EXECUTIVE SUMMARY Indian Oil Corporation Limited, with a yearly turnover of about 2 Lac Corers is the biggest Company in India in terms of sales. It has once again topped the Indian Companies in the Fortune 500 list of Companies with a rank of 125. In such a large sized corporation the common problem is the Receivable Management and formulating a sound Credit Policy and Collection Procedure. In this fluctuating Oil Market it is very difficult to maintain the level of the Sundry Debtors and hence the Profitability. Moreover the Private Companies are entering the Oil Industry which has provided a tough competition for IOCL. In this study the Ratios are analyzed to interpret the Financial Status of the Corporation and then it is compared with the market Competitors. The Debtors of the Eastern Region has been analyzed in details and a few probable solutions to the existing problems has been formulated The intended growth strategy demands a strong financial position to build and sustain the growth story. Any company whether industrial or trading requires the current assets for day to day working of the unit and these current assets are often referred as working capital of the company and is one of the major contributors in improving profitability of any organization and is a vital component of success and survival i.e. both profitability and liquidity for the organization. So looking at the importance of the working capital and working capital management, the project was aimed to assist the company to analyze its present efficiency in terms of managing working capital and assessing the future working capital requirement and assigning to identify the major loopholes in various processes which are having or can have an adverse effect on the working capital of the company and suggesting some of the important ways to handle those condition. The project started with understanding the company process and then reviewing the past financial performances and working
EXECUTIVE SUMMARYIndian Oil Corporation Limited, with a yearly
turnover of about 2 Lac Corers is the biggest Company in India in
terms of sales. It has once again topped the Indian Companies in
the Fortune 500 list of Companies with a rank of 125. In such a
large sized corporation the commonproblem is the Receivable
Management and formulating a sound Credit Policy and Collection
Procedure. In this fluctuating Oil Market it is very difficult to
maintain the level of the Sundry Debtors and hence the
Profitability. Moreover the Private Companies are entering the Oil
Industry which has provided a tough competition for IOCL. In this
study the Ratios are analyzed to interpret the Financial Status of
the Corporation and then it is compared with the market
Competitors. The Debtors of the Eastern Region has been analyzed in
details and a few probable solutions to the existing problems has
been formulated
The intended growth strategy demands a strong financial position
to build and sustain the growth story. Any company whether
industrial or trading requires the current assets for day to day
working of the unit and these current assets are often referred as
working capital of the company and is one of the major contributors
in improving profitability of any organization and is a vital
component of success and survival i.e. both profitability and
liquidity for the organization.So looking at the importance of the
working capital and working capital management, the project was
aimed to assist the company to analyze its present efficiency in
terms ofmanaging working capital and assessing the future working
capital requirement and assigning to identify the major loopholes
in various processes which are having or can have an adverse effect
on the working capital of the company and suggesting some of the
important ways to handle those condition.The project started with
understanding the company process and then reviewing the past
financial performances and working capital efficiency with the help
of ratio analysis. The next step was to see the operating cycles
and the process of forecasting working capital and then finding out
the sources the company uses to raise these funds. The project also
focuses on the prevailing policies related to inventory,
receivable, cash and payable management. The analysis resulted in
assessing the working capital requirement problem in the system
ofrecording and reporting of various data related to policy
formulation and better working capital management. There is an
urgent need to develop a formal process of credit analysis ofthe
existing and more importantly the new customer to develop more
specific credit terms and the most importantly a proper monitoring
and controlling system for a better management of
receivables.Managing working capital has always been a challenge
for the big companies and IOCL is not an exception to this.
