SUMMER TRAINING REPORT

ON
“PERFORMANCE APPRAISAL TOWARDS MANIKARAN POWER LIMIT

HEMWATI NANDAN BAHUGUNA GARHWAL UNIVERSITY

SRINAGAR (GARHWAL) UTTARAKHAND

IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE

AWARD OF DEGREE OF

BUSINESS ADMINISTRATION (BBA)

(2020-2023)
SUBMITTED BY UNDER THE GUIDANCE OF
AGNIK DEBNADTH ANIL PUNDIR
BBA 4TH SEM (FACULTY)
ROLL NO – 20210510001

DOON PG COLLEGE OF AGRICULTURE, SCIENCE AND TECHNOLOGY

DEHRADUN (UTTARAKHAND)

1
DECLARATION

I hereby declare that the project entitled “3A TRADERS” has been submitted in the partial fulfilment
of the requirement of the degree of Bachelors in Business Administration.

This is my original work not submitted for the award of any other degree, diploma, fellowship or any
other similar title or price .( AGNIK DEBNATH ) course & sem BBA 4th sem.

Date:
Palace: Dehradun

2
ACKNOWLEDGEMENT

As far as on summer internship, “ WORKING CAPITAL MANAGEMENT TOWARDS 3A

TRADERS” is concerned, initially I would like to express my deepest thanks to Ms. Abhijeet Jana
Managing Director , Head of 3A TRADERS for giving me this opportunity to do an internship
within the organisation and I would like to thank my Head of the Department Prof. ANIL PUNDIR.

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1 INTRODUCTION 5–8

2 ABOUT COMPANY 9 - 10

3 WORKING CAPITAL 11 - 17

4 OBJECTIVE OF STUDY 18

5 RESEARCH METHODOLOGY 19 - 20

6 RATIO ANALYSIS 21 - 47

7 SURVEY AND QUESTIONNAIRES 48 -53

8 LIMITATIONS 54

9 CONCLUSION 55

10 BIBLOGRAPHY 56

INDEX

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Introduction

Recently US based research firm Zion Market Research has published a

new report titled “Power Tools Market by Mode (Electric, Pneumatic,
and Others), by Tool Type (Drilling & Fastening, Sawing, Demolition,
and Material Removal), and by Application (Construction,
Automotive, Aerospace, DIY, and Others): Global Industry
Perspective, Comprehensive Analysis, and Forecast, 2018– 2025”.
According to the report, the global power tools market was valued at
approximately USD 27 billion in 2018 and is expected to generate
around USD 36 billion by 2025, at a CAGR of around 4.14% between
2019 and 2025.

The power tools market is likely to grow rapidly over the estimated
timeframe, owing to the flourishing construction industry sector,
mainly in emerging nations. The rapid urbanization and
industrialization are anticipated to further fuel this market’s in the
future. The ongoing trend of constructing smart buildings and
infrastructures in cities of the emerging nations, such as India, China,
and Brazil, is also projected to propel the power tools market growth
and development in the years ahead. The increasing automation
requirements among various industry verticals have led to a rapid shift
from hand tools to power tools, as power tools offer durability, better
performance, precision, time efficiency, etc. This, in turn, is also likely

5
to foster the power tools market in the upcoming years. Additionally,
owing to technological advancements, the development of cost-
effective and energy-efficient tools is expected to positively influence
the market in the future. However, the unstable economic condition
may hinder the market’s growth and development in the upcoming
years.

