INTRODUCTION :A vital role was assigned to the public sector in the process of economic development of India. This role that was originally enshrined in the Industrial Policy Resolution of 1948 was further emphasised in the Industrial Policy Resolution of 1956. Public Sector was envisaged not only to control the commanding heights of the economy but also to serve as a vehicle to promote balanced and equitable growth. This led to a phenomenal growth of the public sector enterprises at both the Centre and the States during the earlier plans. However, the Government rethinking on the role of public sector enterprises was necessitated by the severe resource crunch faced at the Centre as well as State level around the terminal years of the Seventh Plan. The net losses incurred by the public enterprises being a major contributor to deficit budgets, a need was felt to urgently review the role of these enterprises with a view to reducing the financial burden on the respective Governments at the Centre and in the States. After all, losses of these enterprises reduce the financial maneuverability of the Government to spend money on the development of social sectors and infrastructure, considered so vital for the development of the economy. Agribusiness firms, generally, of all size need to particularly control and monitor their working capital. This is because they are generally associated with a higher proportion of current assets (up to 60%) relative to large firms, less liquidity, volatile cash flows, and a reliance on short-term debt (Peel et al., 2000). Evidence suggests that mostly these firms practice ad hoc or subjective working capital decision-making rather than modern approach for creating the value for the firm (Nayak and Greenfield, 1994; Khoury et al., 1999). Peel and Wilson (1996) assert that these firms should adopt proper working capital management practices in order to reduce the probability of business closure, as well as to enhance business performance. Knowledge and understanding of the working capital management practices of Agribusiness firms is currently inadequate. Research in this area is determined by absence of an agreed framework for model development and hypothesis formulation. Little theoretical justification has been provided for the lower take-up of working capital management practices by agribusiness firms (Pike and Pass, 1987; Mitchell et al., 1998). Most empirical studies simply describe the characteristics of their sampled firms and the proportion of firms reporting the utilization of specific working capital management techniques (Peel and Wilson, 1996; Maxwell et al., 1998). The factors associated with the adoption of working capital management practices have generally been explored within a univariate statistical framework (Kim and Chung, 1990; Mian and Smith, 1992; Ng et al., 1999). Therefore, the main purpose of this paper is to report comparative findings of a survey of working capital management practices of selected agribusiness firms from dairy co-operatives, private and MNC dairy firms as a part of my thesis conducted in July 2008. This paper is also an attempt to know the effect of the ownership, government regulation, managerial

Working Capital Management.............

Management & Change, Volume 13, Number 2 (2009) empowerment and cultural factor on the working capital decision making. Working capital management practices of firms are analyzed with the help of a two dimensional approach for working capital decision making, developed as a part of my thesis, in order to analyze the improvements in the working capital management practices. This paper is divided into five sections; second section covers introduction of approached used for studying the working capital management practices, research methodology is a part of section third and empirical findings of dairy firms, are discussed in section four, and section five concludes the paper findings.

APPROACHES EMPLOYEED FOR STUDYING WCMPRACTICES

The approach used of this paper is a two-dimensional approach internal and external. This approach, I have developed as a part of my PhD. Internally, it takes care of the management of level of investment in current assets and short-term financing as well as the management of operations (that affect the balances of current assets and liabilities) and therefore maximises the benefits and minimize the cost of the working capital assets and short-term financing (Short-term debts) by taking care of internally generated problems. Externally it manages the firm-supplier and firm-customer cooperation and therefore minimizes the costs of inter-firm transactional relations and thereby results in synergy effects on firm value by taking care of the externally generated problems. This is achieved by reducing inter-firm transaction costs and creates firm value in a win-win condition (Rubin and Alvarez, 1998). We classify the functions of managing working capital internally, the first dimension, into the management of level of current assets, current liabilities and management of operations (that affect the balances of current assets and liabilities) as well as the management of activities of cash payments and cash receipts (as shown in figure 2). With respect to the working capital management on operations, we concentrate on the operations of purchases and sales and related activities of cash payments and cash receipts.

