A

Summer Internship Project Report

On

WORKING CAPITAL MANAGEMENT

At
KONECRANES INDIA

Submitted to the Savitribai Phule Pune University in

Partial Fulfillment of Requirement for the Award of Degree of

MASTER OF BUSINESS ADMINISTRATION(MBA)

SUBMITTED BY

ROHAN MARUTI POWAR

Under the Guidance of

Prof. MADHULIKA GHUPTA

Through

DR. D. Y. PATIL COLLEGE CENTRE FOR MANAGEMENT

& RESEARCH,

CHIKHALI PUNE-411062

2021-2022
 Shikshan Maharshi Dr. D.Y. Patil Shikshan Sanstha’s

Dr. D. Y. Patil
Centre For Management & Research
Approved by AICTE, Affiliated to University of Pune ● DTE CODE-MB6168

CERTIFICATE

This is to certify that the Project Report titled “WORKING CAPITAL MANAGEMENT” for KONECRANES INDIA
which is being submitted herewith for the award of the degree of Master of Business Administration of Savitribai
Phule Pune University is the result of the original research work completed by Rohan Maruti Powar under my
supervision and guidance and to the best of my knowledge and belief the work embodied in this Project Report has
not formed earlier the basis for the award of any degree or similar title of this or any other University or examining
body.

Place: Project Guide HOD DIRECTOR

Date: DYPCMR
 ACKNOWLEDGMENT

I am highly grateful and thankful to my Director and my project guide Prof. Madhulika Gupta for helping me
in completion of my Summer Internship Project. Without their support this project would have not become a
reality. They have helped me throughout the project. I am indebted to them for extending me all cooperation and
patronage while completing the project. They have been wonderful supporters and continuous motivators for me
who helped me in turning my ordinary project into an excellent one.

I am thankful to KONECRANES INDIA for providing me an opportunity to work with them and make a wonderful
project.

ROHAN MARUTI POWAR

 DECLARATION

I, the undersigned, hereby declare that the Project Report titled “WORKING CAPITAL MANAGEMENT”
for KONECRANES INDIA written and submitted by me to the Savitribai Phule Pune University in partial
fulfillment of the requirements for the award of degree of Master of Business Administration under the guidance of
Prof. Madhulika Gupta is my original work and the conclusions drawn therein are based on the material collected
by myself.

Place : ROHAN MARUTI POWAR

Date : Project Student

 INDEX

SR. NO. CONTENTS PAGE NO.

1 INTRODUCTION
1.1 Objectives of the Study
1.2 Need of the Study
1.3 Scope of the Study
1.4 Timeline of the Project
1.5 Limitations of the Study

2 ORGANISATION PROFILE

3 THEORETICAL BACKGROUND

4 RESEARCH METHODOLOGY

5 DATA ANALYSIS & INTERPRETATION

6 OBSERVATION & FINDINGS

7 SUGGESTIONS & RECOMMENDATION

8 CONCLUSION

9 BIBLIOGRAPHY

ANNEXURE
 EXECUTIVE SUMMERY

Project Name : A Study of Working Capital Management of KONECRANES INDIA.

Company Name : KONECRANES INDIA Pvt Ltd.
Industry Type : Engineering and Service.
Duration : 60 Days

The project on Working Capital Management has been very good experience. Every manufacturing
company faces the problem of Working Capital Management in their day-to-day processes. An organization’s
cost reduced & profit increased only if it is able to manage its Working Capital efficiently. At the same time, the
company can provide the customer satisfaction & hence can improve their overall productivity & profitability,
Funds needed for short term needs for the purpose like raw material, payment of wages and other day to day
expenses are known as WORKING CAPITAL. Decision relating to Working Capital (Current Assets-Current
liabilities) and short-term financing are known as WORKING CAPITAL MANAGEMENT. It involves the
relationship between a firm’s short – term assets and its short-term liabilities. By definition, working capital
Management entails short –term definition, generally relating to the next one-year period.
The goal of working capital management is to ensure that the firm is able to continue its operation and that it
has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses. Working
capital is primarily concerned with inventories management, cash management & payable management.
The internship is the bridge between the institute & the organization. This made me to be involved in a project
that helps me to employ my theoretical knowledge about myriad & fascinating facets of finance. Moreover, in
the process I could contribute substantially to the organizational growth.
The experience that I gathered over the past two months has certainly provided the organization, which I believe
will help me shouldering any responsibility in a future.
 INTRODUCTION TO WORKING CAPITAL MANAGEMENT

Working capital may be regarded as the life blood of the business. Working capital is the Major importance for
internal and external analysis because of its close relationship with the current day to day operation of business.

