Varun Project

WORKING CAPITAL MANAGEMENT
PART- 1
EXECUTIVE SUMMARY
KRUPANIDHI DEGREE COLLEGE Page | 1

EXECUTIVE SUMMARY
A project on working capital management has been a very good experience. Every
manufacturing company faces the problem of working capital management in their day to day
process. An organization’s cost reduces and the profits increased only if it is able to manage its
working capital efficiently. At the same time, the company can provide customer satisfaction and
hence can improve their overall productivity and profitability.
This project is sincere effort to study and analyze the working capital management
of EXIDE INDUSTRIES, HOSUR. The project focused on making a financial overview of the
company by conducting a working capital analysis of EXIDE INDUSTRIES for the years 2011-12
to 2015-16
All organization has to carry working capital in one form or the other. The efficient
management of working capital is important from the point of view of both liquidity and
profitability. Poor management of working capital means that funds are unnecessary tied up in idle
assets. Hence reducing liquidity and reducing the ability to invest in productive assets such as plant
and machinery, affects the profitability.
The working capital management refers to management of working capital or to be

more precise the management of current assets. A firm’s working capital consist of its investments in
currents assets which include short term assets such as cash and cash balances, inventories
receivables and marketable securities. So the working capital management refers to the management
of the level of all those individual current assets. The need for working capital management arises
from two considerations. First, existence of working capital is imperative in any firm. The fixed
assets, which usually require a large chunk of total funds, can be used at an optimum level of only if
supported by sufficient working capital and second the working capital involves investment of funds
of the firms. If the working capital level is not properly maintained and managed, then it may result
in unnecessary blocking of scarce resources of the firm. The insufficient working capital on the other
hand, will put various hindrances in smooth working of the firm. Therefore, the working capital
management needs attention of all the financial managers.

PART- 2
RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
The methodology I have adopted while collecting the information and interpretation
and interpreting in a significant way. The main sources from which I have collected information are:
i. Place of study: EXIDE INDUSTRIES, HOSUR.

ii. Time span of study. 4 weeks
iii. Method of study: discussion with concerned persons in the finance persons in the finance
and other concerned departments.
iv. Subject of financial management: Ascertain various ratios and its comparison with
yesteryears.
TITLE OF THE STUDY
Project Report on “A study on Working Capital Management with reference to

EXIDE INDUSTRIES”, HOSUR.
STAMETMENT OF THE PROBLEM:
Working capital is the lifeblood and nerve system of a business. Just as circulation of
blood is essential in the human body for maintaining life; working capital is very essential to
maintain the smooth running of business. No business can successfully run without an adequate
amount of working capital. Working capital is very significant aspect in the management of finance
of any organization. Scrutiny of the levels of working capital can straightforwardly identify the
liquidity and profitably position of the firm.
OBJECTIVES OF THE STUDY:
1. To understand the policies and procedure followed by the EXIDE INDUSTRIES, HOSUR
concerning the working capital management with particular reference to cash flow statement
and ratio analysis.
2. To study the currents assets and current liabilities of the company

3. To study the accounts receivable and payables , inventory, and cash system in, EXIDE
INDUSTRIES, HOSUR
4. To offer suggestion for improving the working capital management in the Company.
SCOPE OF STUDY:
The working capital management includes administration of both current assets and
current liabilities, as the time for the dissertation is restricted and the subject is very crucial, the
study is confined to only the management of current assets in EXIDE INDUSTRIES, HOSUR.
RESEARCH DESIGN:
The study relates to working capital management in EXIDE INDUSTRIES,

HOSUR. According to Claire Selltiz and others “a research design is the arrangement of conditions
for collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure”. The research design is the concepted structure within which
research is conducted.
Thus research is an organized inquiry designed and carried out to provide

information to solve the problem. Research is the process is the process of scientific investigation of
a certain problems; Research is the process of systematically obtaining accurate answers and
interpreting information
SOURCES OF DATA COLLECTION

There are two sources of data for investigation.
1) Primary source: Primary data are those, which are collected for the first time, and they are
original in nature. Primary data has been collected through personal interviews with
concerned Officers of the company like finance department, finance manager and as well
staff.

2) Secondary sources: They include a company’s profit and loss account, balance sheet, sales
figures, sales reports, inventory records, registers, document etc. A proper analysis of these
records will reveal the degree of efficiency of the business.
LIMITATIONS OF THE STUDY
1) The information is considered is confidential and not available for study.

2) Definition and concepts used by different authorities are different.
3) Time available for the study is limited.
4) The study conducted in Exide industries Hosur alone only and not the other plant of Exide
industries Hosur.

PART- 3
INDUSTRY PROFILE
COMPANY PROFILE

INDUSTRY PROFILE
MANUGACTURING INDUSTRY OVERVIEW
Manufacturing industry refers to those industries which involve in the

manufacturing and processing of items and indulge in either creation of new commodities or in value
addition. The manufacturing industry accounts for a significant share of the industrial sector in
developed countries. The final products can either serves as a finished good for sale to customers or
as intermediate goods used in the production process.
EVOLUTION OF MANUFACTURING INDUSTRY
Manufacturing industries came into being with the occurrence of technological and
socio-economic transformations in the Western countries in the 18th-19th century. This was widely
known as industrial revolution. It began in Britain and replaced the labor intensive textile production
with mechanization and use of fuels.
Working of manufacturing industry:
Manufacturing industries are the chief wealth producing sectors of an economy.

These industries use various technologies and methods widely known as manufacturing process
management. Manufacturing industries are broadly categorized into engineering industries,
construction industries, electronics industries, chemical industries, energy industries, textile
industries, food and beverage industries, metalworking industries, plastic industries, transport and
telecommunication industries.
Manufacturing industries are important for an economy as they employ a huge share
of the labor force and produce materials required by sectors of strategic importance such as national
infrastructure and defense. However, not all manufacturing industries are beneficial to the nation as
some of them generate negative externalities with huge social costs. The cost of letting such
industries flourish may even exceed the benefits generated by them.

ANALYSIS OF MANUFACTURING INDUSTRY
It suggests that the manufacturing industry has served as the pivotal factor in the
economic development of a country. The same applies for the United States Of America, whose
economy has been growing rapidly owing to the successful manufacturing industry. Manufacturing
industry analysis also indicates that the manufacturing industry provides employment to many
thereby contributing to the gross domestic product and per capita income of the country.
Approximately 75% of the engineers as well as the scientists get employed in the manufacturing
industry as recorded by a manufacturing industry analysis. The Census bureau categorizes a
particular manufactured product depending on the primary goods produced by the manufacturing
industry.
Statistical data showing the impact of the manufacturing industry on economy:
 In the year 1992, the expenditure incurred on the research and development by the
manufacturing establishments was USD$91.2 billion in the United States of America. Out of
this Non Governmental manufacturing establishments registered 79.4% of USD$91.2 billion
 18% of GDP or gross domestic product in the year 1993 was due to revenues generated by
the manufacturing industry, established according to reports of manufacturing industry
analysis.
 46.4 was the result obtained in order to find out the number of workers employed in every
establishment. This figure was registered in the year 1992.
 15% of shipments in the manufacturing segment were due to the material industry.
 Capital stock has registered a steady rise for all the sectors of the manufacturing industry
since 1982.
 Employment opportunity in the manufacturing industry has declined comparatively.
Manufacturing industry analysis also suggests that in some countries like China,
technological knowhow has to be developed. Despite the fact that China is ranked fourth in
the manufacturing productivity, due to technological lacunae, it is not being able to compete
in the world market. Also needed are professionals well versed in the technological
knowhow.

BATTERY MANUFACTURING INDUSTRY PROFILE
The Indian storage batteries market is approximately estimated at US$ 500
million with the automotive batteries segment 60 to 70 percent of the overall market value. In
terms of volumes, the overall consumption of the automotive batteries could be around 6.3
million units with the 40 QE segment comprising around 1.2 to 1.3 million units per annum,
Various batteries (clockwise from bottom left): two 9-volt, two AA, one D, a handheld ham
radio battery, a cordless phone battery, a camcorder battery, one C, and three AAA.
A battery is one or more electrochemical cells, which store chemical energy and
make it available as electric current. There are many types of electrochemical cells, including
galvanic J' cells, electrolytic cells, fuel cells, flow cells, and voltaic cells. Strictly, an electrical
"battery" is two or more cells connected together, but often a single cell is called a battery. A
battery's characteristics may vary due to many factors including internal chemistry, current
drain, and temperature.
There are two types of batteries, primary (disposable) and secondary

(rechargeable), both of which convert chemical energy to electrical energy. Primary batteries can
only be used once because they use up their chemicals in an irreversible reaction. Secondary
batteries can be recharged because the chemical reactions they use are reversible; they are
recharged by running a charging current through the battery, but in the opposite direction of the
discharge current. Secondary, also called rechargeable batteries can be charged and discharged
many times before wearing out. After weaning out some of the batteries can be recycled.
ABOUT BATTERY
A battery is perhaps the only gift of science where electric is stored by means of
elector chemical potentials guided by electro comical reaction. Chemical reaction initiated by
electricity. Which take place with the means of electron exchange between the reactions, as and
when required the stored energy can be counted back to electro chemical reaction. In certain
cases the electrical chemical reactions guiding the energy transformation is not reversible. Such
batteries are called ordinary cells. Where the electro chemical reaction guiding energy
transformation is reversible hence they can be reused through only after outing a required
amount of electric energy once it gets exhausted. These batteries are called secondary batteries.

BATTERY HISTORY
A battery, which is actually an electric cell, is a device that produces electricity

from a chemical reaction. Strictly speaking, a battery consists of two or more cells connected in
series or parallel, but the term is generally used for a single cell. A cell consists of a negative
electrode; an electrolyte, which conducts ions; a separator, also an ion conductor; and a positive
electrode.
TIMELINE OF BATTERY HISTORY

 1748 - Benjamin Franklin first coined the term "battery" to describe an array of charged
glass plates.
 1780 to 1786 - Luigi Galvani demonstrated what we now understand to be the electrical
basis of nerve impulses and provided the cornerstone of research for later inventors like
Volta.
 1800 - Alessandro Volta invented the voltaic pile and discovered the first practical
method of generating electricity. Constructed of alternating discs of zinc and copper with
pieces of cardboard soaled in between the metals, the voltaic pile produced electrical
current. The metallic conducting;- arc was used to carry the electricity over a greater
distance. Alessandro Volta's voltaic pile was the first "wet cell battery" that produced a
reliable, steady current of electricity.
 1836 - Englishman, John F. Daniel invented the Daniel Cell that used two electrolytes:
copper sulfate and zinc sulfate. The Daniel Cell was somewhat safer and less corrosive
then the Volta cell.
 1839 - William Robert Grove developed the first fuel cell, which produced electrical by
combining hydrogen and oxygen.
 1839 to 1842 - Inventors created improvements to batteries that used liquid electrodes to
produce electricity. Bunsen (1842) and Grove (1839) invented the most successful.
 1859 - French inventor, Gaston Planet developed the first practical storage lead-acid
battery that could be recharged (secondary battery). This type of battery is primarily used
in cars today.