Fig. 2 Two-dimensional Approach of Working Capital Management If a firm can effectively design the purchasing and sales policies, it would have other direct effect in a firms external value chain as credit purchasing and payment as well as credit selling and collection policies have. In the management of the activities of cash payment, the firm has to slow-down cash payments and pay debts as late as it is reliable with maintaining its credit standing with suppliers so that it can make the most efficient use of the money it already has. In the management of the activities of cash receipt, the firm has to speed-up and control cash collection. A firm has to speed-up the collection of sales so that it earns income and uses the money sooner, for investment or paying bills and save future expenses. One important thing that we have to note, here, is that for our purpose managing working capital internally refers only to the levels and operations, which are directly, connected with the firms external linkages (that its suppliers and customers). It therefore, makes it clear that our paper does not refer to internal operations such production operations and other internally performed administrative activities. We classify the function of managing working capital externally, second dimension, as the management of relations (co-operation) of firms with their forward linkages (Customers) and backward linkages (suppliers) (as shown in figure 2). As not a single firm can survive in isolation, it has to make transactions with the other firms e.g. suppliers, customer. Every transaction between the two firms has costs, which can only be minimized, for both, by mutual co-operation. It, therefore, originates need for development of an appropriate inter-firm managerial governance pattern. With the help of which transaction costs for both the firms may decrease. It may cause to increase in value of the firm. Two types of costs are associated with each transaction, one is of working capital balances (change in the balances of Management & Change, Volume 13, Number 2 (2009) current assets and liabilities caused by the transaction) and other originates from the inter-firm transactional relationship. Therefore total cost of a transaction is aggregate of these two costs. Cost of working capital balances is subjected to control in managing working capital internally. Here, our issue of discussion is the second component of transaction cost. The volume and spread of inter-firm transactional relationship cost depend upon the transacting characteristics existing between the transacting firms. Aggregate cost of transaction of a firm may increase if both the firms in transaction seek to maximize their own benefits without considering the effects of their actions on other transaction firm. But there are some costs, under the head of inter-firm relationship costs, which can be avoided if the two parties coordinate their common operations (Williamson, 1985). It can be achieved if firms can assess their transaction and decide on the appropriate inter-firm managerial governance pattern. It will possibly reduce the aggregate costs of firms to a level below the sum total of costs of both firms without cooperation. Therefore the environment of cooperation (inter firm managerial governance pattern) between transacting parties may result at a concomitant benefit of creating value to both firms by reducing inter-firm transactional relationship cost. Inter-firm cooperation has become important as a result of specialization and globalisation. Number of inter-firm transactions will rapidly increase in numbers as the firms are specializing in few of their operations and leaving the rest to other firms. Inter-firm cooperation will also decrease cost of working capital balances within the firm. A good inter-firm assistance decreases the need to hold extra balances of cash, receivables and inventories within the firm. Another factor that generates the need of inter-firm cooperation is globalisation of firms due to cost and market factors. When a firm performs global it is forced to depend on the cooperation of other firms, which are accustomed to the new environment in terms of business culture, social culture and regulatory requirements. This inter-firm cooperation createsvalue chain (Porte, 1985), which is inter-connected with value network (Rappaport, 1986). Though, firms have to set up a feasible inter-firm governance patterns (Van Der Meer Kooistra and Vosselman, 2000).