Funds collected from different sources are invested in the business for the acquisition of assets. These funds are
applied for earning revenue. Working capital management comes under the scope of financial management.
Financial management involves the application of general management principles to particulars financial
operation. Cash is the life of company, if this lifeline deteriorated, so does the companies’ ability to found its
operation, reinvest and meet capital requirement and payments. Understanding a company’s cash flow prospects
is looking its working capital management.

Working capital refers to the cash a business requires for day-to-day operations, or more specifically for the
financial the conversion of raw materials to finished goods, which the company sells to generate revenue.
Among the most important items of working capital are levels of inventory, accounts receivables, account
payable. Analysis looks at these items for signs of a company’s efficiency and financial strengths.

The goal of working management is to manage the firm’s current assets and liabilities in such a way that a
satisfactory level of working capital is maintained. The term current assets refer to those assets which in the
ordinary course of business be, or will be, converted into cash within one year without undergoing diminution
in value and without disrupting the operation of the firm.

Working Capital is a difference of Current Assets and Current Liability.

Working Capital = Current Assets –Current Liability

In Working Capital, it is the Increase in Working Capital or Decreased in Working Capital.

Increased in Working Capital means the Increased in Current Assets and Decreased Current Liabilities

Decreased in Working capital means the decreased in current assets and increased in current Liability.

It is the Proportion of the Current Assets, Current Liability and the Working Capital.

Relationship of Current Assets and Working Capital is positive and upward relationship.

Relationship of Current Liability and Working Capital is negative and downward relationship.
DEFINITION
According to Gretsenberg-

“Circulating capital means current assets of a company that are changed in the ordinary course of business from
one form to another.”

According to Weston & Brigham –

“Working capital refers to a firm’s investment in short term assets, such as cash amounts receivables,
inventories etc.”
 CLASSIFICATION OF WORKING CAPITAL

Concept based and Time-based working capital

Gross working
capital

Net working
Concept based
capital

Negative
working capital
Working
capital Regular
working capital
Permenant /
Fixed
Reserve
working capital
Time based
Seasonal
working capital
Temperory/
Variable
Special
working capital
 OBJECTIVES OF THE STUDY
1) To study the concept of working capital management at KONECRANES INDIA.
2) To know the various sources and applications of working capital.
3) To understand the impact of cash flows on the working capital.
4) To offer the suggestions based on the observations

NEED OF STUDY

 The need for working capital management arises due to the time gap between production and realization
of cash from sales.
 It helps to maintain proper balance between profitability, risk, and liquidity of the business significantly.
 By managing the working capital, current liabilities are paid in time.
 The Management of working capital helps to manage all the factors affecting the working capital in the
most profitable manner.

SCOPE OF STUDY

The study is on working capital management of selected public enterprises. The study
furnishes the management of idea about the performance of working capital of the company.
Management of working capital refers to management of current assets, current liabilities and
relationship between them. The basic goal of working capital is to maintain the satisfactory level of
working capital. A sound working capital policy ensures higher profitability and proper liquidity of a
firm. Every business need funds for two purposes: for its establishment and to carry out its day-to-day
operations. For this purpose, it is important for the company to manage its short-term assets and
liability. Working capital is quite essential for the working of any business. For a good manufacturing
company, some basic capital for producing the goods is required before it starts selling them. It has to
take care of production expenses, administration expenses as well as selling expenses. Moreover,
since business is usually done on credit, there is a time lag between the date of sale and date of
receipt of revenues, which can be as high as 90 days at times. Considering all these, it is essential
that a company has sufficient capital to keep it going before its coverts its purchases into goods and
then finally into cash. Each and every study has its own scope. This project intends to study the
working capital position of the public enterprises. This study helps to identify the areas that could be
improved. Further suggestions were quoted which the company could use it in the future program
enhancing better utilization of all resources.
 LIMITATIONS OF THE PROJECT

Generally, company does not allow outsiders to conduct any study or research work in company.
Therefore, get the project done in company itself was very difficult. Due to confidentiality some important
information, which are important for the project, could not collected.

Some of the information lack in accuracy, due to which approximate values were used for the analysis.
Hence, the result also reveals approximate values.

The project is based on theoretical guidelines and as per situations prevalent at the time of practical
training. Hence, it may not be applied to different situations.

