Project Report

On
“A STUDY OF WORKING CAPITAL MANAGEMENT OF
WELSPUN ENTERPRISES LTD

Submitted to
Rashtrasant Tukadoji Maharaj Nagpur University

In Partial Fulfillment of degree of

Bachelor of Business Administration in
the faculty of commerce
Finance Management

Submitted By
VAIBHAV SAHARE

Under the Guidance of

CA Dr.Manish Shah

G H Raisoni College Of Commerce, Science & Technology

Nagpur (2023-2024)
 Declaration

I,Vaibhav sahare hereby declare that the project entitled

“STUDY OF WORKING CAPITAL MANAGEMENT OF

WELSPUN ENTERPRISES LTD” is a record of independent

research work carried out by me under the supervision and guidance

of CADr.manish s h a h . This has not been previously

submitted for the award of any Diploma/ Degree of this or any other

university.

Place : Nagpur Signature

Date : (Vaibhav sahare)

 Acknowledgement

It is my pleasure to place on record my sincere gratitude towards

my guide CA Dr. manish shah who spent her precious time
providing innovative ideas and expert guidance to my project work.
It was her direction and encouragement at every moment and step
that motivated me to steer the research work confidently and
successfully.
I am grateful to Dr. Aarti Deshpande, Director , Dr. Jasvinder
Kaur , Officiating Principal, Dr. Pankaj Pethe HOD BBA
Department , for their encouragement, moral support and the
valuable guidance and also thankful to Teaching and Non-teaching
staff for their continuous help to complete this project.
I am also grateful to CA Manish shah sir& Dr Jasvinder Kaur
Mam , without their constant support and timely help my project
would never been completed.
I am indebted to my respected parents because of whose
blessings, I have been able to carry out this work successfully. I am
also thankful to all those who have directly or indirectly helped me
for this project work.

Place : Nagpur Signature

Date : Vaibhav Sahare

INDEX
Chapter No. Particulars Page
No.
Chapter -1 INTRODUCTION
Chapter- 2 COMPANY PROFILE
Chapter- 3 AIMS & OBJECTIVES
Chapter- 4 RESEARCH METHODOLOGY
Chapter- 5 DATA ANALYSIS AND
INTERPRETATIONS
Chapter- CONCLUSION & SUGGESTIONS

BIBLIOGRAPHY/ REFERENCES
ANNEXURE
 hggh

T
INTRODUCTION

Working capital, also known as net working capital (NWC), is the difference between a company's
current assets, such as cash, accounts receivable (customer's unpaid bills), and inventories of raw
materials and finished goods, and its current liabilities, such as accounts payable. NWC is a measure
of a company's liquidity and refers to the difference between operating current assets and operating
current liabilities. Working capital is a measure of company's liquidity, operational efficiency, and
short term financial health. If a company has substantial positive working capital, then it should have
the potential to invest and grow.

If a company's current assets do not exceed its current liabilities, then it may have trouble growing or
paying back creditors, or even go bankrupt. To calculate working capital, compare a company's
current assets to its current liabilities. Current assets listed on a company's balance sheet include
cash, accounts receivable, inventory, and other assets that are expected to be liquidated or turned into
cash in less than one year. Current liabilities are due within 12 months. Working capital that is in line
with or higher than industry average for a company of comparable size is generally considered
acceptable. Low working capital may indicate a risk of distress or default.

Working Capital management is a business strategy designed to ensure that a company operates
efficiently by monitoring and using its current assets and liabilities to the best effect. Working
Capital management can improve a company's earnings and profitability through efficient use of its
resources. Management of working capital includes inventory management as well as management
of accounts receivables and account payables. The objectives of working capital management, in
addition to ensuring that the company has enough cash to cover its expense and debt, are minimizing
the cost of money spent on working capital, and maximizing the return on asset investments.

Importance of Working Capital Management

Efficiently maintaining a balanced ratio between current assets and current liabilities is called
working capital management. Significance of Working Capital management ensures that the
company has enough monetary liquidity to meet short term debts. Structuring an effective working
capital management is a great way to enhance the income. Ratio analysis and management of
individual components of working capital are two primary importance of Working Capital
Management.

