INTRODUCTION OF RSWM RSWM is a premier company of the Group, with a turnover of Rs.775 crore

(US$ 177 million). RSWM is exporting a complete range of yarn and fabric

to over 60 countries worldwide, giving RSWM a markedly visible presence

across the textile world.

The manufacturing capacity of the Company is upwards of 81,000 MT of

Yarn per annum from its five units - Gulabpura, Banswara, Mandpam,

Rishabhdev and Ringas located in Rajasthan. RSWM also manufactures

12 million meters of fabric per annum at its Gulabpura unit.

PRESENT POSITION OF TAXTILE INDUSTRY The Indian textile industry contributes about 14 per cent to industrial

production, 4 per cent to the country's gross domestic product (GDP) and

17 per cent to the country’s export earnings, according to the Annual Report

2014-15 of the Ministry of Textiles.

It provides direct employment to over 35 million people and is the second

largest provider of employment after agriculture.

According to the Ministry of Textiles, the cumulative production of cloth

during April’14- March’15 has increased by 8.3 per cent as compared to

the corresponding period of the previous year.

RESEARCH METHODOLOGY OBJECTIVE OF THE STUDY:-

To analyze financial position of the organization to execute

the routine operations and meet for contingencies.

To study the working capital management of RSWM Ltd.,

Banswara.

To practically understand the concept of working capital

studies in academic session.

To study the trends & reasons for deviation.

INTRODUCTION TO WORKING CAPITAL MANAGEMENT

CONCEPTS OF WORKING CAPITALGROSS WORKING CAPITAL:

Simply called as working capital, it refers to the firm’s investment in current assets. Current assets are the assets, which can be converted into cash within an accounting year (or operating cycle), and include cash, short-term securities, debtors, bills receivables and stock (inventory).

NET WORKING CAPITAL (NWC)NWC = Current Assets – Current Liabilities Current liabilities are those claims of outsiders, which are expected to mature

for payment within an accounting year (or operating cycle) and include creditors, bills payable and outstanding expenses.

Net working capital can be positive or negative. A positive net working capital will arise when current assets exceed current liabilities. On the other hand, negative working capital occurs when current liabilities are in excess of current assets.

 The gross working capital concept focuses attention on two aspects of current

assets management. Optimum investment in current assets. Financing of current assets.

COMPONENTS OF WORKING CAPITAL The main components of the Working Capital Management are as

follows:

Receivable Management.

Cash Management

Inventory Management

Payables Management

In the form of an equation, the operating cycle process can be expressed as follows:

Operating cycle = R + W + F + D – C

Where,

R = Raw material and stores storage period.

W = Work-in-Progress period.

F = Finished goods storage period.

D = Debtors collection period

C = Credit payment period.

FINDINGS

Since, the Working Capital of RSWM Banswara is increasing every year but the Current Assets & Current Liabilities are decreasing from the last year, these is due to following reasons:-

In Current Assets, Inventory & Loans & Advances are increases from the last years. But Other Current Assets & Cash & Bank balance is decreases, specially there is a drastically change in Cash & Bank Balance. If we see the figures of Cash & Bank in Balance-Sheet, we can find that there is increase in Cash in hand & Saving a/c of the company, but decrease in fixed deposits of the firm in 2014-15 from Rs. 70.40 lakhs to Rs. 7.12 Lakhs. All these Cash are invested in the Fixed Assets or Inventory of the firm and this is happening every year. This shows that company is running at the high risk. So company should increase its cash & bank balance for good liquidity.

Current Liabilities was also decreased from 5669.41 to 4643.34 in 2014-15 this is due to the no provision made in the year 2014-15 & also the low Working Capital loans.

If we see the changes we find that Current Assets & Current Liabilities of 2013-14 is increased from 2012-13 Such a volatility in current assets & current liabilities indicates poor working capital management of the company and it must be controlled, other wise it must be harmful in future for the company.

CONCLUSION RSWM Banswasra is one of the most leading companies of LNJ Bhilwara Group. It

has proper resources to manage its production cycle. All the departments of RSWM Banswara are well coordinated with each other. It has its customers in both global and domestic market.

RSWM has the latest technology for the production. The SQC and CPPC departments are also strong. RSWM has policies like Environment Policy & Quality Policy. It has a good brand image and good brands.

RSWM has also dad considerable success with major modernization schemes involving almost total replacement of outdated equipments & production methods, achieving capacity utilization. Also, RSWM has carried out many engineering & maintenance improvements, resulting in lower operating costs.

In order to conclude, it can be said that Working Capital Management is effective only through proper blend of Cash Management, Receivables Management, Inventory Management & Payables Management.

Company’s policy regarding management of all these are clean set. Company keeps its position secure in both Debtors & Creditors dealings. The profit & turnover of the company is increasing every year. The structural health of Working Capital is improving continuously.It is a prosperous, growing firm which would attain heights in coming years.

LIMITATION OF THE STUDY

This study was restricted to RSWM Ltd. (Banswara Unit) only and therefore,

the result of this study cannot be generalized to other parts of the units.

The study was relayed upon the information given by the respondents at the

time of interview.

Due to confidentially of certain information all the details could not be

obtained from the company.

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