The time span for the project was very short which was 2 months, which itself act as a major constraint.
Moreover, studying the guidelines and applied it practically within such short time span was a task of great
pressure.
 COMPANY PROFILE

The Indian crane industry: Evolution and growth

From being simple machines used to carry up and bring down materials, cranes and hoists have
today become more sophisticated simplifying processes in manufacturing, mining, infrastructure, automotive
and construction industries.
A wide range of industries, especially manufacturing, mining and construction require heavy loads to be
lifted or lowered in various processes. Machineries like hoist and cranes have greatly refused the human efforts
and also brought down the process timing, thereby increasing the output.
A crane is a machine used for lifting materials. It has a winder, wire ropes or chains and sheaves to lift
and lower loads and to move them horizontally. It has one or more simple machines to produce the mechanical
power for moving the loads, which otherwise is beyond a human's physical capability. Cranes are commonly
used in the transport industry for loading and unloading freight. It is widely used in the construction industry,
especially while building tall buildings, and also in the manufacturing industry for assembling of heavy
equipment.
 The earliest cranes were used for construction activities in Ancient Greece. They were mostly powered
by Laboure’s or men or other animals. Later, as their application increased, they evolved into larger cranes to
lift heavier weights. With the growth in the shipping industry, harbor cranes were introduced for loading and
unloading material and even building of huge ships. Wood being the commonly used material back then, most
of the earliest cranes were made from wood. Later after industrial revolution, cast iron and steel cranes came
into existence.
The invention of steam engines added to the power of these cranes. The earliest steam crane being introduced in
the 18th or 19th century and were used till the late 20th century. With increase in the scope of their usage,
today's cranes are powered by internal combustion engines or electric motors and hydraulic systems and operate
with advanced computerized systems. Some industries though still use manual cranes power supply is a
concern.

Wall travelling jib crane Overhead Crane Service

 Clamp crane Crane Header

ABOUT KONECRANES

Leading the global overhead crane industry with the largest service network and a complete range of lifting
equipment.

ABOUT US
Konecranes Private Limited is a global player with locations in Finland and subsidiaries and
many partner agencies all over the world.
We offer our customer a complete range of cranes, drives and handling technology for every application
– optimized by comprehensive sales and service support.
These solutions provide our customers with valuable quality and efficiency benefits. In small workshops
as well as in major industrial enterprise.
Our extensive product range includes a wide range of solutions for specific industries for travel
application, load handling at the workplace and material flow in production and storage.
The company experts always focus on the benefits from our customers – the greatest possible efficiency
and reliability, optimum availability and maximum performance.
Our customer approach has a long tradition that dates back over a long history of Konecranes Private
limited. It began in 1910. Since 1924, KONE has been owned by one of Finland's wealthiest families,
the Herlin family.

MISSION

Not just lifting things, but entire businesses.

VISION

We know in real time how millions of lifting devices perform. We use this knowledge around
the clock to make our customers’ operations safer and more productive.

VALUES

 TRUST IN PEOPLE
 TOTAL SERVICE COMMITMENT
 SUSTAINED PROFITABILITY

OBJECTIVE
 Maximum availability of your equipment
 Cost effective operation
 Maximum safety and reliability
 Efficient utilization
 Sustainable maintenance of your investment

OUR SERVICE STORY

Safety is everything

We want our people and our customers returning home safely each and every night. At Konecranes there is no
job so important and no service so urgent that we cannot take the time to perform our work safely and correctly.
Lifting productivity

Of course, downtime is costly, but we want to make sure you get the most out of your uptime. Together with
safety, improving your productivity is our primary focus.

The strength of experience

When you choose Konecranes, you acquire a trusted source of global experience and knowledge combined with
local know-how to empower your lifting operations and increase your safety and productivity. Konecranes
began manufacturing overhead cranes in the 1930s and has since acquired companies with experience dating
back to 1884. In almost 100 years of making cranes, we have listened to our customers to develop equipment
and technology to help lift their businesses.

Konecranes is a world-leading group of Lifting Businesses, serving a broad range of customers, including
manufacturing and process industries, shipyards, ports and terminals. Regardless of your lifting needs,
Konecranes is committed to providing you with lifting equipment and services that increase the value and
effectiveness of your business.

We have always been dedicated to improving efficiency and performance of businesses in all types of
industries. And we have done this by continuously providing lifting equipment and services people can trust.

When you choose Konecranes, you acquire a unique source of global experience and knowledge combined with
local know-how to empower your lifting solutions and increase your safety and productivity.