1.2 MEANING :The Accounting system uses a web-enabled application developed in the office of Controller General of Accounts, the apex accounting authority of the Government of India under Ministry of Finance (India). In the first step, every agency receiving funds is registered on the system, including registration of all the bank accounts of the agency; this information is shared with the respective banks Core Banking System (CBS) for authentication.Accounting system purpose is to provide greater transparency and accountability to social sector monitoring that has not existed until now. Financial utilization can be put in the public domain, and fund transfers to grassroots entities and utilization by them can be accessed by interested individuals and organizations51.3 SCOPE : Accounting System will aid in better fiscal deficit management, and to ultimately move to a system of flow of authorization as against the actual flow of funds, whereby banks will first meet the expenses of the implementing agencies and then seek reimbursement from the Central Government.1.4 NEED :There are over 1045 plans being implemented in the priority social sector, aimed at millions of beneficiaries across India, through the different ministries of the central government of India. Moreover, the Central Government also releases funds under Additional Central Assistance program to states to use within their region. Approximately Rs. 300,000 crores (USD 66 Billion) are released under these channels each year6. Given the diversity in and number of channels through which the money is spent, the Central Government finds it necessary to ensure that the money is spent according to its intended purpose, and provide an accounting of same.

1. 6 REFERENCES :

1. Bhunia, A., 2006. Liquidity management of public sector iron and steel enterprises in. Peleman Industries Inc, U.S.A., pp: 4.

2. Eljelly, A., 2004. Liquidity-profitability tradeoff: An empirical investigation in emerging market. Int. J.Comm. Manage., 14(2): 48-58.

3. Horne and Wachowitz, 2000. Fundamentals of Financial Management. 11th Edn., Prentice Hall Inc., pp: 2.

4. Horne, J.C.V., 1973. Fundamentals of Financial Management, Prentice Hall Inc. Englewood Cliffs, N.J., pp: 29.

5. Joshi, P.V., 1995. Working Capital Management under Inflation. 1st Edn., Anmol Publishers, pp: 20-93.

6. Rao, R., 1980. Working Capital Management in Private Sector. Prateeksha Publications, Jaipur, pp: 13-22.

2

REVIEW OF LITERATURE

2.1 Introduction2.2 Temporal Studies2.3 Inter Country Study organizational entitlement2.4 Funding Mix 2.5 Conclusions2.6 References

2.1 INTRODUCTIONIn addition to studying relationships between Government organizational characteristics and failure, researchers have tried to quantify financial indicators of failure risk, or financial vulnerability. Financial vulnerability is similar to organizational failure in that it is difficult to measure but important to understand for nonprofits hoping to avoid problems. Young 2007 The most obvious measure of health, financial surplus, is not necessarily a sign of success. No indicator can tell the full story of nonprofit financial health, so it is best to use multiple measures to represent this idea. 1

2.2 TEMPORARY STUDY Greenlee and Tuckman (2007) identify three areas that provide a context for measuring financial health: assets and liabilities, surpluses of revenues over expenses, and efficiency (measures of the productivity of funds within the nonprofit, including days of cash available, debt to equity ratios, etc.) For an individual organization, Keating, Fisher, Gordon, and Greenlee (2005) add to these previous ratios to provide a set of fifteen predictor ratios that can be compared over time within the same organization to evaluate trends or that can be compared with the ratios of organizations in the same stage of life within the same subsector. Table 1A, below, shows these variables and the observations of poor financial health that they were found to successfully predict. .2

2.3 INTER COUNTRY STUDY ORGANISATIONAL ENTITLEMENT. Two studies in New York showed similar results, referring to the phenomenon as If this perception hinders the adaptive strategies nonprofit managers might otherwise employ, it could cause higher rates of failure when government cuts occur, according to adaptive theory.3Hager, Galaskiewicz, and Larson (2004)Other authors disagree with this characterization. The study of organization hazard rates by) found that the probability of organizational death for organizations receiving public funding was 155 times that of those organizations not receiving public funding. Furthermore, the young organizations that received public funding were found to have hazard rates that were roughly the same as organizations funded by other means, while the older organizations that received public funding were found to have hazard rates that were more similar to the young, government-funded organizations than to the older organizations funded by other means (the government funded organizations had higher hazard rates than the other older organizations). The authors hypothesize that this is due to the "fickle" nature of public funds. This assertion is also made by.4 Rushton and Brooks (2007) Although a nonprofit that loses government funds may be able to find other sources of funding of equal amount to replace the lost revenue, these sources may carry restrictions that were different from the restrictions on the government funds. More or less flexibility in spending, more or less effort that is exerted to secure the revenue, and more or fewer reporting requirements may not make the revenues totally equal, especially if the new funds are less flexible and more resources are needed to secure new funds than the old ones Weisbrod asks if societys inadequate support for nonprofits [is] pushing them in undesirable, counterproductive directions in search of revenue? (1998) In other words, what organizational adaptations are made when government funding.52.4 Funding Mix: Fund Diversity, Portfolio Theory, and the Relationship to Resource Dependence Theories

