INDEX

CHAPTER I
 INTRODUCTION
 OBJECTIVES OF STUDY
 NEED FOR THE STUDY
 SCOPE OF THE STUDY
 METHODOLOGY OF THE STUDY
 LIMITATIONS OF THE STUDY

CHAPTER II
 INDUSTRY PROFILE
 COMPANY PROFILE

CHAPTER III
 THEORETICAL FRAME WORK OF STUDY

CHAPTER IV
 DATA ANALYSIS AND INTREPRETION

CHAPTER V
 FINDINGS
 SUGGESTIONS
 CONCLUSION
 BIBLIOGRAPHY
 INTRODUCTION

Finance plays a significant role in the operations of any purposive organization.

Proper planning and control of business finance lead to the efficient utilization of resources.
Financial decisions also alter the size and variability of the earnings stream or profitability.
The value of the firm determined by financial policy decisions, such as risk and profitability.
The task of financial management is to strike a balance between risks and profitability by
contributing the highest long-term value to the securities of the firm.

Financial Management therefore performs a crucial role in the survival and success
of business undertaking. The objectives of financial management cover the maximization of
profits, wealth and well being of shareholders.

Financial management is that managerial activity which is concerned with the

planning and controlling of the firms financial resources. Through it was a branch of
economies till 1890, as a separate activity or discipline it is of recent origin. Still, it has no
unique body of knowledge of its own, and draws heavily on economics for its theoretical
concepts even today.

Ezra soloman,

Financial management is concerned with the efficient use of an important economic

resource, namely, capital funds.

FINANCE

Finance has taken on an even greater strategic focus as Manager Scope with how to
create value within corporate settings, proper utilization of resources, balancing various stake
holders claims, information effects and financial signaling, the globalization of finance,
regulatory and law changes and a host of other consideration now permeate the land scope of
financial decision making.

According to Paul G Hastings, Finance is the management of the monetary affairs of a

company.
INTRODUCTION TO WORKING CAPITAL MANAGEMENT:

Working capital constitutes an integral part of the business if fixed assets have long
term implications; working capital contains short term and current significance. Working capital
is the firm’s holdings of current assets such as cash, receivables,inventory and marketable
securities. Every firm required working capital for its day to day transaction such as purchasing
raw material, for meeting salaries, wages rents, rates,advertising etc. But there is most
disagreement among various financial authorities(financial manager, accountants, business men
and economists) as to the exact meaning of the term working capital.

Definitions :

Working capital is descriptive of that capital which is not fixed. But the more

common use of working capital is to consider it as the difference between the book value

of the current assets and the current liabilities.

CONCEPTS OF WORKING CAPITAL:

There are two concepts of working capital

Balance sheet concept
Operating cycle or Circular flow Concept
On the basis of balance sheet Working capital may be classified in two ways:

WORKING CAPITAL

On the basis of concept on the basis of time

GROSS WORKING CAPITAL PERMANENT WORKING CAPITAL

NET WORKING CAPITAL TEMPERARY WORKING CAPITAL
Gross working capital
a l s o r ef e r r e d to a s w o rk in g ca p i t a l me a n s the firm’s investment
in current assets.i.e
Net working capital

refers to the difference between current assets and

currentliabilities. i.e.-------CURRENT ASSETS:Current assets are
those assets which in the ordinary course of business can
beconverted into cash or held in the business for the short
time only.Constituents of Current Assets:-STOCK OF RAW
MATERIALWORK IN PROGRESSFINISHED GOODSTRADE
DEBOTRSPREPAYMENTSCASH BALANCESCURRENT
LIABILITIES:Current Liabilities refers to short term debts of the
business. It is money owned bya business which will need to be repaid
within the next 12 months.Constituents of Current Liabilities:-TRADE
CREDITORSSHORT TERM LOANSBANK
OVERDRAFTSDIVIDEND DUE FOR PAYMENTTAX DUE TO PAY
WITHIN THE NEXT 12 MONTHS.
10

C U R R E N T A S S E T S
C U R R E N T L I A B I L
I T I E S
Net working capital
OBJECTIVES OF FINANCIAL MANAGEMENT

The objective of financial management are considered usually at two levels as micro
and macro level the chief objectives of financial management are to make an intensive and
economical use of capital resources.