PRODUCTS

 Light Lifting Equipment

o Electric Chain Hoists
o Electric Belt Hoists
o Steel Light Crane Systems and Monorails
o Aluminum Light Crane Systems and Monorails
o Manual Lifting Equipment
o Jib Cranes
 Industrial Cranes
o Industrial Cranes
o Wire Rope Hoists
o Crane Components
 Products for hazardous environments
o Cranes
o Wire Rope Hoists
o Light Lifting Equipment
o Manual Lifting Equipment
 Process Cranes
o Power Industry Cranes
o Waste-to-Energy Cranes
o Steel Industry Cranes
o Pulp & Paper Industry Cranes
o Petro-chemical industry cranes
o Other Industry Applications
o Automation & Software Products
 Port Cranes
o Container Handling
o Bulk Handling
o Shipyards
 Lift trucks
o Forklifts
o Reach stackers
o Empty Container Handlers
o Gantry Trucks
 SERVICES

Whether you operate cranes, hoists, load handling attachment or other related equipment from company
or any other manufacturer we are
 Crane Service able to offer a comprehensive
o Maintenance Programs and innovative range of service
o Inspection Services activities to support the entire life
o Repairs and Improvements
cycle of your lifting equipment
o Spare Parts
from a single source. Our aim is
o On-call Service
o Accessories and Lifting Equipment to enable you to concentrate fully
o Special Services and Consultation on your core business by giving
o Crane Reliability Survey you the certainty that your
 Port Service equipment operates with
o Maintenance Programs maximum reliability and
o Inspection Services efficiency.
o Repairs and Improvements
o Spare Parts
o On-call Service
o Fluid’s
o Crane Reliability Survey
Konecranes is committed to: -
 Machine Tool Service (MTS)
o Maintenance Programs
o Repairs and Improvements
 Behaving safely – always.
o Spare Parts
 Zero tolerance towards unsafe acts and safety violations.
 o On-call
Zero accidents Service illness at workplace.
and work-related
 Special Services
Continuallyoimproving and
our safety Consultation
culture and performance.
 Meeting or exceeding applicable legal and other requirements.

 Parts
o Crane Parts
o Port Crane Parts
 Modernizations LITERATURE REVIEW
o Steel
o Paper, power, Ports & Shipyard
 The purpose of this chapter is to present a review of literature relating to the working capital
management. The following are the literature review by different authors and different research scholars.

 HERZFELD B (1990), Studied that “Cash is King”- so say the money managers who share the
responsibility of running this country’s businesses. And with bank demanding more from their
prospective borrowers, greater emphasis has been placed on those accountable for so called Working
capital management. Working capital management refers to the management of current assets and
current liabilities.in essence, the purpose of that function is to make certain that the company has enough
assets to operate its business. Here are the things you should know about working capital management.

 SAMILOGLU F.AND DEMIRGUNES K (2008) , Studies that the effect of working capital
management on firms’ profitability. In accordance with this aim, to consider statistically significance
relationship between firm profitability and the components of cash conversion cycle at length, a simple
consisting of Istanbul Stock Exchange (ISE) listed.

 Gass D (2006), Studied “Cash is the lifeblood of business” is an often-repeated maxim amongst
financial managers. Working capital management refers to the management of current assets and current
liabilities. Components of short-term assets include inventories, loans and advances, debtors,
investments and cash and bank balances. Short-term liabilities include creditors, trade advances,
borrowings and provisions. The major emphasis is, however, on short-term assets, since short-term
liabilities arise in the context of short-term assets. It is important that companies minimize risk by
prudent working capital management.

RESEARCH
METHODOLOGY
 Statement of Problem

“Research Questions”

1. How companies measure the performance of the company?

2. Working Capital Management is it really necessary for the organization?

RESEARCH DESIGN: -
The project is based on descriptive research. The project deals with working capital of KONECRANES
INDIA and there has been a lot of research already been done on the topic. I have tried to understand the
functioning of working capital and its impact on the company. The research also include comparison between
KONECRANES INDIA and which one of these is better in its operations with research to working capital.

SOURCES OF DATA: -

Books were also referred to have understanding of working capital management and ratio analysis.

TOOLS AND TECHNIQUES FOR COLLECTION OF DATA: -

Data collection method can be broadly classified into

 Primary data
 Secondary data
Data collected from primary methods or which is the first-hand information is known as primary data. Data
collected from secondary methods or which is already available, second-hand data is known as secondary data.

PRIMARY SOURCE OF DATA: -

 Discussion with the supervisor for better understanding of the topic.

SECONDARY SOURCE OF DATA: -

 Annual report
 Web site of KONECRANES INDIA.
 Review of previous reports related to the topic.
  Study about the topic ‘working capital’ from books.
 Secondary data were collected by using company website, newsletters, annual report and books.

DATA ANALYSIS
AND
INTERPRETATION

COMPONENTS OF WORKING CAPITAL

The main components of the Working Capital Management are as follows:

 Receivable Management.
 Cash Management
 Inventory Management
 Payables Management

RECEIVABLE MANAGEMENT:

Receivable management highlights the importance of account receivable in the day-to-day operations of
a business enterprise and the role of receivable management in improving profitability and liquidity of an
enterprise. Various dimension of receivable management viz. Credit Standards, Credit Analysis, Credit Terms
and Collection Policies are included in receivable management. The Average Collection Patterns are the
methods of monitoring accounts receivable. Account receivables represent the amount due from its customers
to whom the company has extended the credit.