1. Ratio Analysis- Process of determining and analysing numerical relationships in accordance to

financial statements like balance sheets, income statements and cash inflow statements is known as
ratio analysis. The primary purpose of ratio analysis is to appraise the operating and financial
performance of an economic activity and determine its efficiency, profitability, liquidity and
solvency. It also helps in getting a brief idea about comparative valuation by comparing ratios of
different companies in the same sector.

2. Inventory Management- Inventory management has huge importance of working capital

management, it involves overseeing the purchase of new items and managing the existing ones. It
aims to create such a purchase plan that will ensure effective delivery of materials. Two most use
inventory management strategies are "just-in-time" method and "Material Required Planning". In
former one the firm plans to receive items at the time of need rather than maintaining high inventory
levels, and the latter one is based sales forecasts.

3. Cash Management- Cash management is process of collecting, managing and utilizing the
cash inflow to optimize the short-term financial stability. The key component in accomplishing this
task is solvency as an importance of working capital management. Successful cash management is
useful when any unexpected demand for cash occurs unexpectedly.

Objectives of Working Capital Management

Management of working capital is one of the key objectives of working capital management. It
assists the business management to properly allocate their resources in order to achieve quarterly
business goals and objectives. Applying the correct ratios will reveal the management strategies and
techniques along with some additional necessary analysis. Controlling working capital, Managing
working capital and effectively managing resources, all this terms means the same. Some additional
financial indicators have always been considered for effective
management such as turnover ratio, ratio of collection, performance ratio, etc. All these can
effectively accomplish when following best standard in the industry, setting objectives of working
capital as well as an art of working capital management.

1. Optimization of Working Capital Operating Cycle-

In simple terms, working capital cycle starts from the day raw materials are acquired and completes
when the finished products are sold. One of the major objectives of working capital management is
to ensure that there is no hindrance during the above mentioned process. It includes collecting and
processing raw materials and other initial investment in time, placing all the essentials for production
beforehand, selling finished products as soon as possible, collecting account receivables on time and
clearing all the account payable's in time.

2. Balance Working Capital-

The good net working capital is required to stay in a stable equilibrium. The ratio of current assets
and current liabilities should be optimized. Because the lower value of this ratio implies that
company is not financially stable to clear its current debts, higher value is also not an indication of
prosperity, it suggests that company has too many inventories and they are not investing in excess
cash.

3. Minimize Cost of Capital:

Working capital management focuses on minimizing cost of capital, rate of interest in some special
cases. It is only when the cost of capital will be lesser than revenue, one can earn profit. Utilization
of long-term funds (in proper mix) is one way of minimizing capital cost. The fundamental principle
of financial management should be followed sincerely while deciding the finance mix, always. The
principle states that long term sources should finance fixed assets and permanent assets. Also, the
short-term or temporary assets should be financed .

4. Assists the Business to Avoid Over-borrowing:

Over-borrowing is among the quickest techniques towards business growth as well as business
failure. The objectives of working capital management out of over-borrowing leads to
mismanagement of finance as well as assets. Their business goes far beyond their financial goals
which leads towards financial failure for a business. A proper working capital management will
definitely give you a warning sign where you can put your control towards business expansion.

5. Optimal Return on Current Asset Investment:

The return on the investment infused on short term assets must exceed the average cost of capital to
ensure wealth maximization. In other words, the rate of return earned from the investment in short
term assets should exceed the rate of interest or cost of capital. Objectives of working capital
management aims to extract maximum from an investment in current assets to ensure higher
profitability.

6. Expansion of Company's Investment:

Money you saved from effective working capital management tactics is being an inexpensive source
of finance that can be used for your business expansion, funds for existing projects or company's
investment toward expansion of their idea and vision towards growth of an organization.

7. Healthy Relation with Suppliers/Providers:

When a business has defined objectives of working capital and engaging its best management
concerning its working capital along with other financial indicators. Then lenders, suppliers, non-
trade creditors as well as provides will be more interested in carrying a business with you. Their
understanding of the business, management setup will definitely boost confidence within the
business as well as in the transactions of a company.