MARKOWITZ (1952) Given that nonprofit require funds from government, private donors, commercial income, or other sources to survive, nonprofit leaders must pursue some mix of these revenue streams to fulfill their missions and survive. Nonprofits are generally assumed to pursue the funding mix that allows them to maximize some desirable objective (reward) such as mission accomplishment or revenue attainment, its proxy, and to minimize some undesirable aspects (risk) such as uncertainty or outside control over mission. This idea is rooted in the business literatures Modern Portfolio Theory, first articulated by. The uncertainty of a portfolio is related to the variance of individual components of that portfolio, and the law of large numbers indicates that diversification keeps actual returns close to expected returns.6

KINGMA 1993 Furthermore, diversification reduces an organizations exposure to risk tied to one revenue stream, such as a change in political leadership, which corporate finance theory refers to as unsystematic risk. An ideally diversified portfolio takes unsystematic risk, revenue stream variance, and revenue stream covariance (crowding-in and crowding-out effects) into account.7

2.5 CONCLUSION

Overall, the results of the analyses dealing with steadiness are far from conclusive, due to the likely misspecification of the steadiness variable. In general, these analyses confirm that government funding is correlated with a decreased hazard of failure even when controlling for government funding steadiness, and this decrease is mitigated only for those organizations that are the steadiest across all funding types. The results indicate that government funding must do something positive for an organization other than be a steady income stream. Theories related to government funding as a proxy for legitimacy or as an indicator for increased professionalism (and thereby being correlated with increased survival) would tend to be supported by these results.

Accounting System and Its Relationship with Government Funding and Exit/Failure The final set of analyses examined the relationship between diversity of revenue sources and nonprofit exit or failure. While the role and benefits of diversity of funding sources is debated, it is generally believed to provide a benefit by reducing risk and increasing legitimacy. The optimal level of diversity is also debated. Using portfolio theory, and understanding the relative stability of funding sources, one would expect.

2.6 REFERENCES

1. From the book of Public Subsidies and Charitable Giving: Crowding out, Crowding in, or Both? Journal of Policy Analysis and Management 19.3 (2000b): 451-464. Author Young 2007a

2. From the book of Organizational mortality: the liabilities of newness and adolescence. Administrative Science Quarterly 35 (1990): 530-547 author Greenlee and Tuckman (2007)

3. From the book of Revenue Diversification in Nonprofit Organizations: Does it Lead to Financial Stability? Journal of Public Administration Research 19.4 (2008): 947-966. authorAldarich and Pfeffer 1976; Bielefeld 1994

4. From the book of Tales from the Grave: Organizations Accounts of Their Own Demise. American Behavioral Scientist 39.8 (Aug 1996): 975-994 author Hager, Galaskiewicz, and Larson (2004)

5. From the book of Government Funding of Nonprofit Organizations. Chapter 4 in Financing Accounting: Putting author Rushton and Brooks (2007)

6. From the book of Portfolio Selection. The Journal of Finance 7 (1952): 77-91. author MARKOWITZ (1952)

7. From the book of Portfolio Theory and Nonprofit Financial Stability. Nonprofit and Voluntary Sector Quarterly 22 (1993): 105-119. author KINGMA 1993 3

RESEARCH METHODOLOGY

3.1Introduction3.2Research Approach3.3Secondary data3.4Objectives of the study3.5Hypothesis of the study3.6 Summary

