GROUP NO. 8

2
HISTORY & MILESTONE OF JHAKAR INDUSTRY
In 1995, Mr VIJAYPAL JAKHAR established the JAKHAR GRANITE INDUSTRIES in
Jalore, Rajasthan.Industry started as a small enterprise established to manufacture granite
tiles.In the last 20 years industry has grown constantly so that currently regarded as one of the
known Granite Industry. At the present, AKHAR GRANITES is successfully headed and
managed by Mr VijayPal Jakhar and Mr Dushyant Jakhar. This Industry do a business in
which granite in the form of slabs and tiles has several attractive features which includes
extra fine mirror polish, scratch free glossy surface and durability.
Operations which are involved in the processing of Jakhar Granites are:
 Dressing
 Cutting/Sawing
 Surface Grinding and Polishing
 Edge-Cutting-Trimming
HISTORY & MILESTONE OF SWEET MEMORIES (RESTURANT)
In 2012, Mr Gaurav established the Sweet memories cafe and restaurant in Haldwani, near
Kusumkhera.
Main Course :
 Pizza
 Coffee
 Cakes
 Muffins
 Dosa
 North Indian meal
 South Indian meal
 Burger
HISTORY & MILESTONE OF STUDIO ELEVEN (PARLOUR)
Based in rural Fort Loramie, Ohio, Studio Eleven was established in 1992 as a family owned
and operated business dedicated to providing high quality and affordable promotional
products and corporate apparel that are on time, on budget, and on target. Our vast selection
of over 900,000 products allows you to find the perfect promotional items for your marketing
or human resource needs.

3
OBJECTIVES OF THE STUDY
Working capital is the most widely used and powerful technique of financial analysis. The
main objective of the present study is to know the financial condition of the small business.
• To know the overall operational efficiently and performance of the business.
• To interpret the financial position ; ie. appropriate (or) not.
• To assess the long term financial viability of business.
• To know whether the owner is constantly concerned about the overall profitability of
the business (or) not.
• To provide reliable financial information about economic resources and obligation of
a business.
• To provide reliable financial information those add ,it’s in estimating the potential of
the business.
SCOPE OF THE STUDY
The main scope of the study was to put into practical the theoretical aspect of the study into
real life work experience.
The study of working capital is based on tools like Ratio Analysis and Statement of changes
in working capital.
Further the study is based on last 3 years financial data.
LIMITATIONS OF THE STUDY
 Limited interaction with the concerned heads due to their busy schedule.
 The findings of the study are based on the information retrieved by the selected unit.
 There may be some fractional differences in the calculated ratios.

4
CHAPTER 2
RESEARCH METHODOLOGY

5
RESEARCH METHODOLOGY
INTRODUCTION:
Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying the research systematically. In that various steps, those
are generally adopted by a researcher in studying his problem along with the logic behind
them.
“The procedures by which researchers go about their work of describing, explaining and
predicting phenomenon are called methodology”.
TYPE OF RESEARCH:
This project “A Study on Working Capital Management of restutant /coaching/ parlour
” is considered as an analytical research.
Analytical Research is defined as the research in which, researcher has to use facts or
information already available, and analyze these to make a critical evaluation of the facts,
figures, data or material.
TOOLS USED FOR ANALYSIS OF DATA
The data were analyzed using the following financial tools. They are:
 Ratio analysis.
 Statement of changes in working capital.

6
SOURCE OF RESEARCH DATA
For the purpose of the study necessary information has been collected through primary and
secondary sources.
PRIMARY DATA:
The primary data are those which are collected a fresh and for the first time, and thus
happened to be original in character. Primary data include the information collected from the
restutant /coaching/ parlour through discussions. The Primary data has been collected
from Personal Interaction with owner of business.
SECONDARY DATA :
The secondary data on the other hand are those which have already been collected by
someone else and which have already been passed though the statically process.
The secondary data include the information from the business annual reports (2013, 2014 &
2015) which include financial statement like balance sheet and income statements and
magazine.
SAMPLING DESIGN
1. Sampling unit : Financial Statements.
2. Sampling Size : Last three years financial statements.
3. Tools Used : MS-Excel has been used for calculations.
4. Visiting proof : photos with business owners

7
INTRODUCTION OF WORKING CAPITAL MANAGEMENT
Working capital management is significant in financial management. It plays a vital role in
keeping the wheel of the business running. Every business requires capital ,without it
can’t be promoted. Investment decisions is concerned with investment in current assets and
fixed assets .
Working capital in simple terms is the amount of funds, which a company, must have to
finance its day-to-day operation, it can be regarded as part/portion of capital, which is,
employed in short operation.
Every organization invests their funds in two terms of capital namely,
1. Fixed Capital.
2. Working Capital
The amount invested in the assets like Plant and Machinery, Building, Furniture etc, blocked
on permanent basis and is called Fixed Capital Organization not only requires Fixed Capital,
but also need of fund to meet day to day operations for short term purpose, such funds is
called Working Capital.
A Study of Working Capital is of major part of the external and internal analysis because of
its close relationship with the current day to day operation of business. Working Capital
consists broadly for that position/the assets of a business that are used at related current
operations and is represented by raw materials, stores, work in process and finished goods
merchandise, note/bill receivable

8
MEANING OF WORKING CAPITAL
Working capital means the funds (i.e.; capital) available and used for day to day operations
(i.e.; working) of an enterprise. It consists broadly of that portion of assets of a business
which are used in or related to its current operations. It refers to funds which are used during
an accounting period to generate a current income of a type which is consistent with major
purpose of a firm existence.
In Accounting:
METHODS OF ESTIMATING WORKING CAPITAL: -
 Conventional Method: -
According to the conventional method, cash inflows and outflows are matched with each
other. Greater emphasis is laid on liquidity and greater importance is attached to current ratio,
liquidity ratio, etc., which pertain to the liquidity of a business.
 Operating cycle method:
In order to understand what gives rise to differences in the amount of timing of cash flows,
we should first know the length of time which is required to convert cash into resources,
resources into final product, the final product into receivables and receivables back into cash.

9
OBJECTIVES OF WORKING CAPITAL MANAGEMENT
Effective management of working capital is means of accomplishing the firm’s goal of
adequate liquidity. It is concerned with the administration of current assets and current
liabilities. It has the main following objectives-
1. To maximize profit of the firm.
2. To help in timely payment of bills.
3. To maintain sufficient current assets.
4. To ensure adequate liquidity of the firms.
5. It protects the solvency of the firm.
6. To discharge current liabilities.
7. To increase the value of the firm.
8. To minimize the risk of business.