CASH MANAGEMENT:

Cash the most liquid asset, is of vital importance to the daily operations of the business firms. While the
proportion of corporate assets held in the form of cash is very small, often between 1% and 3%, its efficient
management is crucial to the solvency of the business because in a very important sense cash is the focal point
of fund flow in a business. In view of its importance, it is generally referred to as the “life blood of a business
enterprise”. The evidence suggests that the existing practices of cash inflows and outflows predictions remain
much to be desired. Concentration banking is the most popular technique employed by the business forms to
intensify cash inflows. Usually, the local sales office or a branch of the company performs this function. The
management at the head Office utilizes these funds on the basis of daily collection reports. As regards the
control of cash outflows, firms have a tendency to defer payment till the last moment. Funds are arranged only
on the day cheques are expected be presented by the payee and for the amount necessary to honors the cheques.
In the case of local payment cheques are many times handed over after the banking hours.

INVENTORY MANAGEMENT:

Working Capital as net concept is defined as the difference between current assets and current liabilities.
Current assets being those assets that are likely to be converted into liquidity within a year are time or so. These
include items like inventories of raw materials Semi manufactured articles or work-in-progress and finished
goods, accounts receivables or bills receivables, bank balance and cash balance etc. Current liabilities are in
essence short-term liabilities, which have to be settled in a year’s time. These include accounts payable or
amount payable to suppliers of goods and services for goods and services delivered on credit, bills payable,
bank overdraft etc. since inventories constitute a major item of current assets, the management of inventories is
crucial to successful working capital management. Working capital requirements are influenced by inventory
holding – the period during which raw materials remains in store, during which processing takes place and that
during which finished goods lie in the warehouse prior to sale. The level of inventory invested affects the total
investment in working capital. Thus, operating ratio of turnover or sales to Working Capital are affected by it
as well.

PAYABLES MANAGEMENT:

A substantial part of purchases of goods and services in business are on credit terms rather than against
cash payment. White the supplier of goods and services tends to perceive credit as a lever for enhancing sales
or as a form of non-price instrument of competition; the buyer tends to look upon at as a loaning of goods or

inventory. The supplier’s credit is referred to as accounts payable, trade credit, trade acceptance, commercial
draft or bills payable depending on the nature of credit provided. The extent to which this ‘buy now, pay latter’
facility is provided will depend upon a variety of factors such as the nature, quality and volume of items to be
purchased, the prevalent practices in the trade, the degree of competition and the financial status of the parties
concerned. Trade credit or payables constitute a major segment of current liabilities in many business
enterprises and they primarily finance inventories, which form a major component of current assets in many
cases.

OPERATING CYCLE CHART / WORKING CAPITAL CYCLE:

EVENTS OF OPERATING CYCLE

The operating cycle (working capital cycle) consists of the following event, which continues throughout
the life of business.

1) Conversion of cash into raw materials.

2) Conversion of raw materials into work-in-progress.

3) Conversion of work-in-progress into finished stock.

4) Conversion of finished stocks into accounts receivables through sale and

5) Conversion of accounts receivables into cash.

The duration of the operating cycle for the purpose of estimating working capital is equal to the sum of the
duration of each of above said events, less the credit period allowed by the suppliers.
In the form of an equation, the operating cycle process can be expressed as follows:

Operating cycle = R + W + F + D – C

Were,

R = Raw material and stores storage period.

W = Work-in-Progress period.

F = Finished goods storage period.

D = Debtor’s collection period

C = Credit payment period.

KONECRANES INDIA PVT LTD

ASSESSMENT OF WORKING CAPITAL

CURRENT ASSETS: - (Amount in thousands)

PARTICULARS 2018 2019 2020 2021

Inventories 1,27,767 2,49,843 2,09,664.91 2,29,320.99

Debtors 11,884 1,49,843 52,416.22 54,497.7

Cash and Bank 7,080 64,013 5,918.86 78,051.56

Loans and advances 9,800 68,616 23,667.20 63,804.07

(A) TOTAL CURRENT

ASSETS 1,56,531 5,32,315 2,91,667.19 4,25,674.31

CURRENT LIABILITIES: -

Current liabilities 1,33,797 2,26,262 1,23,540.37 1,74,579.32

 Provisions 9,707 28,495 34,194.0 49,581.30

(B) TOTAL CURRENT

LIABILITIES 1,43,504 2,54,757 1,57,734.37 2,24,160.62
(A-B) NET
INCREASE/DECREASE IN
WORKING CAPITAL 13,027 2,77,558 1,33,932.82 2,01,513.69