Types of Working Capital

1. Gross Working Capital:

Balance sheet reporting current assets of the firm tend to be popularly known as gross working
capital. Current assets are those short-term assets that can easily converted to cash within one year of
time-frame. The reason why asset liquidity in in nature? It is mainly because their liabilities occurs
any time and never hold off for the liquidation of current assets and resource. This gap or mismatch
produces is overcome by opting short term financing options.

2. Net Working Capital / Working Capital:

Net working capital is a very often used types of working capital in companies. Here are the two
ways to derive net working capital. Firstly, you can find net working capital merely by finding
difference in current assets over current liabilities from the sheet of the business. Secondly, net
working capital is a subset of current assets which are informally / indirectly financed by long-term
assets. Net working capital is considered most important types of working capital for management
decisions on working capital financing.

Factors affecting Working Capital

1)Length of Operating Cycle

2) Nature of Business

3)Scale of Operation

4)Business Cycle Fluctuation

5)Seasonal Factors

6) Technology and Production Cycle

7)Credit Allowed

8)Credit Avail
9)Operating Efficiency

10) Availability of Raw Materials

11) Level of Competition

Operating Cycle Concept

Working capital is also called a circulating capital or revolving capital. That is the money/capital
which circulates in various forms of current assets in a continued manner. For example, at a point of
time, funds may be tied up in raw materials, then later converted into semi-finished products, then
intofinished/ final products and when these finished products are sold, it is converted either into
account receivables or cash.

This cash is reinvested in current assets. Thus, the amount always keeps on circulating or revolving
from cash to current assets and back again to cash. That is why some people prefer to use the term
liquidity management instead of working capital management. Although this circulation takes place
at short intervals, the money is required again and again. The American Institute of Certified Public
Accountants defined the operating cycle as: "the average time intervening between the acquisition of
material or services entering the process and the final cash realisation."

According to I. M. Pandey, "Operating cycle is the time duration involved in the acquisition of
resources, conversion of raw materials into work- in- process into finished goods, conversion of
finished goods into sales and collection of sales." Thus, operating cycle of a manufacturing
enterprise involves three phases

1. Acquisition of resources such as raw material, labour, power and fuel etc.

2. Manufacture of the product which includes conversion of raw material

into work-in-progress into finished goods.

COMPANY

,
INTRODUCTION

The roads and water construction industry is a vital sector that underpins the development and
economic prosperity of a nation. It encompasses a wide range of activities involved in the planning,
design, construction, and maintenance of roads, bridges, dams, canals, water treatment plants, and
other infrastructure projects.

Roads Construction

Road construction involves the creation of new roads, as well as the rehabilitation and maintenance
of existing ones.

Road construction
This sector includes various specializations, such as highway construction, bridge construction, and
paving.
Roads are essential for transporting goods and people, and they play a critical role in facilitating
trade, tourism, and economic development.
Water Construction

Water construction focuses on building and maintaining infrastructure that supplies water for various
purposes, including drinking water, irrigation, and industrial use.

Water construction
Key projects in this sector include dams, reservoirs, canals, water treatment plants, and wastewater
treatment facilities.

A reliable and safe water supply is essential for public health, sanitation, and food security. The
market size for roads and water construction in India is lumped together under the broader category
of transportation infrastructure construction. Here's a breakdown of what we know:
Estimated Market Size:

 The Indian Transportation Infrastructure Construction Market is estimated at a whopping

USD 143.60 billion in 2024 [Mordor Intelligence].
 This market is expected to grow at a healthy Compound Annual Growth Rate (CAGR) of
7.76%, reaching USD 208.71 billion by 2029 [Mordor Intelligence].

