Supriya Mathpati

A
PROJECT REPORT
ON
A STUDY OF
WORKING CAPITAL MANAGEMENT
WITH SPECIAL REFERENCE TO
DHANSAMPADA NAGARI SAHAKARI PATHSANTHA

MARYADIT, GADHINGLAJ
FOR THE PARTIAL FULFILLMENT OF
BACHELOR OF BUSINESS ADMINISTRATION
SUBMITTED BY
MISS. SUPRIYA BHALCHANDRA MATHAPATI
UNDER THE GUIDANCE OF
MRS. T. N. TASHILDAR (M.COM., B.ED)
SUBMITTED TO
SHIVAJI UNIVERSITY, KOLHAPUR
THROUGH
THE PRINCIPAL,
DR. GHALI COLLEGE, GADHINGLAJ.
2021-22
VIDYA PRASARAK MANDAL’S
DR. GHALI COLLEGE GADHINGLAJ.
CERTIFICATE
This is to certify that the project report entitled “A STUDY OF
WORKING CAPITAL MANAGEMENT” with special reference to
“DHANSAMPADA NAGARI SAHAKARI PATHSANTHA
MARYADIT, GADHINGLAJ” submitted by Ms. MATHAPATI
SUPRIYA B. to SHIVAJI UNIVERSITY, KOLHAPUR in partial
fulfillment of the requirements for the award of degree, ‘BACHELOR OF
BUSINESS ADMINISTRATION’.
To the best of our knowledge and belief the matter presented here has
not been submitted earlier for the award of any other degree of Shivaji
University, Kolhapur.
Mr. M. S. Vandkar Dr. M. R. Patil

Head Principal
BBA Dept. Dr. Ghali College, Gadhinglaj.
A
PROJECT REPORT
ON
A STUDY OF
WORKING CAPITAL MANAGEMENT
WITH SPECIAL REFERENCE TO
DHANSAMPADA NAGARI SAHAKARI PATHSANTHA

MARYADIT, GADHINGLAJ
FOR THE PARTIAL FULFILLMENT OF
BACHELOR OF BUSINESS ADMINISTRATION
SUBMITTED BY
MISS. SUPRIYA BHALCHANDRA MATHAPATI
UNDER THE GUIDANCE OF
MRS. T. N. TASHILDAR (M.COM., B.ED)
SUBMITTED TO
SHIVAJI UNIVERSITY, KOLHAPUR
THROUGH
THE PRINCIPAL,
DR. GHALI COLLEGE, GADHINGLAJ.
2021-22
CERIFICATE
This is to certify that the project report entitled “A STUDY OF
WORKING CAPITAL MANAGEMENT” with special reference to
“DHANSAMPADA NAGARI SAHAKARI PATHSANTHA
MARYADIT, GADHINGLAJ” being submitted by Ms. MATHAPATI
SUPRIYA B. to SHIVAJI UNIVERSITY, KOLHAPUR in partial
fulfillment of the requirements for award of degree of BACHELOR OF
BUSINESS ADMINISTRATION has been prepared under my guidance
and supervision is her original work and completed satisfactorily.
To the best of my knowledge and belief that no such work has been
previously submitted to the award of any degree.
Date: / /20
Place: Gadhinglaj
Mrs. T. N. TASHILDAR
(Project Guide)
DECLARATION
I undersigned hereby declare that the project report entitled A STUDY OF
“WORKING CAPITAL MANAGEMENT” procedure with special reference to
“DHANSAMPADA NAGARI SAHAKARI PATHSANTHA MARYADIT,
GADHINGLAJ” is an original work prepared by me under the guidance of Mrs. T.
N. Tashildar.
The empirical finding of the study and conclusion drown by me are based on
the work done and data collected during the project work. The matter included in this
report is not copy of any source.
I understand that any such copying is liable to punished as the University
authorities deem fits.
Date: / / 20
Place: Gadhinglaj
Ms. Mathapati Supriya B.
(Student)
ACKNOWLEDGEMENT
This project bears the imprint of many persons cooperation and it gives me
great pleasure to express my heartiest gratitude towards them.
I take this opportunity to express my deep gratitude to Dr. Ghali College,
Gadhinglaj. I sincerely thank to Principal, Dr. M. R. Patil for the continuous
inspiration and blessings. I also want to thank Mr. M. S. Vandkar, Head of the
department and also all teaching staff. I am indebted the library of the Dr. Ghali
College.
I am also extend thanks to my project guide Mrs. T. N. Tashildar for her
continuous support & valuable guidance.
I sincerely thanks to “DHANSAMPADA NAGARI SAHAKARI
PATHSANTHA MARYADIT, GADHINGLAJ”, for giving me an opportunity to
work on this project and providing with all necessary facilities. I express my deep
sense of gratitude towards the management of “DHANSAMPADA NAGARI
SAHAKARI PATHSANTHA MARYADIT, GADHINGLAJ” for their whole
hearted support and help during my project work.
Last but not least, I also thank my family and friends for giving their support
in competition of this project work.
Ms. Mathapati Supriya B.