The objective of financial management of macro level is considered of firm level since
business firms are profit seeking organizations. These objectives are frequently expressed in
terms of money. Therefore, primary resources are commonly encountered.

1. Profit Maximization

2. Wealth Maximization

Every enterprise needs inventory for smooth running of it’s activities. It serves as a
link between production and distribution process. There is, generally, a time lag between the
recognition of a need and its fulfillment. The greater the time lag, the higher requirements for
inventory. It also provides a cushion for future price fluctuations.

In a complex industry like HERITAGE FOODS INDIA LIMITED it studied clearly of

how the thing are being performed and what is the real impact of these on industry and how
effectively the inventory is utilized is interested to be known by researcher because of its great
significance in the research.

INTRODUCTION TO WORKING CAPITAL MANAGEMENT:

Working capital constitutes an integral part of the business if fixed assets have long
term implications; working capital contains short term and current significance. Working capital
is the firm’s holdings of current assets such as cash, receivables,inventory and marketable
securities. Every firm required working capital for its day to day transaction such as purchasing
raw material, for meeting salaries, wages rents, rates,advertising etc. But there is most
disagreement among various financial authorities(financial manager, accountants, business men
and economists) as to the exact meaning of the term working capital.

Definitions :

Working capital is descriptive of that capital which is not fixed. But the more

common use of working capital is to consider it as the difference between the book value
of the current assets and the current liabilities.

OBJECTIVES OF FINANCIAL MANAGEMENT

The objective of financial management are considered usually at two levels as micro
and macro level the chief objectives of financial management are to make an intensive and
economical use of capital resources.

The objective of financial management of macro level is considered of firm level since
business firms are profit seeking organizations. These objectives are frequently expressed in
terms of money. Therefore, primary resources are commonly encountered.

1. Profit Maximization

2. Wealth Maximization

Every enterprise needs inventory for smooth running of it’s activities. It serves as a
link between production and distribution process. There is, generally, a time lag between the
recognition of a need and its fulfillment. The greater the time lag, the higher requirements for
inventory. It also provides a cushion for future price fluctuations.

In a complex industry like HERITAGE FOODS INDIA LIMITED it studied clearly of

how the thing are being performed and what is the real impact of these on industry and how
effectively the inventory is utilized is interested to be known by researcher because of its great
significance in the research.

OBJECTIVES OF THE STUDY

Objective setting is the initial stage or starting point of any project to be undertaken. It is
essential to know what objectives means from the literally or the study point of view.
The main objectives of the study are:
 To study the working capital management of PMP INDIA PVT LTD.
 To study the various ratios related to inventory, receivable and payable.
 To study the factors affecting the working capital
 .To develop a practical approach towards problem solving by applying theoretical
knowledge.
NEED OF THE STUDY

Every bank have depositors. Therefore there is a need to know the percentage rate of
depositers and also there is great importance to understand the working capital management
system of this bank.

The study helps to take steps to control the working capital management process.
METHODOLOGY OF THE STUDY

The study is based on both primary and secondary data.

The primary data has been collected through structured questionnaire reflecting working
capital management practices . The collected data is tabulated and suitable interpretation had
been made by considering the data collection through secondary data like annual reports ,storage
records of the organization.
LIMITATIONS OF THE STUDY

The study has the following limitations

 The study is limited only for a period of 5 years i.e., from 2014-15to 2017 -2018.
 The limitations of ratio analysis can be applicable of the study.
 There may be approximation in calculating ratios and taking the figures from the annual
reports.
 CHAPTER–III

NDUSTRY PROFILE

COMPANY PROFILE
Industry profile