Asia/Pacific region to be fastest growing market

In 2013, the US was the world’s largest consumer and second largest
producer of power tools, accounting for 24 percent of sales and 12
percent of output. Between 2013 and 2018, the US market will
account for approximately one-sixth of additional global sales. The
country is a significant market for power tools because it is home to
substantial tool using industries such as construction, general
manufacturing, and motor vehicle production and repair. In addition,
there is widespread interest in do-it yourself (DIY) activities, resulting
in asizable consumer market.
China was the second largest national market for power tools in
2013, with ten percent of global demand, and was the largest
producer, with one-third of global output. In addition, power tool
growth in China through 2018 will be nearly double
the global average.
However, India will post even more rapid gains among major
countries, albeit from a very small base Both countries have
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extremely low power

7
tool market penetration rates, with widespread adoption limited by
the high initial purchase price of power tools compared to non-
powered hand tools. Poverty and unreliable electric grids also play a
role, particularly in rural areas. In much of the developing world, the
availability of low cost laborers utilizing hand tools has limited power
tool demand.
Cordless electric tools to post fastest growth: Electric tools account
for the vast majority of total power tool sales, areflection of their
ease of use compared to other power tool types. Cordless electric
models will post the most robust growth as steady improvements in
battery technology -- such as the adoption of lithium-ion batteries –
increase power and run time, areas where corded products still hold
a significant advantage. Cordless tool manufacturers have also begun
to design product lines around one battery structure, increasing
convenience by reducing the number of spare batteries needed at
the job site or around the home.

With growing automation & time-efficiency requirements, there is a

radical shift from hand tools towards power tools in India. Over the
past few years, power tools have gained acceptance across all major
verticals including construction, industrial, and automotive. Further,
to fulfill the continuously growing demand for power tools in the
country, manufacturers are coming up with innovative products
which offer application-specific power tools as per end user
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requirements.

9
Electric power tools segment bagged the highest revenue share in
2017. The segment is anticipated to continue its dominance over the
coming years on the back of higher performance, cost efficiency, and
ease of use. Further, in terms of tool types, concrete segment
contributed a majority of the revenue share in 2017, followed by
metal and wood working segments.

Moreover, the Southern region contributed the largest revenue

share towards the overall India power tools market in 2017,
attributed to the presence of robust industrial sector in the region. In
addition, during the forecast period, the Western region is projected
to exhibit the highest growth rate on account of the flourishing
construction and industrial segments in the regiz

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About The Company

3A Traders is a spares parts manufacturing company of power tools

machines in New Delhi , India . Aim to become best Tools dealer,
suppliers and Manufacturers in India. Company manufactures all
types of spares which used in power tools industry and also import
all kinds of power tools machines and tools from different parts of
countries .Their exclusive collections on major scale includes
internationally acclaimed branded products of various catalogs like
Bosch, Makita, Dewalt, Stanley, Ambika & many more.

Our Vision
Our vision is to become the trusted and India’s largest offline and
online tools kits shopping venture to caters the industrial tool kits
and home needs of tool kits at door step with every requirements of
our customers online and offline.
Our Mission
Our Mission is to ensure quality tools in our portfolio and to ensure
on time delivery of products at your convenient time. This mission is
achieved by providing the very best quality products, delivered when
the customer wants them at incredible prices.

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Meaning of capital

In the ordinary sense of the word capital means an initial investment invested by a
businessman or owner at the time of commencing the business.

Introduction of Working Capital

It describes about how the company manages its working capital and the various steps
that are required in the management of working capital.

Cash is the lifeline of a company. If this lifeline deteriorates, so does the company’s
ability to fund operations, reinvest, and meet capital requirements and payments.
Understanding a company’s cash flow prospects is to look at its Working Capital
Management.

Thus, in very simple words, working capital may be defined as “capital invested in
current assets.” Here current assets are those assets, which can be converted into cash
within a short period of time and the cash received is again invested in these assets.
Thus, it is constantly receiving or circulating. Hence, working capital is also known as
circulating capital or floating capital.

Meaning of working capital

Working capital means the funds (i.e., capital) available and used for day to day
operation (i.e.; working) of a company. In Accounting

Working Capital = Current Assets – Current Liabilities

Definition of working capital

According to Weston & Brigham

“Working capital refers to a firm’s investment in short term assets - cash, short term
securities, account receivable, and inventories.”