Growth Drivers:

 Massive government investments are a key driver. Initiatives likeA Bharatmala Pariyojana
(highway development) and Gati Shakti National Master Plan (infrastructure development)
are fueling growth [TechSci Research, PR Newswire]
 Increasing urbanization and a booming logistics sector are creating a demand for better roads
and efficient freight movement [GII Research, Mordor Intelligence].
 Foreign Direct Investment (FDI) is another growth factor, with funds flowing into
infrastructure development projects [TechSci Research].

GOVERNMENT INITIATIVE

India has several government initiatives focused on roads and water construction. Here are two major
ones:

1. Bharatmala Pariyojana:

 Launched in 2017, this ambitious program aims to improve India's road network for efficient
movement of people and goods.
 It focuses on:
o Building new highways (around 34,800 km) to bridge critical infrastructure gaps.
o Expanding existing highways and improving their efficiency.
o Developing coastal roads, ring roads, and expressways for faster connectivity.
 This initiative is overseen by the Ministry of Road Transport and Highways.
 You can find progress reports and details on the Press Information Bureau website:
pib.gov.in.
2. Gati Shakti National Master Plan:

 Launched in 2021, this broader plan aims to develop holistic infrastructure across sectors.
 It includes a focus on improving connectivity through:
o Efficient freight movement
o Modernization of railways
o Building multi-modal logistics parks
 This plan aims to break silos between ministries and ensure better coordination for
infrastructure projects.

KEY INVESTMENTS AND DEVELOPMENT

India is making significant strides in roads and water construction, driven by massive government
investments and a growing need for improved infrastructure. Here's a breakdown of key areas:

Investments:

 Public-Private Partnerships (PPP): The government is increasingly relying on PPPs to

attract private investment for road and water projects. This reduces the financial burden on
the government while leveraging private expertise [KPMG].
 Foreign Direct Investment (FDI): FDI is another crucial source of funding. The
government has relaxed FDI norms in infrastructure sectors, making it easier for foreign
companies to invest [Invest India].
 Focus on Green Infrastructure: There's a growing focus on sustainable practices.
Investments are being made in building eco-friendly roads using recycled materials and solar
power for toll plazas [Economic Times].

Developments:

 Smart Roads: Technologies like intelligent transportation systems (ITS) are being
implemented to improve traffic management, safety, and efficiency. This includes real-time
 traffic monitoring, automatic toll collection systems, and accident detection systems
[SmartCitiesWorld].
 Water Resource Management: Developments are happening in areas like rainwater
harvesting, desalination plants for coastal areas, and micro-irrigation techniques for water
conservation [National Read Today].
H
AIMS AND OBJECTIVES

AIM

The aim of this project was to get knowledge of working capital and working capital managements,
and how it plays a vital role in any firm as well as how it beneficial to know about how efficiently
any firm is operating and how financially stable it is in the short term.

OBJECTIVES

As the research was done with the help of secondary data, objectives were to study the working
capital of WELSPUN ENTERPRISES LTD of 5 years. After the study acknowledged that working
capital is the money used to cover all of a company's short-term expenses, including inventory,
payments on short-term debt, and day-to-day expenses called operating expenses. Working capital is
critical since it is used to keep a business operating smoothly and meet all its financial obligations
within the coming year.
RESEARCH

METHODOLOGY
RESEARCH METHODOLOGY

Research may be defined as a systematic and objective analysis and recording of controlled
observations that may lead to the development of generalization of principles or theories
resulting in prediction and possibly ultimate control of events.

Methodology is often used in a narrow sense to refer to methods, technology or tools

employed for the collection data as well as it's processing. This is also used something to
designate data collected to arrive at the conclusion.

Research methodology simply refers to the practical "how" of any given piece of research.
More specifically, it's about how a researcher systematically designs a study to ensure valid
and reliable results that address the research aims and objectives.

The methodology chapter should justify the design choices, by showing that the chosen
methods and techniques are the best fit for the research aims and objectives, and will
provide valid and reliable results. A good research methodology provides scientifically
sound findings, whereas a poor methodology doesn't.

Why do we need Research?

