Summer Training Presentation 1

8/8/2019 Summer Training Presentation 1

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SUBMITED TO

Mrs. OMKAR KAUR

SUBMITED BY

AMANPREET SINGH

BBA 5TH SEM

80906320005

A PROJECT REPORT ON WORKING CAPITAL


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Leadership Through Innovation

Amber Portfolio

Amber Enterprises (India) Pvt. Ltd

Sheet Metal(Rajpura, Dehradun,

G Noida &

KalaAmb)

Heat

Exchangers(Dehradun)

Extrusion &

Vacuum Forming(G Noida)

Assembly(Rajpura, Dehradun

& KalaAmb)

AutomobileIndustry

Room Air

conditioners

Commercial Air

conditioners

Telecom Air

conditioners

Commercial Air

conditioners

Room Airconditioners

Indian Railways

RefrigeratorsCase liners

Refrigerators

Door Liners

Washing

Machines

Microwave

Ovens

Air conditioners(RAC & CAC)

Refrigerators

Microwave

ovens

Railway RMPU

Luminaries

Indoor Lightings


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Amber: An ISO: 9001 accredited company

Amber has eight manufacturing locations, located at Rajpura, Dehradun , HP, and G. Noida

Amber Enterprises (India) Pvt Ltd Turnover : Rs 650 Crores(approx)

Primarily involved in four areas:

a) Air conditioning and Microwave ovens

b) Precision Sheet Metal Components

c) Vacuum Forming & Extrusion

d) Aviation: Flying Training of commercial pilots & Aircraft Chartering

Major customers : LGEIL, Whirlpool, Voltas, Blue Star, Indian Railways, Philips, JCI, Mazda,

Govt. Agencies, RCF Kapurthala, ICF Chennai

Manufacturing 0.55 Million Appliances in a year & 6.0 million components per year.

Expertise in the manufacturing of windows, split air conditioners , CAC (Ducted & Package), RMPU

(Roof mounted package Unit), MWO, and other precision sheet metal components

Leadership Through Innovation

Amber Group Overview


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Working capital, also known as "WC", is a financial metric which represents operating

liquidity available to a business.

It is calculated as :

Working Capital = Current Assets Current Liabilities

Net working capital is working capital minus cash (which is a current asset) and minus

interest bearing liabilities (i.e. short term debt).

Current assets and current liabilities include three accounts which are of special

importance. These accounts represent the areas of the business where managers have themost direct impact:

accounts receivable (current asset)

Inventory (current assets), and

accounts payable (current liability)


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An increase in working capital indicates that the business has either increased current assets

(that is has increased its receivables, orother current assets) orhas decreased current

liabilities, for example has paid off some short-term creditors

Working Capital Management :-

Decisions relating toworking capital and short term financing are referred to as working

capital management. These involve managing the relationship between a firm's short-term

assets and its short-term liabilities. The goal ofworking capital management is to ensure that

the firm is able to continue its operations and that it has sufficient cash flow to satisfy bothmaturing short-term debt and upcoming operational expenses.

Management of working capital :-

Management will use a combination of policies and techniques for the management of

working capital. These policies aim at managing the current assets (generally cash and cashequivalents, inventories and debtors) and the short term financing, such that cash flows and

returns are acceptable


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To study the various components of financial statements of AMBER GROUP LTD.

To analyze the profitability of the company.

To study trend ofoperations of the company and its effect on profits

.To analyze the long-term financial position i.e. solvency of the company.

To analyze the short-term financial position i.e. liquidity.

To help the management in financial planning of the organization


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As the project involves analyzing of financial structure, the research is exploratory

in nature, covering financial parameters and came of the important ratios to carry

out research.

There are basically two techniques adopted forobtaining information:

1. Primary data2. Secondary data

Primary Data is gathered specifically for the project at hand through personal

interviews with the accounts officers.

Secondary data is previously collected and assembled for some project other thanthe one at hand. It is gathered and recorded by someone else prior to current needs

of the researcher. It is less expensive than the primary date.


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Secondary data can be obtained from both external and internal sources.