According to Mead Mallett& Field

“Working capital means current assets”

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The project describes how the management of working capital takes place at Marathon
Electric India Pvt. Ltd.

Classification of working capital

Working capital can be classified are as follows-

 On the basis of concept

 On the basis of time

Kinds of Working Capital

On the basis of On the basis of time

concept

Gross Net Permanent/ Temporary

working working /Variable
capital capital Fixed working
working capital
capital

Regular Reserve Seasonal Special

working working working working
capital capital capital capital

According to concepts, there are two types of working capital these are-

 Gross working capital

 Net working capital

1. Gross working capital

Gross working capitalrefers to investment in all current assets -raw materials, work-
in- progress, finished goods, book debts, bank balance and cash balance. The gross
concept of working capital is significant in the context of measuring working capital
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needed,

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measuring the size of the business, continued and smooth flow of operations of the
business and the like.

2. Net working capital

Net working capital refers to the excess of current assets over current liabilities. That
is, the value of current assets minus the value of current liabilities (current liabilities
include trade creditors, bills payable, outstanding expenses such as wages, salaries,
dividend payable and tax payable, bank overdraft, etc.) The net concept of working
capital is significant in the context of financing of working capital, the short term
liquidity aspects of the business, and the like.

Net working capital may be positive or negative. A positive net working capital arises
when current assets exceed current liabilities and a negative working capital occurs
when current liabilities are in excess of current assets. It shows bad liquidity position.
This is a qualitative concept which highlights the character of the sources from which
the funds have been procured to support that portion of the current assets which is in
excess of current liabilities.

According to time there are two kinds of working capital. These are-

 Permanent working capital.

 Temporary/varying working capital.

1. Permanent Working Capital

Permanent working capital refers to the minimum amount of all current assets
that is required at all times to ensure a minimum level of continuous business
operations. Some minimum level of raw materials, working process, bank
balance, finished goods, etc. a business has to carry all the time irrespective of
the level of manufacturing/marketing operations. This level of working capital
is referred to as core working capital or core current assets. Permanent
working capital is defined as the “amount of current assets required to meet a

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firm’s long- term minimum needs”. You should note, that the level of core
current assets is not, however, a constant sum all the times. For a growing
business the permanent working capital will be rising, for a declining business
it will be decreasing and for a stable business it will be remaining more, or less
stay-put. So permanent working capital perennially needs one though not fixed
in volume. This part of the working capital being a permanent investment
needs to be financed through long-term funds. Depending upon the changes in
the production and sales, the need for working capital, over and above the
permanent working capital, will fluctuate.

 Initial Working Capital: In the initial period of its operation, a firm must
need enough money to pay certain expenses before the business profits. In the
initial years the banks may not funding loans or overdrafts, sales may have to
be made on credit and it may be necessary to pay the creditors immediately.
Therefore the owners themselves have to provide the necessary funds in the
initial period, which may be known as initial working capital.

Regular Working Capital: The firm is always required to keep certain

funds with it to continue the regular business operations, which is called as
Regular Working Capital. It is required to maintain regular stock of raw
materials and work-in-progress and also of the finished goods, which must be
maintained permanently at a definite level. Regular working capital is the
excess of current assets over current liabilities. It ensures smooth operation of
business.

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 Seasonal Working Capital: Some business operations require additional
working capital during a particular season. For example, the groundnut oil
producers may have to purchase groundnut in a particular season and have to
employ additional labor for that purpose. These may require additional funds
for a temporary period, which may be called as seasonal working capital.
 Special Working Capital: In all enterprises, some unforeseen events do
occur like a sudden increase in demand, downward movement of prices of raw
materials, strike, or natural calamities, when extra funds are needed to tide
over such situation. Such type of extra funds is called as Special working
capital.