Since, the Working Capital of KONECRANES INDIA PRIVATE LIMITED is increasing every year these is
due to following reasons: -

 In Current Assets, Inventory and Loans & Advances are increases from the last years. But Cash &
Bank balance is decreases from the year 2019 to 2020, specially there is a drastically change in Cash
& Bank Balance. If we see the figures of Cash & Bank in Balance-Sheet, we can find that there is an
increase in Cash in hand and saving account of the company, but decrease in fixed deposits of the
firm from 64,013 to 5,918.86 in 2019 to 2020. All these Cash are invested in the Fixed Assets or
Inventory of the firm and this is happening every year. This shows that company is running at the
high risk. So, company should increase its cash & bank balance for good liquidity. And in the year
2018 we can see that the cash and bank balance has increased of 78,051.56.

 If we see the changes, we find that Current Assets & Current Liabilities of 2019 is increased from
2018. Such volatility in current assets & current liabilities indicates poor working capital
management of the company and it must be controlled, otherwise it must be harmful in future for the
company.

RATIO ANALYSIS
 The importance of working capital management cannot be over-emphasized in view of the time and
energy spent by company management on such decision. For any future corrective action analysis of past
performance of the firm on the working capital front is essential. This requires knowledge and use of certain
tools and techniques that may help management to spot out problem areas for future action. Among many such
analytical tools ratio analysis is a simple but effective tool available to the management. Working capital
management is concerned with maintaining an adequate amount of working capital, proper balance of current
assets vis-à-vis non-current assets in the asset structure and a reasonable mix of short term and long-term
sources in the financial structure of the firm. Ratio analysis can be used by management as a tool to verify the
level and composition of working capital held by management in the business as against its operations, the
extent of liquidity present in its asset structures, well as financial structure and the efficiency with which
working capital is being used in the business. In other words, management can employ ratios to analyze three
facts of working capital management, namely, liquidity and its structural health. To analyze the level of current
assets, current liabilities held and working capital position of Konecranes various ratios are used. These ratios
when compared with the ratios of past years show the improvement and financial strength achieved by the
company. The company is constantly refining its working capital management process and reducing cost and
risk.

CURRENT RATIO
(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

CURRENT ASSETS 156531 532315 291667.19 425674.31
CURRENT LIABILITIES 143504 254757 157734.37 224160.62

CURRENT RATIO 1.09: 1 2.09: 1 1.84: 1 1.90: 1

 CURRENT RATIO
2.5

1.5

0.5

0
2018 2019 2020 2021

Interpretation: -

 Current ratio indicates the margin of safety available with the company. Normally, it is expected that the
current ratio should be 2:1, which indicates that current assets should be twice as compared to current
liabilities.

 Current Ratio measures short term solvency of the company. Current Ratio of 2019 is more when
compared to 2018 and equal to its ideal ratio i.e., 2:1, which clearly indicates that is good for firms
ability to meet current obligation.

QUICK/ ACID TEST RATIO

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

QUICK ASSETS 28,764 2,82,472 82,002.28 1,96,353.32

CURRENT LIABILITIES 1,43,504 2,54,757 1,57,734.37 2,24,160.62

QUICK RATIO 0.20: 1 1.11: 1 0.52: 1 0.88: 1

 QUICK RATIO
1.2

0.8

0.6

0.4

0.2

0
2018 2019 2020 2021

Interpretation: -

 The Acid-Test Ratio, also known as the quick ratio, is a liquidity ratio that measures how sufficient a
company’s short-term assets are to cover its current liabilities.
 In other words, the acid-test ratio is a measure of how well a company can satisfy its short-term (current)
financial obligations
 The standard quick ratio is 1:1, which means that liquid current assets should be equal to the liquid
liabilities.

ABSOLUTE LIQUID RATIO

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

ABSOLUTE LIQUID
ASSETS 7,080 64013 5,918.86 78051.56
CURRENT LIABILITIES 143504 254757 157734.37 224160.62
ABSOLUTE LIQUID
RATIO 0.05 0.25 0.04 0.35
 ABSOLUTE LIQUID RATIO
0.4

0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
2018 2019 2020 2021

Interpretation:
 The ideal absolute liquid ratio is taken as 1:2.
 Absolute liquid assets = cash, cash equivalents, bank balances and marketable securities etc.
 It is the ratio of absolute liquid assets to quick liabilities. However, for calculation purpose, it is taken as
ratio of absolute liquid assets to current liabilities.
 This ratio was decreased due to the less bank balance of the company. Which was not good indication,
but in the year 2021 we can see that the ratio has increased and company is trying to make its ideal ratio.

