Working Capital Management with Reference to CSL

Description

Working Capital Management with Reference to CSL (Final Project Report)

Page Length : 60

Executive Summary  

Finance is said to be ‘the science of money’. Finance implies funds necessary for carrying on the activities of an organization. The funds include;

1. Fixed capital for procuring fixed assets, i.e., plant, machinery, building, tools and
2. Working capital for procuring raw materials, payment of wages, overhead

Working capital (WC) is a financial metric which represents available to a business, organization or other entity, including governmental entity. Working capital may be regarded as the lifeblood of a business firm. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Working capital refers to firm’s investment in short term assets such as cash, short term securities, amount receivables, inventories of raw materials, work in progress and finished goods. There might not be many business firms in the world where, besides investment in fixed assets, funds would not be needed for carrying on day-to-day operations of the business. It can also be regarded as that portion of the firm’s total capital that is employed in short term operations. It refers to all aspects of current assets and current liabilities. Net working capital is calculated as If current assets are less than current liabilities; an entity has a working capital deficiency, also called a working capital deficit.

Technically, Working capital management is an integral part of the financial management. Decisions relating to working capital and short term financing are referred to as working capital management. The financial manager must determine the optimum level of working capital funds and also the optimum composition of current assets and current liabilities. He must ensure that the appropriate sources of funds are used to finance working capital and also see that short term liabilities of the business are met well in time. The goal of working capital management is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses.

A firm may exist without making profits but cannot survive without liquidity. A firm not making profits may be treated as sick but one having no liquidity may soon meet with its downfall and ultimate die. Working capital has thus become a basic and broad measure of judging the performance of a business firm.

Cochin Shipyard Limited (CSL) is one of the most modern ship-building and ship- repairing yard in the country. CSL was incorporated in the year 1972 as a fully owned Government of India company. In the last three decades the company has emerged as a forerunner in the Indian Shipbuilding & Ship repair industry. This yard can build and repair the largest vessels in India. It can build ships up to 1, 10,000 DWT and repair ships up to 1, 25,000 DWT. The yard has delivered two of India’s largest double hull Aframax tankers each of 95,000 DWT. CSL has secured shipbuilding orders from internationally renowned companies from Europe & Middle East and is nominated to build the country’s first indigenous Air Defense Ship.

This project is undertaken to study the present model of working capital management and utilization in CSL. Main objective of this study is to suggest optimization and improvisation strategies, if any to represent mode of working capital management.

Content

1. Chapter i
   1. Introduction
   2. Statement of the problem
   3. Scope and significance of the study
   4. Objectives
   5. Limitations
   6. Methodology used for the study
2. Chapter ii
   1. Company profile
      1. History of the company
      2. Organization chart
   2. Chapter iii
      1. Review literature
      2. Working capital
   3. Chapter iv
      1. Ratio analysis of cochin shipyard limited
3. Chapter v
   1. Findings, conclusion and suggestions
      1. Findings:
      2. Conclusion:
      3. Suggestions:
4. Bibliography
   1. Books
   2. Websites