10
THE NEED FOR THE WORKING CAPITAL
The need for working capital arises due to the time gap between production and realization of
cash from sales. Working capital is must for every business for purchasing raw-materials,
semi finished goods, stores & spares etc and the following purposes.
1. To purchase raw materials, spare parts and other component.
A manufacturing firm needs raw-materials and other components parts for the purpose of
converting them in to final products, for this purpose it requires working capital. Trading
concern requires less working capital.
2. To meet over head expenses.
Working capital is required to meet recurring over head expenses such as cost
of fuel, power, office expenses and other manufacturing expenses.
3. To hold finished and spare parts etc.
Stock represents current asset. A firm that can afford to maintain stock of required finished
goods, work in progress & spares in required quantities can operate successfully. So for that
adequate quantity of working capital is required.
4. To pay selling & distribution expenses.
Working capital is required to pay selling & distribution expenses. It includes cost of
packing, commission etc.
5. Working capital is required for repairs & maintenance both machinery as well as factory
buildings.
6. Working capital is required to pay wages, salaries and other charges.
7. It is helpful in maintain uncertainties involved in business field.

11
WORKING CAPITAL MANAGEMENT
Working Capital Management refers to management of current assets and current
Liabilities. The major thrust of course is on the management of current assets .This
Is understandable because current liabilities arise in the context of current assets.
Working Capital Management is a significant fact of financial management. Its
Importance stems from two reasons:-
 Investment in current assets represents a substantial portion of total investment.
 Investment in current assets and the level of current liabilities have to be geared quickly
to change in sales. To be sure, fixed asset investment and long term financing are
responsive to variation in sales. However, this relationship is not as close and direct as it
is in the case of working capital components.
CLASSIFICATION OF WORKING CAPITAL
WORKING
CAPITAL
On The Basis of Concept On The Basis of Time
Gross Working
Capital
Net Working
Capital
Permanent /
Fixed Working
Capital
Temporary /
Fluctuating
Working Capital
Initial Working
Capital
Regular Working
Capital
Seasonal
Working Capital
Special Working
Capital

12
WORKING CAPITAL ON THE BASIS OF CONCEPTS
The concept of working capital includes current assets and current liabilities both. There are
two of working capital they are gross and net working capital.
1. Gross working capital: It refers to the firm’s investment in current assets. Current assets
are the assets, which can be converted into cash within an accounting year or operating
cycle. It includes cash, short term securities, debtors (account receivables or book debts),
bills receivables and stock (inventory). This concept has the following advantages:-
 It provides the correct amount of working capital at the right time.
 It helps in the fixation of various areas of financial responsibility.
 It enables a firm to plan and control funds and to maximize the return on investment. For
these advantages, gross working capital has become a more acceptable concept in
financial management.
2. Net working capital: It refers to the difference between current assets and liabilities are
those claims of outsiders, which are expected to mature for payment within an accounting
year. Current liabilities are those that are expected to mature within an accounting year
and include creditors, bills payable and outstanding expenses.
Working Capital Management is no doubt significant for all firms, but its significance is
enhanced in cases of small firms. A small firm has more investment in current assets than
fixed assets and therefore current assets should be efficiently managed.
The working capital needs increase as the firm grows. As sales grow, the firm needs to invest
more in debtors and inventories. The finance manager should be aware of such needs and
finance them quickly.

13
WORKING CAPITAL ON THE BASIS OF TIME
1. Permanent / Fixed Working Capital
Permanent or fixed working capital is minimum amount which is required to ensure effective
utilization of fixed facilities and for maintaining the circulation of current assets. Every firm
has to maintain a minimum level of raw material, work- in-process, finished goods and cash
balance. This minimum level of current assets is called permanent or fixed working capital as
this part of working is permanently blocked in current assets. As the business grow the
requirements of working capital also increases due to increase in current assets.
i. Initial working capital
ii. Regular working capital
2. Temporary / Fluctuating Working Capital
Temporary / Fluctuating working capital is the working capital needed to meet seasonal as
well as unforeseen requirements. It may be divided into two types.
i. Seasonal Working Capital
ii. Special Working Capital
“WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES”.

14
NATURE OF WORKING CAPITAL
Working capital management is concerned with the problems that arise in attempting to
manage the current assets ,the current liabilities and the inter relationship that exists between
them. The term current refers to those assets which in the ordinary course of business can be
,or will be converted into cash within one year without undergoing a diminution in value
and without disrupting the operation of the firm. The major current assets are cash,
marketable securities, accounts receivables and inventory.
Current liabilities are those liabilities, which are intended at their inception ,to be paid in the
ordinary course of business, within a year out of the current or the earning of the concern
.The basic current liabilities are accounts payable ,bills payable ,bank overdrafts and
outstanding expense.
The goal of working management is to manage the firm’s assets and liabilities in such a way
that a satisfactory level of working capital is maintained. This is because if the firms cannot
maintain a satisfactory level of working capital ,it is likely to become insolvent and may even
be forced into bankruptcy. The current assets should be large enough to cover its current
liabilities in order to ensure a reasonable margin of safety. Each of the short term source of
financing must be continuously managed to ensure that they are obtained and used in the
way. Interaction between current liabilities is ,therefore the main theme of the of
management of working capital.

15
IMPORTANCE OF WORKING CAPITAL
1. Solvency of the business: Adequate working capital helps in maintaining the solvency of
the business by providing uninterrupted of production.
2. Goodwill : Sufficient amount of working capital enables a firm to make prompt
payments and makes and maintain the goodwill.
3. Easy loans: Adequate working capital leads to high solvency and credit standing can
arrange loans from banks and other on easy and favorable terms.
4. Cash discounts: Adequate working capital also enables a concern to avail cash discounts
on the purchases and hence reduces cost.
5. Regular Supply of Raw Material: Sufficient working capital ensures regular supply of
raw material and continuous production.
6. Regular payment of salaries, wages and other day to day commitments: It leads to
the satisfaction of the employees and raises the morale of its employees, increases their
efficiency, reduces wastage and costs and enhances production and profits.
7. Exploitation of favorable market conditions: If a firm is having adequate working
capital then it can exploit the favorable market conditions such as purchasing its
requirements in bulk when the prices are lower and holdings its inventories for higher
prices.
8. Ability to Face Crises: A concern can face the situation during the depression.
9. Quick and regular return on investments: Sufficient working capital enables a
concern to pay quick and regular of dividends to its investors and gains confidence of the
investors and can raise more funds in future.
10. High morale: Adequate working capital brings an environment of securities, confidence,
high morale which results in overall efficiency in a business.

