,38,668
To other provision :-
Staff gratuity
Pro. Fund - 22,00,000
B.D & BDR - 55,78,000
Staff bonus
pro. - 50,00,000
Contingent pro.
against staff
asset - 5,03,000
Inv. Dep. Res.- 10,00,000 1,42,81,000
To net profit 82,68,375
19,48,57,453 19,48,57,453
41
Table no. - 3
P & L A/C FOR THE YEAR ENDING 2013-14

fee 15,800
To depreciation & repair Other income 61,29,352 61,45,152
exp. :- 99,44,805
Staff gratuity
Pro. Fund - 23,00,000
B. D & BDR - 78,00,000
Staff bonus
Provision - 60,50,000
Contingent pro.
against staff
assets - 31,96,000
Inv.Dep.Res- 24,00,000 2,17,46,000
To net profit 1,10,70,160
21,88,53,730 21,88,53,730
42
Table no. - 4

fee 27,300
To depreciation & repair Other income 1,10,15,799 1,10,43,099
exp. :- 1,45,72,772
Staff gratuity
provision
fund - 26,00,000
B.D & BDR - 40,00,000
Staff bonus
Provision - 63,00,000 1,29,00,000
24,10,91,914 24,10,91,914
43
Table no. - 5

fee 18,000
To depreciation & repair Other income 1,32,55,477 1,32,73,447
exp. :- 1,34,45,155
Staff gratuity
Pro. Fund - 1,76,85,000
B.D & BDR - 43,89,772
Staff bonus
Pro. - 68,00,000
Contingent prov.
Against staff
assets - 76,761 2,89,51,533
28,04,75,343 28,04,75,343
44
Table no. - 6

To depreciation & repair fee 13,000
exp. :- 8,08,93,271 Other income 7,32,10,313 7,32,23,313
Staff gratuity
Pro.fund - 63,36,001
B.D & BDR - 23,00,789
Staff bonus
pro. - 70,00,000
Contingent pro.
Against staff
Assets - 2,26,734
Overdue int.
pro.- 9,61,484
Income tax pro.
(2015-16) - 1,05,00,000
Staff leave
Casement pro. - 52,10,000 3,25,35,008
31,04,71,230 31,04,71,230
45
Table no. -7
BALANCE SHEET OF THE YEAR 2012-13
Liability RS. Assets Rs.
Sh. Capital :- 4,00,00,000 Cash :-

Authorized capital On hand 1,19,13,400
(16,00,000 sh. Of Rs.25 Current A/c 2,07,95,095
each) F. D A/c 33,15,00,000 36,42,08,495
Issued, subscribed & Other bank cash :-
paid-up capital:- 3,34,85,500 Current A/c 3,86,60,423
(14, 59,420 sh. Of Rs. 25 Fixed A/c 46,35,537 4,32,95,960
each persons Investment :-
3,64,85,000) Central & state gov.
Reserve and surplus 13,69,10,521 Security 25,34,07,395
Other provision fund 3,03,09,815 Co operative 10,05,050 26,44,12,445
Deposits :- Loan & advances :-
Fixed Deposit 82,60,58,316 Short term 84,88,14,066
Saving Deposit 34,14,70,565 Medium term 55,93,732 85,44,07,798
Current Deposit 13,76,22,417 Int.receivables 60,27,459
Bills receivables 48,48,505
Bills payable 48,48,505 Land & building 3,15,69,878
Branches transaction 11,56,202 Furniture, fixture & other
After completion of assets 1,68,00,079
period for reserve 5,97,23,686 Other assets & Debtors 58,91,731
Amt. rec. against claim 3,88,53,874
Int.payable on inv. 2,14,240
Other liabilities &
creditors 1,02,48,082
P & L A/C Profit 82,68,375

