# WCMITC

Essay by kadiyalaanoopUniversity, Master'sA-, August 2014

ANALYSIS OF PRINCIPLES OF WORKING CAPITAL

SIZE OF THE WORKING CAPITAL

Size of working capital=Current assets/ Total assets X 100

Size of the working capital of ITC-PSPD Ltd during the year

2010-2013

 Year Current Assets Total Assets Size of the Working Capital 2010 656.74 2602.54 25.23 2011 820.49 2987.09 27.47 2012 960.38 3397.39 28.27 2013 1034.5 3821.6 27.07 TOTAL 3472.11 12808.62 108.04 AVERAGE 868.0275 3202.155 27.01

Interpretation:

From the above table we find the size of the working capital period is increased in the year 2010 to 2012 there should be gradual to increased or decreased in the ratio of increased in the year 2010 to 2012 and decreased in the year 2013. On overall low ratio indicates high profits.

Size of Working Capital of ITC-PSPD

STRUCTURE OF THE CURRENT ASSETS

Structure of the current assets in working capital of ITC-PSPD Ltd during the year 2010-2013

 Particulars 2010 2011 2012 2013 Average a) Inventories 401.64 525.06 607.34 719.4 563.36 b) Sundry Debtors 146.57 159.13 201.36 213.19 180.0625 c) Cash & Bank Balances 1.73 0.56 2.69 7.13 3.0275 d) Interest Accrued on Loans & Deposits 0.15 0.09 0.09 0.08 0.1025 e) Deposits 8.92 8 10.46 11.95 9.8325 f) Loans & Advances 97.74 127.66 138.44 82.75 111.6475 Total 656.75 820.5 960.38 1034.5 868.0325

Interpretation:

From the above table we find the structure of the Total Current Assets in working capital is increased during the years 2010 to 2013.

The average value is 868.03 which is higher than the values of Current Assets during the years 2010 and 2011.

Structure of the Average of current assets in working capital of ITC-PSPD Ltd

STRUCTURE OF THE CURRENT LIABILITIES

Structure of the current liabilities of ITC-PSPD Ltd during the year 2010-2013

 Particulars 2010 2011 2012 2013 Average a) Hundies & Acceptances 1.19 0.93 2.07 2.16 1.59 b) Sundry Deposits 12.7 15.33 18.25 19.4 16.42 c) Sundry Creditors 243.21 165.17 167.04 202.52 194.49 d) Provisions 41.27 117.94 130.9 142.7 108.20 Total 298.37 299.37 318.26 366.78 320.70

Interpretation:

From the above table we find that structure of the current liabilities is increased during the years 2010 to 2013 with respect to Current Assets. The average value is 320.7 which is higher than the value of Current Liabilities in the years 2010 and 2011.

Structure of the Average of current liabilities of ITC-PSPD Ltd

STATEMENT OF CHANGES IN WORKING CAPITAL

Statement of changes in working capital of ITC-PSPD Ltd during the year 2010-2013

 Particulars 2010 2011 Increase Decrease Current Assets Inventories 401.64 525.06 123.42 - Sundry debtors 146.57 159.13 12.56 - Cash & Bank Balances 1.73 0.56 - 1.17 Interest Accrued on Loans & Deposits 0.15 0.09 - 0.06 Deposits 8.92 8 - 0.92 Loans & Advances 97.74 127.66 29.92 - Total CA (A) 656.74 820.49 Current Liabilities Hundies & Acceptances 1.19 0.93 - 0.26 Sundry Deposits 12.7 15.33 2.63 - Sundry Creditors 243.21 165.17 - 78.04 Provisions 41.27 117.94 76.67 - Total CL(B) 298.37 299.37 Net Working Capital (A-B) 358.37 521.12 Increasing In W.C 162.75 162.75 521.12 521.12 86.6 86.6

Interpretation:

From the table we find the Current Assets has been increased by over all value but the values of Cash & Bank balances, Interest Accrued on Loans & Deposits and Deposits has been decreased. Current Liabilities is also has been increased except Hundies & Acceptances and Sundry Creditors. The Net Working Capital has been increased by 162.75Crs.

Statement of changes in working capital of ITC-PSPD Ltd

Statement of changes in working capital of ITC-PSPD Ltd during the year 2010-2013

 Particulars 2011 2012 Increase Decrease Current Assets Inventories 525.06 607.34 82.28 - Sundry debtors 159.13 201.36 42.23 - Cash & Bank Balances 0.56 2.69 2.13 - Interest Accrued on Loans & Deposits 0.09 0.09 0 - Deposits 8 10.46 2.46 - Loans & Advances 127.66 138.44 10.78 - Total CA (A) 820.49 960.38 Current Liabilities Hundies & Acceptances 0.93 2.07 1.14 - Sundry Deposits 15.33 18.25 2.92 - Sundry Creditors 165.17 167.04 1.87 - Provisions 117.94 130.9 12.96 - Total CL(B) 299.37 318.26 Net Working Capital (A-B) 521.12 642.12 Increasing In W.C 121 121 642.12 642.12 120.99 121

Interpretation:

From the table we find out that the Current Assets and Current Liabilities have been increased in all the particulars. The overall Net working Capital has been increased by value 121.0Crs.

Statement of changes in working capital of ITC-PSPD Ltd