Project Report of Ankush

8/8/2019 Project Report of Ankush

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INDIA YAMAHA PVT. LTD.FARIDABAD

Submitted by:-

ANKUSH PATHANIA

ROLL NO B26

REG NO 10901691

LOVELY PROFESSIONAL UNIVERSITY PHAGWARA (PUNJAB)


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INTRODUCTION

y India Yamaha Motor Private Limited (IYM) is

100% subsidiary of Yamaha motor corporation

limited (YMC), Japan. Incorporated in August

2001.y Having plants in Faridabad(haryana) and

Surajpur(uttar pradesh).

y Having 406 dealers across the country.

y Exporting over 50 countries including Argentina,

Mexico, Bangladesh, Sri Lanka, Colombia, Nigeria

and the Ivory Coast.


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OBJECTIVES OF THE STUDYy To study the working capital management of INDIA

YAMAHA MOTOR Pvt. Ltd.

y To study the optimum level of current assets and

current liabilities of the company.

y To study the working capital components such as

receivables accounts,cash management,

Inventory position.y To study the liquidity position through various

working capital related Ratios.


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RESEARCH METHODOLOGYy Research design (Descriptive research design)

y Both primary and Secondary data has been used for

the study.

y Primary data directly from company finance

department

y

Secondary data from annual repots.


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WORKING CAPITAL

MANAGEMENTy Working Capital management is the management of

assets that, are current in nature. Current assets, by

accounting definition are the assets normallyconverted in to cash in a period of one year. Hence

working capital management can be considered as the

management of cash, market securities receivable,

inventories and current liabilities


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TYPES OFWORKING CAPITALy Gross Working Capital

yNet working Capital

y Gross working capital = total current assets

yNet working capital = current assets current

liabilities


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2007 2008 2009 Ideal Ratio

1. Working Capital Turnover

(times)

4.84 10.23 5.71 -

2. Current Assets Turnover (times) 1.78 2.98 1.97 -

3. Inventory turnover (times) 9.49 9.20 7.88 -

(B) Liquidity Ratio

1. Current Ratio 2.12 1.80 2.41 2:1

2.AcidTestRatio 1.15 0.98 1.03 1:1

3. Cash Ratio 0.57 0.08 0.05 0:5

Efficiency Ratios


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Particulars Amount Changes in Working Capital

Dec 2008 Dec 2009 Increase

(Debit)

Decrease

(Credit)

Current Assets

Inventories 93.87 146.36 52.48 -

Sundry Debtors 123.22 114.71 - 8.51

Cash and Bank

Balances

10.64 5.63 - 5.01

Other current assets

Total current assets

20.14

247.87

21.66

288.36

1.52 -

Current iabilities 137.02 116.07 20.95 -

Working capital (CA-C ) 110.85 172.29

Increase in Working Capital 61.44 61.44

172.29 172.29

74.96 74.96

Schedule of Changes in Working Capital


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Size of cash balance (Rs. in Crores)

-100

-80

-60

-40

-20

0

20

40

60

80

100

2007 2008 2009

Cash

Trend


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Size of sales (Rs. in Lacs)

0

200

400

600

800

1000

1200

2007 2008 2009

Sales

Trend


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Current ratio and quick ratio

0

0.5

1

1.5

2

2.5

2007 2008 2009

Current Ratio

Quick Ratio


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Cash to Current assets ratio

0

5

10

15

20

25

30

2007 2008 2009


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Cash to Current Liability Ratio (%)

0

10

0

30

40

50

0

007 00 009


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LIMITATION OF THE STUDY

y The authenticity of the suggestions and

recommendations depend upon the rationality of thedata provided to me.

y Have to rely upon the data supplied.


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FINDINGSy Current assets comprise/a significant portion i.e. 30.89%

(average for three years of study) of total investment in assetsof the company. There is fluctuating and rather increasing trend

of this ratio during the period which shows management in-efficiency in managing working capital in relation to totalinvestment. Further current assets to fixed assets ratio alsoshows on fluctuating trend during the study period whichsubstantiate above mentioned criterion of in-effectiveness inmanagement of working capital by the company.

y Current assets turnover ratio for the first three years of studyshows fluctuating trend which is due to significant increase insales. In 2002 current assets turnover ratio is highest one i.e.2.98 during the study, reasons being during this year companyhas achieved sales growth 44.36% over the previous year.


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y The ratio used for analysis of liquidity position are current ratioand quick ratio. These ratio reveals that company has soundliquidity position throughout the period of study. Both the ratio

shows fluctuating trend within reasonable limit but these ratioare higher than conventionally accepted norms i.e. 2:1 in caseof current ratio & 1:1 in case of quick ratio, which showsineffectiveness of the management in managing current/quickassets in relation to current liabilities.

y The ratios used for cash management are cash to current assets

ratio, cash to current liabilities ratio. Cash to current liabilitiesalso shows decreasing trend and cash to current assets ratioalso shows decreasing trend. All these ratios reveals thatmanagement has no definite cash policy.


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y Inventory turnover ratio depict the fluctuating trend which

indicates the accumulation of inventory in turn which cause

loss to the company by way of deterioration of stock, interest

loss on blockage of stock etc. Further composition of inventory

reveals that portion of individual element of inventory has

fluctuating trend which indicates that management has no

policy in respect of inventory management.

y Debtors Turnover ratio reveals an decreasing trend during theperiod of study and average collection period ranges from 38 to

46 days. Keeping in view of TWO WHEELER industry trend

credit period of 41 days is quite very higher. It reveals that

management has no specific policy in respect of debtors

management.


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Recommendations

y The increasing liabilities should be controlled by the

company and adequate measures are to be takenhenceforth .

y The company can reduce the cost of production and

try to improve its profitability.

y The cash management should be done more

effectively as a major portion comprises of current

assets which are present in the company .


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y High creditors payment period will affect the regular

supply of raw materials, so company can make

necessary steps to pay its creditors at reasonable timeperiod.


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EXTRAWORK

I WORKED ON ERP SOFTWARE PACKAGE IN

INDIA YAMAHA MOTORS PVT. LTD. MORETHAN ONE MONTH.


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Documents

Project Report of Ankush