1,63,03,16,224 1,63,03,16,224
46
Table no. - 8
Issued, subscribed & Cash :-

paid-up capital:- 3,94,33,650 On hand 2,14,19,389
(14, 59,420 sh. Of Rs. 25 Current A/c 2,26,40,062
each persons F. D A/c 36,60,00,000 41,00,59,451
3,94,33,650) Other bank cash :-
Reserve and surplus 18,47,59,609 Current A/c 1,24,31,744
Other provision fund 3,36,91,345 Fixed A/c 46,35,537 1,70,67,281
Deposits :- Investment :-
Fixed Deposit 87,09,45,062 Central & state gov.
Saving Deposit 34,58,19,591 Security 25,34,07,395
Current Deposit 15,76,88,827 Co operative 10,05,050 26,44,12,445
Loan & advances :-
Bills payable 26,83,254 Short term 63,41,51,553
Branches transaction 12,59,549 Medi. term 22,48,28,389
After completion of Long term 6,68,49,264 92,58,29,206
period for reserve 5,96,73,766 Int.receivables (inv.) 76,76,126
Int.payable on inv. 88,915 Land & building 3,48,20,891
Other liabilities & Furniture, fixture & other
creditors 1,02,08,336 assets 1,66,20,207
Other assets & Debtors 60,95,309
P & L A/C Profit 1,10,70,160 Amt. rec. against claim 3,20,57,895
1,71,73,22,065 1,71,73,22,065
47
Table no. - 9

Fixed Deposit 1,04,24,35,199 Central & state gov.
Loan & advances :-
Branches transaction 12,59,549 Medium term 30,52,56,835
After completion of period Long term 8,93,66,761 1,05,99,58,100
for reserve 5,85,59,601 Int.receivables (inv.) 78,21,288
Int.payable on inv. 2,03,066 Bills receivables 22,38,832
Other liabilities & Land & building 3,65,88,178
creditors 1,04,18,283 Furniture, fixture & other
assets 1,83,49,598
P & L A/C Profit 1,28,15,791 Other assets & Debtors 85,96,424
Amt. rec. against claim 6,32,145
2,03,50,18,090 2,03,50,18,090
48
Table no. -10

(20, 34,361 sh. Of Rs. 25 Current A/c 69,83,927
Fixed Deposit 1,10,23,17,122 Central & state gov.
Loan & advances :-
Branches transaction 4,69,405 Medium term 39,81,05,600
After completion of period Long term 9,50,07,495 1,22,87,84,514
for reserve 30,99,98,833 Int.receivables (inv.) 26,19,75,295
Int.payable on inv. 30,04,666 Land & building 3,66,33,577
Other liabilities & Furniture, fixture & other
creditors 2,83,37,404 assets 1,83,77,321
Other assets & Debtors 82,34,430
2,44,37,62,675 2,44,37,62,675
49
Table no. - 11
Liability RS. Assets RS.

Fixed deposit 1,24,47,34,964 Central & state gov.
saving deposit 55,38,54,824 Security 48,69,81,395
current deposit 19,68,24,472 Co operative 10,05,050 48,79,86,445
Loan & advances :-
After completion of period Medium term 39,85,10,824
for reserve 34,11,76,238 Long term 9,68,73,144 1,25,43,33,810
Int.receivables (inv.) 29,67,22,630
Int.payable on inv. 29,09,463 Bills receivables 23,39,745
Other liabilities & Land & building 3,61,47,958
creditors 3,94,54,189 Furniture, fixture & other
assets 1,74,85,958
Other assets & Debtors 1,22,80,312
2,68,47,49,208 2,68,47,49,208
50
TABULAR REPRESANTATION
Table no. - 12
WORKING CAPITAL STATEMENT
Particular 2012-13 2013-14 2014-15 2015-16 2016-17

Current
assets :-
Cash 36,42,08,495 41,00,59,451 55,52,86,659 37,13,71,176 51,21,47,368
balance
Bank 4,32,95,960 1,70,67,281 3,58,48,421 4,06,54,683 3,91,66,718
balance
Bills recei. 48,48,505 26,83,254 22,38,832 22,63,637 23,39,745
Other assets 58,91,731 60,95,309 85,96,424 82,34,430 1,22,80,312

& debtors
Gross W.C 41,82,44,691 43,59,05,295 60,19,70,336 42,25,23,926 56,59,34,143
(a)
Current
liability :-
Bills 48,48,505 26,83,254 22,38,832 22,63,637 23,39,745
payable
Current 13,76,22,417 15,76,88,827 19,01,37,786 16,97,18,713 19,68,24,472
deposit
Other lia. & 1,02,48,082 1,02,08,336 1,04,18,283 2,83,37,404 3,94,54,189
creditors
Total (b) 15,27,19,004 17,05,80,417 20,27,94,901 20,03,19,754 23,86,18,406
Total 57,09,63,695 60,64,85,712 80,47,65,237 62,28,43,680 80,45,52,549