 1866 - French engineer, Georges Leclanche patented the carbon-zinc wet cell battery
called the Leclanche cell. According to The History of Batteries: "George Leclanche's
original cell was assembled in a porous pot. The positive electrode consisted of crushed
manganese dioxide with a little carbon mixed in. The negative pole was a zinc rod. The
cathode was packed into the pot, and a carbon rod was inserted to act as a currency
collector. The anode or zinc rod and the pot were then immersed in an ammonium
chloride solution. The liquid acted as the electrolyte, readily seeping through the porous
cup and making contact with the cathode material. The liquid acted as the electrolyte,
readily seeping through the porous cup and making contact with the cathode material."
 1868 - Twenty thousand of Georges Leclanche's cells were now being used with
telegraph equipment.
 1881 - J.A. Thiebaut patented the first battery with both the negative electrode and
porous pot placed in a zinc cup.
 1881 - Carl Gassner invented the first commercially successful dry cell battery (zinc
carbon cell).
 1899 - Wald mar Jenner invented the first nickel-cadmium rechargeable battery.
 1901 - Thomas Alva Edison invented the alkaline storage battery. Thomas Edison's alkaline
cell had iron as the anode material (-) and nickelic oxide as the cathode material (+).
 1949 - Lew Urry developed the small alkaline battery in 1949. The inventor was working for
the Eveready Battery Co. at their research laboratory in Parma, Ohio. Alkaline batteries last
five to eight times as long as zinc-carbon cells, their predecessors.
 1954 - Gerald Pearson, Calvin Fuller and Daryl Chapin invented the first solar battery. A
solar battery converts the sun's energy to electricity. In 1954, Gerald Pearson, Calvin Fuller
and Daryl Chapin invented the first solar battery. The inventors created an array of several
strips of silicon (each about the size of a razorblade), placed them in sunlight, captured the
free electrons and turned them into electrical current. Bell Laboratories in New York
announced the prototype manufacture of a new solar battery. Bell had funded the research.
The first public service trial of the Bell Solar Battery began with a telephone carrier system
(Americus, Georgia) on October 4 1955.
 1964 - Duracell was incorporated.

COMPANY PROFILE
INTRODUCTION
 Incorporated in January 1947.

 EXIDE is Asia’s largest exporter of batteries.
 A veteran with 52 years of experience.
 It has seven manufacturing units in India and five units apart from India.
 It has corporate alumni of chloride group PLC, UK.
 It provides 4.2 million SLI automotive batteries and 3 million industrial batteries with 300Ah
capacity.
 Collaborated with shin- Kobe electric machinery ltd (part of Hitachi group), Japan and
Furukawa batteries, Japan.
 It is a leader of South Africa traction batteries with 25% market shares.
 EXIDE captured international market and got costumers like Hyundai, Mitsubishi, TATA,
Toyota, Hero, Honda, FIAT etc.
 The company has subsidiaries in UK, Singapore and Srilanka.
 It’s export span to eighteen countries across five continents in growing list of overseas
costumers.
 The types of batteries manufactured by EXIDE are:
 Automotive Batteries
 Industrial Batteries
 Submarine batteries
 The two main manufacturing units of EXIDE which are present in all its manufacturing
plants are:
 Automotive
 VRLA (industrial)
 It has products which has capacity ranging from 2.5Ah to 10,000Ah and more.
 EXIDE also acquired the industrial/ manufacturing units of standard batteries ltd located at
Taloja & kanchurmarg (Maharashtra), Guindy (Tamil Nadu), and plant at Ahmednagar
(Maharashtra) from Cosepa Fiscal industries ltd as a going concern.
 The manufacturing plants of EXIDE in India are:

 Shamnagar (West Bengal)
 Chinchwad (Pune)
 Haldia (West Bengal)
 Hosur (Tamil Nadu)
 Taloja (Maharashtra)
 Ahmednagar (Maharashtra)
 Bawal (Haryana)
 The company’s Submarine batteries is mainly manufactured in the Pune manufacturing plant
 It is the first company to design battery powered electrical boat and maintenance free
batteries, traction batteries for wheel chairs and flat plate batteries for automated guided
vehicles.
 EXIDE today is a Rs 3606 crores power storage company.
HISTORY:
 1916- Chloride Electric Storage Co. (CESCO) UK sets up trading operations in India as an
import house.
 1946- First factory set up in Shamnagar, West Bengal.

 1947- Incorporated as Associated Battery Makers (Eastern) Limited on 31 January 1947
under the Companies Act.
 1947- Incorporated Chloride International Limited (previously Exide Products Limited)
 1969- Second factory at Chinchwad, Pune
 1972- The name of the Company was changed to Chloride India Limited
 1976- R&D Centre established at Calcutta
 1981- Third factory at Haldia, West Bengal
 1988- The name of the Company was changed to Chloride Industries Limited
 1994- Technical collaboration with Shin Kobe Electric Machinery Co. Ltd. of Japan, a
subsidiary of the Hitachi Group.
 1995- Chloride Industries Limited renamed Exide Industries Limited
 1997- Fourth factory at Hosur, Tamil Nadu
 1998- Acquisition of industrial/ manufacturing units of Standard Batteries Ltd located at
Taloja & Kanjurmarg (Maharashtra), Guindy (Tamil Nadu) and plant at Ahmednagar
(Maharashtra) from Cosepa Fiscal Industries Limited as a going concern.
 1999- Acquired 51% Shareholding in Caldyne Automatics Ltd
 2000- Acquisition of 100% stake in Chloride Batteries S E Asia Pvt Ltd., Singapore and 49%
stake in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.
 2003- Commissioned plant at Bawal, Haryana
 2003- New joint venture in UK, ESPEX, with 51% holding.
 2004- Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka became a subsidiary
consequent to acquiring further 12.50% Equity holding.
 2005- Investment in 50% shareholding of ING VYSYA Life Insurance Company Limited
 2007- Caldyne Automatics Ltd becomes 100% subsidiary consequent to acquiring the
balance 49% shareholding.
 2007- Investment with 26% shareholding in CEIL Motive Power Pty Ltd. A Joint Venture in
Australia.
 2007- Acquired 100% stake in Tandon Metals Ltd.
 2008- Acquired 51% stake in Lead Age Alloys India Ltd.
 2009- Divestment of shareholding in CEIL Motive Power Pty Ltd.
 2012- Acquisition of Inverter manufacturing facility at Roorkee, Uttarakhand
 2012- Technical Collaboration with East Penn Manufacturing Co., USA

 2012- Acquisition of second Inverter manufacturing facility at Haridwar, Uttarakhand.
 2012- Acquisition of balance 49% shares in ESPEX Batteries Limited, UK.
 2013- Acquisition of remaining 26% shares of ING VYSYA Life Insurance Company adding
a total of 100% stake.
 2014- ING VYSYA renamed as “EXIDE LIFE INSURANCE COMPANY LTD.
PRESENT STATUS
 Largest manufacturers and exporter of batteries in Asia.
 Developed vast range of batteries through research and developments and has number of
patents to its name
 Manufacturing specific batteries for specific applications that tough the daily lives of
millions of people and costumers of India
 Thus justifies the slogan “India moves on EXIDE”
WHY EXIDE INDIA?
1) CLAIM LEADERSHIP
EXIDE is a dominant player in the industrial battery segment. The company exports
batteries which have captured niches in south East Asian and European markets.

2) GLOBAL QUALITY
 Developed and produced accordingly to international standards and ISO9001, 14001
and ISO/ TS- 16949.
 Longer warranty time.
 Lower total cost of ownership.
3) MANUFACTURING STRENGTH
The only company with multi locational manufacturing units spread across country
and equipped with words largest and most advanced machineries.
4) OFFER WIDE RANGE OF BATTERIES
Products range cowering capacities from 2.5Ah to10,000Ah and more. Using the
latest technological input, we manufacture industrial batteries for the power, telecom,
infrastructure projects computer industries as well as the railways, mining and defense
sectors.
5) SOLUTION PROVIDER
EXIDE offers complete solution regarding equipment selection, battery sizing,

optimum room layout, installation, operation and maintenance. We offer lead acid batteries
from 2.5Ah to10,000Ah which no other companies in India offer wide range of capacity.

6) EXPERIENCE
Over 52 years accumulated experience of research and development, manufacturing

field operations
7) R&D CENTER
Our R&D center, set up in 1976, is counted among the premier battery research
facilities in the world and is recognized by the department of scientific and industrial.
Research under ministry of science and technology, government of India.
8) SAFETY CONSCIOUS
Underwriters laboratories Inc. USA certifications for the products and available on
request.

MANUFACTURING PLANTS OF EXIDE
MANUFACTURING STATE ESTABLISHED YEAR

PLANTS
Shamnagar West Bengal 1946
Chinchwad Pune 1969
Haldia West Bengal 1981
Hosur Tamil Nadu 1997
Taloja Maharashtra 1998
Ahmednagar Maharashtra 1998
Bawal Haryana 2003
EXECUTIVE COMMITTEE
 Mr. G. Chatterjee
 Mr. A. K. Mukherjee
 Mr. Nadeem Kazim
 Mr. Subir Chakraborty
 Mr. Arun Mittal
 Mr. Jitendra Kumar
 Mr. Achim Luelsdorf
 Mr. Arnab Saha
BOARD OF DIRECTORS
 Mr. R. G. Kapadia, Chairman & Independent Director

 Mr. R. B. Raheja ,Vice-Chairman & Non-Executive Director
 Mr. P. K. Kataky, Managing Director & Chief Executive Officer (till April 30, 2016)

 Mr. G. Chatterjee, Managing Director & Chief Executive Officer (w.e.f May 01, 2016)
 Mr. A. K. Mukherjee, Director- Finance & Chief Financial Officer
 Mr. Nadeem Kazim, Director-HR & Personnel
 Mr. Subir Chakraborty, Director-Automotive
 Mr. Arun Mittal, Director-Industrial (w.e.f May 01, 2016)
 Mr. Vijay Aggarwal, Independent Director
 Ms. Mona N. Desai, Independent Director
 Mr. Sudhir Chand, Independent Director
 Mr. Bharat D. Shah, Independent Director
 Mr. Nawshir H. Mirza, Independent Director
FACTORY PROFILE
 Fourth factory
 Established in 20th may, 1996
 Manufacturing and operation started on June 1997

 It manufactures two type of batteries
 Automotive batteries
 Industrial batteries (VRLA)
 Floor space: 50,000 sq.
 Industrial plant
 VRLA plant inauguration- April 1997
 VRLA commercial production- June 1997
 ISO 9001 certification- October 1998
 UL certification- December 2000
 Automotive plant
 Auto project commenced- October 1997
 Auto plant inauguration- July 1998
 Auto new plant project started- February 2000
 New plant inauguration- December 2000
NATURE OF BUSINESS CARRIED
Exide HOSUR plant is the fourth factory for Exide industry with a turnover of 6900
crores in the year 2015-16. It is found in 1997.It has total land area of 74.5 of which 42% is green
zone. HOSUR Exide plant is the more productive unit. It has been the two productive plants like
Auto and VRLA type batteries.
 Auto plant batteries are used for car, truck, and tractor.
 VRLA plant batteries are used for railways, ship.
Exide uses latest world class manufacturing technology to produce batteries for the
above applications. Its factories have all the modern equipment necessary to manufacture world class
products. It also sources its components from the best battery component in the world. The various
batteries are
 Automotive Batteries
 Industrial Batteries
 Submarine Batteries

