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INTERPRETATION: The working capital turnover ratio studies the velocity or utilization of the working capital of the firm during all the years. The higher the working capital turnover ratio the lower the investment in the working capital &the higher the profitability. High working capital turnover reflects the better utilization of the working capital of the firm. The analysis of working capital turnover ratio in DCI indicates the utilization of working capital which is consistent &it increased in the year 2007-08& it decreased in 2008-09, which is a negative sign. Net asset turnover ratio: Net asset includes net fixed asset & net current asset that is current asset minus current liability. Since net asset equal to capital employed. Net asset turnover may also be called capital employed turnover. Net asset turnover = sales /income Net asset Table 11 Net asset turnover ratio Years Income Net asset Net asset turnover ratio 2005-06 50689.89 676003.39 0.75 2006-07 57289.09 70859.29 0.80 2007-08 70531.72 66359.99 1.06 2008-09 68522.19 69352.26 0.99 Source: worked out from annual reports of DCI Interpretation: DCI is producing 1.06 income for one rupees of capital employed in net asset in the year 2007-08, which is better t than the remaining years . But it needs improvement in net asset turnover other than the year 2007-08. Total asset turnover ratio: Total asset turnover ratio is shows the firm’s ability in generation sales from all financial resources committed to total asset. Thus Total asset turnover ratio = sales / income Total asset Table .12. Total asset turnover ratio Years Income Total asset Total asset turnover ratio 2005-06 50689.89 85003.72 0.59 2006-07 57289.09 89656.47 0.63 2007-08 70531.72 89363.53 0.78 2008-09 68522.19 98876.46 0.69 Source: worked out from annual reports of DCI Interpretation: DCI generates income of rupees 0.78 for the one rupees investment in fixed &current asset together in the year 2007-08, is better than the remaining years. But the company must take steps to improve the total asset turnover. CURRENT ASSET TURNOVER RATIO: Current asset turnover ratio is a ratio between income from operation & current assets. The firm may wish to know its efficiency of utilizing fixed asset & current asset separately. A high ratio indicates a high degree of efficiency. Current asset turnover ratio = income Current asset www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 09, July-2013 Page 90
TABLE 13 CURRENT ASSET TURNOVER RATIOS year Income from Current assets Current assets operation turnover 2005-06 50689.89 85003.72 0.56 2006-07 578289.09 89656.47 0.64 2007-08 70531.72 89363.53 0.79 2008-09 68522.19 98876.46 0.69 Source: worked out from annual reports of DCI INTERPRETATION: The current asset turnover ratio is the ratio of income from operation to current assets. A high ratio indicates a high degree of efficiency. The higher ratio, the lower the investment in current asset & higher would be the profitability. The analysis of current assets turnover ratio of DCI for the past four years reveals a slight dissatisfactory ratio. The ratio is high in 2007-08 compared to the previous two years, but again in2008-09the ratio is decrease .this is a negative sign. 1.6.2 RESULTS FROM DESCRIPTIVE STATISTICS ANALYSIS Jon Dowel et al (1995) defines an interview as any verbal communication between researcher and the subject that provides information or further understanding through a two-way discussion. Mark Sauders (2003) says that the use of interview can help us to gather valid and reliable data that are relevant to a research question or objective. The questions will be open ended in order to further explore answers deeply. An interview conducted with the finance manager D.Subba Roa related to cash management & management of receivable in DCI presented as follow: CASH MANAGEMENTIN IN DCI: Cash section in DCI is responsible for the proper cash management .the various activities performed by the cash section are cash book maintenance , maintenance of fixed deposit registers , bank reconciliation statement , investment proposals, preparation of cheques, preparation of general vouchers, arrangement of payments etc. It assesses the requirements of funds from various sections for expected payment in the following months & sees whether the estimate receivable would be sufficient to meet the obligation or not. If receivables are insufficient to meet the obligation of fixed deposits to the extent of the requirement are enchased & funds made available for the require payments. According to the guidelines given by the department of public enterprise regarding investment of surplus funds by public sector enterprises, the investment has to be made in instrument which has been credit rated by established agencies. DCI generally invest the surplus funds in various bank & financial institution, certificate of deposit etc. Internal audit is conducted once in a month to verify the correctness. The cash section prepared the cash budget for every month & also for every year. The revenue section in DCI prepared the cash flow statement based on expected realization of sundry debtors. The cash flow statement deal with expected realization only. Thus, cash section prepares the estimated income &expenditure statement every month of the year. Surplus funds are invested in those of the banks which quote higher rate of interest. Cash & bank balance sat the end of the final year2008-09 amounted to Rs 33184.38. Cash management of DCI mainly compromises of: Cash management, Cash monitoring & Cash investment. Among the three, cash investment is complicated activity. For this purpose, DCI prepare the following statements: 1. Statement of estimation for anticipation receipt &payments 2. Statement showing the detailed of statutory payments & monthly maturities of FDR’s 3. Statement showing interest rate of various public or private sector banks. statement of estimate for anticipated receipt & payments, DCI keeps cash in current account in Syndicate bank .the surplus balance available for the investment would be invested with the bank financial institutions, who ever offers higher rate of interest for replacement of surplus in any financial institution , the institution must be satisfy the following three condition : 1. Capital adequacy ratio must be more than 90% 2. Net worth of institution must be not less than 100crores www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 09, July-2013 Page 91
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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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sec110.01). However, it did establi
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The Impact of Macroeconomic Factors
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Bajaj 2.53 0.003 4.38 0.24 1.68 -0.
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Nestle 2012 ITC 2012 Q1 -0.28 -0.28
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