(a + b)
51
NET W.C 26,55,25,687 26,53,24,878 39,91,75,435 22,22,04,172 32,73,15,737
(a - b)
GROSS WORKING CAPITAL
Particular 2012-13 2013-14 2014-15 2015-16 2016-17

G.W.C 41,82,44,691 43,59,05,295 60,19,70,336 42,25,23,926 56,59,34,143
NET WORKING CAPITAL
Particular 2012-13 2013-14 2014-15 2015-16 2016-17

N.W.C 26,55,25,687 26,53,24,878 39,91,75,435 22,22,04,172 32,73,15,737
COMPARISON OF G.W.C & N.W.C

120
100
R
S
80
(
C 60
R G.W.C
O N.W.C
40
R
E
)
20
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation:-
52
We can see above chart the comparison of G.W.C and N.W.C is last five year higher gross
working and net working in 2014-15 so its situated in the year bank liquidity position is
also higher than other years.
Table no. - 13
WORKING CAPITAL
Particular 2012-13 2013-14 2014-15 2015-16 2016-17

Net W.C 26,55,25,687 26,53,24,878 39,91,75,435 22,22,04,172 32,73,15,737
% in net 45.5% 43.7% 49.6% 35.7% 40.7%

W.C
Chart no: - 13.1
% OF WORKING CAPITAL
60
50
P
E
R 40
C
E
30
N
T % OF
A 20 W.C
G
E
10
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation:-
53
Above the chart is a percentage vise change of net working capital. So that chart is in a
fluctualisation of last five year.
In that chart increase and decrease of working capital that is not stability of the working
capital. But 2014-15 in 49.6% is higher than others so this is good condition of the bank.
And 2015-16 in 35.7% this is less than the others so this is not good condition of the bank
in 2015- 16.
RATIO ANALYSIS OF WORKING CAPITAL
CURRENT RATIO
This is widely used ratio show the proportional current assets to current liability. It
measures of short term strength of the bank. Ideal current ratio is 2:1
Current assets
Current ratio =
Current liability
Table no. - 14
Year 2012-13 2013-14 2014-15 2015-16 2016-17

Current
assets 41,82,44,691 43,59,05,295 60,19,70,336 42,25,23,926 56,59,34,143
Current
liability 15,27,19,004 17,05,80,417 20,27,94,901 20,03,19,754 23,86,18,406
Current 2.73:1 2.56:1 2.97:1 2.11:1 2.38:1
ratio
Chart no: - 14.1
54
CURRENT RATIO
3.5
P 3
E
2.5
R
C
2
E
N current
1.5
T ratio
A 1
G
E 0.5
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation: -
In 2012-13 current ratio is 2.73:1. This is more than ideal so it is good. But last five years
is not big change of the current ratio. 2014-15 in 2.97:1 this is greater than others so they
were very good position of the bank.
In 2016-17 is current ratio is 2.38:1 this higher than the ideal so that is good of the bank.
Current ratio is situated of financial position of any company or firm. So JCCB current
ratio is more than ideal so good position of the bank.
55
QUICK RATIO
The purpose of this ratio is to measure how well a company can meet its short term
obligations with its most liquid assets. For this reason, the ratio excludes inventories from
current assets, and is calculated as follows:
Cash + Cash Equivalents + A/C Receivables

Quick ratio =
Current Liabilities
Table no. - 15
Particular 2012-13 2013-14 2014-15 2015-16 2016-17
Cash & 40,75,04,455 42,71,26,732 59,11,35,080 41,20,25,859 55,13,14,086

Cash Equi.
A/C 1,08,75,964 1,03,59,380 1,00,60,120 26,42,38,932 29,90,62,375
Recei.
56
Current 15,27,19,004 17,05,80,417 20,27,94,901 20,03,19,754 23,86,18,406
Liab.
Quick 2.73:1 2.56:1 2.96:1 3.37:1 3.56:1
Ratio
Chart no: - 15.1
QUICK RATIO
4
3.5
P
E 3
R
2.5
C
E
2
N
Quick
T 1.5 ratio
A
G 1
E
0.5
0
2012-13 2013-14 2014-15 2015-16 2016-17
,
57
Interpretation:-
A high ratio is an indication that the firm is liquid and has the ability to meet its current
liabilities in time and on the other hand a low quick ratio represents that the banks
liquidity position is not good. In 2016-17 quick ratio is greater than the others. So we can
say that the 2016-17 is good condition of the financial position.
Quick ratio is a situated of the bank liquidity position. So current year quick ratio more
than by others that is excellent condition for liquidity.
ABSOLUTE LIQUID RATIO
The relationship between the absolute liquid assets and current liabilities is established by
this ratio. Absolute liquid assets take into account cash in hand, cash at bank.
Absolute liquid assets
Absolute Liquid Ratio =

