Submitted By : ABHIJIT KUMAR NAGDEV Admission No.

. : DPGD/JA12/0664 Specialization Name : Finance Name of the Institute : Welingkar Institute of Management. Year : December 2013

WORKING CAPITAL MANAGEMENT

Working Capital is the amount of capital that a business has available to meet the day to day cash requirements of its operations. Working Capital refers to that part of the firm capital, which is required for financing Short-Term or Current Assets such as Cash, Marketable Securities, Debtors and Inventories. Working Capital is also known as Revolving or Circulating Capital or Short Term Capital.

There are two interpretation of working capital under the balance sheet concept: Gross Working Capital Net Working Capital

 The term working capital refers to the Gross working capital and represents the amount of funds invested in current assets. Thus, the gross working capital is the capital invested in total current assets of the enterprises. Current assets are those assets which are converted into cash within short periods of normally one accounting year. The term working capital refers to the net working capital. Net working capital is the excess of current assets over current liabilities or say:
Net Working Capital = Current Assets - Current Liabilities.

 The gross operating cycle of a firm is equal to the length of the inventories and receivables conversion periods. Thus, Gross Operating Cycle = RMCP + WIPCP + FGCP + RCP
RMCP = Raw Material Conversion Period WIPCP = Work -in- Process Conversion Period FGCP = Finished Goods Conversion Period

RCP = Receivables Conversion Period

Britannia Industries LTD.

About Company: In 1918 The Company was Incorporated on 21st March, as a public limited company under the Indian Companies Act, VII of 1913. In 1979 With effect from 3rd October, the name of the Company was changed from the Britannia Biscuit Co., Ltd., to Britannia Industries Ltd. Company has its offices at Bangalore Headquarters, Mumbai, Chennai, Delhi, Calcutta, Hyderabad The Company is divided into two divisions Biscuit & Bakery

Awards of Britannia Industries.

Britannia received the Most Respected Company Award 2011 from Businessworld. Bourbon received the Most Popular Confectionery Product Preferred By Youth (Biscuit) Award. Britannia was awarded the Global Performance Excellence Award (GPEA) by Asia Pacific Quality Organization (APQO)

Limitations: Large number of executive staff & their assistants are appointed, at the same time they are highly paid which affects to the profitability of company. Dead Stock & Wastage of Material affects to the cost of material. Delivery of Material is not as per the schedule/time commitment, so it also affects to the sales of company.

Recommendation: Company should increase the inventory holding period. It is the major part of working capital of company. Company has to take control on cash balance because cash is non earning assets and increase cost of funds. Company should raise it fund through short term sources for short term requirement of funds.