Questions for Viva Examination: 4 Question x 5 marks = 20 marks

1. What prompt you to choose this topic? Also state the relevance of this study in the industry which you have
selected.

I chose this project because it aligns perfectly with my interest & passion for Working
Capital Management. The objectives of the project strongly resonate with me, and I find
the challenges it presents to be exciting and intellectually stimulating.

This research is helpful in knowing the Havell's position of funds maintenance and
setting the standards for working capital inventory levels, liquidity ratio, quick ratio,
current ratio, return on current assets, etc.

• The principal motivation behind this project is to deliver a superior comprehension

of the idea working capital administration.

• To figure out the preparation and the board of working capital at Havells.

• To gauge the monetary adequacy of the organization by examining different

proportions.
• To recommend ways for better administration and control of working capital.

• To concentrate on the equilibrium between money and credit in the association.

This research is helpful to the management for expanding the dualism and the project
viability and present availability of funds.
This project is also useful as it companies the present year data with the previous year
data and thereby it shows the trend analysis i.e increasing fund or decreasing fund.

The project is useful in further expansion decision to be taken by Management.

2. Write down the sources of data collection to write review of literature with reason for selecting those
sources.

Data has collected from Havells India Limited web sites and published materials related
to working capital management as well as any relevant information on capital of the
company will be essentially collected. All data has been prepared based on 5 years of
Havells India Limited financial year data.

ANALYSIS OF DATA: Data and information which has gathered from the sources shall
form part of policies and practices regarding management of the working capital.
Analysis will be done in terms of theoretical concepts.

STATISTICAL TOOLS
The statistical tools for analyzing the data collected has percentage method and bar
graph diagrams.
Working capital shows an organization's functional proficiency. Assuming there is any cash
that is utilized for stock or client's records covering an organization's bills or different liabilities
can't be utilized. An expansion in working capital implies that it is negative, and a firm isn't
being productive in its tasks and records receivable assortments are slow.
The investigation of (Shin and Soenen, 1998) steady with later concentrate on the very true
that done by (Deloof, 2003) by involving test of 1009 enormous Belgian non-monetary firms
for the time of 1992-1996. Nonetheless, (Deloof, 2003) utilized exchange credit strategy and
stock arrangement are estimated by number of days records of sales, creditor liabilities and
inventories, and the money transformation cycle as an exhaustive proportion of working
capital administration. He establishes a critical negative connection between gross working
pay and the quantity of days records of sales, inventories and records payable.
3. Write down the hypothesis based on review of literature connect with your Project work.

The hypothesis is accepted as there is a positive relationship between efficient working

capital management and profitability of the company.
The companies more efficient in managing their working capital are expected to pose
high level of profitability and vice versa.
According to Hypothesis is accepted as the different components of the working capital
which are management of cash, management of receivables& payables and
management of debtors & creditors have a major effect on the management of the
working. capital in the company.
In the same way it is accepted the hypotheses that there is a negative relationship
between liquidity and profitability of the companies as so the companies with high level
of liquidity are expected to post low level of profitability and vice versa.
Numerous scientists have concentrated on working capital from various perspectives
and in various conditions. The accompanying ones were exceptionally fascinating and
helpful for our research: (Eljelly, 2004) clarified that effective liquidity the board includes
arranging and controlling ebb and flow resources and momentum liabilities in such a
way that takes out the gamble of failure to meet due transient commitments and evades
unnecessary interest in these resources.
As indicated by Ghosh and Maji, 2003: - - 22 -
In this paper made an endeavor to look at the effectiveness of working capital
administration of the Indian concrete organizations during 1992 - 1993 to 2001 - 2002.
For estimating the effectiveness of working capital administration, execution, usage, and
generally speaking productivity records were determined as opposed to utilizing some
normal working capital administration proportions.
4. How would you have connected objectives of your topic with the review of literature?

As per Shin and Soenen, 1998: -

As per Smith and Begemann 1997: -

Underlined that the people who advanced working capital hypothesis shared that benefit
and liquidity involved the striking objectives of working capital administration. The issue
emerged on the grounds that the boost of the company's profits could truly undermine
its liquidity, and the quest for liquidity tended to weaken returns. This article assessed
the relationship between conventional and elective working capital measures and profit
from speculation (return on initial capital investment), explicitly in modern firms recorded
on the Johannesburg Stock Trade (JSE).