Current liabilities
Absolute Liquid Assets = Cash + Bank Balances
Table no. - 16
YEAR 2012-13 2013-14 2014-15 2015-16 2016-17
Absolute 40,75,04,455 42,71,26,732 59,11,35,080 41,20,25,859 55,13,14,086

Liq. A.
Current 15,27,19,004 17,05,80,417 20,27,94,901 20,03,19,754 23,86,18,406
58
Lia.
Ab. Ratio 2.66:1 2.50:1 2.91:1 2.05:1 2.31:1
Chart no: - 16.1
59
ABSOLUTE LIQUID RATIO
3.5
3
P
E 2.5
R
C
2
E
N absolute
1.5 liquid
T
ratio
A
1
G
E
0.5
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation: -
This ratio is useful only when used in conjunction with current ratio and quick ratio. An
absolute liquid ratio of 0.5:1 is considered ideal for most of the companies. Here last five
years is above 2:1 so this is a good position of the bank.
The reason of computing absolute liquid ratio is to eliminate accounts receivables from the
list of liquid assets because there may be some doubt about their quick collection.
TOTAL ASSETS TURNOVER RATIO
60
This ratio is calculated to know whether the total assets are used effectively or not. This
ratio indicates the number of times total assets are being turned over in a year. This ratio
shows that how the assets are utilized.
Net sales
Total Assets Turnover Ratio =
Total asset
Table no. - 17
Year 2012-13 2013-14 2014-15 2015-16 2016-17
Net
Sales:-
Interest 18,77,94,508 21,14,25,718 22,94,13,574 26,64,48,453 23,65,22,425
Comm. 18,24,277 12,82,860 6,35,241 7,53,443 7,25,492
Total 18,96,18,785 21,27,08,578 23,00,48,815 26,72,01,896 23,72,47,917
T. Assets 1,63,03,16,224 1,71,73,22,065 2,03,50,18,090 2,44,37,62,675 2,68,47,49,208
T.A.T.R 0.116 times 0.123 times 0.113 times 0.109 times 0.088 times
Chart no: - 17.1
61
T A T RATIO
0.14
0.12
0.1
T 0.08
I
M
0.06
E TAT
S ratio
0.04
0.02
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation :-
The total assets turnover ratio of the bank is 0.088% in 2016-17 year. This is in the years
which show effective use of total capital in its operation in the 2012-13 and 2013-14 so,
the bank tries to improve its utilization of the assets.
DEBTORS TURNOVER RATIO
62
Debtors turnover ratio is one of the key turnover ratios used to analyze the performance
of a bank. This ratio throws light on the effectiveness of the bank in utilizing its working
capital blocked in debtors. It also indicates the frequency of conversion of receivables into
cash in a given financial year.
Net credit sales
Debtors Turnover Ratio =

Average debtors
Table no. 18
Year 2012-13 2013-14 2014-15 2015-16 2016-17
Net credit
sales 52,38,668 6,45,152 1,10,43,099 1,32,73,447 7,32,23,313
Average
Debtors 53,70,118 43,89,281 54,17,628 52,49,033 73,10,028
D.T.RATIO 0.98 times 0.15 times 2.03 times 2.52 times 10 times
Chart no: - 18.1
63
Debtors Turnover Ratio
12
10
8
T
I
Debtors
M 6
Turnover
E Ratio
S
4
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation: -
How many times per year do the debtors buy and pay on average that is a debtors
turnover ratio. In the 2016-17 is 10 times so debtors take an average of 36.5 days to pay
after the sale. But in the 2013-14 is 0.15 times buy and pay that year this lowest other than.
AVERAGE COLLECTION PERIOD RATIO
64
ACP is calculated by dividing the day in a year by the debtors turnover. The average
collection period represents the number of days worth of credit sales that is blocked with
the debtors. It is computed as follows:
Days in a year
Average Collection Ratio =

Debtors turnover
Table no: - 19
Particular 2012-13 2013-14 2014-15 2015-16 2016-17