Research is a careful and detailed study of a particular problem or concern, using scientific
methods. An in-depth analysis of information creates space for generating new questions,
concepts and understandings. The main objective of research is to explore the unknown
and unlock new possibilities. It's an essential component of success.
1) Expands Your Knowledge Base

One of the greatest benefits of research is to learn and gain a deeper understanding. The
deeper you dig into a topic,the more well-versed you are ,furthermore, research has the
power to help you build on any personal experience you have on the subject.

2) Keeps You Up to Date

Research encourages you to discover the most recent information available. Updated
information prevents you from falling behind and helps you present accurate information.
You're better equipped to develop ideas or talk about a topic when you're armed with the
latest inputs.

3) Builds Your Credibility

Research provides you with a good foundation upon which you can develop your thoughts
and ideas. People take you more seriously when your suggestions are backed by research.
You can speak with greater confidence because you know that the information is accurate.

4) Sparks Connections

Take any leading non-profit organization, you'll see how they have a strong research arm
supported by real-life stories. Research also becomes the base upon which real-life
connections and impact can be made. It even helps you communicate better with others
and conveys why you're pursuing something.

5) Encourages Curiosity

As we've already established, research is mostly about using existing information to create
new ideas and opinions. In the process, it sparks curiosity as you're encouraged to explore
and gain deeper insights into a subject. Curiosity leads to higher levels of positivity and
 lower levels of anxiety

Objectives of Research

Well-defined objectives of research are an essential component of successful research

engagement. If you want to drive all aspects of your research methodology such as data
collection, design, analysis and recommendation, you need to lay down the objectives of
research methodology. In other words, the objectives of research should address the
underlying purpose of investigation and analysis.

It should outline the steps you'd take to achieve desirable outcomes. Research objectives help
you stay focused and adjust your expectations as you progress. The objectives of research should be
closely related to the problem statement, giving way to specific and achievable goals. Here are the
four types of research objectives for you to explore:

General Objectives

Also known as secondary objectives, general objectives provide a detailed view of the aim
of a study. In other words, you get a general overview of what you want to achieve by the
end of your study. For example, if you want to study an organization's contribution to
environmental sustainability, your general objective could be: a study of sustainable
practices and the use of renewable energy by the organization.

Specific Objectives

Specific objectives define the primary aim of the study. Typically, general objectives
provide the foundation for identifying specific objectives. In other words, when general
objectives are broken down into smaller and logically connected objectives, they're known
as specific objectives. They help define the who, what, why, when and how aspects of your
project. Once you identify the main objective of research, it's easier to develop and pursue
a plan of action.
Types of Research

1) Theoretical Research

Theoretical research, also referred to as pure or basic research, focuses on generating

knowledge, regardless of its practical application. Here, data collection is used to generate
new general concepts for a better understanding of a particular field or to answer a
theoretical research question. Results of this kind are usually oriented towards the
formulation of theories and are usually based on documentary analysis, the development of
mathematical formulas and the reflection of high-level researchers.

2) Applied Research

The goal is to find strategies that can be used to adres a specific research problem. Applied
research draws on theory to generate practical scientific knowledge, and its use is very
common in STEM fields such as engineering, computer science and medicine. This type of
research is subdivided into two types:

a) Technological applied research:

looks towards improving efficiency in a particular productive sector through the

improvement of processes or machinery related to said productive processes.

b) Scientific applied research:

has predictive purposes. Through this type of research design, we can measure certain
variables to predict behaviours useful to the goods and services sector, such as
consumption patterns and viability of commercial projects.

c) Exploratory Research
Exploratory research is used for the preliminary investigation of a subject that is not yet
well understood or sufficiently researched. It serves to establish a frame of reference and a
hypothesis from which an in-depth study can be developed that will enable conclusive
results to be generated. Because exploratory research is based on the study of little-studied
phenomena, it relies less on theory and more on the collection of data to identify patterns
that explain these phenomena.

d) Correlational Research

The purpose of this type of scientific research is to identify the relationship between two or
more variables. A correlational study aims to determine whether a variable change, how
much the other elements of the observed system change.

e) Research Process

All research endeavours share a common goal of furthering our understanding of the
problem and thus all traverse through certain basic stages, forming a process called the
research process.