Importance of working capital

Working capital is one of the important measurements of the financial position. The
words of H. G. Guthmann clearly explain the importance of working capital.
“Working Capital is the lifeblood and the nerve center of the business.” The object of
working capital management is to manage firm’s current assets and liabilities in such
a way that a satisfactory level of working capital is maintained. If the firm cannot
maintain a satisfactory level of working capital, it is likely to become insolvent and
may even be forced into insolvency. Thus, the need for working capital to run day-to-
day business activities smoothly can’t be overstated.

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Requirements of working capital

There are no set rules or formula to determine the working capital requirements of the
firms. A large number of factors influence the working capital need of the firms. All
factors are of different importance and also an important change for the firm over
time. Therefore, an analysis of the relevant factors should be made in order to
determine the total investment in working capital. Generally the following factors
influence the working capital requirements of the firm:

• Nature and size of the business

• Seasonal fluctuations

• Production policy

• Taxation

• Depreciation policy

• Reserve policy

• Dividend policy

• Credit policy:

• Growth and expansion

• Price level changes

SOURCE OF CAPITAL

The financial manager is always interested in obtaining the working capital at the
right time at a reasonable cost and at the best possible favorable terms. A part of the
working capital investment is a permanent investment in fixed assets. These following
are the various sources of working capital:-Source of working capital divided into two
parts

 Long - term
 Short - term
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Sources of long term working capital

 Issues of share
 Floating of debenture
 Public deposit
 Loans

Sources of short term working capital

 Internal source
 Depreciation
 Taxation
 Accrued expense
 Ploughing back of profit
 External source
 Bank credit
 Trade credit
 Government assistance
 Loan from Director
 Security of employee

Need of 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
purpose

 To purchase raw material, spare parts and other components.

 To meet overhead expenses.

 To hold finished and spare parts etc.

 To pay selling and distributing expenses.

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Working capital management

Working capital management means management or administrating of all aspects of

working capital: current assets and current liabilities.

In other word of Adam Smith; “working capital management is concerned with the
problems that arise in attempting to manage the current assets, current liabilities and
the interrelationship that exist between them”

Structure of Working Capital

The different elements or components of current assets and current liabilities
constitute the structure of working capital, which can be illustrated in the shape of a
chart as follows:-
Structure of Current Assets and Current Liabilities

Current Liabilities Current Assets

Bank Overdraft Cash and Bank Balance
Creditors Inventories: Raw-Materials
Work-in-progress
Finished Goods
Outstanding Expenses Spare Parts

Bills Payable Accounts Receivables

Short-term Loans Bills Receivables

Proposed Dividends Accrued Income

Provision for Taxation, etc. Prepaid Expenses

Short-term Investments

Need of the Study

The need of the study is the important part of the project. My purpose of doing this
study is to find out the cause of shortage of working capital. Working capital is the

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lifeblood and the nerve center of business. Working capital is very essential to
maintain the smooth running of a business. No business can run successfully without
an adequate amount of working capital. How the business retain their market share as
well as the goodwill of the company. So that company has to maintain its cash to run
the business and accomplishing their day to day expenses.

Objective of the study

 To study the Working Capital position.

 To study the movement of Working Capital components ( Inventory,

Creditor's, Debtor’s )

 To evaluate the cash management performance

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Research methodology
The research methodology is a way to systematically solve the research problem. It may
be understood as a science of studying new 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.

The procedure by which a researcher goes about their work of describing, explaining
predicting phenomenon is called methodology.

Research Design
A research design is an arrangement of condition for collection at analysis of data in a
manner that combines relevance to the research purpose with the economy in the
process.

Sample size
It is the substantial portions of the largest population that are sampled achieve reliable
results.

 Sample size – the last four years, i.e. 2018-2019 to 2021-2022 financial
statements of the company.

A tool used for calculation – MS-Excel.

Data collection
The data have been collected from two types-

 Primary data

 Secondary data

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Primary data

Primary data are the data which is collected from first hand, for the first time which
is original in nature.