Student
CONTENTS
SR. NO. PARTICULARS PAGE NO.
1 INTRODUCTION TO THE STUDY
1.1 Introduction
1.2 Statement of the research problem
1.3 Hypothesis of the study
1.4 Objectives of the study
1.5 Scope of the study 1-5
1.6 Importance of the study
1.7 Research methodology
1.8 Limitations of the study
1.9 Review of literature
2 THEORETICAL BACKGROUND
2.1 Introduction
2.2 Meaning
2.3 Definitions
2.4 Concepts of working capital
2.5 Importance of working capital
2.6 Features of working capital
2.7 Characteristics of working capital 6-16
2.8 Classification / types of working capital
2.9 Factors determine the working capital requirements
2.10 Nature of working capital
2.11 Operating or working capital cycle
2.12 Advantages of adequate working capital
2.13 Disadvantages of working capital
3 COMPNAY PROFILE
3.1 Introduction to the organisation
3.2 History of the organisation
3.3 Vision statement of the organisation
3.4 Mission statement of the organisation 17-22
3.5 Organisation structure
3.6 Department of organization
3.7 Service offered
3.8 Awards
3.9 Important statistical information
3.10 Future plan of organization
4 DATA ANALYSIS & INTERPRETATION 23-36
5 FINDING AND OBSERVATION 37
6 SUGGESTIONS & CONCLUSION 38-39
7 BIBLIOGRAPHY 40
8 APPENDIX
LIST OF TABLE
Sr. No Particulars Table No Page No
1 Computation of Working Capital 2016 4.1 23
6 Calculation of Working Capital 4.6 28
For the year 2016-2017
10 Current Ratio 4.10 32
11 Quick or Liquid Ratio 4.11 33
12 Proprietary Fund Ratio 4.12 34
13 Fixed Assets Ratio 4.13 35
14 Current Assets to Proprietors Funds 4.14 36
Ratio
LIST OF GRAPHS
Sr. No Particulars Graph No Page No
1 Current Ratio 4.10 32
2 Quick or Liquid Ratio 4.11 33
3 Proprietary Fund Ratio 4.12 34
4 Fixed Assets Ratio 4.13 35
5 Current Assets to Proprietors Funds 4.14 36
Ratio
Shivaji University, Kolhapur Working Capital Management
CHAPTER I
INTRODUCTION TO THE STUDY
1.1 INTRODUCTION
Working capital is the most valuable term of any business organization. The role of the
working capital in industry indicate the effective utilization and control of net current assets,
proper maintains of the working capital in industrial is importance as circulation of blood in
human body. The study of Working Capital Management is one of the most importance
studies to the firm now this study indicates that manage to current assets and current
liabilities.
Funds which are needed for short - term purposes are known as Working Capital. In
simple words, working capital refers to that part of firms capital, which is required for
financing short - term or current assets. Funds thus, vested in current assets keep revolving
fast and are being constantly converted into cash and this cash flow out again in exchange for
other current assets.
In the firm study is also helpful for the company as well as researcher to know the
company actual finance position of the firm. The working capital is needed for the production
process. Marketing selling distribution process etc. It is also can as Circulation Capital,
because it starts with cash and ultimately results in cash after completing the cycle. Cash is
converted into stock of goods, later the goods are sold, sale of goods creates debtors and bills
receivables and finally they are turned into cash. The success of business is depending upon
the successful application of working capital. The study of working capital has greater
importance. It is related with day-to-day operation of business. Managing current assets and
current liabilities. Arranging short-term financing negotiating favorable credit terms,
controlling cash moment, managing accounts receivable and monitoring investment consume
a great of the time financial manager.
The term 'Working Capital‟ is also defined as, excess of „current assets over current
liabilities‟. This concept of working capital is useful to know whether the current assets are
sufficient or not to meet the current liabilities i.e. the short - term solvency of the business is
sound or questionable.
Dr. Ghali College, Gadhinglaj Page 1

Today we all know that financial manager plays on a important role not only long -
term financial planning for effective utilization of resources available which makes
considerable changes in determining profitability of organization. Working capital tell about
organization short - term solvency and credit worthiness. There are different techniques
available in order to utilize short-term financial resources effectively and efficiently which
generate considerable profitability to organization.
In this report I made an effort to know the study of working capital position of the
organization and to understand the day-to-day operations or transactions of the business and
manage the current assets and current liabilities of the firm and some suggestions of
improving profitability of organization.
1.2 STATEMENT OF THE RESEARCH PROBLEM
The propose of study will an attempt to study the Working Capital Management with
an intention to find out the current assets and current liabilities and find out working capital
of the company for future expansion of company.
1.3 HYPOTHESIS OF THE STUDY
There is a positive relationship between efficient working capital management and

profitability of the company.
1.4 OBJECTIVES OF THE STUDY
1) To understand Working Capital Management and net working capital.
2) To know smooth working capital operating cycle.
3) To know how the company maintains its credit policy.
4) To understand and analyze the relationship between Working Capital Management and
profits of the firm.
5) To know proper balance between current assets and current liabilities.
1.5 SCOPE OF THE STUDY

 Geographical scope –
The geographical scope of the study is limited to Gadhinglaj.

 Topical scope –
The topical scope of the study is limited to Working Capital Management only.
 Functional scope –
The functional scope of the study is limited to study of working capital only.
 Durational scope –
The durational scope of the study is limited to period of 30 days.
1.6 IMPORTANCE OF THE STUDY

1) It is needed to study for knowing / understanding how the Working Capital Management
is implemented in the “Dhansampada Nagari Sahakari Patsanstha Maryadit
Gadhinglaj”.
2) It is necessary to understand the practical aspects of the Working Capital Management.
3) Know the factors responsible for working capital.
4) Understand the financial problem in organization.
5) Calculate the ratio from which we can go through with strength and weaknesses of
organization.
6) It is needed to know the proper liquidity level of the “Dhansampada Nagari Sahakari
Patsanstha Maryadit Gadhinglaj”.
1.7 RESEARCH METHODOLOGY
 Types of research –
The research was conducted by the researcher would be descriptive research.
 Data required –
The require data is regarding to Working Capital Management.
 Data source –
The data was collected from both the primary and secondary sources.
A) Primary Data :-
The primary data was collected from structured questionnaire and observation.
Keeping in view the objectives of the study on appropriate research methodology was used

the specific research such as participant observation and interview was used for data
collection.
Interview method consists of structured interview schedule and informal discussion

related to the topic and discussion to the owners.
B) Secondary Data :-
The secondary data was collected such as –
 Annual reports of the company