16
ADEQUACY & INADEQUATE OF WORKING CAPITAL
ADEQUACY OF WORKING CAPITAL:
Working capital should be adequate so as to protect a business from the adverse effects of
shrinkage in the values of current assets. It ensures to a greater extent the maintenance of a
company’s credit standing and provides for such emergencies as strikes, floods, fire etc. It
permits the carrying of inventories at a level that would enable a business to serve
satisfactorily the needs of its customers. It enables a company to operate its business more
efficiently because there is no delay in obtaining materials etc; because of credit difficulties.
INADEQUATE OF WORKING CAPITAL:
When working capital is inadequate, a company faces many problems. It stagnates the growth
and it becomes difficult for the firm to undertake profitable projects for non-availability of
working capital funds. Difficulty in implementing operating plans and achieving the firm’s
profit targets. Operating inefficiencies creep in when it becomes difficult even to meet day-
to-day commitments. Fixed assets are not utilized efficiently thus the firm’s profitability
would deteriorate. Paucity of working capital funds renders the firm unable to avail attractive
credit opportunities. The firm loses its reputation when it is not in a position to honor it short-
term obligations thereby leading to tight credit terms.

17
ESTIMATION OF WORKING CAPITAL REQIUREMENTS
Managing the working capital is a matter of balance.The following aspects have to be taken
into consideration while estimating the working capital requirements. They are:
1. Total costs incurred on material, wages and overheads.
2. The length of time for which raw material are to remain in stores before they are
issued for production.
3. The length of the production cycle or work-in-process, i.e., the time taken for
conversion of raw material into finished goods.
4. The length of sales cycle during which finished goods to be kept waiting for sales.
5. The average period of credit allowed to customers.
6. The amount of cash required paying day-today expenses of the business.
7. The average amount of cash required to make advance payments.
8. The average credit period expected to be allowed by suppliers.
9. Time lag in the payment of wages and other expenses.

18
OPERATING CYCLE OF WORKING CAPITAL
The working capital cycle reserves to the length of time between the firm paying cash for
materials etc., this working capital also known as operating cycle. Working capital cycle or
operating cycle indicates the length or time between companies paying for materials entering
into stock and receiving the cash from sales of finished goods. The operating cycle (Working
Capital) consists of the following events. Which continues throughout the life of business?
 Conversion of cash into raw materials.
 Conversion of raw materials into work in progress.
 Conversion of work in progress into finished stock.
 Conversion of finished stock into accounts receivables(Debtors)through sales
 Conversion of account receivables into cash.
RAW
MATERIALS
WORK-IN-
PROGRESS
FINISHED
STOCK
DEBTORS
CASH

19
ESTIMATION OF CURRENT ASSETS
1. Raw Material Inventory:
The Investment in Raw Material can be computed with the help of the following formula:-
Budgeted Cost of Raw Average Inventory
Production x Material(s) x Holding Period
( In units ) per unit (months/days)
12 months / 52 weeks / 365days
2. Work-in-progress (W/P) Inventory:
The relevant cost of determine work in process inventory are the proportionate share of cost
of raw material and conversion costs ( labors and Manufacturing over Head cost excluding
depreciation) In case, full until of raw material is required in the beginning the unit cost of
work is process would be higher, i.e., cost of full unit + 50% of conversion cost compared to
the raw material requirement. Throughout the production Cycle, working process is normally
equivalent to 50% of total cost of production. Symbolically,
Budgeted Estimated work- Average Time Span
Production x in-progress cost x of work-in-progress
( In units ) per unit inventory (months/days)
3. Finished Goods Inventory:
Working capital required to finance the finished goods inventory is given by factors summed
up as follows:-
Budgeted Cost of Goods Produced Finished Goods
Productionx x per unit (excluding x Holding Period
( in units ) depreciation) (months/days)

20
4. Debtors:
The working capital tied up in debtor should be estimated in relation to total cost price (
excluding depreciation ) symbolically,
Budgeted Cost of Sales per Average Debt
Production x unit excluding x Collection Period
( In units ) depreciation (months/days)
5. Cash and Bank Balances:
Apart from Working Capital needs for Financing Inventories and Debtors, Firms also find it
useful to have such minimum cash Balances with them. It is difficult to lay down the exact
procedure of determining such an amount. This would primarily be based on the motives of
holding cash balances of the business firm, attitude of management towards risk, the access to
the borrowing sources in times of need and past experience.

21
COMPONENTS OF WORKING CAPITAL
The components of working capital are:
 CASH MANAGEMENT
 RECEIVABLES MANAGEMENT
 INVENTORY MANAGEMENT
CASH MANAGEMENT:
Cash is the important current asset for the operation of the business. Cash is the basic input
needed to keep the business running in the continuous basis, it is also the ultimate output
expected to be realized by selling or product manufactured by the firm.
The firm should keep sufficient cash neither more nor less. Cash is the money, which a firm
can disburse immediately without any restriction. The term cash includes coins, currency and
cheques held by the firm and balances in its bank account.
OBJECTIVES OF CASH MANAGEMENT
Primary object of the cash management is to maintain a proper balance between liquidity and
profitability. In order to protect the solvency of the firm and also to maximize the
profitability. Following are some of the objectives of cash management.
1. To meet day to day cash requirements.
2. To provide for unexpected payments.
3. To maximize profits on available investment opportunities.
4. To protect the solvency of the firm and build up image.
5. To minimize operational cost of cash management.
6. To ensure effective utilization of available cash resources
RECEIVABLES MANAGEMENT:
Receivables or debtors are the one of the most important parts of the current Assets which is
created if the company sells the finished goods to the customer but not receive the cash for
the same immediately. Trade credit arises when a company sales its products or services on
credit and does not receive cash immediately. It is an essential marketing tool, acting as a
bridge for the moment of goods through production and distribution stages to customers.

22
The receivables include three characteristics
1. It involve element of risk which should be carefully analysis.
2. It is based on economic value. To the buyer, the economic value in goods or services
passes immediately at the time of sale, while seller expects an equivalent value to be
received later on.
3. It implies futurity. The cash payment for goods or serves received by the buyer will
be made by him in a future period.
A company gives trade credit to protect its sales from the competitors and to attract the
potential customers to buy its products at favorable terms. Trade credit creates receivables or
book debts that the company is accepted to collect in the near future. The customers from
who receivables have to be collected are called as “Trade Debtors” receivables constitute a
substantial position of current assets.
Granting credit and crediting debtors, amounts to the blocking of the company’s funds. The
interval between the date of sale and the date of payment has to be financed out of working
capital as substantial amounts are tied up in trade debtors. It needs careful analysis and proper
management.
In HCIL ltd., they are selling the goods on cash basis and also on credit basis.
INVENTORY MANAGEMENT:
Inventories are goods held for eventual sale by a firm. Inventories are thus one of the
major elements, which help the firm in obtaining the desired level of sales. Inventories
include raw materials, semi-finished goods, finished products.
In company there should be an optimum level of investment for any asset, whether it is plant,
cash or inventories. Again inadequate disrupts production and causes losses in sales. Efficient
management of inventory should ultimately result in wealth maximization of owner’s wealth.
It implies that while the management should try to pursue financial objective of turning
inventory as quickly as possible, it should at the same time ensure sufficient inventories to
satisfy production and sales demand.
The main objectives of inventory management are operational and financial.
The operational mean that means that the materials and spares should be available in
sufficient quantity so that work is not disrupted for want of inventory. The financial objective
means that investments in inventories should not remain ideal and minimum working capital
should be locked in it.