INVENTARY TURNOVER RATIO

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

COST OF GOODS SOLD 4,37,541.34 428,974.40 769,637.94 858,243.12
AVERAGE INVENTARY 127,767 249,843 209,664.91 229,320.99
INVENTARY
TURNOVER RATIO 3.42 1.72 3.67 3.74
 INVENTARY TURNOVER RATIO
4

3.5

2.5

1.5

0.5

0
2018 2019 2020 2021

Interpretation: -

 Inventory turnover is an efficiency ratio which calculates the number of times per period a business sells
and replaces its entire batch of inventories.
 Inventory turnover ratio is used to assess how efficiently a business is managing its inventories. In
general, a high inventory turnover indicates efficient operations
 As we see, In the year 2019 inventory ratio has decreased by 1.72 from 3.42, which shows that it is
holding its inventory longer than previously measured time periods.

DEBTORS TURNOVER RATIO

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

CREDIT SALES 7,21,644 7,88,759.00 13,58,314.00 15,45,968
AVERAGE DEBTORS 11,884 1,49,843 52,416.23 54,497.70
DEBTOR TURNOVER
RATIO 60.72 5.26 25.91 28.37
 DEBTOR TURNOVER RATIO
70

60

50

40

30

20

10

0
2018 2019 2020 2021

Interpretation: -

 The receivables turnover ratio is a ratio measuring how efficiently a firm uses its assets.
 As we see decrease in debtor’s turnover ratio in the year 2018 to 2019 is from 60.72 to 4.81 is due to
sluggishness in the market. But we can see, from the year 2021 its again started improving.

DEBTORS COLLECTION PERIOD

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

AVERAGE DEBTORS 11,884 1,49,843 52,416.23 54,497.70
CREDIT SALES 7,21,644 7,88,759.00 13,58,314.00 15,45,968
DEBTORS
COLLECTION PERIOD 6 days 69 days 14 days 13 days
 80 DEBTORS COLLECTION PERIOD
70

60

50

40

30

20

10

0
2018 2019 2020 2021

Interpretation: -

 The period, on average, that a business takes to collect the money owed to it by its trade debtors. If a
company gives one month’s credit, then, on average, it should collect its debts within 45 days.
 Average collection period is increased in the year 2018 to 2019 from 6 days to 69 days. Company
should try to reduce the collection period days to utilize its working capital operating cycle. And we can
see the improvement from the year 2021.

WORKING CAPITAL TURNOVER RATIO

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

SALES 7,21,644 7,88,759.00 13,58,314.00 15,45,968
WORKING CAPITAL 13,027 2,77,558 1,33,932.8 2,01,513.7
WORKING CAPITAL
TURNOVER RATIO 55.40 2.84 10.14 7.67
 WORKING CAPITAL TURNOVER RATIO
60

50

40

30

20

10

0
2018 2019 2020 2021

Interpretation: -

 Working capital turnover is a ratio which measures how efficiently a company is using its working
capital to support a given level of sales.
 In the year 2018, there is an extremely high working capital turnover ratio can indicate that a company
does not have enough capital to support its sales growth. This is a particularly strong indicator when the
accounts payable component of working capital is very high, since it indicates that management cannot
pay its bill as they come due for payment.
 We can see the effect in the year 2019, as the working capital turnover ratio gets too low.

FIXED ASSETS TURNOVER RATIO

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

SALES 7,21,644 7,88,759.00 13,58,314.00 15,45,968
FIXED ASSETS 11,29,730 13,53,229 15,19,871.00 16,71,755.00
FIXED ASSETS
TURNOVER RATIO 0.64 0.58 0.89 0.92
 FIXED ASSETS TURNOVER RATIO
1

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2018 2019 2020 2021

Interpretation: -

 The fixed-asset ratio is used to measure operating performance. This ratio specifically measures a
company's ability to generate net sales from fixed-asset investments.
 A higher fixed-asset turnover ratio indicates that a company has more effectively utilized investment in
fixed assets to generate revenue.

TOTAL ASSETS TURNOVER RATIO

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

NET SALES 721644 788759 1358314 15,45,968
TOTAL ASSETS 1142756 1630787 1653803 1873269
TOTAL ASSETS
TURNOVER RATIO 0.63 0.48 0.82 0.83
 0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2018 2019 2020 2021

Interpretation: -

 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.
 Higher turnover ratios mean the company is using its assets more efficiently. Lower ratios mean that the
company isn’t using its assets efficiently and most likely have management or production problems.
 Assets turnover ratios are showing improvement in the year under review, which reflects management
efficiency.