 Books
 Company website
 Internet
 Data analysis –
Data analysis to “Dhansampada Nagari Sahakari Patsanstha Maryadit
Gadhinglaj” was depend on five years balance sheet.
1.8 LIMITATIONS OF THE STUDY
1) This study is purely based on secondary data which is given by firm.
2) The study was related only on the Working Capital Management.
3) Financial data is confidential due to nature.
4) The period of the study is restricted to only on financial statements due to time
constraints.
5) The study is depend the past annual reports and oral information given by employers.
6) This is only limited to “Dhansampada Nagari Sahakari Patsanstha Maryadit Gadhinglaj”.
1.9 REVIEW OF LITERATURE
A) Research Paper :
1) According to T.Poojitha in their study in titled as “A Review On Working Capital

Management.” They found – (1) Current ratio of the company is in decrease ratio from 2013-
14 to 2015-16 then from 2015-16 till now it is increase. (2) Debt – Equity ratio is increased
from 2013-14 to 2016-17 and then decreased in 2017-18 and there is a high increase in 2018-
19. (3) Return on shareholders equity is increased from 2013-14 to 2016-17 and then in 2017-
18 it is in decrease and then in 2018-19 it is in increasing trend.
2) According to Bhadrappa Haralayya in their study in titled as “Working Capital

Management at TVS Motors, Bidar.” They found – (1) The company current assets are

higher than the current liabilities and the ratio is also above the standard position of 2:1. It
indicate sufficient liquidity. (2) It is found that company Quick Ratio is sound for all three
years as it was always above the standard ratio of 1:1. It indicate sufficient liquidity. (3)
Even though the company tried to show a positive recovery in working capital still it is not
sustaining on the same trend. (4) It is found from the study that cash flow of the company has
ups and downs which finally do not supporting the net working capital.
3) According to Dr. K. R. Sivabagyam in their study in titled as “A Study On The Effect Of

Working Capital On The Profitability Of TCS.” They found – (1) On the basis of key
discovery from this study it has been perceive that the management of a firm can grow the
value for their shareholders by decreasing the credit period permitted. (2) The management
can also make returns for their shareholders by adding more inventories to meet a best level.
(3) Firms can also hold long to pay their creditors. (4) Firms are efficient of employing
feasible competitive advantage by way of effective and efficient usage of the resources of the
firm by reducing the cash transfiguration cycle to its minimum.
B) Books:
1) According to my study of book titled as „Management Accounting‟ written by PRIN. DR.

P.M.HEREKAR. I got meaning and definition of Working Capital Management.
2) According to my study of book titled as „Management Accounting' written by Prof. Pankar

Pramod Kisan. I got concept of working capital. I also got objectives regarding Working
Capital Management and operating cycle.

CHAPTER II
THEROTICAL BACKGROUND
2.1 INTRODUCTION
Management of working capital is a crucial aspect of financial management. It is

concerned with determination of optimum size and composition of working capital, its
effective utilisation and the choice of financing mix for raising current resources. Inadequacy
and mismanagement of working capital is one of the leading cause of business failures.
The need for skilled working capital management has thus become greater in recent
years. A firm invests a part of its permanent capital in fixed assets and keeps a part of it for
working capital i.e. for meeting the day-to-day requirements. We will hardly find a firm
which does not require any amount of working capital for its normal operations. Working
capital to a company is like the blood of human body. It is the most vital ingredient of a
business.
Working capital refers to a firm‟s investment in short-term assets viz., cash, short-
term securities, amounts payable and inventories of raw materials, work-in-process and
finished goods.
The efficient working Capital management is necessary to maintain balance of

liquidity and profitability. If the funds are tied up in ideal current assets represent poor and
inefficient working Capital management which affects the firm‟s liquidity as well as
profitability.
2.2 MEANING
Working capital refers to the cash a business requires for day to day operations or
more specifically, for financing the conversion of raw materials into finished goods, which
the company sells for payment. Among the most important items of working capital are
levels of inventory, debtors and creditors. These items are looked at for signs of a company's
efficiency and financial strength.
Working capital is defined as the „excess of current assets over current liabilities‟. All
elements of working capital are quick moving in nature and therefore, require constant
monitoring for proper management. The funds required by the business for conducting the

day-to-day operation. For example : purchase of raw material or finished goods payment of
expenses like salary, wages, freight, rent, etc. and carrying out production, for investment in
stocks and stores, receivable and cash on hand etc. from the working capital of the business.
2.3 DEFINITIONS
 According to Shubin :
“Working capital the amount of funds necessary to cover the cost of operating the
enterprise”.
 According to Weston and Brigham :
“Working capital refers to the firm‟s investment in short term assets – cash, short-term
securities, accounts receivable and inventories”.
 According to J. S. Mill :
“The sum of the current assets is the working capital of business”.
 According to Genestenberg :
“Circulating capital means current assets of a company that are changed in the ordinary
course of business from one form to another”.
2.4 CONCEPTS OF WORKING CAPITAL
There are two concepts of working capital :
2.4.1 Gross Working Capital :
The sum total of all current assets of a business concern in termed as gross working
capital.
Gross Working Capital = Stock + Debtors + Receivables + Cash
Constituents of Current Assets
1) Cash in hand and bank balances

2) Bills receivables
3) Sundry debtors ( less provision for bad debts )
4) Short term loans and advances
5) Inventories of stocks, as :

a) Raw material
b) Work in process
c) Finished goods
6) Prepaid expenses
2.4.2 Net Working Capital :
The difference between current assets and current liabilities of a business concerns is
termed as the net working capital.
Net Working Capital = Stock + Debtors + Receivables + Cash + Creditors + Payables
Constituents of Current Liabilities
1) Bills payable
2) Sundry creditors
3) Outstanding expenses
4) Short term loans, advances, and deposits
5) Bank overdraft
6) Dividends payable
2.5 IMPORTANCE OF WORKING CAPITAL
2.5.1 Liquidity Management:
By properly analyzing the expenses payable or to be incurred in the near future the
financial team of and enterprise would easily plan for their funds accordingly.
2.5.2 Out of cash:
In appropriate prepared plans of day to day expenses may result in enterprise liquidity
issues. They have to postpone or to arrange funds from some other sources which give a bad
impression of an enterprise at the party.
2.5.3 Helps in decision making :
By correctly analyzing the requirement of funds for day to day operations the finance
team can appropriately manage the funds and can decide accordingly for available funds and
for the availability of funds also.