23
The following are the objectives of inventory management:-
 To ensure continuous supply of materials, spares and finished goods.
 To avoid both over and under stocking of inventory.
 To maintain investments in inventories at the optimum level as required by the
operational and sale activities.
 To keep material cost under control so that they contribute in reducing cost of production
and overall purchases.
 To minimize losses through deterioration, pilferage, wastages and damages.
 To design proper organization for inventory control so that management. Clear cut
account ability should be fixed at various levels of the organization.
 To ensure perpetual inventory control so that materials shown in stock ledgers should be
actually lying in the stores.
 To ensure right quality of goods at reasonable prices.
DANGERS OF EXCESSIVE WORKING CAPITAL:
Too much working capital is as dangerous as too little of it. Excessive working capital raises
problems.
1. It results in unnecessary accumulation of inventories. Thus chances of inventory
mishandling, waste, theft and losses increase.
2. Indication of defective credit policy and slack collection period. Consequently, it results
in higher incidence of bad debts, adversely affecting profits,
3. Makes the management complacent which degenerates in to managerial inefficiency.
4. The tendencies of accumulating inventories to make a speculative profit, which tends to
liberalize the dividend policy, make it difficult for the concern to cope in the future when
it is not able to make speculative profits.

24
CHAPTER 3
DATA PRESENTATION & ANALYSIS

25
A] NET WORKING CAPITAL
An analysis of the net working capital will be very help full for knowing the operational
efficiency of the company.
NWC= CURRENT ASSETS-CURRENT LIABILITIES
JAKHAR GRANITE INDUSTRIES, JALORE (Granite industry)
Years Current Asset Current Liabilities NWC
2013 2314214 135621 2178593
2014 2433145 145632 2287513
2015 2521767 166592 2355175
Table No.1
INTERPRETATION:-
The above chart shows that during the year 2013 the industry has 2,178593 N.W.C. and after
that in year 2014 and 2015 it is continue increasing. In 2015 N.W.C. was 2355175. So we can
say that is in position when there is sufficient WC to pay off it current liabilities.
SWEET MEMORIES (restaurant)
Years Current Asset Current Liabilities NWC
2013 300000 210000 90000
2014 270000 220000 50000
2015 315000 270000 45000
Table No.2
2050000
2100000
2150000
2200000
2250000
2300000
2350000
2400000
2013 2014 2015
Net working capital
Net working capital

26
STUDIO ELEVEN (parlor)
Years Current Asset Current
Liabilities
NWC
2013 400000 300000 100000
2014 360000 320000 40000
2015 419000 370000 49000
Table No.3
INTERPRETATION:-
The above chart shows that during the year 2013 the company has 100000 N.W.C. But in the
year 2014 the N.W.C decreases to (40000) but after that it comes positive in 2015 49000.In
the year 2013 the company has 100000 N.W.C this means the company in a positive position
& sufficient WC available to pay off its current liabilities.
0
20000
40000
60000
80000
100000
2013 2014 2015
Net working capital
Net working capital
0
20000
40000
60000
80000
100000
120000
2013 2014 2015
Net working capital
Net working capital

27
B] RATIO ANALYSIS
Ratio Analysis is a powerful tool of financial analysis. Alexander Hall first presented it in
1991 in Federal Reserve Bulletin. Ratio Analysis is a process of comparison of one figure
against other, which makes a ratio and the appraisal of the ratios of the ratios to make proper
analysis about the strengths and weakness of the firm’s operations. The term ratio refers to
the numerical or quantitative relationship between two accounting figures. Ratio analysis of
financial statements stands for the process of determining and presenting the relationship of
items and group of items in the statements.
Note: I have used the ratio analysis in this project in order to substantiate the managing of
WC. For this, I used some of the ratios to get the required output.
1. LIQUIDITY RATIOS:
Liquidity refers to the ability of a firm to meet its current obligations as and when these
become due. The short-term obligations are met by realizing amounts from current,
floating or circulating assets. Following are the ratios which can help to assess the
ability of a firm to meet its current liabilities.
1. Current ratio
2. Acid Test Ratio /
Quick Ratio /
Liquidity Ratio
3. Absolute liquid ratio
4. Time interest ratio
2. TURNOVER/ACTIVITY RATIOS:
These are the ratios which indicate the speed with which assets are converted or
turned over into sales.
1. Inventory Turnover
Ratio.
2. Debtors/ Accounts
receivables Turnover
Ratio.
3. Total assets turnover
ratio
4. Creditors/Accounts
Payables Turnover
Ratio.
5. Working Capital
Turnover Ratio.
6. Fixed assets turnover
ratio

28
1. CURRENT RATIO:-
It is a ratio, which express the relationship between the total current Assets and
current liabilities. It measures the firm’s ability to meet its current liabilities. It
indicates the availability of current assets in rupees for every one rupee of current
liabilities. A ratio of greater than one means that the firm has more current assets than
current liabilities claims against them. A standard ratio between them is 2:1.
Current Ratio: Current Assets
Current Liabilities
Years Current Asset Current Liabilities Current Ratio
2013 2314214 1356212 1.7
2014 2433145 1456327 1.6
2015 2521767 1665920 1.5
Table No.4
INTERPRETATION:-
From this chart we can see that during the year 2013 C.R. was 1.7, which means
that year the Jakhar Ind. Was able to meet its all C.L. In next two years C.R.
dropped to 1.5 .
1.4
1.45
1.5
1.55
1.6
1.65
1.7
1.75
2013 2014 2015
current ratio
current ratio

29
Years Current Asset Current Liabilities Current Ratio
2013 300000 210000 1.42
2014 270000 220000 1.22
2015 315000 270000 1.16
Table No.5
INTERPRETATION:-
It is seen from the above chart that during the year 2013 the C.R. was 1.42, which
means that during this year the sweet memories is able to meet its all C.L. But in the
year 2014the C.R. dropped to 1.22 due to increase in C.L. and decrease in c.a .In the
year 2015 the C.R.was1.16. The standard current ratio is 2:1. Hence it can be said that
there is not enough C.A. in studio eleven to meet its C.L. in the current year.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2013 2014 2015
current ratio
current ratio