a) Formulating the research problem- The researcher must choose the problem he wants to
study and decide the area of interest and subject matter to be enquired about.

b) Extensive literature survey- After choosing the research problem, an extensive

literature survey is done and a brief summary of the problem is formulated.

c) Development of a working hypothesis- A working hypothesis must be stated in clear

terms.

d) Preparing the research design- The research is designed depending upon its utility and
appropriateness for a particular research problem. Accuracy, reliability and validity of data
must be ensured.
e) Determining sample design- Sampling can be either probability sampling or non-
probability sampling. The researcher must carefully select a sampling procedure and
sample size.

f) Collecting data- There is a need to collect reliable data to carry out an efficient research.
It may be done using methods like observation, interview, questionnaires, schedules, etc.

g) Analysis of data Analysis of data involves the application of many tools and techniques
to the raw data to make meaningful and useful interpretations.

h) Hypothesis testing- After the analysis of data, the researcher tests the hypothesis
formulated by him/her in earlier stages.
L
Year Current asset-current liability
2018-2019 45647 lakh
2019-2020 37468 lakh
2020-2021 29331 lakh
2021-2022 60611 lakh
2022-2023 1833.02 cr

Current asset-current liability

200000

180000

160000

140000

120000

100000

80000

60000

40000

20000

0
2019 2020 2021 2022 2023
Liquidity Ratio

Current Ratio

Current Ratio measures the firm's short-term solvency or ability of the firm to pay off it's current
liabilities out of current assets, Ideal current ratio is 2:1

Year Liquidity ratio

2018-2019 1.46
2019-2020 1.39
2020-2021 1.31
2021-2022 1.06
2022-2023 1.90
Average 1.42

Liquidity ratio
2

1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Average

Conclusion
The table shows the statio for the last five years Current ratio for the year 2018-19 higher it is 1.46
for the year. The financial year 2021-2022 has the lowest current ratio which 1.06. The average ratio
is 1.42.
Quick Ratio

It establish the relationship between quick assets and current liabilities. It is a measure of instant debt
paying ability of the firm. The idea quick ratio is 1:1.

Year Quick ratio

2018-2019 1.46
2019-2020 1.39
2020-2021 1.31
2021-2022 1.03
2022-2023 1.86
Average 1.41

Quick ratio
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Average

Conclusion

The table shows the current ratio for the last five years. Current ratio for the year 2022-23 is higher.
It is 1.86 for the year. The financial year 2021-2022 has the lowest carent ratio which is 1.03. The
average ratio is 1.41
Profitability ratio

Gross profit ratio

It is the ratio of gross profit to sales expresses as percentage. It is also known as gross margin

Year Ratio
2018-2019 14.93
2019-2020 17.78
2020-2021 20.49
2021-2022 23.01
2022-2023 14.17
Average 18.07

Gross Profit Ratio

25

20

15

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Average

Conclusion

The table shows the current ratio for the last five years. Current ratio for the year 2021-2022 is
higher. It is 23.01 for the year. The financial year 2022-2023 has the lowest current ratio which is
14.17 The average ratio is 18.07 times
Net Profit Ratio

Net profit ratio shows the relationship between net profit and net sales. It measures the overall
profitability as well as efficiency of the business

Year Net Profit Ratio

2018-2019 7.90

2019-2020 9.39

2020-2021 8.98

2021-2022 8.94

2022-2023 26.35

Average 12.31

Net Profit Ratio

30

25

20

15

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Average

Conclusion
The table shows the current ratio for the last five years. Current ratio for the year 2022-2023 is
higher. It is 26.35 for the year. The financial year 2018-2019 has the lowest current ratio which is
7.9. The average ratio is 12.31.
Return on Investment

It is abo known as return on capital employed, this shows the relationship between profit
before interest and tax and capital employed.

Year Ratio
2018-2019 13.83
2019-2020 13.52
2020-2021 8.00
2021-2022 6.90
2022-2023 12.16
Average 10.88

ROI Ratio
16

14

12

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Average

Conclusion
The table of shows the current ratio for the last five years. Current ratio for the year 2018-2019 is
higher. It is 13.83. The financial year 2021-2022 has the lowest current ratio which 6.90. The
average ratio is 10.88.