2.5.4 Addition in the value of business :
As the management accordingly manages all the day to day required funds that help
the authorized personnel to timely pay for all the outstanding creates of value addition or
goodwill enhancement in the market.
2.5.5 Help in the situation of cash crunches :
By properly managing the liquid funds one can help the organization not to affect the
situation of crisis or cash crunches and pay for its day to day expenses on a timely basis.
2.5.6 Perfect investment plans :
Correctly managing the funds or working capital one can choose or plan for their
investments accordingly and invest the funds to maximize return as per their availability.
2.6 FEATURES OF WORKING CAPITAL
1) The working capital can be easily converted into hard cash whenever required.
2) Working capital also protect the organization from bankrupt.
3) Working capital can also provide assistance to pay off day to day expenses.
4) The working capital is essential to maintaining the financial position of the organization.
5) The working capital changes with volume output of business.
2.7 CHARACTERISTICS OF WORKING CAPITAL
2.7.1 Needs that are Short Term:
Working capital is being utilized in acquiring current affairs which will be converted
to cash for a short period only.
2.7.2 Circular movement:
Working capital is being converted to cash constantly which will just be turned as a
working capital all over again.
2.7.3 Permanency:
Although it is just a kind of short term capital, working capital is needed by a business
forever and always.

2.7.4 Fluctuation:
Working still fluctuates every now and then even it is something permanent.
2.7.5 Liquidity:
It is very liquid for it can be converted as cash any time without losing anything.
2.7.6 Less risky:
Investments in current assets such as working capital comes with less risk for it is just
for short term.
2.8 CLASSIFICATION / TYPES OF WORKING CAPITAL
A) On the Basis of Concept:
On the Basis of Concept, working capital is classified as Gross Working Capital and Net
Working Capital.
1) Gross Working Capital :
This refers to the aggregate amount of funds invested in the current assets of the
business. In other words, Gross Working Capital is the total of the current assets of the
business. These include: Cash, Accounts Receivable, Inventory, Marketable Securities and
Short Term Investments.

2) Net Working Capital :
Net Working Capital is the amount by which current assets exceed the current
liabilities of a business. Thus, the working capital equation is defined as the difference
between current assets and current liabilities.
B) On the Basis of Time :
On the basis of Time, working capital may be classified as permanent or fixed

working capital and temporary or variable working capital.
1) Permanent or Fixed Working Capital :
It is that portion of the working capital that remains permanently tied in current assets
to undertake business activity uninterruptedly. In other words, Permanent Working Capital is
the least amount of current assets needed to carry out business effortlessly. It is also known as
fixed working capital.
Permanent working capital can we further divided into the following categories :
a) Regular working capital :
This is defined as the least amount of capital required by a business to fund its day
today operations of a business. Examples include, payment of salaries and wages and
overhead expenses for the processing of raw materials.
b) Reserve working capital :
Reserve working capital is a type of fund a business maintenance over and about the
working capital required. The reserve working capital refers to the short term financial
arrangement made by the business units to meet any changes or uncertainties.
2) Temporary or Variable Working Capital :
This can be defined as the working capital invested for a temporary period of time in
the business. For this reason, it is also called as Temporary Working Capital. Such a capital
varies with respect to the change in the size of the business or changes in the assets of the
business.

Temporary working capital can be further divided into the following categories :
a) Seasonal working capital :
This refers to the increased amount of working capital a business needs during the
peak season of the year. A business may even have to borrow funds to meet its working
capital needs. Such a working capital specifically meets the demands of business having a
seasonal nature.
b) Special working capital :
Special working capital is that part of the variable working capital which is meant for
meeting the special business operation such as extensive marketing companies, experiments
with products or methods of production etc.
2.9 FACTORS DETERMINE THE WORKING CAPITAL

REQUIREMENTS
2.9.1 Nature of Business :
The requirement of working capital is very public utility undertaking such as

electricity, water supply and railways because they offer cash sales only and supply services
not products and not funds are tried of inventories and receivables.
2.9.2 Size of the Business :
Greater the size of the business, greater is the requirement of Working Capital.
2.9.3 Production Policy :
If the policy is to keep the production stead by the accumulating inventories it will
required higher working capital.
2.9.4 Length of Production Cycle :
The longer the manufacturing time the raw materials and other supplies have to
carried for longer in the process with progressive increment of labour and the service cost
before the final product is obtained. So working capital is directly proportional to the length
of the manufacturing process.

2.9.5 Seasonal Variations :
Generally during the busy season of firm requires larger working capital than in slack
season.
2.9.6 Working Capital Cycle :
The speed with which the working cycle completes one cycle determines the
requirement of working capital. Longer the cycle larger is the requirement of working capital.
2.9.7 Rate of Stock Turnover :
There is an inverse co-relationship between the questions of working capital and the
velocity or speed with which the sales are affected. The firm having the high rate of stock
turnover will needs lower amount of working capital as compared to a firm a lower rate of
turnover.
2.9.8 Credit Policy :
A concern that purchase it's requirements on credit and sales its product / services on
cash required lesser amount of working capital and vice versa.
2.9.9 Business Cycle :
In period of boom when the business is prosperous there is need for large amount of
working capital due to prices in prices optimistic expansion of business etc. on the contrary in
time of depression the business contract, sales decline, difficulties are faced in collection for
debtors and the firm may have large amount of working capital.
2.9.10 Price Level Changes :
Changes in the price level also affected in the working capital requirements.
Generally rise prices leads to increase in the working capital.
2.10 NATURE OF WORKING CAPITAL
1) It is used for purchase of raw materials, payment of wages and expenses.
2) It changes form constantly to keep the wheels of business moving.
3) Working capital enhances liquidity, solvency, credit worthiness and reputation of the
enterprise.