30
Years Current Asset Current
Liabilities
Current
Ratio
2013 400000 300000 1.33
2014 360000 320000 1.12
2015 419000 370000 1.13
Table No.6
INTERPRETATION:-
It is seen from the above chart that during the year 2013 the C.R. was 1.33, which
means that during this year the studio eleven is able to meet its all C.L. But in the year
2014the C.R. dropped to 1.12 due to increase in C.L. and decrease in c.a .In the year
2015 the C.R.was1.13. The standard current ratio is 2:1. Hence it can be said that
there is not enough C.A. in studio eleven to meet its C.L. in the current year
1
1.05
1.1
1.15
1.2
1.25
1.3
1.35
2013 2014 2015
current ratio
current ratio

31
2. ACID TEST RATIO / QUICK RATIO / LIQUIDITY RATIO:-
This ratio establishes a relationship between quick/liquid assets and current liabilities.
It measures the firms’ capacity to pay off current obligations immediately. An asset is
liquid if it can be converted in to cash immediately without a loss of value;
Inventories are considered to be less liquid. Because inventories normally require
some time for realizing into cash. This ratio is also known as acid-test ratio. The
standard quick ratio is 1:1. Is considered satisfactory.
Quick Ratio = Quick Assets
Current Liabilities
Quick Assets = C.A.- Inventory
Year Quick Assets Current Liabilities Quick Ratio
2013 562145 1356212 0.41
2014 750214 1456327 0.51
2015 873267 1665920 0.52
Table No.7
INTERPRETATION:
It seems from the above chart that quick ratio of the industry during the year 2013 was
0.41 which increased and became 0.52 in 2015.
0
0.1
0.2
0.3
0.4
0.5
0.6
2013 2014 2015
quick ratio
quick ratio

32
2013 100000 210000 0.47
2014 50000 220000 0.22
2015 45000 270000 0.16
Table No.8
INTERPRETATION:-
During the year 2013 the quick ratio was 0.47, but in the year 2014 it decreases to
(0..22)and continues to decrease in the following years. In 2015 it was 0.16 This
shows the Sweet memories does not maintains satisfactory quick ratio. The quick
ratio is above the standard ratio i.e., 1:1. Hence it shows that the liquidity position of
the resturant is not adequate
0
0.1
0.2
0.3
0.4
0.5
2013 2014 2015
quick ratio
quick ratio

33
2013 60000 300000 0.2
2014 5000 320000 (0.15)
2015 70000 370000 0.18
Table No.9
INTERPRETATION:-
During the year 2013 the quick ratio was 0.20, but in the year 2014 it decreases to
(0..15)and continues to decrease in the following years. In 2015 it was 0.18 This
shows the studio eleven does not maintains satisfactory quick ratio. The quick ratio is
above the standard ratio i.e., 1:1. Hence it shows that the liquidity position of the
parlour is not adequate
0
0.05
0.1
0.15
0.2
0.25
2013 2014 2015
quick ratio
quick ratio

34
3. ABSOLUTE LIQUID RATIO:-
Absolute liquid ratio may be defined as the relationship between absolute liquid
assets and current liabilities. Absolute liquid assets include cash in hand and cash at
bank.
The standard absolute liquid ratio is 1:2
Absolute Liquidity Ratio = Cash& Bank Balance
Current Liabilities
Table No.10
INTERPRETATION:
During the year 2013 the absolute liquidity ratio was 0.26 which is fine for the
industry. In the year 2014 nad 2015 ratio increased and remain same, which
represents that liquidity position of the industry is satisfactory.
0.23
0.24
0.25
0.26
0.27
0.28
0.29
0.3
0.31
0.32
2013 2014 2015
Absolute liquid ratio
Series 1
Years Cash & Bank
Balance
Current Liabilities Absolute Liquidity
Ratio
2013 365412 1356212 0.26
2014 457810 1456327 0.31
2015 519714 1665920 0.31

35
Table No.11
INTERPRETATION:
During the year 2013 the Absolute liquidity ratio was 0.95 which is good for the
company. But during the year 2014 it increases to 0.84. In the year 2015 it increases
to 0.85 but still remained below the standard ratio Hence it shows that the liquidity
position of the sweet memories is not satisfactory
0.78
0.8
0.82
0.84
0.86
0.88
0.9
0.92
0.94
0.96
2013 2014 2015
Series 1
Years Cash & Bank
Balance
Ratio
2013 200000 210000 0.95
2014 185000 220000 0.84
2015 231000 270000 0.85

36
Table No.12
INTERPRETATION:
During the year 2013 the Absolute liquidity ratio was 0.71 which is good for the
company. But during the year 2014 it increases to 0.90. In the year 2015 it decreases
to 0.86 but still remained below the standard ratio Hence it shows that the liquidity
position of the studio eleven is not satisfactory
0
0.2
0.4
0.6
0.8
1
2013 2014 2015
Series 1
Years Cash & Bank
Balance
Ratio
2013 215000 300000 0.71
2014 290000 320000 0.90
2015 319000 370000 0.86

37
4. Times Interest Earned Ratio
The times interest earned ratio, sometimes called the interest coverage ratio, is a
coverage ratio that measures the proportionate amount of income that can be used to
cover interest expenses in the future.
Formula
The times interest earned ratio is calculated by dividing income before interest and
income taxes by the interest expense.
Both of these figures can be found on the income statement. Interest expense and
income taxes are often reported separately from the normal operating expenses for
solvency analysis purposes. This also makes it easier to find the earnings before
interest and taxes or EBIT.
Analysis
The times interest ratio is stated in numbers as opposed to a percentage. The ratio
indicates how many times a company could pay the interest with it’s before tax
income, so obviously the larger ratios are considered more favourable than smaller
ratios.
In other words, a ratio of 4 means that a company makes enough income to pay for its
total interest 4 times over. Said another way, this company's income is 4 times higher
than its interest expense for the year.
As you can see, creditors would favour a company with a much higher time’s interest
ratio because it shows the company can afford to pay its interest payments when they
come due. Higher ratios are less risky while lower ratios indicate credit risk.
Required data:-

38
Table No.13
INTERPRETATION:
In the year 2013 Time Interest Earned Ratio was 86 but 2014 and 2015 it
reduced. In 2015 it was 76.26. The lowe the ratio credit risk decreased.
Table No.14
70
72
74
76
78
80
82
84
86
88
2013 2014 2015
Times and intrest earned ratio
Year Income before
interest and tax
(EBIT)
Interest Expenses Times Interest
Earned Ratio
2013 2064782 24000 86.03
2014 2314597 28200 80.07
2015 2474751 32450 76.26
Year Income before
interest and tax
(EBIT)
Interest Expenses Times Interest
Earned Ratio
2013 1800000 12000 150
2014 2150000 15000 143.33
2015 2320000 16500 140.60