3.1 IntroductionThis chapter describes the research process within which the purpose, aims and research questions were created. The research approach and some options for methods of information gathering and analysis are also discussed.In the subsections, several sources are used in order to get a wider view of the research approach, the research strategy and the respondents, it also gives a wider view on how to, in the end, reach the purpose of this dissertation. When choosing a research approach, there are two methods to consider; the deductive and the inductive approach. The deductive approach is where a theory and hypothesis are developed and then design a research strategy to test the theory. This approach is widely used in scientific research and is a highly structured approach. The developed theory or hypothesises subject to a rigorous test in order to explain causal relationships between variables (Saunders, Lewis & Thornhill 2003).Using the inductive approach, where theory follows data, the research is characterized by the respondents of data and development of theory as a result of the data analysis. The inductive approach to research emphasizes the close understanding of the research context and gaining an understanding of the meanings humans attach to events. It seeks to develop an empirical generalization that describes patterns of data and it tries to identify or develop a theoretical proposition that is consistent with those patterns (Schutt, 1996). The purpose of applying this strategy to the research is therefore to understand the nature of the problem studied (Saunders et al., 2003).

In this study both a quantitative and a qualitative research design have been used. The benefit of a quantitative research design lets the researcher to quantify the respondents answers towards certain variables, hypothesis or demographic data to draw statistical conclusions and comparisons. This is one of the foremost advantages of the quantitative design and a common design in scientific reports and studies in all areas.

3.2 Research Approach Theron (1992) notes that the survey research process starts with the selection of valid measurement(s)/questionnaire(s) that contain the questions that measure the intended concept(s). Therefore, the questions need to be worded carefully and unambiguously, must be acceptable to the respondents, not give offence, and be easily understood by everyone. Once the questionnaire has been selected or developed, the respondents need to be selected. The relevant criterion in selecting respondents is that the questions should apply to the population from which the respondents have been selected (Theron, 1992). The next step was to administer the questionnaires.

Baker (1988) discusses four types of questions that may form part of a questionnaire, viz. closed-ended questions, open-ended questions, contingency questions, and matrix questions.

Linde Rothman and Sieberhagen (1999 cited in van Zyl, 2002) add that as self-evaluation questionnaires are usually quantified, it is easier to compare the scores of different individuals. Weiers (1988) further postulates that the analysis of questionnaires is easy due to the structured information in the questionnaire with minimal or no open-ended questions.

Kerlinger (1986) however, found that the main problems experienced using questionnaires involve poor levels of response and the limitation of not being able to test the given response for accuracy. Furthermore, the validity of self-evaluation questionnaires may differ from situation to situation as some items are ambiguous and could be viewed as having two possible answers (Smith, 1981 cited in van Zyle, 2002; van Zyl& van der Walt, 1994).

Defining the research questionIdentifying the context for the studyPreliminary data gathering (review of Literature)Developing the theoretical framework for the studyGeneration of Research QuestionsDefining the variablesField work(establishing contact with students of various universities))(establishing contact with professionals of various organisations))

Instrument developmentItems and scalingReliability and validity of the instrument

Conducting the surveyInterviews and observations

Analysis and findings of the Research

Discussion on findings

Conclusion and revisit the Literature

Chart 3.1 The Research Process

Source: Sekaran, 2001 Adams and Schvaneveldt (1985) advise research design refers to a plan, blueprint, or guide for data employees of organisations and interpretation - set of rules that enable the investigator to conceptualise and observe the problem under study. Figure 3.1 as follows, provides a starting point by describing the research design used for this study.

3.4 Secondary Data Secondary data is based on past research work on this area of study. They are data from Internet, textbooks, government publications, unpublished research work and journals. Also, acknowledge authorities within the area of studies provided valuable materials for this study.

3.5Objectives of the studyPrimary objectiveThe main objective to study the ACCOUNTING SYSTEM OF CENTRAL GOVERNMENT is for project work that had assigned to me from the Universtiy of Mumbai for the Semester I of M. Com I.