Secondary data
Secondary data are those data which have already collected and stored. Secondary
data easily get those secondary data from records annual reports of the company, etc.
It will save the time, money and to collect the data.

The major source of data of this project was collected through annual reports, profit
and loss account of the four year period of company, i.e. from 2018-2019 to 2021-
2022 and some more information collected from the internet and text source.

Tools used for Analysis of data

The data were analyzed using the following tools. They are-

 Ratio Analysis.

Statement of changes in working capital

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Ratio analysis

Introduction
Ratio analysis is a powerful tool financial analysis. Ratio analysis is a process of
comparison of one figure against another, which makes a ratio and the appraisal of the
ratios to make a 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 statement stands for the process of
determining and presenting the relationship of items and group of items in the
statements.

Types of Ratio Analysis

 Liquidity Ratio

 Turnover/Activity Ratio

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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 of 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 Liquidity 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/Account receivable Turnover Ratio

3. Creditors/Account payable Turnover Ratio

4. Working Capital Turnover Ratio

1.1 Current Ratio

The Current ratio 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’s has more
current assets in the comparison of current liabilities. A standard ratio between them
is 2: 1.
Current Ratio = Current Assets

Current Liabilities

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Table showing the current ratio

27
Year Current Assets Current Liabilities Current Ratio

2018-2019 20,915.61 4,930.54 4.24

2019-2020 20,743.18 5,678.34 3.65
2020-2021 22,775.58 10,459.17 2.17
2021-2022 28,195.36 11,337.50 2.48
Source: financial statement (Amount in lakh)

Current Ratio
4.5
4
3.5
3
2.5
2 Current Ratio
1.5
1
0.5
0
2018-20192019-20202020-20212021-2022

(Amount in lakh)

Interpretation
The above chart shows that during the financial year2018-2019 the company had a
current ratio of 4.24:[Link] the next year, i.e.2019-2020 it decreased by 0.59. It was
about3.65:1 in the year 2019-2020. And in the year 2020-2021 it was again decreased
by 1.48. During this year, i.e. 2020-2021 it was about 2.17:1. These show that the
current ratio was decreased every year. But in the last yea r,i.e. 20121-2022 the
current ratio was increased to 2.48:1, due to increase in current assets. The current
ratio is greater to the standard ratio, i.e. 2:1. Hence it can be said that there are enough
current assets in Marathon Electric India Pvt. Ltd. to meet its current liabilities.

1.2 Acid Test Ratio /Quick Ratio / Liquidity Ratio

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The Acid test ratio/Quick ratio/Liquidity ratio establishes a relationship between
quick/liquid assets and current liabilities. It measures the firm’s capacity to pay off
the current obligation immediately. An asset is liquid if it can be converted into cash
immediately without a loss of value; Inventories are considered to be less liquid.
Becauseinventory’snormally require some time for converting into cash. This ratio is
also known as an acid-test ratio. The standard quick ratio is 1:1 is considered
satisfactory.

Quick Ratio = Quick Assets (current assets – Inventory)

Current
Liabilities Table showing Quick
Ratio
Year CurrentAssets Inventories Quick Assets Current Quick Ratio
Liabilities
2018-2019 20,915.61 4,213.05 16,702.56 4,930.54 3.38

2019-2020 20,743.18 5,759.21 14,983.97 5,678.34 2.63

2020-2021 22,775.58 5,875.76 16,899.82 10,459.17 1.61

2021-2022 28,195.36 5,240.57 22,954.79 11,337.50 2.02

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Source: Financial statement (Amount in lakh)

Quick Ratio
4
3.5
3
2.5
2
Quick Ratio
1.5
1
0.5
0
2018-2019 20119-2020 2020-2021 2021-2022

(Amount in lakh)

37

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Interpretation
The above chart shows that during the financial year 2018-2019 the company had a
Quick ratio of 3.38:1. In the next year, i.e.2019-2020 it decreases by 0.75. It was
about 2.63:1 in the year 2020-2021. During the year 2011-20 the quick ratiowas
againdecreasedby1.02. And it was about1.61:1 in the year 2021-2022 due to increase
in current liabilities and decrease in Quick assets. But in the last year 2021-2022 the
quick ratio increased by 0.41. And it was increased to 2.02:1. The quick ratio of the
company is greater to the standard ratio, i.e., 1:1. Hence it shows that the liquidity
position of the company is adequate.