39
INTERPRETATION:
In the year 2013 Times Interest Earned Ratio was 150 but during the year 2014 it
reduces to 143.33. In the year 2015 it was 140.60 As higher the ratio the credit ratio is
very low and as the ratio decreases the credit risk becomes higher and higher
STUDIO (ELEVEN parlor)
Table No.15
INTERPRETATION:-
In the year 2013 Times Interest Earned Ratio was 168 but during the year 2014 it
reduces to 147.4. In the year 2015 it was 147.5 As higher the ratio the credit ratio is
very low and as the ratio decreases the credit risk becomes higher and higher.
0
5
10
15
20
25
2013 2014 2015
Inventory Turnover ratio
135
140
145
150
155
160
165
170
2013 2014 2015
Year Income before
interest and tax
(EBIT)
Interest Expenses Times Interest Earned
Ratio
2013 3200000 19000 168.4
2014 3310000 22500 147.11
2015 3540000 24000 147.5

40
5. INVENTORY TURNOVER RATIO:-
Inventory turnover ratio is the ratio, which indicates the number of times the stock is
turned over i.e., sold during the year. This measures the efficiency of the sales and
stock levels of a company. A high ratio means high sales, fast stock turnover and a
low stock level. A low stock turnover ratio means the business is slowing down or
with a high stock level.
Inventory Turnover Ratio = Net Sales
Closing Inventory
Table No.
INTERPRETATION:
From the above chart we can see that during the year 2013 Inventory Turnover
Ratio was 12.13 times , and by 2015 ratio decreased and remain 5.57 times only.
0
2
4
6
8
10
12
14
2013 2014 2015
Year Net Sales Closing inventory Inventory Turnover
ratio
2013 2245461 185241 12.13Times
2014 2541567 321450 7.90Times
2015 2757669 494550 5.57Times

41
Table No.
INTERPRETATION:
It is seen from the above chart that During the year 2013 , the Inventory t/o ratio is
19.5 times, in the year 2014 it decreases to 17.84 times, in the year 2015 it again
increases to 21.8 times.
Table No.
0
5
10
15
20
25
2013 2014 2015
ratio
2013 1760000 90000 19.5Times
2014 2052000 115000 17.84Times
2015 2295000 105000 21.8Times
ratio
2013 3920000 150000 26.13Times
2014 4080000 180000 22.67Times
2015 4470000 165000 27.09Times

42
INTERPRETATION:-
It is seen from the above chart that During the year 2013 , the Inventory t/o ratio is
26.13 times, in the year 2014 it decreases to 22.67 times, in the year 2015 it again
increases to 27.09 times.
20
21
22
23
24
25
26
27
28
2013 2014 2015

43
6. INVENTORY HOLDING PERIOD :-
This period measures the average time taken for clearing the stocks. It
indicates that how many days’ inventories take to convert from raw
material to finished goods.
Inventory Holding Period = Days in a year
Inventory turnover ratio
Table No.16
INTERPRETATION:
The Inventory Turnover Ratio of the Jakhar Granite Indusrty during the year
2013 was 30.09 days only. It increased in 2014 and 2015 and become 65.52
days.
0
10
20
30
40
50
60
70
2013 2014 2015
Inventory Holding Period
Year Days in a
Year
Inventory Turnover
Ratio
2013 365 12.13Times 30.09 Days
2014 365 7.90Times 46.20 Days
2015 365 5.57Times 65.52 Days

44
Table No.17
INTERPRETATION:
Inventory holding period fluctuate over the years. It was 18.7 days in the year 2013. It
increases to 20.4 days in the year 2014 and to 16.7 days in the year 2015.
0
5
10
15
20
25
2013 2014 2015
inMillions
Years
Year Days in a
Year
Inventory Turnover
Ratio
Inventory Holding
Period
2013 365 19.5Times 18.7Days
2014 365 17.84Times 20.4Days
2015 365 21.8Times 16.7Days

45
Table No.18
INTERPRETATION:-
Inventory holding period fluctuate over the years. It was 13.96 days in the year 2013.
It increases to 16.1 days in the year 2014 and to 13.47 days in the year 2015.
This shows the company is minimizing these inventory-holding days thereby to
increase the sales.
12
12.5
13
13.5
14
14.5
15
15.5
16
16.5
2013 2014 2015
Year Days in a
Year
Inventory Turnover
Ratio
Inventory Holding
Period
2013 365 26.13Times 13.96 Days
2014 365 22.67Times 16.1 Days
2015 365 27.09Times 13.47 Days

46
7. DEBTORS /ACCOUNTS RECEIVABLES TURNOVER RATIO:-
Debtor’s turnover ratio indicates the speed of debt collection of the firm. This ratio
computes the number of times debtors (receivables) has been turned over during the
particular period.
Debtors Turnover Ratio = Net Sales
Average Debtors
Year Net Sales Average Debtors Debtors Turnover
Ratio
2013 2245461 194465 11.54Times
2014 2541567 231485 10.97Times
2015 2757669 353553 7.79Times
Table No.19
INTERPRETATION:
In the year 2013, Debtors Turnover Ratio was 11.54 times which is continuously
increasing during the year 2014 and 2015. During the year 2015 the ratio was
decreased and became 7.79 times only.
0
2
4
6
8
10
12
14
2013 2014 2015
Debtors Turnover Ratio

47
Ratio
2013 1760000 42000 42Times
2014 2052000 35000 58.6Times
2015 2295000 21000 109Times
Table No.20
INTERPRETATION:
In the year 2013 ,Debtors Turnover Ratio was 42 times and increases to 58.6 times in
the year 2014. But in the year 2015, it again increases to 109 times
0
20
40
60
80
100
120
2013 2014 2015

48
Ratio
2013 3920000 62000 63.22Times
2014 4080000 49000 83.26Times
2015 4470000 53000 84.33Times
Table No.21
INTERPRETATION:-
In the year 2013 ,Debtors Turnover Ratio was 63.22 times and increases to 83.26
times in the year 2014. But in the year 2015, it again increases to 84.33 times.
0
10
20
30
40
50
60
70
80
90
2013 2014 2015

49
8. DEBTORS COLLECTION PERIOD :-
Debtors collection period measures the quality of debtors since it measures the
rapidity or the slowness with which money is collected from them a shorter collection
period implies prompt payment by debtors. It reduces the chances of bad debts. A
longer collection period implies too liberal and inefficient credit collection
performance.
Average Collection Period = Days in a Year
Table No.22
INTERPRETATION:
In the above chart we can see that in the year 2013 Debtors Collection
Period was 31 days. It was increased during the year 2014 and 2015. In
2015 it reduced by 12 days.
0
2
4
6
8
10
12
14
2013 2014 2015
Debtors Collection Period
Year Days in a
Year
Debtors Turnover Ratio Debtors Collection Period
2013 365 11.54 Times 31 Days
2014 365 10.97 Times 33 Days
2015 365 7.79 Times 45 Days