EXIDE HOSUR- DREAM
To become a formidable global enterprise through manufacturing excellence.
FOCUS OF EXIDE- HOSUR
 Quality
 Productivity
 Cost
 Delivery
 Safety and cleaner environment
 Highly motivated team
 Fast response (before and after sales)
 Long lasting term costumer relationship
VISION
Providing credible value addition to customers, employees and shareholders while

simultaneously being recognized by society as a responsible corporate citizen. In addition, achieving
operational excellence while addressing and taking steps towards environmental protection.
MISSION
Strive to carefully balance the interest of all stakeholders; to fulfill aspirations of the
employees and to passionately pursue excellence without deviating from our core values.
CORE VALUES
 Customer Orientation
 Personal Integrity and Commitment

 Teamwork and Mutual Support
 Employee Development and Involvement
 Striving for Excellence
 Management by Processes and Facts
 Responsible Corporate Citizenship
OBJECTIVES AND GOALS OF THE COMPANY
 To modernize , upgrade and improve facilities or higher production and productivity

 To achieve better Quality in Products.
 To Strengthen the Marketing Organization to effectively Compete in National and
international markets.
 To get ISO certifications
 To maintain and developed highly motivated human Resources to achieve Professional
competence and ensure career development of its work force.
 To maintain Market Shares in Industry.
AWARDS/ CERTIFICATES AND RECOGNITION
 Exide wins CFO of the year award in automotive and auto-ancillary category from CNBC-
TV18
 CII Productivity Award -1ST Prize in category “A” for Significant Improvement in
Productivity
 Company’s Plant at Hosur, Tamilnadu is an ISO-9001, ISO / TS-6949 and ISO-14001

certified by TUV-NORD of Germany.
 Delivery and quality certificate from Toyota in 2002
 Developing and improving quality of batteries by reducing lead time of suppliers from TVS
in 2002
 100 PPM quality commitment award from APC 2003
 100 PPM award from Hyundai in 2003

 100 PPM award from OEM customer American Power Corporation –January 2003
 Quality award from OEM customer Toyota - April 2003 & April 2004
 Safety award from Government of Tamilnadu - April’03
 100 PPM award from OEM customer Hyundai - June’03
 Zero PPM Award from OEM customer Toyota – April’04
 Zero PPM award from Toyota in 2004
 Green award from OEM customer Toyota - April’04
 Best Quality supplier award from OEM customer Toyota – April’05
 Zero PPM award from OEM customer Toyota- April’05
 Quality Delivery Award from OEM customer Toyota - April’05
 First Prize in Best Garden Competition (Industrial Category) awarded by Mysore

Horticulture Society – 2005
 Leadership and Excellence Award in Safety , Health & Environment by CII –2006
 Indian Manufacturing Excellence – “Gold” Award –for Automotive Ancillary Category from
Frost & Sullivan in 2006
 CII-EXIM Bank Award for Strong Commitment to Excel by CII in 2006

 Best quality award from Toyota in 2007
 Teri corporate environmental award in 2007(second best)
 CII business excellence award in 2007
 "Exide, Haldia factory gets TPM award for Category A, 2008, from Japan Institute of Plant
Maintenance"
 CII Quality Award – Certificate of Appreciation for Commendable effort in the area of Total
Quality at the CII(ER) Quality Award 2008-09
 At the CII (Eastern Region) awards ceremony in Kolkata for 08-09 Exide won
 Zero PPM & best Kaizen trophy from M/s Toyota in 2009
 Good IR award from ministry of labor, Tamilnadu in 2009

 Best support award from m/s Hyundai and m/s Renault Nissan in 2010
 Safety award from chief inspector of factories, Tamilnadu in 2010
 JIIPM TPM award in 2010 (category A)
 Quality circle award from M/s Toyota in 2011-12
 Par- excellence & excellence award from CCQC & NCQC in 2012-13
 1st prize in quality Kaizen competition from M/s JCB & M/s M&M in 2013
 Winner of EFY award in the category SMF batteries in 2005-13
 Central Excise award “top tax payer” in 2013-14
 Green tech environment award in 2014
 Quality improvement award from Hyundai in 2004
 CII-ITC Award 2016 for Commendable Achievement in SCM Sustainability
 Golden Peacock Award for Excellence in Corporate Governance 2016
 Manufacturing Today Award 2016
 Greentech Safety Award 2016
 Golden Peacock National Quality Award 2016

 NCQC Excellence Awards - 2015-16
 RCQC Excellence Awards - 2015-16
 Frost & Sullivan Sustainability 4.0 Awards - 2016
PRODUCTION DEPARTMENT PRINCIPLE
“TO ACHIEVE ZERO DEFECTS”
In production area they are using many process to produce a battery, some process
are grid casting, small parts casting, assembling the parts, acid filling, heat sealing, pole bearing, air
leakage testing & charging and testing.

WORK FLOW MODEL

BRIEF OUTLINE OF THE PROCESS OF MANUFACTURE OF VALUE

REGULATED LEAD ACID BATTERIES AND AUTOMOTIVE BATTERIES.
The basic raw material for manufacturing a lead acid battery & automotive battery (a
captive rechargeable source of energy) is lead. The essential steps for manufacture are as follows.
1) Alloy Blending
2) Grid costing & Ageing
3) Oxide Manufacturing
4) Paste Mixing, Pasting and Curing
5) Drying
6) Plate parting and Lug Brushing (Plate Cleaning or Plate Finishing)
7) Assembly
8) Charging
9) Final Assembly
QUALITY POLICY OF THE COMPANY

 The aim of the company is to always provide satisfaction to customers.
 The company will develop design, produce and market products and services that cater
continuously to the needs and expectation of customer and succeed in gaining/retaining a
competitive edge.
 A quality system meeting international standards will be implemented and maintained.
 Procedures and processes shall be standardized and effective control systems instituted to
eliminate variability due to non-conformance.
 The standards and system shall be continually reviews and up graded audits and management
reviews shall be carried out.
 Human resources will be developed through planned and structured training and
development Programmes to be conducted on a reader basis.
 T P M POLICY
 ENVIRONMENT POLICY
It is the policy of the company to:
1. Minimize the adverse impact of our activities, products and service by implementing an
environmental management system.
2. Prevent pollution through waste minimization at source, recovery / treatment of emission

and releases conservation of energy, recycling & optimum use of resources.
3. Continuously improve our environmental performance through setting and reviewing and
associate objectives and targets and periodic evaluation.
4. Comply with applicable legal requirements and other requirements related to our
environmental aspects.
5. Communicated all interested practice and all people working for or on behalf of our
organization.

PRODUCT PROFILE
For cars, Jeeps and commercial vehicles,

1. Automotive batteries
Passenger cars, two wheelers to tractors,
2. Heavy duty batteries For trucks and tractors
3. Light weight batteries For wireless transmission batteries
4. Transaction batteries For material handling equipment
5. Train lighting cells For railway coaches
For telecommunications, telephone,
6. Stationary batteries
Emergency lighting
For defense Requirements Company
Manufacturers, two or three submarine
7. Submarine batteries
batteries a year, for new generation
Submarine to the Indian navy
AREA OF OPERATION
Exide industrial limited manufacturing and distributing the batteries in globally, It

has National and regional customers where the activities takes place according to the order given by
customers that to the legal right. The distribution net work is as follows
COMPETITORS INFORMATION
The company faces competition on two fronts. It faces competition from new player
in the organized sector who is focusing on advertising and publicity for promoting their brands. The
company also faces competition from low cost products from the unorganized sector. There are
many firms or agencies dealing with batteries. They produces, markets the product. EXIDE
industries ltd facing a huge competition from companies like:
AUTOMATIVE BATTERIES INDUSTRIAL BATTERIES

 PANASONIC  AMRAJA
 AMARON  HBL
 WIPRO  STAR
 MICROTEX  NED ENERGY SYSTEM
 AMCO-YUASA  KIRL OSKAR
 PRESTOLITE  PANASONIC
 OKAYA  BB-CHINA
 VARTA  ROCKET-KOREA
BRANDS OF EXIDE
 CHLORIDE
 INDEX
 DYNEX
 Standard Furukawa(sf sonic)
 JUPITER
 CONREX
 CHAMPION
 LITTLE CHAMP
 BOSS
MAJOR CUSTOMERS

AUTOMATIVE BATTERIES INDUSTRIAL BATTERIES
 HYUNDAI  MOTOROLA
 HMT LTD.  ERICSSON
 MARUTI  EMERSON
 TATA  SIEMENS
 TOYOTA  DUBAS
 BAJAJ AUTO  BHEL
 FIAT  BSNL
 HERO  VSNL
 HONDA  BEL
 PIAGGO  NTPC
 ESCORTS  GAIL
 MAHINDRA  ABB
 ASHOK LEYLAND  GODREJ
 GENERAL MOTORS  KPCL
 SWARAJ MAZADA  INDIAL RAILWAYS
 MITSUBISHI MOTORS  LUCENT TECHNOLOGY
 JOHN DERE  TVS ELECTRONICS
 EICHER
 MNC’S

ORGANIZATIONAL STRUCTURE
EXECUTIVE CHAIRMAN
M D & CEO
DIRECTOR (INDUSTRIAL)
CHIEF OPERATING MANAGER
PRODUCTION PRODUCTION PERSONNEL ACCOUNTS MATERIAL CUSTOMER SUPPORT

AUTOMOTIVE INDUSTRIAL SERVICE
HEAD HEAD PRODUCTION HEAD PERSONNEL HEAD HEAD HEAD CUSTOMER

PRODUCTION INDUSTRIAL ACCOUNTS MATERIAL SUPPORT SERVICE
AUTOMOTIVE
MANAGER MANAGER ASSISTANT ASSISTANT ASSISTANT ASSISTANT

MANAGER MANAGER MANAGER MANAGER
ASSISTANT ASSISTANT
MANAGER MANAGER

INFRASTRECTURAL FACILITIES
The Exide has eight manufacturing plants producing world class products. Exide
factories are located strategically around the country to provide logistic support for its production of
over five million batteries per annum.
Each of these factories is equipped with state of the art equipment sourced from the
best battery making machinery manufacturers in the world. Exide, due to its strong roots with the
erstwhile chloride group has access to the best manufacturing practices in the field of lead Acid
Batteries.
A technology tie up with Shin Kobe the makers of world class Hitachi VRLA
batteries has given Exide the technological edge in maintenance free catteries. Other strategic
technology agreement with Furukawa, Japan and Oldham, U, K. has given Exide competitive edge
in proving the most reliable solutions for packaged power.
 Environmental policy
 Safety measures facilities
 Medical facilities
 Effluents training
 Transportation facilities
 Canteen facilities
FUTURE GROWTH AND PROSPECTUS
 To further expand the business to other regions of Karnataka, Tamil Nadu and Andhra
Pradesh.
 To set up a sophisticated research and development so that the company may have its
own new styles and designs of products that suits the modern fast moving life style.
Objectives and Goals of Company
 To modernize , upgrade and improve facilities or higher production and productivity