1.3 Absolute Liquidity Ratio

The absolute liquidity ratio may be defined as the relationship between Absolute
liquid assets and current liabilities. Absolute liquid ratio includes cash in hand and
cash at bank. The standard ratio is 0.5:1.

Absolute Liquidity Ratio = Cash & Bank Balance

Current Liabilities

Table Showing Absolute Liquidity Ratio

Year Cash & Bank Balance Current Liability Absolute Liquidity Ratio

2018-2019 4,516.04 4,930.54 0.91

2019-2020 396.01 5,678.34 0.06

2020-2021 1,607.07 10,459.17 0.15

2021-2022 5,098.44 11,337.50 0.44

Source: Financial statement (Amount in lakh)

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Absolute Liquidity Ratio
1
0.9
0.8
0.7
0.6
0.5
Absolute Liquidity Ratio
0.4
0.3
0.2
0.1
0
2018-20192019-20202020-20212021-2022

(Amount in lakh)

Interpretation
The above chart shows that during the financial year 2018-2019 the absolute liquidity
ratio of the company was about 0.91:[Link] the next year 2019-2020 it decreased by
[Link] was about 0.06:1, in the year [Link] the year2020-2021 absolute
liquidity ratio increased by 0.09, and it was about0.15:1, in the year 2020-2021. In the
last year ,i.e. 2021-2022 it increased by 0.29, and it was about0.44:1. After 2019-2020
the absolute liquidity ratio of the company is increasing every year. But besides of
2009- 2010 the absolute liquidity ratio of the company is less than to the standard rate
i.e., 0.5:1. Hence it shows that the liquidity position of the company is satisfactory.

[Link] Turnover Ratio

The Inventory turnover ratio is the ratio, which indicates the number of times the
stock is turned over i.e., sales during the year. This measures the efficiency of the
sales and stock levels of the company. A high ratio means high sales, fast stock
turnover, and a low stock level. A low stock turnover ratio means the business slows
down or with a high stock level.

Inventory Turnover Ratio = Net sales

Closing Inventory

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Table showing the Inventory turnover ratio
Year Net Sales Closing Inventory Inventory Turnover Ratio

2018-2019 37,102.41 4,213.05 8.80 Times

2019-2020 49,374.65 5,759.21 8.57 Times

2020-2021 52,052.91 5,875.76 8.85 Times

2021-2022 55,254.01 5,240.57 10.54 Times

Source: Financial statement (Amount in lakh)

Inventory turnover
1 ratio
2

1
0

8 Inventory turnover
ratio
4
6
2

0
2018- 2019- 2020- 2021-
2019 2020 2021 2022

(Amount in lakh)

Interpretation

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The above chart shows that during the financial year 2018-2019, 2019-2020, and
2011- 2012 in all three years there is no major difference in the inventory turnover
ratio, which is in all three years, the inventory turnover ratio was about 8.80
times,8.57 times, and
8.85 times, respectively. But in the last year, i.e. 2021-2022 it increased by 1.69 times
as compared to the previous year, i.e. 2020-2021. And it was about 10.54 times in the
year 2021-2022. It shows that in all three years the company had general sales, but in
the last year 2021-2022 the company increased in its sales as compared to last three
previous years i.e. 2018-2019, 2019-2020, and 2020-2021.