50
Table No.23
INTERPRETATION:
As from the chart it is known that in the year 2013 Debtors Collection Period was 8.6
days. It decreases to 6.2 days in the year 2014 which shows the efficient credit
collection performance of the company. In the year 2013 it again reduces to 3.3 days.
0
2
4
6
8
10
2013 2014 2015
Year Days in a
Year
Debtors Turnover Ratio Debtors Collection
Period
2013 365 42Times 8.6Days
2014 365 58.6Times 6.2Days
2015 365 109Times 3.3days

51
Table No.24
INTERPRETATION:-
As from the chart it is known that in the year 2013 Debtors Collection Period was
5.77 days. It decreases to 4.38 days in the year 2014 which shows the efficient credit
collection performance of the company. In the year 2013 it again reduces to 4.32
days.
0
10
20
30
40
50
60
70
80
90
2013 2014 2015
Year Days in a
Year
Debtors Turnover Ratio Debtors Collection
Period
2013 365 63.22Times 5.77Days
2014 365 83.26Times 4.38Days
2015 365 84.33Times 4.32Days

52
9. CREDITORS/ACCOUNTS PAYABLES TURNOVER RATIO:-
Creditor’s turnover ratio is the ratio, which indicates the number of times the debts
are paid in the year. This ratio is calculated as follows.
Creditors Turnover Ratio = Net Purchases
Average Creditors
Year Net Purchases Average
Creditors
Creditors TurnoverRatio
2013 1154632 126284 9.1 times
2014 1456782 142565 10.2 times
2015 1583248 166592 9.5 times
Table No.25
INTERPRETATION:
From the above chart we can see that the Creditors Turnover Ratio was changing over
the years. During the year 2013 it was 9.1. Then it decreased in 2014. Then again at
the time of 2015 ratio again increased. It shows that Industry has been making
payments to creditors in right manner.
8.4
8.6
8.8
9
9.2
9.4
9.6
9.8
10
10.2
10.4
2013 2014 2015
Creditors Turnover Ratio

53
Creditors
Creditors
TurnoverRatio
2013 85000 21000 4Times
2014 90000 28000 3.2Times
2015 97000 19000 5.1Times
Table No.26
INTERPRETATION:
It is clear that creditor turnover ratio changing over the years. It was 4 times in
the year 2013. It decreases to 3.22 times in the year 2014. In the year 2015 it
increases to 5.1 times. It shows that company has been making prompt payment
to the creditors
0
1
2
3
4
5
6
2013 2014 2015

54
Creditors
Creditors
TurnoverRatio
2013 85000 33000 2.57Times
2014 91000 41000 2.22Times
2015 103000 31000 3.32Times
Table No.27
INTERPRETATION:-
It is clear that creditor turnover ratio changing over the years. It was 2.57 times in the
year 2013. It decreases to 2.22 times in the year 2014. In the year 2015 it increases to
3.32 times. It shows that company has been making prompt payment to the creditors.
0
0.5
1
1.5
2
2.5
3
3.5
2013 2014 2015

55
10. CREDITORS PAYMENT PERIOD:-
The Creditors Payment Period represents the average number of days taken by the
firm to pay the creditors and other bills payables.
Average Payment Period = Days in a Year
Table No.28
INTERPRETATION:
During the year 2013 the Average Payment Period was 40 days. This time
period was changing over the years. Next year it decreased by 4 days then
during the year 2015 it again rises.
34
35
36
37
38
39
40
41
2013 2014 2015
Creditors Payment Period
Average Payment Period
Year Days in a Year Creditors Turnover
Ratio
Average Payment
Period
2013 365 9.1 times 40 Days
2014 365 10.2 Times 36 Days
2015 365 9.5 times 38 Days

56
Table No.29
INTERPRETATION:
Average payment period changing over the years It was 91.25 days in the year 2013.
It increase 114 days in the year 2014, But in the year 2015 it decreases to 71.5 days.
0
20
40
60
80
100
120
2013 2014 2015
Ratio
Average Payment
Period
2013 365 4Times 91.25Days
2014 365 3.2Times 114Days
2015 365 5.1Times 71.5Days

57
Table No.30
INTERPRETATION:-
Average payment period changing over the years. It was 142.02 days in the year
2013. It increase to 164.41 days in the year 2014, But in the year 2015 it decreases to
109.93 days.
0
50
100
150
200
2013 2014 2015
Ratio
Average Payment
Period
2013 365 2.57Times 142.02Days
2014 365 2.22Times 164.41Days
2015 365 3.32Times 109.93Days

58
11. WORKING CAPITAL TURNOVER RATIO:-
This ratio indicates the number of times the working capital is turned over in the
course of the year. This ratio measures the efficiency with which the working capital
is used by the firm. A higher ratio indicates efficient utilization of working capital
and a low ratio indicates otherwise. But a very high working capital turnover is not a
good situation for any firm.
Working Capital Turnover Ratio = Net Sales
Net Working Capital
Year Net Sales Net Working Capital WCTR
2013 2245461 2145632 1.04 Times
2014 2541567 2244551 1.13 Times
2015 2757669 2355175 1.17 Times
Table No.31
INTERPRETATION:
The Working Capital Ratio was increasing over the years. WCR was highest in
the 2015. From 2013 to 2015 the ratio raised from 1.04 to 1.17.
0.95
1
1.05
1.1
1.15
1.2
2013 2014 2015
WCTR
WCTR

59
2013 1760000 180000 (9.7)Times
2014 2052000 214000 (9.5)Times
2015 2295000 165000 (13.9)Times
Table No.32
INTERPRETATION:
The working capital t/o ratio is fluctuating year to year that was high in the year 2013,
9.7 times; there was a subsequent decrease in the year 2014 to (9.5) times .But it
increases in the year 2015 to (13.9) times. This shows the company is not utilizing
working capital effectively.
0
2
4
6
8
10
12
14
16
2013 2014 2015
WCTR
WCTR

60
2013 3920000 322000 (12.17)Times
2014 4080000 353000 (11.55)Times
2015 4470000 309000 (14.46)Times
Table No.33
INTERPRETATION:-
The working capital t/o ratio is fluctuating year to year that was high in the year 2013,
12.17 times; there was a subsequent decrease in the year 2014 to (11.55) times .But it
increases in the year 2015 to (14.46) times . This shows the company is not utilizing
working capital effectively.
0
2
4
6
8
10
12
14
16
2013 2014 2015
WCTR
WCTR