 To achieve better Quality in Products.
 To Strengthen the Marketing Organization to effectively Compete in National and

international markets.
 To get ISO certifications
 To maintain and developed highly motivated human Resources to achieve Professional
competence and ensure career development of its work force.
 To maintain Market Shares in Industry.
CSR ACTIVITIES OF EXIDE
 eradicating hunger, poverty and malnutrition, (promoting health care including preventive
health care) and sanitation including contribution to the Swach Bharat Kosh set-up by the
Central Government for the promotion of sanitation and making available safe drinking water
 promoting education, including special education and employment enhancing vocation
skills especially among children, women, elderly, and the differently abled and livelihood
enhancement projects
 promoting gender equality, empowering women, setting up homes and hostels for women
and orphans; setting up old age homes, day care centers and such other facilities for senior
citizens and measures for reducing inequalities faced by socially and economically backward
groups
 enduring environmental sustainability, ecological balance, protection of flora and fauna,
animal, welfare, agro-forestry, conservation of natural resources and maintaining quality of
soil, air and water including contribution to the Clean Ganga Fund setup by the Central
Government for rejuvenation of river Ganga.
 protection of national heritage, art and culture including restoration of buildings and sites of
historical importance and works of art; setting up public libraries; promotion and
development of traditional arts and handicrafts
 Measures for the benefit of armed forces veterans, war widows and their dependants.
 Training to promote rural sport, nationally recognized sports, Paralympics sports and
Olympic sports

 Contribution to the Prime Minister’ National Relief Fund or any other fund set up by the
Central Government for socio - economic development and relief and welfare of the
Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women
 Contribution or funds provided to technology incubators located within academic
institutions which are approved by the Central Government
 Rural development projects
 Any other projects or activities as may be approved by the Central Government pursuant to
section 135 of the Companies Act, 2013, from time to time
SWOT ANALYSIS
S-Strengths:
 EXIDE is a super brand
 It has wide distribution network
 Appropriate infrastructure for condition of training
 Partnership with various technical & management institution for providing a continuous
supply of fresh graduate
 Streamlined system of recruitment
 Providing the necessary welfare facilities for the employees in the comfort zone &
increasing the retention level of the employees
 IR/LR relation very conductive for the smooth functioning of the unit
W-Weakness:
 Difficult to change to an alternative line production with the existing machinery

 High employee turnover

 Lack of clarity and transparency in upward/down ward communication.
 Evaluation of effectiveness of training programmers being imparted.
 No clear job description for various levels resulting in dual reporting relationships.
 Performance appraisal system: its approach, effectiveness acceptability.
 Effectiveness of organization health study.
O-Opportunities:
 Opportunity to expand globally

 To have in-house online dilution plant for sulphuric acid. This will not only reduce the cost
of acid procurement but also will help us to consume the recovered acidic water from plate
washing thereby achieving reduction in effluent generation.
 To convert the accumulated calcium sulphate solid sludge to useful products in construction
industry with the help of IISc Bangalore.
 Further reduction in tank formation by increasing the jar formation of VRLA batteries.
 To start using rain water in process after necessary treatment. At present we are this only for
the green belt development. Storage caexidity of rain water reservoir is 30000KL.
 To extend green belt in additional to hectares.
T-Threats:
 Fast changing consumer’s tastes & preferences

 Liberalization policy of the government of India
 Fast changing market conditions
 High costs price in view of overheads
 Importing components at the low cost from china
 Increasing competition (Nationality & Globally)
 Unfavourable duty structure
 Slow growth rate in profits expected.

PART- 4
WORKING CAPITAL
MANAGEMENT

CONCEPT OF WORKING CAPITAL
Working capital may be regarded as the lifeblood of a business. Working capital is

major important to internal and external analysis because of its close relationship with the current
day to day operations of the business.
Working capital defined as the excess of current assets over current liabilities and
provisions. It is concerned with the problems that arise in attempting to manage the current assets,
the current liabilities and the interrelationship that exist between them.
Working capital represents the total of all current assets, where the current liabilities
and provisions exceeds assets the difference is referred to has a negative working capital. This
situation does not generally exit in a business firms because this is generally a situation of crisis.
At the beginning of the business venture cash is provided by owners and lenders. A
part of this cash is invested in tools, machinery, furniture, equipment, building and other forms of
fixed assets which are not be sold during the normal course of business. The remaining cash is used
as a working capital to meet the current requirement of the business enterprise such as purchase of
services, raw materials or merchandise.
NATURE OF WORKING CAPITAL
Working capital management is concerned with the problems that arise in

attempting to manage the current assets, current liabilities and provisions.
CURRENT ASSETS
The term current assets refers to those assets which in the ordinary course of
business can be turned into cash within one year without undergoing a depreciation in the value and
without disrupting the operating of the firm.
CURRENT ASSETS INCLUDE:
 Cash and bank balance
 Investments

 Fixed deposits with bank
 Pre paid expenses
 Advance in payment for tax
 Stock in process including semi finished goods.
CURRENT LIABILITIES
The term current liabilities are those liabilities which are intended at their inception
to be paid in the ordinary course of business or within one year out of the current assets or earnings
of the concern.
CURRENT LIABILITIES INCLUDE:
 Unsecured loans
 Provision for taxation
 Sales tax dividends
 Liabilities fox expenses
 Provision fund dues.
NEED FOR WORKING CAPITAL:
The basic objective of the financial management is to maximize shareholder wealth.

This is possible only when company earns sufficient profit. The amount of such profit largely
depends upon the magnitude of the sales. However sales do not convert into cash instantaneously.
There is always time gap between the sales of goods and the receipt of cash. Working capital is
required for this period in order to sustain the sales activity. In case adequate working capital is not
available for this period, the company will not be in a position to sustain the sales since it may not be
in a position to purchase raw materials, pay wages and other expenses required for manufacturing
the goods to be sold.

The goal of working capital management is to manage the firm’s current assets and
current liabilities in such way that a satisfactory level of working capital is maintained.
TYPES OF WORKING CAPITAL
WORKING CAPITAL
NET WORKING PERMANENT BALANCE SHEET NEGATIVE

CAPITAL WORKING CAPITAL WORKING CAPITAL WORKING CAPITAL
GROSS WORKING TEMPORARY CASH WORKING

CAPITAL WORKING CAPITAL CAPITAL
1. NET WORKING CAPITAL:
Net working capital is the difference between current assets and current liabilities.
The concept of net working capital enables a firm to determine how much amount is left for
operational requirements.
2. GROSS WORKING CAPITAL:
Gross working capital is the amount of funds invested in the various components of
current assets.
ADVANTAGES OF GROSS WORKING CAPITAL:
 Financial managers are profoundly concerned with current assets;
 It enables a firm to realize the greatest return on investments;
 It helps in fixation of various areas of financial responsibilities.

3. PERMANENT WORKING CAPITAL:
Permanent working capital is the minimum amount of current assets which is

needed to conduct a business even during the dullest season of the year. This amount varies from
year to year, depending upon the growth of a company and the stage of the business cycle which it
operates. It is the amount of fund required to produce the goods and services which are necessary to
satisfy demand at a particular point. It represents the current assets which are required on a
continuing basis over the entire year.
CHARACTERISTICS OF PERMANENT WORKING CAPITAL:
 It is classified on the basis of the time factor;
 Its size increases with the growth of business operation.
4. TEMPORARY OR VARIABLE WORKING CAPITAL:
It represents the additional assets which are required at different times during the
operating year-additional inventory, extra cash etc., seasonal working capital is the additional
amount of current assets particularly cash, receivables and inventory which are required during the
more active business season of year.
5. BALANCE SHEET WORKING CAPITAL:
Balance sheet working capital is one which is calculated from the items appearing in
the balance sheet. Gross working capital, which is represented by the excess of current assets, and
net working capital, which represented by the excess of current assets over current liabilities, are
examples of the balance sheet working capital.
6. CASH WORKING CAPITAL
Cash working capital is one which is calculated from the items appearing in the
profit and loss account. It shows the real flow of money or value at a particular time and is
considered to be the most realistic approach in working capital management. It is the basis of the

operation cycle concept which has assumed a great importance in financial management in recent
years. The reason is that the cash working capital indicates the adequacy of the cash flow, which is
an essential pre-requisite of a business.
7. NEGATIVE WORKING CAPITAL:
Negative working capital emerges when current liabilities exceed current assets.
Such a situation is not absolutely theoretical, and occurs when a firm is nearing s crises of some
magnitude.
FACTORS DETERMINING WORKING CAPITAL:
 Nature of industry
 Cash requirements
 Nature of business
 Manufacturing time
 Volume of sales
 Inventory turnover
 Receivable turnover
 Value of current assets
 Variations in sales
 Credit control
 Cash reserves
 Changes in technology
 Firm’s policies
 Attitude of risk

i. NATURE OF INDUSTRY:
The composition of assets is a function of the size of a business and the industry to
which it belongs. Small companies have smaller proportions of cash, receivables and
inventory than large companies.
ii. CASH REQUIREMRNTS:
Cash is one of the current assets which is essential for successful operations of the
production cycle. Cash should be adequate and properly utilized. It would be very expansive
to hold expensive cash. A minimum level of cash is always required to keep the operations
going. Adequate cash is also required to maintain good credit relation.
iii. NATURE OF BUSINESS:
The nature of business is an important determinant of the level of the working

capital. Working capital requirements depends upon the general nature or type of business
iv. MANUFACTURING TIME:
The level of working capital depends upon the time requirements to manufacture
good manufacturing. If the time is longer, the size of working capital is great. Moreover, the
amount of working capital depends upon inventory turnover and the unit cost of the goods
that are sold.
v. VOLUME OF SALES:
This is the most important factor affecting the size and components of working
capital. A firm maintains current assets because they are needed to support the operational
activate which result in sales. The volume of sales and size of the working capital are directly
related to each other. As the volume of sales increases, there is an increase in the investment
of working capital-in the cost of operations, in inventories and receivables.
vi. RECEIVABLE TURNOVER:
It is necessary to have an effective control of receivables. A prompt collection of

receivables and good facilities for setting payables result into low working capital
requirements.

vii. VALUE OF CURRENT ASSETS:
A decrease in the real value of current assets as compared to their book value
reduces the size of working capital. If the real value of currents increases, there is an increase
in working capital.
viii. VARIATIONS IN SALEA:
A seasonal business requires the maximum amount of working capital for a

relatively short period of time.
ix. CREDIT CONTROL:
Credit control include such factors as the volume of credit sales, the collection policy
etc. With a sound credit control policy, it is possible for a firm to improve its cash inflow.
x. CASH RESERVES:
It would be necessary for a firm to maintain some cash reserves to enable it to meet
contingent disbursements. This would provide a buffer against abrupt shortage in cash flows.
xi. CHANGES IN TECHONOLOGY:
Technological developments related to the production process have a sharp impact

on the need for working capital.
xii. FIRM’S POLICES:
These affect the levels of permanent and variable working capital. Changes in credit
policy, production policy etc, are bound to affect the size of the working capital.
xiii. ATTITUDE OF RISK:
The greater the amount of working capital, the lower is the risk of liquidity.

METHODS OF ESTIMATING WORKING CAPITAL:
 CONVENTIONAL METHOD:
According to conventional method, cash inflows and outflows are matched with
each other. Greater emphasis is laid on liquidity and greater importance is attached to current
ratio, liquidity ratio etc. which pertain to the liquidity of a business.
 OPERATING CYCLE METHOD:
In order to understand what gives to difference in the amount of timing of cash flows
.we should first know the length of time which is required to convert into resources,
resources into final product, the final product into receivables back into cash.
THERE ARE FOUR MAIN COMPONENTS IN THE OPERATING CYCLE:
 The cycle starts with free capital in the form of cash and credit, followed by investment in
materials, manpower and the services;
 Production phase;
 Storage of the finished products terminating at the time finished product is sold;
 Cash or accounts receivable collection period, which results in, and ends at the point of
Disinvestment of the free capital originally committed.
New free capital then becomes available for productive Re-investment. When new
liquid capital becomes available for recommitment to productive activity, a new operating cycle
begins.
This method is more dynamic and refers to working capital in a realistic way.
Different components of working capital are directed scientifically in order that the fullest utilization
of plant and machinery may be made. This method helps in increasing the profitability of a business.
This enables a company to maintain its liquidity and preserve that liquidity through profitability.