Days in a 365 365 365 365 365
year
Debtors 0.98 0.15 2.03 2.52 10
turnover
ACP ratio 372.4 2433.3 179.8 144.8 36.5
Chart no: - 19.1
ACP RATIO
3000
2500
2000
D
A
1500
Y ACP
S ratio
1000
500
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation:-
65
ACP is an average days in debtors pay off in a bank.
Here ACP is gradually fluctualisation. The bank debt collection team is not performing
well, as a result rate of which the realization has come down.
CREDITORS TURNOVER RATIO
66
The account payable turnover ratio is how many times a firm can pay off its average
accounts payable balance during the course of a year. The accounts payables turnover ratio
is a liquidity ratio that shows a companys ability to pay off its accounts payable by
comparing net credit purchase to the average accounts payable during a period.
Total purchase
Creditors turnover ratio:

Average account payables
Table no: - 20
Years 2012-13 2013-14 2014-15 2015-16 2016-17

Total 3,34,85,500 3,94,33,650 4,37,82,500 5,08,59,025 5,22,44,800
purchase
Average a/c 75,48,293 64,45,795 63,28,557 1,53,00,520 2,08,96,967
payables
C. T. ratio 4.4 times 6.1 times 6.9 times 3.3 times 2.5 times
Chart no: - 20.1
CREDITORS TURNOVER RATIO

8
T 5
I
M 4
E C.T. ratio
S 3
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation:-
67
The lesser the times, the quicker the firm is to pay off its creditors and therefore good for
the bank.
In the 2014-15 is higher C.T. ratio so this not good of the bank. In the 2016-17 is less than
other years so this is good condition of the bank.
WORKING CAPITAL TURNOVER RATIO
68
A higher W.C. turnover ratio is better. It means that bank is utilizing its working capital
more efficiently.
Revenue
W.C. Turnover Ratio =

Net working capital
Table no. - 21
Particular 2012-13 2013-14 2014-15 2015-16 2016-17

Revenue 19,48,57,453 21,88,53,730 24,10,91,914 28,04,75,343 31,04,71,230
Net W.C 26,55,25,687 26,53,24,878 39,91,75,435 22,22,04,172 32,73,15,737
W.C.T.Ratio 0.73 times 0.82 times 0.60 times 1.26 times 0.94 times
Chart no: - 21.1
W.C.T.RATIO
1.4
1.2
1
T
I 0.8
M
W.C.T
E 0.6 Ratio
S
0.4
0.2
0
2012-13 2013-14 2014-15 2015-16 2016-17
YEAR
Interpretation:-
More W.C.T.ratio is good condition of the bank. In the 2015-16 and 2016-17 is high
W.C.T.ratio so that is a increase the working capital.
8. SWOT ANALYSIS
69
STRENGTH
This bank is very reputed in local (RAJKOT) area.

Fully computerized.
Profitability & sound liquidity.
No mistake in regular transactions can be found because of small network.
WEAKNESS
Bank is not performing marketing activity.

Bank is not providing ATM facility.
Less no. of branches are not reputed national level.
OPPORTUNITY
Bank can open branches at state level in near future.

Bank can start providing education loans to needy student.
Bank can also start Mobile Banking.
THREATS
Charge in govt. policy and in rules and regulation regarding bank can be disturbed
in regulation service of bank.
Confidence crises in the co-operative banking sector can disturb the banks
progress.
70
9. FINDING
Current ratio is also higher than the standard of 2:1.Based on this data, liquid
position of the bank shall be considered as satisfactory.
Quick ratio is also higher than the standard of 1:1, which shows that the company
has good liquid position.
The increasing trend in working capital turnover ratio indicates that low investment
in working capital to sales is required for the bank.
Increasing trend in total assets turnover ratio shows the off sales generated by the
total assets. The trend shows that the assets of the company are efficiently utilized
to generate sales.
Absolute liquid ratio is ideal 0.5:1 so bank no less than ideal ratio so JCCB is good
condition of liquidity.
Average collection period ratio
Debtors turnover ratio
71
10. SUGGESTIONS
Bank should provide newer facilities like ATM, net banking, phone banking and
try to more that customer uses this facility.
Private bank is attracting customer by providing them more services so bank
should think on that part also.
Customer awareness program regarding facility provided by the more on television
& newspapers to attract more people.
Jivan commercial co-operative bank must take feedbacks of customers regarding
the quality of the services to compare it with other banks.
The bank should improve its capital structure and financial stability.
72
11. CONCLUSION
After receiving the training at JCCB Ltd. I would like to conclude that it is almost
the developing bank with great potential.
Quality wise its services are well accepted. This is one of the most advantageous
and prestigious achievement of the bank.
During my training I received good support and guidelines from employees and I
found that there is very good level of commitment in all the staff members.
At last I would like to conclude that JCCB is one of the leading firms in the co-
operative sector, and with advanced technologies and educated staff trying to make
position in the banking market.
73
12. BIBLIOGRAPHY
INFORMATIVE PROVIDED BY BANK.