61
12. FIXED ASSET TURNOVER RATIO:-
The fixed (or capital) assets turnover ratio measures how intensively a firm's fixed
assets such as land, buildings, and equipment are used to generate sales. A low fixed
assets turnover implies that a firm has too much investment in fixed assets relative to
sales; it is basically a measure of productivity. The following shows how Eastman's
fixed assets turnover ratio is calculated.
Fixed Asset Turnover = Sales
Fixed Assets
Year Sales FIXED ASSETS FAT
2013 2254632 4502147 0.50 Times
2014 2541325 5214678 0.48 Times
2015 2757669 6558875 0.42 Times
Table No.34
INTERPRETATION:
From the above chart we can see that Fixed Asset Turnover Ratio is decreased
over the years. During the year 2013 it was 0.50 times and in the year 2015 it
decreased by 0.8.
0.38
0.4
0.42
0.44
0.46
0.48
0.5
0.52
2013 2014 2015
Fixed Asset Turnover Ratio
fat

62
2013 1800000 1100000 1.63Times
2014 2100000 1155000 1.8Times
2015 2350000 1232000 1.9Times
Table No.35
INTERPRETATION:
It is shown that in the year 2013 the FAT ratio is 1.63 times and it increases to 1.8
times in the year 2014. In 2015 it again increases to 1.9 times
1.45
1.5
1.55
1.6
1.65
1.7
1.75
1.8
1.85
1.9
1.95
2013 2014 2015
fat

63
2013 4260000 1500000 2.84Times
2014 4330000 1545000 2.80Times
2015 4820000 1610000 2.99Times
Table No.36
INTERPRETATION:-
It is shown that in the year 2013 the FAT ratio is 2.84 times and it decreases to 2.80
times in the year 2014. But In 2015 it increases to 2.99 times.
2.7
2.75
2.8
2.85
2.9
2.95
3
3.05
2013 2014 2015
fat

64
15. Total Assets Turnover.
This ratio takes into account both net fixed asset; and current assets. It also gives an
indication of the efficiency with which assets are used; a low ratio means that
excessive assets are employed to generate sales and/or that some assets (fixed or
current assets) should be liquidated or reduced. Eastman's total assets turnover is as
follows:
Total Asset Turnover = Sales
Total Assets
Year Sales TOTAL ASSETS TATR
2013 2254632 7280546 0.30Times
2014 2541325 8436217 0.30 Times
2015 2757669 9080642 0.30 Times
Table No.37
INTERPRETATION:
In the year 2013 Total Asset Turnover Ratio was 0.30 and it remains same from
2013 to 2015.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
2013 2014 2015
Total Asset Turnover Ratio
WCTR

65
2013 1800000 1500000 1.2Times
2014 2100000 1555000 1.35Times
2015 2350000 1648000 1.42Times
Table No.38
INTERPRETATION:
In the year 2013 Total Asset Turnover Ratio was 1.2 times and in the 2014 it was
1.35 times. It increases in the year 2015 1.42 times.
1.05
1.1
1.15
1.2
1.25
1.3
1.35
1.4
1.45
2013 2014 2015
WCTR

66
2013 4260000 1900000 2.42Times
2014 4330000 1905000 2.27Times
2015 4820000 2029000 2.37Times
Table No.39
INTERPRETATION:-
In the year 2013 Total Asset Turnover Ratio was 2.42 times and in the 2014 it was
2.27 times. It increases in the year 2015 to 2.37 times.
2.15
2.2
2.25
2.3
2.35
2.4
2.45
2013 2014 2015
WCTR

67
CHAPTER 4
FINDINGS OF THE STUDY

68
FINDINGS OF THE STUDY
1. The Working Capital Ratio of Jhahar granite industry was increasing over
the years. WCR was highest in the 2015. From 2013 to 2015 the ratio raised
from 1.04 to 1.17.
2. The working capital t/o ratio of sweet memories is fluctuating year to year that
was high in the year 2013, 9.7 times; there was a subsequent decrease in the year
2014 to (9.5) times .But it increases in the year 2015 to (13.9) times. This shows
the company is not utilizing working capital effectively.
3. The working capital t/o ratio of studio eleven is fluctuating year to year that
was high in the year 2013, 12.17 times; there was a subsequent decrease in
the year 2014 to (11.55) times .But it increases in the year 2015 to (14.46)
times . This shows the company is not utilizing working capital effectively
SUGGESTIONS
1. Manage working capital actively throughout the organisation.
2. Consider alternative funding.
3. Pay your suppliers on time
4. Negotiate discounts with your suppliers
5. Manage your stock actively
6. Investigate the benefits of e-procurement
CONCLUSIONS
1. Working capital is necessary for all business but here we were targeting small
business and we find the small business is going good as we compare by ratio
analysis.
2. Working capital need for day to day operation and here in small business we need
day to day business.

69
APPENDICES
JAKHAR GRANITE INDUSTRIES
DATA COLLECTED FOR RATIO ANALYSIS
(From ANNUAL REPORT – 2013, 2014 & 2015)
S no. Account head 2013 2014 2015
1 Current assets 2314214 2433145 2521767
2 Current liabilities 1356212 1456327 1665920
3 Quick assets 562145 750214 873267
4 fixed assets 4502147 5214678 6558875
5 Earnings per share(ESP) not applicable not applicable not applicable
6 Cash & bank balance 365412 457810 519714
7 Net purchases 1154632 1456782 1583248
8 Average creditors 126284 142565 166592
9 Average debtors 194465 231485 353553
10 Sales 2254632 2541325 2757669
11 Net sales 2245461 2541567 2757669
12 Net working capital 2145632 2244551 2355175
13 Interest expenses 24000 28200 32450
14 Income before interest and
tax (EBIT)
2064782 2314597 2474751
15 Closing inventory 185241 321450 494550
16 Inventories 1100456 1345702 1648500
17 Total Assets 7280546 8436217 9080642

70
SWEET MEMORIES (Restaurant)
(From ANNUAL REPORT – 2013, 2014& 2015)
Sno. Account head 2013 2014 2015
1 Current assets 300000 2700000 3150000
3 Quick assets 100000 50000 45000
4 fixed assets 1100000 1155000 1232000
5 Earnings per share(ESP)
7 Net purchases 85000 90000 97000
9 Average debtors 42000 35000 21000
10 Sales 1800000 2100000 2350000
11 Net sales 1760000 2052000 2295000
14 Income before interest and tax (EBIT) 1800000 2150000 2320000
16 Inventories 200000 212000 180000
17 Total Assets 1500000 1555000 1648000

71
STUDIO ELEVEN (PARLOUR)
(From ANNUAL REPORT – 2013, 2014& 2015)
Sno. Account head 2013 2014 2015
1 Current assets 400000 360000 419000
3 Quick assets 60000 5000 70000
4 fixed assets 1500000 1545000 1610000
5 Earnings per share(ESP)
7 Net purchases 85000 91000 103000
9 Average debtors 62000 49000 53000
10 Sales 4260000 4330000 4820000
11 Net sales 3920000 4080000 4470000
14 Income before interest and tax (EBIT) 3200000 3310000 3540000
16 Inventories 340000 355000 349000
17 Total Assets 1900000 1905000 2029000

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