ADQUACY OF WORKING CAPITAL:
 It protects a business from the adverse effect of shrinkage in the values of current assets.
 It is possible to pay all the current obligations promptly and to take advantage of cash discounts.
 It enables a company to extend favorable credit terms to customers.
 There may be operating losses or decreased retained earnings.
 Current funds may be invested in non current assets
 There may be an unwise dividend policy
INADEQUACY OF WORKING CAPITAL:
 A company may not be able to take advantage of cash discount facilities.
 It is not possible to utilize production facilities fully for the want of working capital.
 A company will not be able to pay its dividends because of the non-availability of funds.
 A company may not be able to take advantage of profitable business opportunities.
 Its low liquidity may lead to low profitability in the same way as low profitability results in
low liquidity.
 The credit worthiness of the company is likely to be jeopardized because of the lack of
liquidity.
 A company may have borrowed funds at exorbitant rates of interest.
DANGERS OF EXCESSIVE WORKING CAPITAL:
 A company may keep very big inventories and tie up its funds necessarily.
 A company may be tempted to overtrade and lose heavily.
 There may be a imbalance between liquidity and profitability.
 A company may enjoy high liquidity and, at the same time, suffer from low profitability.

SOURCES OF WORKING CAPITAL:
SOURCES OF WORKING
CAPITAL
LOANS FROM FUNDS THROUGH

FLOTING OF ISSUE OF ACCEPTING
FINANCIAL INTERNAL
DEBENTURES SHARES PUBLIC DEPOSITS
INSTUTIONS FINANCING
 LOANS FROM FINANCIAL INSTITUTIONS:
The option is normally ruled out, because financial institutions do not provide
finance for working capital requirements. Further, this facility is not available to all
companies. For small companies this option is not practical.
 FLOATING OF DEBENTURE:
The probability of a successful floatation of debentures seems to be rather meager.

In the India capital market, floating of debenture has still to gain popularity. Debenture issues
of companies in private sector not associated with certain reputed and well-known groups
generally fail to attract investors to invest their funds in companies. In this context, the mode
of raising funds by issuing convertible debentures/bonds is also considered, which may
attract a number of investors.
 ACCEPTING PUBLIC DEPOSITS:
The next alternative is public deposits. The issue of tapping public deposits is
directly related to the image of the company seeking to invite public deposits. But the
problem of low profitability in many industries is very common.
 ISSUE OF SHARES:

With a view to financing additional working capital needs, issue of additional shares
could be one way to raise the equity base. Indian companies find themselves in a bad shape
in this context too. Low profit margins as well as lack of knowledge about the company
make the success of a capital issue very dim.
 RAISING FUNDS BY INTERNAL FINANCING:
Raising equity by operational profits poses problems for many companies, because
prices of their end- products are controlled and do not permit companies to earn profits
sufficient to pay reasonable dividend and retain profits to cover margin money requirements
to finance additional working assets. Still, a largely feasible solution lies in increasing
profitability through cost reduction measures managing the cash operating cycle,
rationalizing inventory stocks and so on.
FORMAT OF WORKING CAPITAL IN EXIDE INDUSTRIES LTD:
Format of working capital means the study of elements of current assets and current
liabilities. The main elements of current assets and current liabilities in Exide Industries ltd are:
CURRENT ASSETS:
 Inventories
 Sundry debtors
 Cash and bank balance
 Loans and advances
CURRENT LIABILITIES:
 Liabilities
 Provisions
Tools of Financial Analysis:

Following are the important methods/tools employed for studying and analyzing
financial statements of EXIDE INDUSTREIES, HOSUR are:
1) Ratio Analysis.
2) Statement of changes in working capital.
1) Ratio Analysis:
The ratio analysis is the one of the most powerful tools of financial analysis. It is the
process of establishing and interpreting various ratios (quantities relationship between figures and
groups of figures). It is with the help of ratios that the financial statement can be analyzed more
clearly and decision made from such analysis.
Meaning of ratio:
A ratio is a sample arithmetical expression of the relationship of one number to

another. It may are defined as the indicated quotient of two mathematical expressions. According to
accountant’s Handbook by Wixon, Kell and Bedford, a ratio “is an expression of a quantitative
relationship between two numbers”. In simple language ratios is one number into another and can be
worked out by dividing one number into the other. A financial ratio is the relationship between two
accounting figures expressed mathematically.
Ratios provide clues to the financial position of a concern. These are the pointers or
indicators of financial strength, soundness, positions or weakness of enterprises. One can draw
conclusion about the exact financial positions of a concern with the help of ratios.
Use and significance of ratio analysis:
The ratio analysis is one of the most powerful tools of financial analysis. It is used as
a device to analyzed and interprets the financial health of enterprise. The use of ratios is not confined
to financial managers only. There are several parties interested in the ratio analysis for knowing the
financial position of a firm for different purpose. The suppliers of goods on credit, banks, financial
institution, investors, shareholders and management all make use of ratio analysis one can measure
the financial condition of a firm and can point out whether the condition is strong, good,
questionable or poor.
1. Managerial use of ratio analysis:

 Helps in decision-making:
Financial statement is prepared primarily for decision-making. But the information

provided in financial statement is not an end in itself and meaningful conclusion cannot be
drawn from these statements alone. Ratio analysis helps in making decision from the
information provided in these financial statements.
 Helps in financial forecasting and planning
Ratio analysis is of much help in financial forecasting and planning. Planning

is looking ahead and the ratio calculated for a number of year’s work as a guide for future.
 Helps in communicating:
The financial strength and weakness of a firm are communicated in a more

easy and understandable manner by the use of ratio. The information contained in the
financial statement is conveyed in a meaningful manner to the one for whom it is meant.
Thus ratios help in communication and enhance the value of the financial statement.
 Helps in co-ordination:
Raito’s even help in co-ordination, which is of utmost importance in effective

business management. Better communication of efficiency and weakness of an enterprises
result in better coordination of the enterprises.
 Helps in control:
Ratio analysis even helps in making effective control of the business. Standard ratio
can be based upon Performa financial statement and variance and division, if any, can be
found by comparing the actual with the standards so as to take a corrective action at the right
time.
2. Utility to shareholders:
An investor in a company will like to assess the financial position of the concern
where he is going to invest. Every investor’s first interest will be the security of his investment
and then a return in the form of dividend or interest. Long-term solvency ratios will help an
investor in assessing financial position of the concern. Profitability ratios, on the other hand will

be useful to determine profitability positions. Ratio analysis helps an investor in making up his
mind whether present financial position of the concern warrants further investment or not.
3. Utility to creditors:
The creditors or suppliers extend short-term credit to the concern. They are
interested to know whether financial position of the concern warrants their payments at a
specified time or not. Current and acid test ratios will give an idea about the current financial
position of the concern.
4. Utility to government:
Government is interested to know the overall strength of the industry. Various

financial statement published by industrial units are used to calculate ratios for determine short
term, long term and overall financial position of the concern. Profitability index can also be
prepared with the help of ratios.
Types of ratios:
Several ratios, calculated from the accounting data, can be grouped into various
classes according to financial activity or function to be evaluated. People interested in financial
analysis are short and long term creditors, owner and management. Long-term creditors, on the other
hand, are more interested in the long-term solvency and profitability of the firm. Similarly, owners
concentrate on the firm’s profitability and financial positions. Management is interest in evaluating
every aspect of the firm’s performance. The ratios are listed as follows:
 Current ratio
 Quick ratio
 Working capital turnover ratio
 Current asset turnover ratio
 Net profit ratio
 Inventory turnover ratio
 Inventory to current asset ratio

 Current asset to share holders fund ratio
 Net working capital to current liability ratio
 Inventory to working capital ratio
 Fixed asset turnover ratio
 Equity ratio
 Fixed asset ratio
 Return on share holders fund
 Return on capital employed
 Working capital turnover ratio

PART- 5
DATA ANALYSIS &

INTERPRETATION

1. CURRENT RATIO:
The current ratio is a liquidity ratio that measures a company's ability to pay short-
term and long-term obligations. To gauge this ability, the current ratio considers the
current total assets of a company (both liquid and illiquid) relative to that company's
current total liabilities.
 FORMULA:
CURRENT AS S ETS
CURRENT RATIO=
CURRENT LIABILITIES
 TABLE-1
YEAR CURRENT ASSETS CURRENT LIABILITIES CURRENT
(RS in crores) (RS in crores) RATIO

2011-12 2430.16 1074.91 2.26
2012-13 3390.17 1820.28 1.86
2013-14 3529.44 1683.40 2.10
2014-15 3720.39 1719.09 2.16
2015-16 4177.26 2028.35 2.06

 GRAPH-1:
CURRENT RATIO
5
4.5
4
3.5
3
CURRENT RATIO
2.5
2
1.5
1
0.5
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
The current ratio in the year 2011-12 is 2.26, in the year 2012-13 is 1.86, in the year
2013-14 is 2.10, in the year 2014-15 is 2.16 and in the year 2015-16 is 2.06.
 INTERPRETATION:
From the analysis done in the previous step, it is interpreted that the current ratio has
decreased in 2012-13 compared to 2011-12, again increased in the year 2013-14, again
increased in 2014-15 and again decreased in the year 2015-16.

2. QUICK / LIQUID RATIO:
The quick ratio is a measure of how well a company can meet its short-term financial
liabilities, also known as the acid-test ratio. It is used to supplement the information given by
the current ratio.
 FORMULA:
QUICK (¿)LIQUID ASSETS

QUICK RATIO=
CURRENT LIABILITIES
 TABLE-2:
YEAR LIQUID ASSETS CURRENT LIABILITIES QUICK
(RS in crores) (RS in crores) ASSETS

2011-12 488.84 1074.91 0.45
2012-13 812.32 1820.28 0.44
2013-14 945.24 1683.40 0.56
2014-15 897.62 1719.09 0.52
2015-16 1016.15 2028.35 0.50
GRAPH-2:

0.6
QUICK ASSETS
0.5
0.4
0.3
quick assets
0.2
0.1
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
The quick ratio in the year2011-12 is 0.45, in the year2012-13 is 0.44, in the year
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the quick ratio has
decreased in the year 2012-13 compare to year 2011-12, again increased in the year 2013-14,
again decreased in the year 2014-15 and again decreased in the year 2015-16.
3. WORKING CAPITAL TURN OVER RATIO:

The working capital turnover ratio is also referred to as net sales to working capital.
It indicates a company's effectiveness in using its working capital. The working capital
turnover ratio is calculated as follows: net annual sales divided by the average amount
of working capital during the same 12 month period.
 FORMULA:
NET SALES
WORKING CAPITALTURNOVER RATIO=
NET WORKING CAPITAL
 TABLE-3:
YEAR NET SALES NET WORKING WORKING
(RS in crores) CAPITAL CAPITAL
(RS in crores) TURNOVER
RATIO
2011-12 5318.67 1355.21 3.92
2012-13 6365.89 1569.89 4.05
2013-14 8308.85 1846.04 4.50
2014-15 9534.95 2001.30 4.76
2015-16 9479.44 2148.91 4.41
 GRAPH-3:

WORKING CAPITAL TURN OVER RATIO

5
4.5
3.5
3 WORKING CAPITAL TURN

OVER RATIO
2.5
1.5
0.5
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 working capital turnover ratio is 3.92, in the year 2012-13 is
4.05, in the year 2013-14 is 4.50, in the year 2014-15 is 4.76 and in the year 2015-16 is 4.41.
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the working capital
turnover ratio has increased in the year 2012-13 compare to year 2011-12, again increased in
the year 2013-14, again increased in the year 2014-15 and again decreased in the year 2015-
16.

