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working capital management impacts on the problem of slow development, the impacts of supply and demand risks on the management of working capital and to offer recommendations on possible ways of improving working capital management. The specific objectives of the study are: 1. The review of extant literature on working capital and its management. 2. Examination of the WCM in dredging corporation of India. 3. Establish how working capital management impacts on the development in the Dredging Corporation of India ltd. 4. The suggestion of policy recommendations to enhance WCM in the industry. 5. To study the liquidity position through various working capital related ratios. 6. To estimate the working capital requirement of dredging corporation of India Ltd. 7. To study the operating and cash cycle of the company. 1.5 RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying now research is done systematically. In that various steps, those are generally adopted by a researcher in studying his problem along with the logic behind them. It is important for research to know not only the research method but also know methodology. The procedures by which researcher goes about their work of describing, explaining and predicting phenomenon are called methodology. Methods comprise the procedures used for generating, collecting and evaluating data. All this means that it is necessary for the researcher to design his methodology for his problem as the same may differ from problem to problem. Data collection is important step in any project and success of any project will be largely depend upon now much accurate you will be able to collect and how much time, money and effort will be required to collect that necessary data, this is also important step. Data collection plays an important role in research work. Without proper data available for analysis you cannot do the research work accurately. Primary data can collect through personal interview &survey to support the secondary data. The secondary data are those which have already collected and stored. Secondary data easily get those secondary data from records, journals, annual reports of the company etc. It will save the time, money and efforts to collect the data. Secondary data also made available through trade magazines, balance sheets, books etc. This project is based on primary data collected through personal interview of head of finance department, but primary data collection had limitations such as matter confidential information thus project is based on secondary information collected through four years annual report of the company, supported by various books and internet sides. The data collection was aimed at study of working capital management of the company. 1.6 RESULTS AND DISCUSSION Ratios: the liquidity position of the organization can also be found by using different ratios. These are mainly attributable to the simplicity in calculation and indication of the direction in which further probing is necessary. The objective of this evaluation will be to identify risks in a company’s financial structure. Financial risk from the banks point of view may be defined as the possibility that a company may not be able to meet its debt obligations in a timely manner or at all. Analysis of financial risk concentrates on two areas: Short term liquidity and Long term solvency. Short-term liquidity: This is the ability of the company to meet its current obligations out of its available cash or non cash resources. Working capital (i.e. current assets-current liabilities), current ratio (i.e. current asset ÷ current liabilities) and the quick ratio (i.e. cash+ market securities+ acct. receivable ÷ current liabilities) are the bank’s tools to assess short term liquidly. The nature of the product/service and the length of the production cycle are also important considerations when evaluating the adequacy of working capital. The competitive and economic climate in which a company operates will also affect the level of working capital required to protect creditors. The quick ratio is a more severe indicator of short-term liquidity in that it attempts to assess current creditor www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 09, July-2013 Page 84
coverage without relying on the sale of existing inventory. The reliability of the quick ratio as an indicator of short-term liquidity depends on the quality of receivables and the market value of the securities. Long term solvency: This may be defined as a company’s ability to meet interest and principal payments on long term debt and similar obligations as they become due. The best indicator of longterm solvency is the ability of a firm to generate cash profits over a period of years. Financial leverage provides another means of evaluating long-term solvency. TABLE.1. STATEMENT SHOWING CURRENT ASSSET, CURRENT LIABILITY& WORKIMG CAPITAL (Rs. in lakhs) PARTICULARS 2005-06 2006-07 2007-08 2008-09 A CURRENT ASSETS: Inventories 1047.57 2258.98 2956.00 8178.77 SUNDRY DEBTORS: a. Total debt b. Less: doubtful debts Cash &bank balance OTHER CURRENT ASSET: a. Interest accrued on deposit b. Unbilled operation income LOAN &ADVANCES: a. Advance recoverable b. Income tax c. Deposit d. Prepaid account e. Claims &other recoverable 32570.96 12950.28 19620.68 47214.28 2209.61 6088.76 8367.82 538.68 5898.27 511.71 98.02 1776.14 8822.82 53852.59 12880.45 22974.14 39855.44 2181.02 10556.42 12737.44 1403.41 6708.20 653.29 201.11 2866.46 11832.47 42238.19 12578.86 29659.33 27340.94 1961.65 11490.60 13452.25 1573.26 414.27 639.77 124.48 13203.23 15955.01 35563.85 4768.84 30895.01 33184.38 2189.90 14383.15 16573.05 1909.84 3156.17 535.96 149.65 4293.63 10045.25 GRAND TOTAL ( A) 85003.72 89656.47 89363.53 98876.46 B PARTICULARS 2005-06 2006-07 2007-08 2008-09 CURRENT LIABILITIES : a. Sundry creditor b. Deposit from contractor c. Advance from customers d. Other liabilities e. Interest accrued by not due f. Unclaimed interest PROVISIONS a. Proposed dividend b. For dividend tax c. For employee benefit d. For contractual obligation e. FBT f. For shortage losses g. For dry doc repairs due 1264.79 143.64 394.82 10618.96 27.75 7.14 12457.10 2520.00 353.43 662.98 40.11 0.00 0.00 1366.71 4943.23 2780.34 165.49 86.75 11937.46 18.60 10.59 14999.23 2520.00 428.27 809.57 40.11 15.50 0.00 0.00 3797.55 4562.00 511.49 4.59 14761.20 10.75 17.62 19822.65 2100.00 356.90 668.38 40.11 0.00 0.00 0.00 3180.89 7098.47 596.02 408.22 19004.37 3.35 11.07 27121.50 1400.00 237.93 724.66 40.11 0.00 0.00 0.00 2402.70 GRAND TOTAL (B) 17400.33 18797.18 23003.54 29524.20 C NET WORKING CAPITAL 67603.39 70859.29 66359.99 69352.26 Source: worked out from annual reports of DCI www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 09, July-2013 Page 85
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Table of Contents Articles THE GLOB
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The capital market of a country can
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Figure 1: Components of Indian Fina
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esults as regards the stability of
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10. Hasan, M., K., Haque, M., & Law
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In the first stage of development,
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References: 1. Krishnamacharyulu CS
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and the additional procedures neede
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TO FIND THE RELATIONSHIP BETWEEN ST
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Table No.8: Association between Inv
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The foremost factor to be considere
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economic and social. Some people ma
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eliance, and transparency (Gain Raj
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loans/borrowings has been invested
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Pressure Nowadays, management is in
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includes the red flags that were ex
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Page 36 and 37: The Impact of Macroeconomic Factors
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