CURRENT ASSETS TO TOTAL ASSETS

(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

CURRENT ASSETS 156531 532315 291667.2 425674.3
TOTAL ASSETS 1142756 1630787 1653803 1873269
CURRENT
ASSETS/TOTAL
ASSETS 0.14 0.33 0.18 0.23
 0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
2018 2019 2020 2021

Interpretation: -

 It indicates the extent of total funds invested for the purpose of working capital and throws light on the
importance of current assets of a firm.
 It should be worthwhile to observe that how much of that portion of total assets is occupied by the
current assets, as current assets are essentially involved in forming working capital and also take an
active part in increasing liquidity.
 In the year 2019, organization has increased its current assets which leads to ultimately increased in
current liability of that year.

CURRENT LIABILITIES TO TOTAL

LIABILITIES
(Amount in thousands)

PARTICULARS 2018 2019 2020 2021

CURRENT LIABILITIES 143504 254757 157734.37 224160.62
TOTAL LIABILITIES 1142756 1630787 1653803 1873269
CURRENT LIABILITIES
TO TOTAL LIABILITIES 0.13 0.16 0.10 0.12
 CURRENT LIABILITIES TO TOTAL LIABILITIES
0.18

0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0
2018 2019 2020 2021

Interpretation: -

 The Current to Total Liabilities ratio measures the percentage of Total Current Liabilities to Total
Liabilities, a useful measurement when reviewing a company’s debt structure.
 An increasing Current to Total Liabilities ratio is usually a negative sign, showing the company’s
proportion of Total Current Liabilities are increasing compared to its Total Liabilities.
 As we see, the ratio has increased from 0.13 to 0.16 in the year 2018 to 2019 it is because of
organization has increased its current assets.
 RECOMMENDATION
AND
CONCLUSION
Findings

 The net working capital is increasing from the year 2019 which shows that every year increase in current
assets is greater than increase in current liabilities and it shows that the company has sufficient fund to
meet its short-term obligation as they become due.
 They are using Liberal credit policy because of customer’s healthy financial condition and of good
customer relation.
 Sales increasing very fast, because of product demand and market growth.
 Selling goods on only credit not for cash.

Learning from the Project

Improved co-ordination:

Better co-ordination among purchase, production, marketing, finance department and effective
communication will help in achieving greater efficiency in working capital management.

Another strategy is to increase the inventory turnover, avoiding stock-outs and shortage of stock. This
can be done in the following way: -

 Increasing the raw materials turnover.

 Decreasing the production cycle.
 Increasing the finished goods turnover.
Discounting policy should be liberalized by giving more cash discount to the customers.

Active disposal of obsolete, surplus inventories:

Efforts should be made to dispose obsolete and surplus inventories at reasonable and profitable price
under a buy back arrangement with suppliers to avoid cost of charging it to profit & loss.

CONCLUSION
It is a prosperous, growing firm which would attain heights in coming years. Let me end by bringing in
the beginning. It is globally recognized that the growth of the economy depends to a large extent globally
on the growth of Manufacturing Industries.

Further, today’s Manufacturing Industries are absolutely different from what they were 10 years ago or
will be in the next 10 years. They would remain in the transition. There would be ups and downs.

To conclude, I would say that the Manufacturing Industries opportunity zone as contracting somewhere
and expanding somewhere. This may appear paradoxical. It must be understood that leadership
demands a brilliant focus on emerging opportunities, competence building, strategies for the leadership
position in the opportunities zone and principals centered business practices. Therefore, we need to
create the culture, which embraces change and moves ahead with an objective to lead. Let us complete
for the future global opportunities.

LIMITATIONS

Generally, company does not allow outsiders to conduct any study or research work in company.
Therefore, get the project done in company itself was very difficult. Due to confidentiality some important
information, which are important for the project, could not collected.

Some of the information lack in accuracy, due to which approximate values were used for the analysis.
Hence, the result also reveals approximate values.

The project is based on theoretical guidelines and as per situations prevalent at the time of practical
training. Hence, it may not be applied to different situations.

The time span for the project was very short which was 2 months, which itself act as a major constraint.
Moreover, studying the guidelines and applied it practically within such short time span was a task of great
pressure.

BIBLIOGRAPHY

DATA FROM COMPANY: -

  Secondary data: Balance sheet and Profit and loss account.

BOOKS: -
 Financial Management by Shristavas
 Advance Financial Management by M.Y Khan and Jain
 “Principles of Financial Management” by Satish M. Inamdar of Everest Publishing House

WEBSITES: -
 WWW.KONECRANESINDIA.COM