4. CURRENT ASSET TURNOVER RATIO:
The asset turnover ratio is an efficiency ratio that measures a company's ability to
generate sales from its assets by comparing net sales with average total assets. In other
words, this ratio shows how efficiently a company can use its assets to generate sales.
 FORMULA:
NET SALES
CURRENT ASSET TURNOVER RATIO=
CURRENT ASSETS
 TABLE-4
YEAR NET SALES CURRENT CURRENT
(RS in crores) ASSETS ASSETS
(RS in crores) TURNOVER
RATIO
2011-12 5318.67 2430.16 2.19
2012-13 6365.89 3390.17 1.88
2013-14 8308.85 3529.44 2.35
2014-15 9534.95 3720.39 2.56
2015-16 9479.44 4177.26 2.27
 GRAPH-4:

CURRENT ASSET TURNOVER RATIO

3
2.5
2
CURRENT ASSET
1.5 TURNOVER RATIO
0.5
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 current asset turnover ratio is 2.19, in the year 2012-13 is 1.88,
in the year 2013-14 is 2.35, in the year 2014-15 is 2.56 and in the year 2015-16 is 2.27.
 INTERPRETATION:
From the analysis done in the previous step, it is interpreted that the current asset
turnover ratio has decreased in the year 2012-13 compare to year 2011-12, again increased in
16.
5. STOCK TURNOVER RATIO/ INVENTORY TURNOVER RATIO:

The inventory turnover ratio is an efficiency ratio that shows how effectively
inventory is managed by comparing cost of goods sold with average inventory for a period.
This measures how many times average inventory is "turned" or sold during a period.
 FORMULA:
COST OF GOODS SOLD(NET SALES )

STOCK TURNOVER RATIO=
AVERAGE STOCK (INVENTORY )
 TABLE-5
YEAR NET SALES AVERAGE STOCK STOCK TURN
(RS in crores) (RS in crores) OVER RATIO

2011-12 5318.67 1160.71 4.58
2012-13 6365.89 1407.39 4.52
2013-14 8308.85 1302.86 6.38
2014-15 9534.95 1646.36 5.79
2015-16 9479.44 1245.88 7.61
 GRAPH-5

STOCK TURN OVER RATIO

8
5
STOCK TURN OVER RATIO
4
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 stock turnover ratio is 4.58, in the year 2012-13 is 4.52, in the year 2013-
14 is 6.38, in the year 2014-15 is 5.79 and in the year 2015-16 is 7.61.
 INTERPRETATION:
From the analysis done in the previous step, it is interpreted that the stock turnover ratio has
decreased in the year 2012-13 compare to year 2011-12, again increased in the year 2013-14,
again decreased in the year 2014-15 and again increased in the year 2015-16.
6. NET PROFIT RATIO:

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been
deducted from sales, and income taxes recognized.
 FORMULA:
NET PROFIT AFTER TAX

NET PROFIT RATIO=
NET SALES
 TABLE-6
YEAR NET PROFIT NET SALES NET PROFIT
AFTER TAX (RS in crores) RATIO
(RS in crores)
2011-12 464.69 5318.67 0.09
2012-13 540 6365.89 0.08
2013-14 546.16 8308.85 0.07
2014-15 616.33 9534.95 0.06
2015-16 713.42 9479.44 0.08
 GRAPH-6:

NET PROFIT RATIO

0.1
0.09
0.08
0.07
0.06
NET PROFIT RATIO
0.05
0.04
0.03
0.02
0.01
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 net profit ratio is 0.09, in the year 2012-13 is 0.08, in the year
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the net profit ratio
has decreased in the year 2012-13 compare to year 2011-12, again decreased in the year
2013-14, again decreased in the year 2014-15 and again increased in the year 2015-16.

7. INVENTORY TO CURRENT ASSET RATIO:
This ratio is calculated by dividing the total of inventory by the amount of current assets.
 FORMULA:
INVENTORY
INVENTORY ¿ CURRENT ASSETS RATIO=
CURRENT ASSETS
YEAR INVENTORY CURRENT INVENTORY TO
(RS in crores) ASSETS CURRENT ASSETS
(RS in crores) RATIO

2011-12 1160.71 2430.16 0.48
2012-13 1407.39 3390.17 0.42
2013-14 1302.86 3529.44 0.37
2014-15 1646.36 3720.39 0.44
2015-16 1245.88 4177.26 0.30
 GRAPH-7:

INVENTORY TO CURRENT ASSETS RATIO

0.6
0.5
0.4
INVENTORY TO CURRENT
0.3 ASSETS RATIO
0.2
0.1
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 inventory to current asset ratio is 0.48, in the year 2012-13 is 0.42, in the
year 2013-14 is 0.37, in the year 2014-15 is 0.44 and in the year 2015-16 is 0.30.
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the inventory to current
asset ratio has decreased in the year 2012-13 compare to year 2011-12, again decreased in the
year 2013-14, again increased in the year 2014-15 and again decreased in the year 2015-16.
8. RATIO OF CURRENT ASSETS TO SHARE HOLDERS FUNDS:

This ratio is calculated by dividing the total of current assets by the amount of share
holders’ funds.
 FORMULA:
CURRENT A SSETS
RATIOOF CURRENT ASSETS ¿ SHAREHOLDERS FUNDS= × 100
SHARE HOLDER FUNDS
 TABLE-8
YEAR CURRENT SHARE HOLDER’S RATIO OF CURRENT ASSETS
ASSETS FUND TO SHAREHOLDER’S FUND
(RS in crores) (RS in crores)

2011-12 2430.16 3057.32 79.49
2012-13 3390.17 3423.59 99.02
2013-14 3529.44 3731.46 94.59
2014-15 3720.39 4054.58 91.76
2015-16 4177.26 4434.07 94.21
GRAPH-8:

RATIO OF CURRENT ASSETS TO SHAREHOLDER’S FUND

120
100
80
RATIO OF CURRENT ASSETS TO
SHAREHOLDER’S FUND
60
40
20
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 ratio of current assets to share holder’s fund is 79.49, in the year 2012-
13 is 99.02, in the year 2013-14 is 94.59, in the year 2014-15 is 91.76 and in the year 2015-
16 is 94.21.
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the ratio of current assets to
share holder’s fund has increased in the year 2012-13 compare to year 2011-12, again
decreased in the year 2013-14, again decreased in the year 2014-15 and again increased in
the year 2015-16.
9. NET WORKING CAPITAL TO CURRENT LIABILITIES RATIO:

This ratio is calculated by dividing the total of net working capital by the amount of
current liabilities.
 FORMULA:
NET WORKING CAPITAL

NET WORKING CAPITAL ¿ CURRENT LIABILITY RATIO=
CURRENT LIABILITIES
 TABLE-9
YEAR NET WORKING CURRENT NET WORKING CAPITAL
CAPITAL LIABILITIES TO CURRENT
(RS in crores) (RS in crores) LIABILITIES RATIO

2011-12 1355.21 1074.91 1.26
2012-13 1569.89 1820.28 0.86
2013-14 1846.04 1683.40 1.10
2014-15 2001.30 1719.09 1.16
2015-16 2148.91 2028.35 1.06
 GRAPH-9:

NET WORKING CAPITAL TO CURRENT LIABILITIES RATIO

1.4
1.2
0.8 NET WORKING CAPITAL

TO CURRENT LIABILITIES
RATIO
0.6
0.4
0.2
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 working capital to current liabilities ratio is 1.26, in the year 2012-13 is
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the net working capital to
current liabilities ratio has decreased in the year 2012-13 compare to year 2011-12, again
increased in the year 2013-14, again increased in the year 2014-15 and again decreased in the
year 2015-16.

10.INVENTORY TO WORKING CAPITAL RATIO:
Inventory to working capital ratio, defined as a method to show what portion of a
company's inventories is financed from its available cash, is essential to businesses which
hold inventory and survive on cash supplies. In general, the lower the ratio, the higher the
liquidity of a company
 FORMULA:
INVENTORY
INVENTORY ¿ WORKING CAPITAL RATIO= ×100
WORKING CAPITAL
YEAR INVENTORY WORKING INVENTORY TO
(RS in crores) CAPITAL WORKING CAPITAL

2011-12 1160.71 1355.21 0.86
2012-13 1407.39 1569.89 0.90
2013-14 1302.86 1846.04 0.71
2014-15 1646.36 2001.30 0.82
2015-16 1245.88 2148.91 0.58
 GRAPH-10:

INVENTORY TO WORKING CAPITAL RATIO

1
0.9
0.8
0.7
0.6
INVENTORY TO WORKING
0.5 CAPITAL RATIO
0.4
0.3
0.2
0.1
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 inventory to working capital ratio is 0.86, in the year 2012-13 is 0.90, in
the year 2013-14 is 0.71, in the year 2014-15 is 0.82 and in the year 2015-16 is 0.58.
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the inventory to working
capital ratio has decreased in the year 2012-13 compare to year 2011-12, again increased in
16.
11. EQUITY RATIO/ PROPRIETORY RATIO:

The Equity Ratio is a good indicator of the level of leverage used by a company.
The Equity Ratio measures the proportion of the total assets that are financed by
stockholders, as opposed to creditors.
 FORMULA
SHARE HOLDE R' S FUND

EQUITY RATIO= × 100
TOTAL ASSETS
 TABLE- 11
YEAR SHARE HOLDER’S TOTAL ASSETS EQUITY RATIO
FUND (RS in crores)
(RS in crores)
2011-12 3057.32 4094.37 74.67
2012-13 3423.59 4548.35 75.27
2013-14 3731.46 4956.62 75.28
2014-15 4054.58 5402.62 75.05
2015-16 4434.07 6128.70 72.35
GRAPH-11:

EQUITY RATIO
76
75
74
EQUITY RATIO
73
72
71
70
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 fixed asset equity ratio is 74.67, in the year 2012-13 is 75.27, in the year
2013-14 is 75.28, in the year 2014-15 is 75.05 and in the year 2015-16 is 72.35
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the equity ratio has
increased in the year 2012-13 compare to year 2011-12, again increased in the year 2013-14,
again decreased in the year 2014-15 and again decreased in the year 2015-16.
12. FIXED ASSET TURNOVER RATIO:

Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the value
of fixed assets (on the balance sheet). It indicates how well the business is using its fixed
assets to generate sales.
 FORMULA:
NET SALES
¿ ASSET TURNOVER RATIO= ASSETS¿
NET ¿
 TABLE-12
YEAR NET SALES NET FIXED FIXED ASSET
(RS in crores) ASSETS TURNOVER

2011-12 5318.67 993.19 5.36
2012-13 6365.89 1053.18 6.04
2013-14 8308.85 1049 7.92
2014-15 9534.95 1190.33 8.01
2015-16 9479.44 1448.79 6.54
 GRAPH 12:

FIXED ASSET TURNOVER RATIO

9
5 FIXED ASSET TURNOVER

RATIO
4
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 fixed asset turnover ratio is 5.36, in the year 2012-13 is 6.04, in the year
2013-14 is7.92, in the year 2014-15 is 8.01 and in the year 2015-16 is 6.54.
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the fixed asset turnover ratio
has increased in the year 2012-13 compare to year 2011-12, again increased in the year 2013-
14, again increased in the year 2014-15 and again decreased in the year 2015-16.
13. WORKING CAPITAL TURNOVER RATIO:

The working capital turnover ratio is also referred to as net sales to working capital.
It indicates a company's effectiveness in using its working capital. The working capital
turnover ratio is calculated as follows: net annual sales divided by the average amount of
working capital during the same 12 month period.
 FORMULA:
NET SALES
WORKING CAPITALTURNOVER RATIO=
CAPITAL EMPLOYED
 TABLE-13
YEAR NET SALES CAPITAL EMPLOYED WORKING CAPITAL
(RS in crores) (RS in crores) TURNOVER RATIO

2011-12 5318.67 2851.92 1.86
2012-13 6365.89 9488.43 0.67
2013-14 8308.85 10810.48 0.77
2014-15 9534.95 12168.26 0.78
2015-16 9479.44 13297.61 0.71
 GRAPH-13:

WORKING CAPITAL TURNOVER RATIO

2
1.8
1.6
1.4
1.2 WORKING CAPITAL TURNOVER

RATIO
1
0.8
0.6
0.4
0.2
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 working capital turnover ratio is 1.86, in the year 2012-13 is 0.67, in the
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the working capital turnover
ratio has decreased in the year 2012-13 compare to year 2011-12, again increased in the year
2013-14, again increased in the year 2014-15 and again decreased in the year 2015-16.
14.FIXED ASSET RATIO:
The ratio establishes the relationship between fixed assets and net worth. It can be
calculated as follows.

 FORMULA:
¿ ASSETS
¿ ASSET RATIO=
NET WORTH
 TABLE- 14
YEAR FIXED ASSETS NET WORTH FIXED ASSET
(RS in crores) (RS in crores) RATIO

2011-12 993.19 2687.35 0.37
2012-13 1053.18 3079.69 0.34
2013-14 1049 3459.66 0.30
2014-15 1190.33 3841.09 0.31
2015-16 1448.79 4330.39 0.33
 GRAPH-14:

FIXED ASSET RATIO

0.4
0.35
0.3
0.25
FIXED ASSET RATIO
0.2
0.15
0.1
0.05
0
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 fixed asset ratio is 0.37, in the year 2012-13 is 0.34, in the year 2013-14
is 0.30, in the year 2014-15 is 0.31 and in the year 2015-16 is 0.33
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the fixed asset ratio has
decreased in the year 2012-13 compare to year 2011-12, again decreased in the year 2013-14,
again increased in the year 2014-15 and again increased in the year 2015-16.
15.RETURN ON CAPITAL EMPLOYED (ROCE):

Return on capital employed (ROCE) is a financial ratio that measures a company's
profitability and the efficiency with which its capital is employed. ROCE is calculated as
follows.
 FORMULA:
PROFIT BEFORE INTREST ∧TAXES

ROCE= ×100
CAPITAL EMPLOYED
 TABLE-15
YEAR PROFIT BEFORE CAPITAL ROCE
INTREST AND TAXES EMPLOYED
(RS in crores) (RS in crores)

2011-12 662.69 3198.20 20.72
2012-13 777.13 3548.97 21.90
2013-14 786.71 3862.67 20.37
2014-15 873.53 4213.51 20.73
2015-16 1008.59 4598.43 21.93
 GRAPH-15:

ROCE
22.5
22
21.5
ROCE
21
20.5
20
19.5
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 return on capital employed ratio is 20.72, in the year 2012-13 is 21.9, in
 INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the return on capital
employed ratio has increased in the year 2012-13 compare to year 2011-12, again decreased
in the year 2013-14, again increased in the year 2014-15 and again increased in the year
2015-16.
16.RETURN ON SHARE HOLDER’S FUND:

It is also called as Returns on Proprietors equity. It shows the ratio of net profit to
owners’ equity.
 FORMULA:
NET PROFIT AFTER TAX ∧INTEREST

RETURN ON SHARE HOLDE R ' SFUND = × 100
SHARE HOLDE R' SFUND
 TABLE- 16
YEAR NET PROFIT SHARE RETURN ON
AFTER TAX AND HOLDER’S FUND SHARE
INTEREST (RS in crores) HOLDER’S FUND
(RS in crores)
2011-12 464.69 3057.32 15.20
2012-13 540 3423.59 15.77
2013-14 546.16 3731.46 14.64
2014-15 616.33 4054.58 15.20
2015-16 713.42 4434.07 16.09
 GRAPH-16:

RETURN ON SHARE HOLDER’S FUND

16.5
16
15.5
RETURN ON SHARE HOLDER’S
FUND
15
14.5
14
13.5
2011-12 2012-13 2013-14 2014-15 2015-16
 ANALYSIS:
In the year 2011-12 return on share holder’s fund ratio is 15.2, in the year 2012-13 is 15.77,
in the year 2013-14 is 14.64, in the year 2014-15 is 15.2 and in the year 2015-16 is 16.09
 INTERPETATION:
From the analysis done In the previous step, it is interpreted that the return on share holder’s
fund ratio has increased in the year 2012-13 compare to year 2011-12, again decreased in the
year 2013-14, compare to 2014-15 and again increased in 2015-16.
Statement of changes in working capital:
As the study is confined to working capital management more attention is given

towards preparation of schedule of changes in working capital. Schedule of changes in working

capital is a statement prepared with the help of current account balances appearing in Balance sheet
of two dates increase or decrease in the values of current accounts is noted and its effect on working
capital is ascertained.

PART- 6
FINDINGS
SUGGESTIONS
CONCLUSION
FINDINGS

1. The current ratio in the year 2011-12 is 2.26, in the year 2012-13 is 1.86, in the year 2013-14
is 2.10, in the year 2014-15 is 2.16 and in the year 2015-16 is 2.06.
2. The quick ratio in the year2011-12 is 0.45, in the year2012-13 is 0.44, in the year 2013-14 is
0.56, in the year 2014-15 is 0.52 and in the year 2015-16 is 0.50.
3. In the year 2011-12 working capital turnover ratio is 3.92, in the year 2012-13 is 4.05, in the
4. In the year 2011-12 current asset turnover ratio is 2.19, in the year 2012-13 is 1.88, in the
5. In the year 2011-12 stock turnover ratio is 4.58, in the year 2012-13 is 4.52, in the year 2013-
14 is 6.38, in the year 2014-15 is 5.79 and in the year 2015-16 is 7.61.
6. In the year 2011-12 net profit ratio is 0.09, in the year 2012-13 is 0.08, in the year 2013-14 is
0.07, in the year 2014-15 is 0.06 and in the year 2015-16 is 0.08
7. In the year 2011-12 inventory to current asset ratio is 0.48, in the year 2012-13 is 0.42, in the
8. In the year 2011-12 ratio of current assets to share holder’s fund is 79.49, in the year 2012-
13 is 99.02, in the year 2013-14 is 94.59, in the year 2014-15 is 91.76 and in the year 2015-
16 is 94.21.
9. In the year 2011-12 working capital to current liabilities ratio is 1.26, in the year 2012-13 is
10. In the year 2011-12 inventory to working capital ratio is 0.86, in the year 2012-13 is 0.90, in
11. In the year 2011-12 fixed asset equity ratio is 74.67, in the year 2012-13 is 75.27, in the year
2013-14 is 75.28, in the year 2014-15 is 75.05 and in the year 2015-16 is 72.35
12. In the year 2011-12 fixed asset turnover ratio is 5.36, in the year 2012-13 is 6.04, in the year
2013-14 is7.92, in the year 2014-15 is 8.01 and in the year 2015-16 is 6.54.
13. In the year 2011-12 working capital turnover ratio is 1.86, in the year 2012-13 is 0.67, in the
14. In the year 2011-12 fixed asset ratio is 0.37, in the year 2012-13 is 0.34, in the year 2013-14
is 0.30, in the year 2014-15 is 0.31 and in the year 2015-16 is 0.33
15. In the year 2011-12 return on capital employed ratio is 20.72, in the year 2012-13 is 21.9, in

16. In the year 2011-12 return on share holder’s fund ratio is 15.2, in the year 2012-13 is 15.77,
in the year 2013-14 is 14.64, in the year 2014-15 is 15.2 and in the year 2015-16 is 16.09
SUGGESTIONS AND RECOMMENDATIONS:
 The company has to utilize the working capital effectively as it is the life blood of the
business.
 The company is maintaining more liquid liabilities than liquid assets. The company has to
maintain the ideal ratio of 1:1.
 The company is not maintaining current ratio. It has to maintain the ideal ratio of 2:1
 The company has to reduce the stock level to increase the sales.
CONCLUSION
The study is done on the Working Capital Management in Exide industries limited.
The main objective of the study to understand the Working Capital Management in
Exide Industries ltd and the practical difficulties faced by managing the working Capital and analyse
the various external and internal factors effecting working capital Management in Exide industries
ltd.
From the study conducted it can be concluded that the current ratio is fluctuating
throughout the study.
Whereas the liquid position of the company is not proper as their liquid liabilities are
more than liquid assets. The company should focus on the maintaining of ideal ratio 1:1. As the
working capital is the life blood of the business the company has to maintain efficiently the working
capital to run its operations smoothly.

ANNEXURE
FINANCIAL STATEMENTS
BIBLIOGRAPHY
STATEMENT OF CHANGES IN WORKING CAPITAL OF 2011-12 & 2012-13
PARTICULARS 2011-12 2012-13 STATEMENT OF

CHANGES IN
WORKING CAPITAL
INCREASE DECREASE
A. CURRENT ASSETS
Current investment 649.07 324.68 324.39
inventories 1160.71 1407.39 346.68
trade receivables 426.05 591.81 165.76
cash and cash equivalents 62.79 220.51 157.72
short term loans and advances 131.33 63.17 68.16
other current assets 0.21 782.61 782.4
TOTAL CURRENT ASSETS (A) 2430.16 3390.17 1352.56 392.55
B. CURRENT LIABILITIES
Short term borrowings 24.52 48.61 24.09
Trade payables 689.82 995.39 305.57
Other current liabilities 244.75 593.04 348.29
Short term provisions 115.82 183.24 67.42
TOTAL CURRENT LIABILITIES (B) 1074.91 1820.28 745.37
NET WORKING CAPITAL (A-B) 1355.25 1569.89 607.19 392.55
NET INCREASE IN WORKING 214.64 214.64
CAPITAL
TOTAL 1569.89 1569.89 607.19 607.19

CHANGES IN

WORKING CAPITAL
INCREASE DECREASE
A. CURRENT ASSETS
inventories 1407.39 1302.86 104.53
Trade payables 995.39 1120.86 125.47
TOTAL CURRENT LIABILITIES (B) 1820.28 1683.4 141.35 278.28
CAPITAL
TOTAL 1846.04 1846.04 289.37 289.37