REFERENCE, BOOKS, JOURNALS:-
Joginder Singh Dutta (2001), Working Capital Mnagement
Rao, K.V. and Rao, Chinta. (1991), Evaluating Efficiency of Working
Capital Management Are the Conventional Techniques Adequate?
Decision, Vol.18 No. 2, pp. 81-97
Singaravel, P., (1999), Working Capital - Liquidity Profitability
Triangle, Working Capital Management, Edited by Rao Mohana D and
Pramanik Alokkumar, Deep and Deep Publications Pvt. Ltd., New
Delhi, pp. 21-25.
Natarajan, Sundar, (1980), Working Capital Management and Finance,

Economic and Political Weekly, Vol.15 No.8, pp. M25+M27-M31
Srinivatsava Sanjay, (2004), Working Capital Management.
Financial management - I.M.Pandey
Research methodology - C.R.Kothari
Bank Annual Report
WEBSITES
www.google.com
www.bankingsectorindia.in
www.jccbltd.com
www.shodhganga.infliinet.ac.in
74

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A

SUMMER INTERNSHIP PROJECT

WORKING CAPITAL MANAGEMENT

JIVAN COMMERCIAL CO-OPERATIVE BANK LTD.

(ENROLLMENT NO: - 167590592008)

MBA BATCH: - 2016 18

UNDER THE GUIDANCE OF:-

SHREE H.N.SHUKLA COLLEGE OF MANAGEMENT STUDIES

GUJRAT TECHNOLOGICAL UNIVERSITY

I undersigned BHARADVA JAYDEEP student of department of management 3rd

First of all I would like to thank BOARD OF DIRECTORS.

I am thankful to general manager D.S.VYAS to give me permission for the summer

I want to express my sincere obligation to MR. D.N.KIKANI (Manager), MR. DAVE

I am pleasure to submit my project report to Gujrat Technological University as an

2. BANKING INDUSTRY OVERVIEW

3. OVERVIEW OF JCC BANK LTD.

5. WORKING CAPITAL MANAGEMENT

7. DATA ANALYSIS AND INTERPRETATION

TABLE NO. PARTICULAR PAGE NO.

26 P & L A/C OF 2012-13 to 2016-17 41 45

7 11 Balance Sheet Of 2012-13 To 2016-17 46 50

12 Working Capital Statement 51

16 Absolute Liquid Ratio 58

17 Total Assets Turnover Ratio 60

18 Debtors Turnover Ratio 62

19 Average Collection Period Ratio 64

20 Creditors Turnover Ratio 66

21 Working Capital Turnover Ratio 68

Chart No. Particular Page No.

13.1 Working Capital Chart 53

14.1 Current Ratio Chart 54

15.1 Quick Ratio Chart 57

16.1 Absolute Liquid Ratio Chart 59

17.1 Total Assets Turnover Ratio Chart 61

18.1 Debtors Turnover Ratio Chart 63

19.1 Average Collection Period Ratio 64

20.1 Creditors Turnover Ratio 66

21.1 Working Capital Turnover Ratio Chart 68

BASIC OVERVIEW OF BANKING INDUSTRY

1. Raj Co-Operative Bank

Name of bank :- JIVAN COMMERCIAL CO-OPERATIVE BANK

Year of establishment :- 7th August,1972

Registered office :- Jivan commercial co-operative bank ltd.

Vittalay, Dhabar road , Rajkot-360005

Phone no. :- (1) 028-12240876 ,

Fax no. :- 02812233168

Bank category :- Co-operative Bank

Register no. :- 6106

Authorized capital :- 4,00,00,000

Initial share capital :- 78,200

Initial member :- 1017

Current member :- 24,049

Chairman :- Bhagwanjibhai parasana

General manager :- D.s.vyas

Managing director :- Narendrashing jadeja

Auditor :- Gaurangbhai sanghvi

Working day :- Monday to Friday

Saturday half day