The other Primary objective of study is to knowledge and Information about the working of accounting system in central government.

The primary objective of study also include to know the recent change that occure during the AGM of Central government in Accounting System .

To know the threat to economy

The objective of study is also to determine and find out the treat , so that it can be recognize and necessary action can be taken to resolved it.

To compare permformance

The objective of study is also to compare the performance of accounting system, tax policies and other rules with the past years, with other country accounting system ,etc.

Knowledge

The objective of study is to gain knowledge about the polices, rules and regulation , CAG , working of CAG , implementation of rules etc., of accounting system of Central Government of India.

Decision makingThe objective of study is also used for the decision making by way of analyzing the data, collecting data and interpreting the data.

3.6 Hypothesis of the study

The present study is based on the following hypotheses.

H1: There is no significant relationship between current ratio, liquid ratio, inventory turnover ratio and profitability.H2: There is no significant relationship between working capital turnover ratio as well as debtors turnover ratio and profitability.H3: There is no significant relationship between cash turnover ratio and profitability3.8Summary Research is seen as a systematic process where variables which may influence outcomes, are controlled as far as possible. It is thus important for all researchers to follow set scientific procedures in ensuring credible result. In this chapter, the research methodology followed was discussed with reference to the research strategy, statistical methods, and reliability. This chapter thus formed the background to the following chapter where interpretations were made.

4

ANALYSIS AND INTERPRETATION OF DATA .

4.1Introduction 4.2 Debt equity ratio- PSU all India 4.3 Total investment- PSU all India 4.4 Accumulated losses- PSU all India4.5Growth rates- PSU all India4.6 Net profit- PSU all India4.7Total equity 1990-914.8 Net profits

4.1 DEBT EQUITY RATIO-PSU ALL INDIA

Source : CMIE DATABASETable-4.1 provides all States aggregates relating to the State PSUs. Thefollowing trends emerge from the table:1. The State equity grew at a compound annual rate of growth (CARG) of 19.38 per cent from Rs.11145.67crore in 1990-91 to Rs.45982.20 crore in 1998-99.

2. The other equity showed an increase of 78 per cent from Rs.3607.03crore in 1990-91 to Rs.6425.19crore in 1998-99 (CARG of 7.48 per cent).

3. The total equity increased from Rs.14752.69 crore in 1990-91 to Rs.52407.41 crore in 1998-99 (CARG of 17.17 per cent).

4. The State debt increased by about 77 per cent from Rs.33027.28 crore in 1990- 91 to Rs.58467.38 crore in 1998-99 (CARG of 7.40 per cent).

5. The other debt increased from Rs.29980.07 crore in 1990-91 to Rs.86230.70 crore in 1998-99 (CARG of 14.12 per cent). This was in line with the objectives of these enterprises wherein they were expected to mobilise financial resources through debts from sources other than the State Government.

6. The total debt more than doubled (CARG of 10.95 per cent). Debt : equity ratio declined from 4.27 in 1990-01 to 2.76 in 1998-99 as can be seen in Fig 4.1.

4.2 TOTAL INVESTMENT-PSU ALL INDIA

Source : CMIE DATABASE

The total investment increased from Rs.77760.02 crore in 1990-91 toRs.197105.47 crore in 1998-99 (CARG of 12.33 per cent) as can be seen in Fig4.2.

4.3 ACCUMULATED LOSSES-PSU ALL INDIASource : CMIE DATABASEThe surpluses and reserves increased from Rs.9263.39 crore in 1990-91 to Rs.34471.86 crore in 1998-99 (CARG of 17.85 per cent).

The accumulated losses increased from Rs.11,295.76 crore in 1990-91 to Rs. 31167.29 crore in 1998-99 (CARG of 13.53 per cent) which points to the fact that the surpluses and reserves were merely fictitious in nature. The steep increase in accumulated losses is indicated in Fig.4.3.