CHANGES IN
WORKING CAPITAL

INCREASE DECREASE
A. CURRENT ASSETS
inventories 1302.86 1646.36 343.5
Trade payables 1120.86 1045.63 75.23
TOTAL CURRENT LIABILITIES (B) 1683.4 1719.09 110.92 75.23
NET WORKING CAPITAL (A-B) 1846.04 2001.3 290 134.74
CAPITAL
TOTAL 2001.3 2001.3 290 290

CHANGES IN
WORKING CAPITAL
INCREASE DECREASE

A. CURRENT ASSETS
inventories 1646.36 1245.88 400.48
Trade payables 1045.63 1132.14 86.51
TOTAL CURRENT LIABILITIES (B) 1719.09 2028.35 309.26
CAPITAL
TOTAL 2148.91 616.95 616.95
CONSOLADATED BALANCE SHEET OF EXIDE COMPANY
Apr 15 Apr 14- Apr 13- Apr12- Apr 11-

-Mar 16 Mar 15 Mar 14 Mar 13 Mar 12
EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 85.00 85.00 85.00 85.00 85.00
Total Share Capital 85.00 85.00 85.00 85.00 85.00
Revaluation Reserves 50.40 36.61 38.68 40.37 42.22
Reserves and Surplus 4,194.99 3,719.43 3,335.98 2,954.32 2,560.13
Total Reserves and Surplus 4,245.39 3,756.04 3,374.66 2,994.69 2,602.35
Total Shareholders Funds 4,330.39 3,841.04 3,459.66 3,079.69 2,687.35
Minority Interest 14.61 12.78 11.68 11.16 12.50
Policy Holders Funds 8,634.83 8,040.89 7,149.73 6,257.44 0.00
NON-CURRENT LIABILITIES
Long Term Borrowings 1.90 2.62 4.30 2.38 2.58
Deferred Tax Liabilities [Net] 130.51 131.47 111.78 103.66 87.02
Other Long Term Liabilities 143.87 104.62 46.41 7.36 4.39
Long Term Provisions 41.50 34.84 26.92 26.74 57.08
Total Non-Current Liabilities 317.78 273.55 189.41 140.14 151.07
CURRENT LIABILITIES
Short Term Borrowings 108.80 51.36 10.51 48.61 24.52
Trade Payables 1,132.14 1,045.63 1,120.86 995.39 689.82
Other Current Liabilities 501.94 365.07 352.91 593.04 244.75
Short Term Provisions 285.47 257.03 199.12 183.24 115.82
Total Current Liabilities 2,028.35 1,719.09 1,683.40 1,820.28 1,074.91
15,325.9
Total Capital And Liabilities 13,887.35 12,493.88 11,308.71 3,925.83
6
ASSETS
NON-CURRENT ASSETS
Tangible Assets 1,382.61 1,175.96 1,079.75 1,075.76 1,045.55
Intangible Assets 27.07 23.37 24.47 19.62 11.98
Capital Work-In-Progress 192.46 114.57 62.72 60.77 27.39
Fixed Assets 1,602.14 1,313.90 1,166.94 1,156.15 1,084.92
Non-Current Investments 6,992.36 5,869.18 4,794.30 3,696.64 344.38
Deferred Tax Assets [Net] 0.00 0.00 0.00 0.00 0.15
Long Term Loans And Advances 128.76 199.05 131.68 105.59 18.41
Other Non-Current Assets 1,843.54 2,202.93 2,289.62 2,378.26 1.10
Total Non-Current Assets 11,148.7 10,166.96 8,964.44 7,918.54 1,495.67

0
CURRENT ASSETS
Current Investments 1,254.69 478.90 609.52 324.68 649.07
Inventories 1,245.88 1,646.36 1,302.86 1,407.39 1,160.71
Trade Receivables 722.16 690.15 658.42 591.81 426.05
Cash And Cash Equivalents 293.99 207.47 286.82 220.51 62.79
Short Term Loans And Advances 132.57 100.68 76.13 63.17 131.33
Other Current Assets 527.97 596.83 595.69 782.61 0.21
Total Current Assets 4,177.26 3,720.39 3,529.44 3,390.17 2,430.16
15,325.9
Total Assets 13,887.35 12,493.88 11,308.71 3,925.83
6
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 732.44 407.70 470.73 443.35 280.95
BONUS DETAILS
Bonus Equity Share Capital 54.15 54.15 54.15 54.15 54.15
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market
7,037.20 6,063.85 4,604.58 3,742.88 17.99
Value
Non-Current Investments Unquoted Book
176.72 85.81 8.21 8.72 318.16
Value
CURRENT INVESTMENTS
Current Investments Quoted Market Value 322.19 332.59 229.91 140.43 100.00
Current Investments Unquoted Book Value 932.84 148.56 379.33 184.26 549.07

CONSOLADATED PROFIT AND LOSS A/C OF EXIDE COMPANY
Apr 15 - Apr 14- Apr 13- Apr12- Apr 11-

Mar 16 Mar 15 Mar 14 Mar 13 Mar 12
PARTICULARS
Revenue From Operations [Gross] 9,986.42 9,946.12 8,859.71 7,154.71 5,882.31

Less: Excise/ Service Tax/Other Levies 920.83 786.11 793.38 793.58 563.64
Revenue From Operations [Net] 9,065.59 9,160.01 8,066.33 6,361.13 5,318.67
Other Operating Revenues 413.85 374.94 242.52 4.76 0.00
Total Operating Revenues 9,479.44 9,534.95 8,308.85 6,365.89 5,318.67
Other Income 135.09 95.15 70.80 56.05 41.46
Total Revenue 9,614.53 9,630.10 8,379.65 6,421.94 5,360.13
EXPENSES
Cost Of Materials Consumed 4,121.90 4,827.48 3,917.17 4,208.69 3,467.88
Purchase Of Stock-In Trade 66.83 113.14 100.37 74.03 49.85
Changes In Inventories Of FG,WIP And
240.11 -289.02 -11.69 -200.30 -56.89
Stock-In Trade
Employee Benefit Expenses 851.10 760.93 682.12 403.17 330.38
Finance Costs 1.65 3.21 7.61 9.06 14.91
Depreciation And Amortization
179.96 155.32 140.40 122.00 108.37
Expenses
Other Expenses 3,144.39 3,185.51 2,756.96 1,028.16 783.00

Total Expenses 8,605.94 8,756.57 7,592.94 5,644.81 4,697.50
Profit/Loss Before Exceptional,
1,008.59 873.53 786.71 777.13 662.63
Extraordinary Items And Tax
Profit/Loss Before Tax 1,008.59 873.53 786.71 777.13 662.63
Tax Expenses-Continued Operations
Current Tax 293.27 235.83 232.94 220.61 182.04
Less: MAT Credit Entitlement 0.00 0.53 0.00 0.00 0.00
Deferred Tax -1.10 21.90 7.61 16.52 15.90
Total Tax Expenses 292.17 257.20 240.55 237.13 197.94
Profit/Loss After Tax And Before
716.42 616.33 546.16 540.00 464.69
Extra Ordinary Items
Profit/Loss From Continuing
716.42 616.33 546.16 540.00 464.69
Operations
Profit/Loss For The Period 716.42 616.33 546.16 540.00 464.69
Minority Interest -2.72 -1.78 -1.50 -1.87 -3.05
Share Of Profit/Loss Of Associates 0.00 0.00 0.00 11.22 -15.58
Consolidated Profit/Loss After MI
713.70 614.55 544.66 549.35 446.06
And Associates
OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.) 8.00 7.00 6.00 6.00 5.00
Diluted EPS (Rs.) 8.00 7.00 6.00 6.00 5.00
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 204.00 187.00 153.00 136.00 127.50
Tax On Dividend 41.01 33.74 25.77 22.45 20.67
BIBLIOGRAPHY
FINANCIAL MANAGEMENT by SIR. PRASANNA CHANDRA
PRINCIPAL OF MANAGEMENT ACCOUNTING by DR. S N MAHESHWARI

REFERENCES
MR. MANJUNATH (ACCOUNTS DEPARTMENT)
WEBSITES
www.wikipedia.org
www.exideindustries.com
www.exidereachout.com
www.exide4u.com

Varun Project

Uploaded by

Copyright:

Available Formats

Varun Project

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Varun Project

Uploaded by

Copyright:

Available Formats

WORKING CAPITAL MANAGEMENT

KRUPANIDHI DEGREE COLLEGE Page | 1

The working capital management refers to management of working capital or to be

KRUPANIDHI DEGREE COLLEGE Page | 2

KRUPANIDHI DEGREE COLLEGE Page | 3

i. Place of study: EXIDE INDUSTRIES, HOSUR.

TITLE OF THE STUDY

Project Report on “A study on Working Capital Management with reference to

STAMETMENT OF THE PROBLEM:

OBJECTIVES OF THE STUDY:

KRUPANIDHI DEGREE COLLEGE Page | 4

The study relates to working capital management in EXIDE INDUSTRIES,

Thus research is an organized inquiry designed and carried out to provide

SOURCES OF DATA COLLECTION

KRUPANIDHI DEGREE COLLEGE Page | 5

LIMITATIONS OF THE STUDY

1) The information is considered is confidential and not available for study.

KRUPANIDHI DEGREE COLLEGE Page | 6

KRUPANIDHI DEGREE COLLEGE Page | 7

MANUGACTURING INDUSTRY OVERVIEW

Manufacturing industry refers to those industries which involve in the

EVOLUTION OF MANUFACTURING INDUSTRY

Working of manufacturing industry:

Manufacturing industries are the chief wealth producing sectors of an economy.

KRUPANIDHI DEGREE COLLEGE Page | 8

ANALYSIS OF MANUFACTURING INDUSTRY

Statistical data showing the impact of the manufacturing industry on economy:

KRUPANIDHI DEGREE COLLEGE Page | 9

There are two types of batteries, primary (disposable) and secondary

KRUPANIDHI DEGREE COLLEGE Page | 10

A battery, which is actually an electric cell, is a device that produces electricity

TIMELINE OF BATTERY HISTORY

KRUPANIDHI DEGREE COLLEGE Page | 11

KRUPANIDHI DEGREE COLLEGE Page | 12

 Incorporated in January 1947.

KRUPANIDHI DEGREE COLLEGE Page | 13

KRUPANIDHI DEGREE COLLEGE Page | 14

KRUPANIDHI DEGREE COLLEGE Page | 15

 Largest manufacturers and exporter of batteries in Asia.

WHY EXIDE INDIA?

KRUPANIDHI DEGREE COLLEGE Page | 16

4) OFFER WIDE RANGE OF BATTERIES

EXIDE offers complete solution regarding equipment selection, battery sizing,

KRUPANIDHI DEGREE COLLEGE Page | 17

Over 52 years accumulated experience of research and development, manufacturing

KRUPANIDHI DEGREE COLLEGE Page | 18

MANUFACTURING PLANTS OF EXIDE

MANUFACTURING STATE ESTABLISHED YEAR

Chinchwad Pune 1969

Haldia West Bengal 1981

Hosur Tamil Nadu 1997

Taloja Maharashtra 1998

Ahmednagar Maharashtra 1998

Bawal Haryana 2003

 Mr. R. G. Kapadia, Chairman & Independent Director

KRUPANIDHI DEGREE COLLEGE Page | 19

 Manufacturing and operation started on June 1997

KRUPANIDHI DEGREE COLLEGE Page | 20

NATURE OF BUSINESS CARRIED