4) It enables the enterprises to avail the cash discount facilities offered by its suppliers.
2.11 OPERATING OR WORKING CAPITAL CYCLE
The working capital requirement of a firm depends, to a great extent upon the
operating cycle of the firm. The duration of time required to complete the sequence of events
right from purchase of raw material goods for cash to the realization of sales in cash is called
the Operating Cycle or Working Capital Cycle.
The length of the operating cycle of a manufacturing firm is the sum of the following :
2.11.1 Inventory Conversion Period :
The inventory conversion period is the total time needed for producing and selling the
product.
a) Raw material conversion period

b) Work in progress conversion period
c) Finished goods conversion period.
2.11.2 Debtors Conversion Period:
It is the time required to collect the outstanding amount from the customers

 Determination of operating cycle :
The duration of the operating cycle for the purpose of estimating working capital is
equal to the sum of the durations allowed by the suppliers.
Operating Cycle = R + W + F+ D + C
Where,
R = Raw Material Storage Period = Average Stock of Raw Material
-------------------------------------------
Average Cost of Production Per day
W = Work–in–Progress Holding Period = Average work–in-progress inventory

------------------------------------------------
Average cost of production per day
F = finished Goods Storage Period = Average stock of finished goods

-------------------------------------------
Average cost of goods sold per day
D = Debtors Collection Period = Average book debts

---------------------------------------
Average credit sales per day
C = Credit Period Availed = Average trade creditors

----------------------------------------
Average credit purchases per day
2.12 ADVANTAGES OF ADEQUATE WORKING CAPITAL
2.12.1 Solvency of the Business:
Adequate working capital helps in maintaining solvency of the business by providing

uninterrupted flow of production.
2.12.2 Goodwill :
Sufficient working capital enables a business corn to make prompt payments and
hence help in creating and a maintaining goodwill.
2.12.3 Easy Loans :
A concern having adequate working capital high solvency and good credit standing
can arrange loans from banks and others on easy and favorable terms.

2.12.4 Cash Discounts :
Adequate working capital also enables a concern to avail cash discounts on the
purchases and hence it reduce costs.
2.13 DISADVANTAGES OF WORKING CAPITAL
2.13.1 Only Monetary Factors:
This strategy takes only monetary factors into account. Monetary items like the value
of debts receivable, the value of finished goods etc. are the basic determinants while
implementing the strategy.
2.13.2 Non Situational :
Another disadvantage of Working Capital Management policy is that it‟s not

situational in nature. The strategy does not acknowledge sudden changes in the market
conditions as it is based on fast events and figures.
2.13.3 Based on Data :
Working Capital Management operates around data. It is the key soul of any Working
Capital Management strategy. Data would include every minute details about the components
of working capital.
2.13.4 Problem in Interpretation :
Working Capital Management involves techniques of ratio analysis. Ratios are just a
number that allows a user to interpret the result. In most cases, it is inclear to a user whether a
particular ratio is favorable to the company or not.

CHAPTER III
COMPANY PROFILE
3.1 INTRODUCTION TO THE ORGANISATION
 Name of the organization: Dhansampada Nagari Sahakari Patsanstha Ltd, Gadhinglaj.

 Address: Gune Path, Gadhinglaj, Dist. Kolhapur
 Registration Date: 28/09/1995
 Registration No: KPR/GLI/RSR/CR 2303/95-96 .
 Establishment : 28/09/1995
 Chairman: Shri. Uday Narayan Joshi
 Vice-Chairman: Shri. Krushnaji Ganpati Patil
 Managing Directors : Vishwanath J. Chavan
 Phone No. : (02327) 222235
 Type of Organization: Co-operative Society

3.2 HISTORY OF THE ORGANISATION:-
The Dhansampada Nagari Sahakari Patsanstha Ltd, Gadhinglaj is a leading co-

operative society in Gadhinglaj area. Also have a share capital of the ₹. 1,18,94,650 in last
year. The society has good premises only their own building. They have 1097 members and
their current share capital is 39,67,61,192. The main feature is that they have been as on 'A'
Audit class society of last five years. They have a total deposits of 30,91,57,690 and their
loans allotted is 20,87,05,909. This society just finished their 24th successful year. Their
current year profit is 40,19,854 and their units as authorized share capital is 200,00,000. As
there members and deposits are incoming year by year.
3.3 VISION STATEMENT OF THE ORGANISATION:-

To become strong contributing co-operative society to its members. To achieve all
their short-term and long term financial goal.
To be the best leading cooperative society & give financial stability to customers.
3.4 MISSION STATEMENT OF THE ORGANISATION:-
1. To build a co-operative economy through allocation of fund.

2. To acquire the abundant market from the society.
3. To present the best in class products and service.
4. To provide the unique product so that customer should buy it over another.

3.5 ORGANISATION STRUCTURE:-
The organization body structure of Dhansampada Nagari Sahakari Pat Sanshta Ltd.
Gadhinglaj Dist Kolhapur
Chairman
Vice Chairman
Board of Director
Manager
Passing Officer
Clerk Cashier Peon

3.6 DEPARTMENT OF ORGANIZATION:-
Manager
Head of Department
Internal Department External Department
Service Dept. Loan Dept. Deposit Dept. Peon Pigmy Collector
3.7 SERVICE OFFERED:-
 Their principle is of people helping people. They provide credit and financial services to
the members at competitive prices.
 Each and every depositor has the right to become a member.
 Members attend the annual meeting and are given rights to elect a board of directors.
3.8 AWARDS:-

3.9 IMPORTANT STATISTICAL INFORMATION

3.10 FUTURE PLAN OF ORGANIZATION:-
 To expand the scope of work of the cooperative society.

 The another branch is opened in Kolhapur District.