Featured that effective Working Capital Administration (WCM) was vital for making an
incentive for the investors. How functioning capital was overseen fundamentally affected
both productivity and liquidity. The connection between the length of Net Exchanging
Cycle, corporate productivity and hazard changed stock return was analyzed utilizing
relationship and relapse investigation, by industry and capital power. They found areas
of strength for a connection between lengths of the company's net trading Cycle and its
benefit.
Numerous scientists have concentrated on working capital from various perspectives
and in various conditions. The accompanying ones were exceptionally fascinating and
helpful for our research: (Eljelly, 2004) clarified that effective liquidity the board includes
arranging and controlling ebb and flow resources and momentum liabilities in such a
way that takes out the gamble of failure to meet due transient commitments and evades
unnecessary interest in these resources.
As indicated by Ghosh and Maji, 2003: -
In this paper made an endeavour to look at the effectiveness of working capital
administration of the Indian concrete organizations during 1992 - 1993 to 2001 - 2002.
For estimating the effectiveness of working capital administration, execution, usage, and
generally speaking productivity records were determined as opposed to utilizing some
normal working capital administration proportions.
5. How review of literature provides strong base to identify solution for the problem identified in that company
/ industry?

3&4

As per Marc Deloof 25th APR 2003: -

The connection between working capital administration and corporate profitability is
examined for an example of 1,009 huge Belgian non-monetary firms for the 1992-1996 period.
Exchange credit strategy and stock approach are estimated by number of days debt claims,
creditor liabilities and inventories, and the money change cycle is utilized as a comprehensive
proportion of working capital administration. The outcomes recommend that chiefs can
increase corporate profitability by diminishing the quantity of days debt claims and
inventories. Less beneficial firms stand by longer to cover their bills.
6. What are the challenges you faced while conducting your project data collection and how did you resolve it?

The quality of data collected is critical for making accurate business decisions. Poor
data quality can lead to incorrect insights and wasted resources. The challenge with
data quality is that it can come from a variety of sources, including data entry errors,
incomplete data sets, and outdated information.
Once data is collected, it must be analyzed to extract meaningful insights that can
inform business decisions. The challenge with data analysis is that it requires advanced
data analytics skills and tools, such as machine learning algorithms and data
visualization software.
Depending on the nature of your project or study, accessing relevant data sources may
prove difficult or time-consuming due to restrictions imposed by organizations holding
vital information or limitations in available resources.
The challenges often faced when collecting data include the following: Data quality
issues. Raw data typically includes errors, inconsistencies and other concerns. Ideally,
data collection measures are designed to avoid or minimize such problems.
The collection of data might face challenges such as sampling bias, ensuring data
reliability and validity and respecting data ethics.
7. Summarize your understanding / view of the project findings and suggestion to the Company/Industry.

Working Capital is the prime and most important requirement for carrying out the day-
to-day operations of the business. Working Capital gives the much-needed liquidity to
the business. Working Capital Finance reduces the overall fund requirement, required to
build up the Current Assets, which in turn help you improve your Turnover Ratio.
Firms are created to generate revenues for their owners in the long-term. However, the
long-term value is a sum-total of short – term values.

Working capital management takes care of the short – term value creation. Working
capital management requires managing the short-term levels of investment and
financing them.
Managing working capital levels refer to the investment in cash, inventories and
receivables as well as short-term financing sources such as trade credits and bank loans.
Working Capital is the lifeline of every industry, irrespective of whether it's a
manufacturing industry, services industry.
Findings of the study indicated that the Indian Cement Industry as a whole did not
perform remarkably well during this period. (Shin and Soenen, 1998) highlighted that
efficient Working Capital Management (WCM) was very important for

creating value for the shareholders.

The way working capital was managed had a significant impact on both profitability and
liquidity. The relationship between the length of Net Trading Cycle, corporate
profitability and risk adjusted stock return was examined using correlation and
regression analysis, · by industry and capital intensity.

They found a strong negative relationship between lengths of the firm's net-trading
Cycle and its profitability. In addition, shorter net trade cycles were associated with
higher risk adjusted stock returns.
Some of the findings the researcher found out after carefully analyzing

The questionnaire are as follows:

1) The way of working capital was managed has a significant impact on both profitability and liquidity.