2.2 Debtors/Account receivable Turnover Ratio

The Debtors/Account receivable 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
Note: In MEIPL, we have taken the total net sales instead of the credit sales, because
the credit sales information has not available for the calculation of Debtors Turnover
Ratio.

Table showing the Debtors turnover ratio

Year Net Sales Average Debtors Debtors Turnover Ratio

2018-2019 37,102.41 6,433.77 5.76 Times

2019-2020 49,374.65 7,653.72 6.45 Times

2020-2021 52,052.91 8,461.06 6.15 Times

2021-2022 55,254.01 10,904.96 5.06 Times

Source: Financial statement (Amount in lakh)

Debtors turnover ratio

7 41
6

4
Debtors turnover ratio
3
1

0
2018-2019 2019-2020 2020-2021 2021-2022

(Amount in lakh)

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Interpretation
The above chart shows that the debtor turnover ratio is fluctuating over the years. It
was about 5.76 times in the year 2018-2019. It increased by 0.69 times in the year
2010- 2011. It was about 6.45 times in the year 2019-2020. But in the year 2020-2021
it was decreased by0.30 times, and it was about 6.15 times in the year 2020-2021.
During the next year, i.e. 2021-2022 it was 5.06 which again decreased by 1.09 times
as compared to the last year i.e. 2020-2021. This graph is showing that the company is
not collecting debt rapidly.

2.3. Creditors/Account payable Turnover Ratio

The creditor’s turnover ratio is the ratio, which indicates the number of times the
debts are paid in the year. This ratio is calculated to be as follows:

Creditors Turnover Ratio = Net Purchases

Average Creditors

Note: In the MEIPL, we have taken the cost of materials consumed instead of credit
purchases, because the credit purchase information has not available for the
calculation of Creditors Turnover Ratio.

Table showing the creditors turnover ratio

Year Net Purchases Average Creditors Creditors Turnover Ratio

2018-2019 21,711.73 4,022.49 5.39 Times

2019-2020 30,560.39 4,416.68 6.91 Times

2011-2018 30,864.81 6,048.81 5.10 Times

2021-2022 30,195.25 4,616.96 6.54 Times

Source: Financial statement (Amount in lakh)

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Creditors Turnover Ratio
8

4 Creditors Turnover Ratio

3

0 2018-2019 2019-2020 2020-2021 2021-2022

(Amount in lakh)

Interpretation
The above chart shows that the creditor’s turnover ratio is fluctuating over the years.
It was about 5.39 times in the year [Link] the next year, i.e. 2019-2020 it
was increased by 1.52 times. During that year the creditor’s turnover ratio was about
6.91 times. But in the next year 2020-2021 it was decreased by 1.81 times and it was
about
5.10 times in the year 2020-2021. During the last year, i.e. 2021-2022 it was about
6.54 times, which due to decrease in creditors. This chart is showing that the company
has made prompt payment to the creditors.

2.4. Working Capital Turnover Ratio

The Working Capital Turnover 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, efficient utilization of
working capital and a low ratio indicates inefficient utilization of the working capital.
But a very high working capital turnover ratio is not a good situation for any
company.

Working Capital Turnover Ratio = Net Sales

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Tabel showing the company turnover

Year Net Sales Net Working Capital Working capital Turnover Ratio

2018-2019 37,102.41 15,985.07 2.32 Times

2019-2020 49,374.65 15,064.84 3.27 Times

2020-2021 52,052.91 12,316.41 4.22 Times

2021-2022 55,254.01 16,858.86 3.27 Times

Source: Financial statement (Amount in lakh)

Working Capital Turnover

4. Ratio
5
4
3.
5 Working Capital Turnover
1. Ratio
3
5
2.
1
5
0.
2 2018-20192019-20202020-20212021-2022
5
0

Intepretation

The above chart shows that the working capital turnover ratio is fluctuating year to
year that was minimum in the year 2018-2019, about 2.32 times. There was a
subsequent increase in the year 2019-2020 from 0.95 times, and it was about 3.27
times. It was again increased in the year 2020-2021 from0.95 times, due to decrease in
net working capital . It was about 4.22 times in the year 2020-2021. But in the last

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year i.e. 2012- 2013 it was decreased by 0.95 times, due to increase in net working
[Link] chart shows that the company is utilizing working capital effectively.