CHAPTER IV
DATA ANALYSIS AND INTERPRETATION
4.1 INTRODUCTION
Analysis and Interpretation provide answer to the research questions postulated in the
study.
The chapter IV deals with analysis of data and with the help of accounting tools and
techniques, statistical tools and techniques i.e., ratios, working capital, capital percentage,
summarize the tabulated data with the help of collected data from respected i.e.,
Dhansampada Nagari Sahakari Patsanstha Maryadit Gadhinglaj.
Analysis means the ordering, manipulating, and summarizing of data to obtain

answers to research questions. It‟s purpose is to reduce data to intelligible and interpretable
form so that the relations of research problems can be studied and tested.
Interpretation gives the results of analysis, makes inference pertinent to the research
relations studied and draws conclusions about these relations.
Data analysis and interpretation is the process of assigning meaning to the collected
information and determining the conclusions, significance, and implications of the findings.

Table No. 4.1

Statement of Working Capital 2016
Particulars Amt.
A. Current Assets
Cash and Bank Balance 35,26,709
Investments 12,42,20,006
Debtors 11,61,31,703
Property 14,40,085
Other Receivables 46,22,215
Total A. 249,940,718
B. Current Liabilities
Reserve Fund and Other 2,48,56,629
Reserve
Deposits 20,60,49,970
Other Payable 79,34,496
Total B. 238,841,095
Working Capital 11,099,623
Interpretation :
Above table shows that in 2016 the Current Assets is Rs. 249,940,718 and Current Liabilities
is Rs. 238,841,095. Then Working Capital is Rs. 11,099,623.

Table No. 4.2

Particulars Amt.
A. Current Assets
Investments 14,27,98,611
Debtors 14,20,81042
Property 14,24,723
Total A. 299,113,477
Reserve Fund and Other 28,806,151
Reserve
Deposits 24,1963,970
Borrowings 10,038,586
Total B. 286,621,645
Interpretation :

Table No. 4.3

Particulars Amt.
A. Current Assets
Investments 147,480,174
Debtors 174,207,166
Property 35,97,151
Total A. 336,054,204
Reserve
Total B. 321,746,087
Interpretation :
is Rs. 321,746,087. Then Working Capital is Rs.14, 308,117.

Table No. 4.4

Particulars Amt.
A. Current Assets
Debtors 208,705,909
Property 35,79,597
Total A. 402,881,042
B Current Liabilities
Reserve
Total B. 386,966,542
Interpretation :

Table No. 4.5

Particulars Amt.
A. Current Assets
Debtors 199,211,122
Property 34,54,007
Total A. 441,733,177
Reserve
Total B. 424,334,082
Interpretation :

Table No.4.6
Statement of change in Working Capital
Particulars 2016 2017 Increase Decrease
A) Current Assets
Cash and Bank Balance 35,26,709 38,36,460 3,09,751
Investments 12,42,20,006 14,27,98,611 18,578,605

Debtors 11,61,31,703 14,20,81,042 25,949,339
Property 14,40,085 14,24,723 15,362
Other Receivables 46,22,215 89,72,641 4,350,426
Total A. 249,940,718 299,113,477

Reserve Fund and Other 2,48,56,629 28,806,151 3,949,522

Reserve
Deposits 20,60,49,970 24,19,63,970 35,914,000

Borrowings 10,038,586 10,038,586
Other Payable 79,34,496 58,12,938 2,121,558
Total B. 238,841,095 286,621,645
Working Capita 11,099,623 12,491,832
Increase in Working 1,392,209 1,392,209

Capita
Total 12,491,832 12,491,832 51,309,679 51,309,679
Interpretation :
This table no. 4.6 show in the year 2016 the current assets is Rs. 249,940,718 and
current liabilities is Rs. 238,841,095 and working capital is Rs. 11,099,623. In the year 2017
the current assets is Rs. 299,113,477 and current liabilities is Rs. 286,621,645 and working
capital is Rs. 12,491,832. This table shows that the working capital increased Rs. 13,92,209.

Table No.4.7
B) Current Assets
Investments 14,27,98,611 147,480,174 4,681,563

Debtors 14,20,81,042 174,207,166 32,126,124
Property 14,24,723 35,97,151 2,172,428
Total A. 299,113,477 336,054,204

Reserve Fund and Other 28,806,151 33,310,891 4,504,740

Reserve
Deposits 24,19,63,970 272,527,997 30,564,027

Borrowings 10,038,586 99,53,147 85,439
Other Payable 58,12,938 59,54,052 141,114
Total B. 286,621,645 321,746,087
Working Capita 12,491,832 14,308,117

Capita
Total 14,308,117 14,308,117 39,065,554 39,065,554
Interpretation :

Table No.4.8
A) Current Assets
Investments 147,480,174 173,640,149 26,159,975

Debtors 174,207,166 208,705,909 34,498,743
Property 35,97,151 35,79,597 17,554
Total A. 336,054,204 402,881,042


Reserve
Deposits 272,527,997 309,157,690 36,629,693

Borrowings 99,53,147 34,021,492 24,068,345
Other Payable 59,54,052 68,24,034 8,69,982
Total B. 321,746,087 386,966,542
Working Capita 14,308,117 15,914,500

Capita
Total 15,914,500 15,914,500 66,844,392 66,844,392
Interpretation :
current liabilities is Rs. 321,746,087 and working capital is Rs.14,308,117. In the year 2019

Table No.4.9
A) Current Assets
Investments 173,640,149 214,585,186 40,945,037

Debtors 208,705,909 199,211,122 9,494,787
Property 35,79,597 34,54,007 1,25,590
Total A. 402,881,042 441,733,177