External data may be collected from books and periodicals, government sources,

media and other commercial sources. Internal data is that secondary data, which is

created, recorded or generated by the organization.

As the project is exploratory in nature secondary data is collected from the reports of

the company, books,journals. Secondary data is gathered from annual reports, official

records and standing orders of the units.


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A financial statement is a systematic collection of data according to some logical

and consistent accounting procedures. Its purpose is to convey an idea about some

important financial aspects of a business firm. It may show a position at a moment of

time as in the case of the balance sheet, or may reveal a series of activities over a

given period of time as in the case of income statement.

The information contained in these financial statements is used by various

interested parties like management, creditors, investors, government And others to

formjudgment about the operative performance and financial position of the firm. The

users of financial statements can get better insight about financial strengths and

weaknesses of the firm if they properly analyze the information given in these

statements.


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` Time Series Analysis.

The most common way to evaluate the performance of a firm is to compare its current

position with its past position

` Cross- Sectional Analysis.Anotherway of comparison is to compare the financial position ofone form with

some selected first in the same industry at the same point of time.

` Performa Analysis.

Analysis of present financial position with the help of projected financial statementsfor the future is known as Performa analysis.

` Industry Analysis.

To determine the financial condition and performance of a firm, its ratios may be

compared with average ratios of the industry ofwhich the firm is a member.


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Tools of

Fi ci l

lysis

R tio

lysis

Comp r tive

B l ce

Sheet

C sh Flow

St teme t

Tre d

lysis


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Ratio analysis is a technique of analysis and interpretation of financial statements.

Types of ratios:-

(i) Current Ratio.

The current ratio is an indicatorof a firms short term solvency.

ii) Debtors/Receivables Turnover Ratio.

Debtors turnover ratio indicates the velocity of debt collection of firm.

Debtors Turnover Ratio = Total sales

Debtors

(iii) Working Capital Turnover Analysis.

Working capital turnover analysis isused to measure the efficiency withwhich the

firms are using theirworking capital.


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(iv) Inventory Turnover Analysis.

Every firm has to maintain a certain level of inventory of finished products so as to be

able to meet the requirements of the business and ensure an uninterrupted production.

(v) Creditors Turnover Analysis.

The analysis of creditors turnover is basically the same as of debtors turnover ratio

except that in place of trade debtors, the trades creditors are taken.

Creditors Turnover Ratio = Net Credit Annual Purchases

Average Trade Creditors


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ANALYSIS OF LONG-TERM FINANCIAL POSITION

The term solvency refers to the ability of a concern to meet its long term obligations.

The following ratios have been calculated for determining the solvency of the concern.

1.DEBT-EQUITY RATIO

Debt- Equity ratio, also known as External- Internal Ratio is calculated to measure the

relative claims ofoutsider and the owners (i.e. shareholders) against the firms assets.

Debt-Equity Ratio = Outsiders Fund or External Equities

Shareholders Funds or Internal Equities

2. FUNDED DEBT TO TOTAL CAPITALISATION RATIO

This ratio establishes a link between the long-term funds raised from outsiders and total long

term funds available in the business.

FORMULA= Funded Debt X 100

Total capitalization


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ANALYSIS OF PROFITABILITY OR PROFITABILITY RATIOS

The primary objective of a business undertaking is to earn profits. Profit earning is

considered essential for the survival of the business.

GENERAL PROFITABILITY RATIOS :-

(i) Gross Profit Ratio.This ratio measures the relationship of gross profit to net sales.

Gross Profit ratio = Gross Profit * 100Net Sales

(ii) Operating Ratio.This ratio establishes the relationship between cost of goods sold and otheroperating

expenses on the one hand and sales on the otherhand.

Operating Ratio = Operating cost * 100Net Sales


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(iii) Operating Profit Ratio.

Operating Profit Ratio = Operating profit * 100Sales

(iv) Net Profit Ratio.

Net Profit Ratio = Net profit after tax * 100Net Sales

This ratio establishes a relationship between net profit and sales and indicates

managements efficiency in manufacturing and selling the products.

Documents

Summer Training Presentation 1