2) There is a negative relationship between liquidity and profitability of the company so company with high level of
liquidity are expected to post low level of profitability and company with low level of liquidity are expected to post high
level of profitability .

3) There is a possible positive relationship between efficient working capital management and profitability. company
more efficient in managing their working capital are expected to pose high level of profitability and vice versa.

4) The ultimate objective of any company is to maximize the profit, But, preserving liquidity of the company is an
important objective too.

5) Efficient working capital management involves planning and on the one hand and avoid excessive investment in these
assets on controlling current assets and current liabilities in a manner that eliminates the risk of inability to meet due
short term obligations the other hand.

6) Profitability can be increased in the expense of liquidity.

7) Working Capital Management is a very sensitive area in the field of financial management as it involves the. decision
of the amount and composition of current assets and the financing of these assets.

SUGGESTIONS OR RECOMMENDATION

1)Establish systems to measure working capital. Check whether. levels of working capital can be measured accurately
and regularly, ideally on a daily basis, and certainly on a weekly basis.

It needs system that will allow the company to state the, amount of cash, bills receivable, bills payable, debtors and
creditors.

2) Record past and current levels of working capital knowing the point.

This helps in setting a realistic budget and will enable the company to establish times of the month/year when elements
of working capital are higher/lower.

3) Management of cash is one of the most important areas in the management of working capital in company.
8. How can you relate objectives of your study with conclusion through the SWOT analysis?

The SWOT Analysis is simply an assessment.

So, the conclusion (i.e. the finishing) of the SWOT is when you reach a full understanding of your:
Strengths, Weaknesses, Opportunities, and Threats. By fully understanding them, you can begin to
make decisions that reinforce your Strengths, guard against Weakness, capitalize on the Opportunity,
and mitigate the Threats.

To conclude a SWOT analysis, the key steps are:

1. Summarize the key takeaways from the analysis of the organization's Strengths, Weaknesses,
Opportunities, and Threats. This should highlight the most impactful internal and external factors
identified.

2. Identify the strategic implications of the SWOT findings. Discuss how the organization can
leverage its strengths and opportunities, while also addressing its weaknesses and mitigating
threats.

3. Outline a set of strategic recommendations or an action plan based on the SWOT analysis. This
should provide concrete next steps the organization can take to improve its competitive
position.

4. Reiterate the purpose of the SWOT analysis and how the conclusions will inform the
organization's overall strategy and decision-making going forward.

5. Emphasize the importance of regularly revisiting and updating the SWOT analysis as the
organization's internal and external environments evolve over time.

9. Discuss the practical implications of your research.

Working capital management refers to managing a company's short-term financial assets and liabilities.

The main objective of the working capital management is to maintain an optimal balance between each
of the working capital components. Operating costs and short-term obligations while maximizing its
profitability.

Hence, working capital is critical to gauge company’s short-term health, liquidity and operational
efficiency.

WC = current assets – current liabilities

Positive WC means company has enough resources to pay its short-term debts and invest in growth
and expansion.

Business success heavily on the ability of financial executives to effectively manage receivables
inventory and payables.

Efficient working capital management helps maintain smooth operations and can also help to improve
the company's earnings and profitability. Management of working capital includes inventory
management and management of accounts receivables and accounts payables.
The main practical implication of working capital management is more efficient use of a company
resources by monitoring and optimizing the use of current assets & liabilities.

The objective of it is to maintain sufficient cash flow to meet its short-term

Why is working capital management important?

• Solvency: Efficient Working capital management helps balance current assets and liabilities,
ensuring your business has the necessary resources to pay off its short-term debts. By staying
solvent, your company can avoid financial distress and maintain a positive reputation in the
market.

• Profitability: By managing your working capital effectively, you can reduce costs associated with
excess inventory, improve your cash conversion cycle, and enhance your ability to capitalise on
growth opportunities. These improvements directly impact the bottom line of your business,
leading to increased profitability.

• Liquidity: Liquidity measures how easily a company can convert its assets into cash to meet
financial obligations. Working capital management ensures that your business maintains
adequate liquidity by effectively managing cash inflows and outflows. Sufficient liquidity allows
your company to invest in multiple growth avenues.