Reserve
Deposits 309,157,690 367,620,564 58,462,874

Borrowings 34,021,492 48,95,052 29,126,440
Other Payable 68,24,034 78,77,708 1,053,674
Total B. 386,966,542 424,334,082
Working Capita 15,914,500 17,399,095

Capita
Total 17,399,095 17,399,095 77,598,952 77,598,952
Interpretation :

Calculation of Ratio
4.1) Current Ratio :
Current Assets
Current Ratio = --------------------------
Current Liabilities
Table No. 4.10

Current Ratio
Year Current Assets Current Current Ratio

Liabilities
2016 249,940,718 238,841,095 1.05:1
2017 299,113,477 286,621,645 1.04:1
2018 336,054,204 321,746,087 1.04:1
2019 402,881,042 386,966,542 1.04:1
2020 441,733,177 424,334,082 1.05:1
Figure No. 4.1
Current Ratio
1.052
1.05
1.048
1.046
1.044
1.042
1.04
1.038
1.036
1.034
2016 2017 2018 2019 2020
Interpretation :
Above table and graph shows that current ratio of the company. The current ratio 1.05:1 in
the year 2016, 1.04:1 in the year 2017, 1.04:1 in the year 2018, 1.04:1 in the year 2019 and
1.05:1 in the year 2020. It shows the current ratio continuously increased. The standard of
current ratio is 2:1. So, the organization has to try to maintain this ratio as per the standard.

4.2) Quick or Liquid Ratio :

Liquid Assets
Quick or Liquid Ratio = --------------------------
Liquid Liabilities
Table No. 4.11

Quick or Liquid Ratio
Year Liquid Assets Liquid Liquid Ratio

Liabilities
2016 249,940,718 238,841,095 1.05:1
2017 299,113,477 286,621,645 1.04:1
2018 336,054,204 321,746,087 1.04:1
2019 402,881,042 386,966,542 1.04:1
2020 441,733,177 424,334,082 1.05:1
Figure No. 4.2
Quick or Liquid Ratio

1.052
1.05
1.048
1.046
1.044
1.042
1.04
1.038
1.036
1.034
2016 2017 2018 2019 2020
Interpretation :
Above table and graph shows that liquid ratio of the company. The liquid ratio 1.05:1 in
the year 2016, 1.04:1 in the year 2017, 1.04:1 in the year 2018, 1.04:1 in the year 2019 and
1.05:1 in the year 2020. It shows the liquid ratio continuously increased. So, the organization
has to try to maintain this ratio as per the standard.

4.3) Proprietary Fund Ratio =

Proprietary Fund
Proprietary Ratio = ----------------------------- *100
Total Assets
Table No.4.12
Proprietary Fund Ratio
Year Proprietary Fund Total Assets Proprietary

Ratio
2016 12,538,803 249,940,718 5.01
2017 13,916,555 299,113,477 4.65
2018 16,958,728 335,107,664 5.06
2019 19,494,102 402,881,033 4.83
2020 20,853,102 441,733,177 4.72
Figure No. 4.3
Proprietary Fund Ratio

5.1
4.9
4.8
4.7
4.6
4.5
4.4
2016 2017 2018 2019 2020
Interpretation :
Above table and graph shows that proprietary fund ratio of the company. The company‟s
proprietary fund ratio is 5.01 in the year 2016, 4.65 in the year 2017, 5.06 in the year 2018.
In the year 2019 the proprietary fund ratio of the company is 4.83, 4.72 in the year 2020.

4.4) Fixed Assets Ratio :

Fixed assets
Fixed Assets Ratio = ----------------------. × 100
Proprietors fund
Table No. 4.13
Fixed Assets Ratio
Year Fixed Assets Proprietors funds Fixed Assets

Ratio
2016 14,40,085 12,538,803 11.48
2017 14,24,723 13,916,555 10.23
2018 35,97,151 16,958,728 21.21
2019 35,79,597 19,494,102 18.36
2020 34,54,007 20,853,102 16.56
Figure No.4.4
Fixed Assets Ratio

25
20
15
10
0
2016 2017 2018 2019 2020
Interpretation :
Above table and graph shows that fixed assets ratio of the company. The company fixed
assets ratio is 11.48 in the year 2016, it decreased to 10.23 in the year 2017. In the year 2018
fixed assets ratio 21.21 is increased. The fixed assets ratio was 18.36 in the year 2019, it
decreased to 16.36 in the year 2020.

4.5) Current Assets to Proprietors Funds Ratio :
Current Assets
Proprietors Funds Ratio = --------------------------- × 100
Proprietors Funds
Table No.4.14
Current Assets to Proprietors Funds Ratio
Year Current Assets Proprietors funds Current Assets

to Proprietors
fund Ratio
2016 249,940,718 12,538,803 19.93
2017 299,113,477 13,916,555 21.49
2018 336,054,204 16,958,728 19.81
2019 402,881,042 19,494,102 20.66
2020 441,733,177 20,853,102 21.18
Figure No. 4.5
Current Assets to Proprietors Fund Ratio

22
21.5
21
20.5
20
19.5
19
18.5
2016 2017 2018 2019 2020
Interpretation :
Above table and graph shows that Current Assets to Proprietors Funds Ratio of the
company. Current Assets to Proprietors Funds Ratio was 19.93 in the year 2016, it increased
to 21.49in the year 2017. In 2018 the current assets to proprietors fund ratio was 19.81 it
increased to 20.66 in the year 2019 and also it increased up to 21.18 in the year 2020.

CHAPTER 5
FINDING AND OBSERVATION
 It was observed that the company has sufficient working capital and has better
liquidity position.
 It was found that in the year 2016 the current assets is Rs. 249,940,718 and current
liabilities is Rs. 238,841,095.
 It was observed that in the year 2020 current assets are increased as compared to the
year 2019.
 It was found that in the year 2018 working capital is more than previous year.
 It was observed that the current ratio of the company is continuously increased.
 It was found that the quick or liquid ratio is fluctuated.
 It was observed that the proprietory ratio is slightly fluctuated.
 It was observed that the fixed assets ratio is not stable, it‟s slightly up and down every
year.
 It was found that current assets to proprietors fund ratio is increased.