4.4 GROWTH RATS-PSU ALL INDIASource : CMIE DATABASE10. The net worth increased from Rs.14563.66 crore in 1990-91 to Rs.53579.31 crore in 1998-99 (CARG of 17.68 per cent). However, it was about Rs.149727crore short of the capital employed during 1998-99 indicating a tremendous erosion of financial resources over the Plan period. 11. The total revenue earned increased from Rs.36111.59 crore in 1990-91 to Rs.111556.87 crore in 1998-99 at a CARG of 15.14 per cent. It was only around 55 percent of the capital employed and about 57 percent of the total investment in 1998-99. 12. A comparison of the growth rates in total investment, revenue earned, net worth and accumulated losses is shown in Fig. 4.4.

4.5 NET PROFIT-PSU ALL INDIASource : CMIE DATABASE13. The cash profits/contribution (salesdirect costs) declined from about 20 per cent of the total revenue in 1990-91 to 16.6 per cent in 1998-99 as against the warranted norm of 40 per cent. The gross margin as a percentage of sales declined from 13 per cent in 1990-91 to 11.2 in 1998-99 as against the stipulated norm of 30 per cent. 14. The percentage of profit before interest and taxes to total revenue declined from 10.24 in 1990-91 to 6.64 in 1998-99 against the popular norm of 20 per cent. 15. The net profits were in negative throughout the period of the study excepting for1994-95 and 1995-96 as can be seen in Fig.4.5.

4.6 TOTAL EQUITY 1990-91Source : CMIE DATABASETotal Equity 4.6 The total equity (Table-4.4) was made up of the contributions from the States,Centre and other sources. The States that recorded more than the average growth inMthis regard included Andhra Pradesh, Assam, Goa, Himachal Pradesh, Karnataka, Maharashtra, Pondicherry, Punjab, Rajasthan, Tamil Nadu and West Bengal. The bias in favour of State intervention was the main reason. Fig.4.6 depicts the States that accounted for major proportion of total equity in State PSUs in 1990-91 and 1998-99.

4.7 NET PROFITS Source : CMIE DATABASE

Net Profit Table shows the net profit position of the State PSUs as a whole. During 1990-91 to 1998-99, according to the table, excepting 1994-95 and 1995-96, these enterprises incurred losses during all the other years. However it is interesting to note that some sectors such as financial, trading & services and welfare enterprises (excepting for 1990-91), earned profits all through. Promotional enterprises have shown mixed performance. The manufacturing and utility (excepting in 1994-95) categories of enterprises incurred losses consistently. The utility enterprises were major loss makers. This contradicts the general perception that all State PSUs are in losses. Further, it goes against the belief that welfare and promotional State PSUs are necessarily loss-making propositions. The table clearly points to the need of restructuring/disinvesting manufacturing and utility enterprises. Category-wise distribution of net profits in State PSUs in the years 1990-91 and 1998-99 is indicated in Fig.4.10.

5

FINDINGS, SUGGESTION AND CONCLUSION.

5.1 Findings of the study5.2 Recommendation of the study5.3 Conclusion of the study

5.1 Findings 1. Rapid growth has been noticed in the private sectorsteel companies during privatisation. 2. More and more investments have been made admirably in the private sector steel companies India immediately after LPG.

3. In spite of more investments and rapid growth in steel production, India is far lag behind than that of world steel scenario.

4. The slopes of the ROCE, that is, profitability equation associated with CR, LR, ALR, DER, AOI, AOD and AOC witnessed both positive and negative influences of variations in the independent variables. Out of the seven regression coefficients of the ROCE line, four coefficients that were associated with CR, ALR, AOI .