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FUND FLOW STATEMENT

Principles of working capital for calculating purposes

Current Assets
If the current assets increase as a result of this, working capital also increases. If the
current assets decrease as a result of this, working capital also decreases.

Current liabilities
If the current liabilities increase as a result of this, working capital also decreases. If the
current liabilities decrease as a result of this, working capital also increases.

Statement of Change in Working Capital:

The purpose of preparing this statement is for finding out the increase or decrease in
working capital and to make a comparison between two financial years.

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SURVEY
POWER TOOLS SURVEY IN BUSINESS TO BUSINESS
SECTOR

Figure 1 of Power tools survey Questionnaire - Question 1

Count of CITY
3.5

2.5

1.5

0.5

48
Figure 2 of Power tools survey Questionnaire – Question 2

49
Figure 3 of Power tools survey Questionnaire – Question 3

Do you require spare parts of the machines?

14

12

10

0
MAYBE NO YES

50
Figure 4 of Power tools survey Questionnaire – Question 4

14
Rank your preference of technology with respect to the
countries mentioned below :
12

10

0
CHINESE GERMAN INDIAN

51
Figure 5 of Power tools survey Questionnaire – Question 5

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Figure 6 of Power tools survey Questionnaire – Question 6

How would you prefer to order the

goods ?
website

Phone / whatsapp

Online platform like Amazon , Flipkart or any other

E -mail

0 2 4 6 8 10 12

Figure 7 of Power tools survey Questionnaire – Question 7

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Limitations of the study

 The study is conducted in very short duration (summer training).

 The analysis is limited to just 4 years of data study (from 2019 to 2022)
for financial analysis.

 Limited interaction with the concerned head due to their busy schedule.

 The findings of the study are based on the information retrieved from the
selected unit.

 Very less information and time spent with the company staff.

 This study is done on the basis of the historical data not in the actual
workplace.

 The financial data sensitive in nature the same could not acquire easily.

 Every person has its own preparation to analyze the financial data so
maybe it varies from person to person.

 The company has not provided their financial data properly because of it
is confidential in nature.

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CONCLUSIONS

 The study on working capital management conducted in Marathon Electric

India Pvt. Ltd. to analyze the financial position of the company. The
company’s financial position is analyzed by using the tool of financial
statements from 2018-2019 to 2021-2022.

 The financial status of Marathon Electric India Pvt. Ltd is good. In the last
year i.e., 2021-2022 the inventory turnover ratio has increased, this is a good
sign for the company.

 The company’s liquidity position is not good with regard to the investment in
current assets as there are adequate funds invested in it.

 The company is managing its financial position in a better way. There is a

balance between Current assets and current liabilities and also current ratio is
always above the standard rate.

 Further, Company’s creditor’s turnover ratio is not so good because of this

company may face the shortage of the funds to pay off its debts. To avoid such
situation, companies should use their funds in a productive way and there
should be timely payment of creditors.

 Company net working capital is decreasing, but in the last year i.e., 2021-2022
it was increased, still the company is in a better management position, and the
company present status of maintaining current liabilities and current assets is
satisfactory.

 They are able to manage their cash, funds, and debts. By adopting better
management practices, the company may attain a sound financial position in
the future and will be able to manage its working capital very effectively and
efficiently.
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BIBLIOGRAPHY

Following sources have been sought for the preparation this project report-

 Company profile

 Annual reports of the company from “2018-2019 to 2021-2022”

 Direct interaction with the employees of the company.

 Internet-

 [Link]

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