CHAPTER 6
SUGGESTION AND CONCLUSION
SUGGESTIONS
 It is suggest that the company should maintain the current assets and current liabilities
for better future.
 It is suggest that the company needs to maintain current ratio as per the standard.
 It is suggest that the proper control over various expenses may increase the profit of
the company.
 It is suggest that the company needs to concentrate on recovery of the proprietary
fund ratio.

CONCLUSION
The study on Working Capital Management conducted in Dhansampada Nagari

Sahakari Patsanstha Maryadit Gadhinglaj to analyze the financial position of the
company. The study was conducted mainly with help of secondary data obtained from the
unit. The companies financial position is analyzed by using the tool of annual reports from
2015-16 to 2019 - 2020.
The company shows the proper flow of the cash and its have a good liquidity
position. The working capital of the company is also good continuously.
The company shows good financial performance as it‟s profitability, activity and
productivity ratios are good.
The current ratio, quick or liquid ratio, proprietary fund ratio, fixed assets ratio, and
current assets to proprietors fund ratio all indicates good performance of the company.

BIBLIOGRAPHY
 Articles
1) Dr.K.R.Sivabagyam , “A Study on The Effect of Working Capital on the

Profitability of TCS”, Compliance Engineering Journal,
0898-3577, Volume 12, Issue 4,2021, 153
2) T.Poojitha, “A Review on Working Capital Management”,

International Journal of Innovative Science and Research Technology,
2456-2165, Volume 4, Issue 6, June 2019, 407
3) Bhadrapada Haralayya, “Working Capital Management at TVS Motors, Bidar”,

Iconic Research and Engineering Journals, 2456-8880, Volume 4, Issue 12,
262
 Books
1) Management Accounting, Prin.Dr.P.M.Herekar, Mehta Book Sellers, First
Edition
2) Management Accounting, Prof. Pankar Pramod Kisan, Thakur Publishers,

Edition 2014
 Website
www.investopedia.com 07/04/2022
 Annual reports of the Dhansampada Nagari Sahakari Patsanstha Maryadit Gadhinglaj.












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A

WORKING CAPITAL MANAGEMENT

WITH SPECIAL REFERENCE TO

DHANSAMPADA NAGARI SAHAKARI PATHSANTHA

FOR THE PARTIAL FULFILLMENT OF

BACHELOR OF BUSINESS ADMINISTRATION

MISS. SUPRIYA BHALCHANDRA MATHAPATI

UNDER THE GUIDANCE OF

MRS. T. N. TASHILDAR (M.COM., B.ED)

SHIVAJI UNIVERSITY, KOLHAPUR

DR. GHALI COLLEGE GADHINGLAJ.

WORKING CAPITAL MANAGEMENT” with special reference to

“DHANSAMPADA NAGARI SAHAKARI PATHSANTHA

MARYADIT, GADHINGLAJ” submitted by Ms. MATHAPATI

SUPRIYA B. to SHIVAJI UNIVERSITY, KOLHAPUR in partial

fulfillment of the requirements for the award of degree, ‘BACHELOR OF

Mr. M. S. Vandkar Dr. M. R. Patil

WORKING CAPITAL MANAGEMENT

WITH SPECIAL REFERENCE TO

DHANSAMPADA NAGARI SAHAKARI PATHSANTHA

FOR THE PARTIAL FULFILLMENT OF

BACHELOR OF BUSINESS ADMINISTRATION

MISS. SUPRIYA BHALCHANDRA MATHAPATI

UNDER THE GUIDANCE OF

MRS. T. N. TASHILDAR (M.COM., B.ED)

SHIVAJI UNIVERSITY, KOLHAPUR

This is to certify that the project report entitled “A STUDY OF

WORKING CAPITAL MANAGEMENT” with special reference to

“DHANSAMPADA NAGARI SAHAKARI PATHSANTHA

MARYADIT, GADHINGLAJ” being submitted by Ms. MATHAPATI

SUPRIYA B. to SHIVAJI UNIVERSITY, KOLHAPUR in partial

fulfillment of the requirements for award of degree of BACHELOR OF

BUSINESS ADMINISTRATION has been prepared under my guidance

and supervision is her original work and completed satisfactorily.

previously submitted to the award of any degree.

I undersigned hereby declare that the project report entitled A STUDY OF

“WORKING CAPITAL MANAGEMENT” procedure with special reference to

“DHANSAMPADA NAGARI SAHAKARI PATHSANTHA MARYADIT,

GADHINGLAJ” is an original work prepared by me under the guidance of Mrs. T.

report is not copy of any source.

I understand that any such copying is liable to punished as the University

authorities deem fits.

Ms. Mathapati Supriya B.

great pleasure to express my heartiest gratitude towards them.

I take this opportunity to express my deep gratitude to Dr. Ghali College,

Gadhinglaj. I sincerely thank to Principal, Dr. M. R. Patil for the continuous

I am also extend thanks to my project guide Mrs. T. N. Tashildar for her

continuous support & valuable guidance.

I sincerely thanks to “DHANSAMPADA NAGARI SAHAKARI

PATHSANTHA MARYADIT, GADHINGLAJ”, for giving me an opportunity to

sense of gratitude towards the management of “DHANSAMPADA NAGARI

SAHAKARI PATHSANTHA MARYADIT, GADHINGLAJ” for their whole

hearted support and help during my project work.

in competition of this project work.

Ms. Mathapati Supriya B.

1 Current Ratio 4.10 32

2 Quick or Liquid Ratio 4.11 33

3 Proprietary Fund Ratio 4.12 34

4 Fixed Assets Ratio 4.13 35