• Creditworthiness: Businesses with well-managed working capital are more likely to be perceived
as creditworthy by lenders, investors, and suppliers. Good working capital management signals
that your company is financially stable and can meet its financial obligations.

• Competitive advantage: Efficient Working capital management can give your business a
competitive edge over rivals that may struggle with managing their working capital. By
optimising your cash flow, you can seize new opportunities faster, respond more effectively to
market changes, and invest in innovative strategies that drive growth and market share.

• Operational efficiency: Effective Working capital management ensures your business has the
resources to maintain smooth operations. This includes having the right amount of inventory,
paying suppliers on time, and collecting receivables promptly. By optimising these operational
aspects, you can avoid disruptions and maintain high efficiency in your business.

Tips for effective working capital management

• Monitor receivables: Regularly review your accounts receivable and follow up on overdue
payments to minimise the risk of bad debts and improve cash flow.

• Negotiate favourable payment terms: Work with suppliers to negotiate favourable payment
terms, such as extended credit periods or discounts for early payment.

• Optimise inventory management: Streamline your inventory management process to minimise

holding costs and avoid stock-outs or over-stocking.

• Utilise short-term financing: Explore short-term financing options, such as lines of credit or
working capital loans, to cover temporary cash shortfalls.

• Leverage technology: Implement financial management software to automate and streamline

your Working capital management processes, making tracking and managing your working
capital easier.
10. Mention any 3 important variables identified from the review of literature to be used in your project.

11. Highlight the benefits of SWOT analysis of the Company/industry of your project work.

12. Explain the outcomes of your study and relevance to the Company/industry where you have done the study.

13. Explain usage or practical application of the project submitted.

14. State the objectives of your project in correlation to the problem statement of your project.

15. Visualize future scope for research, based on your project submitted.

16. How would you bridge the gap in your term paper and industry practice?

3. Major findings / Outcome of the study vi

1. Net Working Capital: - for 5 years

Net working capital is the difference between current assets and current Liabilities.

2. Current Ratio: - for 5 years

Current ratio is a measure of firm’s short-term solvency. This ratio is also known as
working capital Ratio. Current ratio is a measure of general liquidity and is most widely
used to check the relationship of the current assets and current liability. The standard
current ratio is 2:1.

3. Absolute Liquidity Ratio: - for 5 years

Absolute liquidity ratio is a ratio of cash in hand and cash at bank to current liabilities.
The standard ratio is 0.5: 1.
4. Liquidity Ratio or Liquid ratio: - for 5 years

This ratio indicates very short term or immediate or very instant financial position.

5. Return on Current Assets: - for 5 years

This ratio indicates the amount of current assets employed in the working capital of the
assets employed in the working capital of the firm as to run the day-to-day operations
of the firm which helps the firm for its easy flow of goods in the trading activity.
6. Current Asset Ratio:- for 5 years

This ratio measures sales per rupee of investment in current assets. This ratio measures
the efficiency with which current assets are employed a high ratio indicates a high
degree of efficiency is asset utilization and a low ratio reflects inefficient use of current
assets.

7. Debtors Turnover Ratio: - for 5 years

Debtors are expected to be converted into cash over a short period of time and
therefore are included in current assets. It shows how many times debtors are
converted into cash in a year.
8. Creditors Turnover Ratio: - for 5 years

Creditors’ turnover ratio establishes relationship between not credit purchases and
average trade creditors and accounts payable. The ratio indicates the velocity with
which the creditors are turned over in relation to purchases. vii

9. Working Capital Turnover Ratio: - for 5 years

It is taken as one of the primary indicators of the short-term solvency of the business. It
establishes the relationship with the net sales. It measures the efficiency with which the
working capital is being used by the firm.

4. Suggestions

Recommendation can be use by the firm for the betterment increased of the firm after
study and analysis of project report on study and analysis of working capital. I would
like to recommend.

1. Organization ought to lessen the stock holding time frame. It is the significant piece
of working capital of organization.
2. Organization needs to take control on cash balance since cash is non acquiring
resources and inflate cost of assets.
3. Organization ought to give thought on unfamiliar trades misfortunes and find
expected way to limit it in future.

4. Organization ought to raise it reserve through momentary hotspots for transient

necessity of assets.