BANGALORE UNIVERSITY

A STUDY ON WORKING CAPITAL MANAGEMENTAT

A PROJECT PROPOSAL SUBMITTED TO BANGALORE UNIVERSITY FOR THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATIONCHANDRASHEKAR .A.C. (Reg. No: 09QZCMA020)UNDER THE GUIDANCE OF

Ms.SHWETHA.N.S(Assistant Professor)Bangalore Institute of Management Studies

BANGALORE INSTITUTE OF MANAGEMENT STUDIES

Approved by AICTE, Affiliated to Bangalore University, Recognized by Govt. of KarnatakaNo. 35, Opp. R. V. Engineering College, Mysore Road, Bangalore 560059, India

2009-11

STUDENTS DECLARATION I hereby declare that the dissertation titled A study on Working Capital Management at Karnataka Co-operative Milk Federation Ltd., Bangalore Submitted by me to the Department of Management, Bangalore University in Partial fulfillment of requirements of MBA Programme is a bonafide work carried by me under the guidance of Assistant Professor Ms.Shwetha. This has not been submitted earlier to any other university or Institution for the award of any degree diploma / certificate or published any time before. DATE: CHANDRASHEKAR.A.C PLACE: BANGALORE Reg. No. - 09QZCMA020CERTIFICATE OF FACULTY GUIDEThis is to certify that Chandrashekar.A.C. Reg. No. 09QZCMA020 has successfully completed his research work and has submitted the report under the guidance and supervision towards the partial fulfillment of the requirements of MBA course of Bangalore University, Bangalore.Date:

Ms Shwetha.N.S (Professor) Place: Bangalore Sign. Of Faculty GuideACKNOWLEDGMENT It gives me a great pleasure to have the privilege of expressing my indebtedness and gratitude to thank Almighty God for giving me the strength and wisdom to complete the project successfully.

This study will be incomplete without acknowledging my sincere gratitude to Dr. S. Radha, Director, Bangalore Institute of Management Studies, for providing me the opportunity to conduct this project.

I am grateful to my project Internal Guide, Ms.Shwetha.N.S , for his support, assistance throughout the project work.

My sincere thanks to the External Guide Mr.Lokesh for dedicating his time, constant support, assistance throughout the project work. And, I would also thank all the other staff KMF Ltd, for their co-operation and guidance during the project work. Place: Bangalore CHANDRASHEKAR.A.C

Date: Reg. No- 09QZCMA020EXECUTIVE SUMMARYKarnataka Milk Federation which is most popular as KMF, evolved itself as a premier and most profitable dairy farmers' organization in the State of Karnataka. As an agency in 1975 to implement the World Bank Aided Dairy Development Projects, Karnataka Dairy Development Corporation (KDDC) was formed, the company grew itself fast and as it spreads the wings of new found rural economic activity - Dairying all over the State, the genesis of apex cooperative body took the shape of KMF in 1983 encompassing entire State with 13 District Co-operative Milk Unions executing the various parameters of Dairy activity - organization of Dairy Co-operatives, Milk Routes, Veterinary Services, Procurement of milk in two shifts of the day, Chilling, Processing of milk, distribution of milk and also establishment of Cattle Feed Plants, Nandini Sperm Station, Liquid Nitrogen Supply, Training Centres - as its main stay.

The study covers the concepts of working capital management and their components. The primary objective of any business is to maximize the value of the Federation and maximize the wealth of the share holders .The dissertation titled A study on working capital management with special reference to KMF Ltd. Bangalore.

Accordingly a research deign was prepared. Relevant primary and secondary data were obtained. Primary data were collected through personnel talk with finance manager of the federation and secondary data were obtained through companys websites and annual report of five years i.e., 2007-09. Ratio Analysis is the analytical tool used for the study.

Analysis and interpretation gives information about, how much the company earns profits, how the company manages with available funds, to know how it maintain funds through reserves and surpluses, to know the maintaining of cash and bank balance and how they manage inventories whether the company earn profits for a longer period of time which helps the company to be provided in the best possible way in order to improve their performance and for their future expansion or diversification of the company and sustain for longer period. Table of ContentsSL. NO. CHAPTERSPAGE NO.

1 Introduction1 13

Introduction about study1

Need for working capital2

Objective of working capital2

Classification of working capital3

Advantages of adequate working capital7

Disadvantages of inadequate working capital8

Factors determining the working capital9

Principle of working capital13

2Research Design14 16

Title of the study14

Statement of the problem14

Need for study14

Objective of the study14

Scope of the study15

Research methodology15

Data analysis16

Limitations of the study16

3Profile of the company17 36

Industry review17

Company Review18

4Data Analysis and Interpretation37 63

5Summary of Findings, Recommendations & Conclusion64 67

Findings64

Suggestions66

Conclusions67

6Bibliography68

7Annexure69 73

LIST OF TABLES

Sl. No.Table DescriptionPage No.

1Constitutes of Current Assets...5

2Constitutes of Current Liabilities.6

3Showing KMF Officers20

4Showing Growth Process of company.22

5Showing Milks composition.28

6Showing Class & type of milk30

7Showing contents of milk.34

8Showing Structure of gross working capital.39

9Showing Net working capital.41

10Showing Current ratio43

11Showing Working capital turnover ratio45

12Showing Cash ratio.47

13Showing Trend analysis..49

14Showing Quick ratio...51

15Showing Current asset to total asset...53

16Showing Current liability to total liability.55

17Showing Current assets to Fixed assets...57

18Showing Inventory turnover ratio60

19Showing Net profit to net sales..62

LIST OF CHARTSSl. No. Chart DescriptionPage No.

1Classification of Kinds of Working Capital 3

2Factors Determining Working Capital 9

3Principles of Working Capital Management12

4Organization structure of KMF Ltd ...19

5Showing Structure of gross working capital.40

6 Showing Net working capital.42

7Showing Current ratio44

8Showing Working capital turnover ratio46

9Showing Cash ratio.48

10Showing Trend analysis..50

11Showing Quick ratio...52

12Showing Current asset to total asset...54

13Showing Current liability to total liability.56

14Showing Current assets to Fixed assets...59

15Showing Inventory turnover ratio61

16Showing Net profit to net sales..63