Submitted By
ANAND K. MALODE

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INTRODUCTION
Working capital is the money and assets that business uses to finance the day to day operations that produce the goods or services supplied to customers”.
The capital required for running the day to day business activities of a firm is known as “Working Capital”. It refers to that part of total capital employed which has been invested for financing of current assets and payment of day to day expenses.
E.g.- Inventories, Debtors, Bill receivable etc.
“Working Capital is the amount of fund necessary to cover the cost of operating the enterprises.”
Working Capital Gap = Current Assets - Current Liabilities
Working capital has two concepts:-
a) Gross concept: - Gross working capital usually referred to as working capital represent investment in current assets. The gross concept of working capital focuses the attention on two aspects of current management.
These are:
i) Optimum investment in current assets.
ii) Financing of current assets.
This mean the level of investment in current assets should be adequate.
b) Net concept: - Net working capital is difference between current assets and current liabilities. The net concept of working capital is an accounting concept that deals with management of net value of current assets in long run. Net concept of working capital
i) Indicates liquidity position of the firm.
ii) Suggests the extent to which working capital needs may be financed by permanent source of funds.
OBJECTIVE OF STUDY
Aims and objective act as the limiting boundaries and keep the researcher on track and help to avoid any mistakes and errors during the project work.
The aims and objective of this project are listed below:
1) To learn more about working capital management and it’s financing from banks.
2) To know the importance of working capital from the company’s point of view.
3) To study the impact of working capital on liquidity position of the firm.
4) To study the Credit Monitoring Arrangement of the firm with respect to Bank Finance.
5) To determine the Maximum Permissible Bank Finance for the company.
6) To study the impact of working capital on the balance sheet of the company.
RESEARCH METHODOLOGY
Research is essentially a logical and an organized enquiry seeking facts through objective methods in order to discover the relationship among them and to refer from the broad principles or laws. It is really a method of critical thinking.
Research may be defined as a systematic and objective analysis and recording of controlled abservations that may lead to the development of generalization of principles or theories resulting in prediction and possibly ultimate control of events.
Methodology is often used in a narrow sense to refer to methods, technology or tools employed fpr the collection data as well as its processing. This is also used sometimes to designate data collection to arrive at the conclusion. In fact it describes that what should have been done. It provides answer to some of the major question while research like what must be done, how it will be done, what data will be needed, what data gathering devices will be employed, how sources of data will be analysed to arrive at the conclusion. For systematic research scientific approach is necessary. It is therefore essential to follow systematic methodology to arrive at a proper conclusion.
There several ways of collecting the appropriate data, which defers considerable in context of money, cost, time and other resources at the dispersal of the researcher. The data for this project has been collected by primary as well as secondary sources.
PRIMARY SOURCES:-
The primary data will be collected from various books of financial management and various other reference materials.
SECONDARY SOURCES:-
The data required for the study will be collected from annual reports of the company of the respective years. The company provided the annual reports. The analysis has been completed with the help of various tools and techniques of ratio analysis to evaluate company performance.
I. Annual Reports of the year 2006-07, 2007-08, 2008-09
II. Company’s Website and other Internet sources.
The project mainly depends upon the secondary data.
HYPOTHESIS
Under this arrangement, the borrower is provided with working capital finance by the bank against the security of movable property, generally inventories. The borrower does not transfer the property to the bank; he remains in the possession of property made available as security for the debt. Thus hypothecation is a charge against property for an amount of debt where neither ownership nor possession is passed to the creditor. Banks generally grant credit hypothecation only to first class customers with highest integrity. They do not usually grant hypothecation facility to new borrowers.
LIMITATION OF STUDY
1) Inter firm comparison is not possible because it is a multi product firm with varying Competitors having multi product profile.
2) Working Capital Management is a vast subject covering many domains of current assets and current liabilities management. It is not possible to cover all the aspects in such a short tenure of the project.