5.2 Recommendations

This is the ultimate stage in which several proposals and suggestions have been offer; to overcome the noticeable problems in the study. Overall inventory management is required to be progressed in case of all the selected steel companies by way of proper application of inventory control system, such as, EOQ, JIT, ABC analysis, etc. and improvement of their sales management so as to reduce stock piling of finished goods. Proper composition of net current assets should be sustained by means of the indexes of the Indian steel companies. Liquidity position is very unsatisfactory in case of all the selected steel companies except KSL. To remove poor liquidity position of the above companies, further investment is required to be bringing in the form of liquid resource for significant reduction in the weigh down of current liabilities in order to improve liquidity position. On the whole, receivable management is not good enough in case of the entire selected companies under the study. Solution to the enormous problem of receivables management, an effective professional co-ordination between sales, production and finance departments is called for. On time billing, timely reminders to defaulting customers and immediate action should be ensured. The investment in loans and advances should be minimised to the extent possible. Suitable awareness should be pre-arranged with careful examination of payment policy for the improvement of the management of payables in case of the entire companies. It should be made by way of prompt payment policy, keeping no idle cash in hand taking short-term loan with lower interest. However, it should repay in one accounting year, otherwise harm profitability. Multiple correlation of 0.814 in case of LSIL would be further improved through external involvement and government interference. profitability for a unit increases in the value of LR, DER and AOC. The coefficient of multiple determinations (R2) makes it clear that 99.80 % of the total variation in the profitability of the company was explained by the seven independent variables CR, LR, ALR, DER, AOI, AOD and AOC. Adjusted R square (R2) signifies that 98.50 % of the variations in the ROCE of TSL are explained by the independent variable. Standard error of regression coefficients being very low certifies that there exists really line of estimates among the variables. C The slopes of the ROCE that is, profitability equation associated with CR, LR, ALR, DER, AOI, AOD and AOC witnessed both positive and negative influences of variations in the independent variables. Out of the seven regression coefficients of the ROCE line, four coefficients that were associated with CR, ALR, AOI and AOD showed positive influences on the profitability. There was a reduction in the profitability for a unit increases in the value of LR, DER and AOC. The coefficient of multiple determinations (R2) makes it clear that 81.40 % of the total Variation in the profitability of the company was explained by the seven independent variables CR, LR, ALR, DER, AOI, AOD and AOC. Adjusted R square (R2) signifies that 66.20 per cent of the variations in the ROCE of LSL are explained by the independent variable. Standard error of regression coefficients being very low certifies that there exists really line of Estimates among The variables. C The slopes of the ROCE, that is, profitability equation associated with CR, LR, ALR, DER, AOI, AOD and AOC witnessed both positive and negative influences of variations in the independent variables. Out of the seven regression coefficients of the ROCE line, two coefficients that were associated with ALR and AOC showed positive influences on the profitability. There was a reduction in the profitability for a unit increases in the value of CR, LR, DER, AOI and AOD. The coefficient of multiple determination (R2) makes it clear that 89.80 % of the total variation in the profitability of the company was explained by the seven independent variables CR, LR, ALR, DER, AOI, AOD and AOC. Adjusted R square (R2) signifies that 18.30 % of the variations in the ROCE of KSL are explained by the independent variable. Standard Error of regression coefficients being very low certifies that there exists really line of estimates among the variables. C The slopes of the ROCE, that is, profitability equation associated with CR, LR, ALR, DER, AOI, AOD and AOC witnessed both positive and negative influences of variations in the independent variables. Out of the seven regression coefficients of the ROCE line, only one coefficient that was associated with CR showed positive influences on the profitability. There was a reduction in the profitability for a unit increases in the value of LR, ALR, DER, AOI, AOD and AOC. The coefficient of multiple determination (R2) makes it clear that 88.20 % of the total variation in the profitability of the company was explained by the seven independent variables CR, LR, ALR, DER, AOI, AOD and AOC. Adjusted R square (R2) signifies that 5.60 % of the variations in the ROCE of JSWSL are explained by the independent variable. Standard Error of regression coefficients being low certifies that there exists really line of estimates among the variables.

5.3 CONCLUSION

The Accounting system in Indian Economy is prove to be great boon as no organization cannot survie without a proper accounting system. It create realiability , accurately and confident data . It is very useful tool to government to track the policy and its level of complete. Its also use by government for various capital budgeting etc and various issue.

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