Return on Total assets

Return on total assets measures the earning when compared with total asset of the firm. It shows the
relationship between net profit and total assets.

Year Ratio
2018-2019 4.37
2019-2020 4.77
2020-2021 2.69
2021-2022 2.11
2022-2023 14.15
Average 5.61

ROA Ratio
16

14

12

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Average

Conclusion

The table shows the current ratio for the last five years. Current estro for the year 2022-2023 higher.
It is 14.15 for the year. The financial year 2021-2022 has the lowest current ratio which is 2.11. The
avenge ratio is 5.61

Return on Shareholders fund.

Return on shareholders fund shows the relationship between profit and shareholder's fund. It
measures the profitability from shareholders point of view Year.

Year Ratio
2018-2019 8.71
2019-2020 9.42
2020-2021 7.65
2021-2022 6.96
2022-2023 30.67
Average 12.68

Ratio
35

30

25

20

15

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Average

Conclusion
The table shows the current ratio for the last five years. Ratio for the year 2023 s higher it is 30.67
for the yes. The financial year 2021-22 has the lowest current ratio which is 6.96. The average ratio
is 12.68.

Asset Turnover Ratio

Asset turnover ratio shows the relationship between net sales and net assets.

Year Ratio
2018-2019 66.95
2019-2020 65.70
2020-2021 44.25
2021-2022 0.39
2022-2023 0.68
Average 35.59

Ratio
80

70

60

50

40

30

20

10

0
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 Average
Conclusion

The table shows the current ratio for the last five years. Current into for the year 2018-19 is higher. It
is 66.95 for the year. The financial year 2021-2022 has the lowest current ratio which in 0.39. The
average ratio is 35.59

&
The analysis of Welspun Enterprises' working capital over the past five years provides valuable
insights into the company's financial health and performance. Various ratios have been examined,
including liquidity ratios, profitability ratios, and efficiency ratios. Here's a comprehensive
conclusion based on the data provided:

Liquidity Ratios:
Welspun Enterprises' liquidity position, as indicated by the current ratio and quick ratio, shows
fluctuations over the years. The current ratio, which ideally should be around 2:1, has been below
this benchmark in recent years, indicating a potential strain on short-term solvency. However, there
has been an improvement in the most recent year, with the current ratio reaching 1.90, suggesting
better liquidity compared to previous years. The average current ratio stands at 1.42, reflecting a
stable but slightly concerning liquidity position.

Profitability Ratios:
The company's profitability, measured through gross profit ratio, net profit ratio, return on
investment, return on total assets, return on shareholders' fund, has demonstrated variability over the
years. While there have been periods of strong profitability, notably in the financial years 2021-2022
and 2022-2023, with exceptionally high ratios in some cases, there have also been downturns in
profitability in other years. The average profitability ratios present a mixed picture, indicating the
need for further examination into the factors influencing profitability fluctuations.

Efficiency Ratios:
The asset turnover ratio provides insight into the efficiency of Welspun Enterprises in utilizing its
assets to generate sales. The ratio has shown fluctuations over the years, with a significant decline
observed in the financial years 2020-2021 and 2021-2022. The sharp decrease in asset turnover
during these years could be indicative of operational inefficiencies or changes in the company's
business model that affected its ability to generate revenue from its assets. However, the average
asset turnover ratio remains relatively healthy at 35.59, suggesting overall efficiency in asset
utilization.

Overall Assessment:
The analysis of Welspun Enterprises' working capital and financial performance indicates a mixed
picture. While there are areas of strength, such as improved liquidity in the most recent year and
periods of strong profitability, there are also areas of concern, including fluctuations in profitability
and a decline in asset turnover in certain years. It is essential for the company to closely monitor its
working capital management practices, streamline operations, and focus on enhancing profitability
and efficiency to ensure sustained growth and financial stability.

Recommendations:

Based on the analysis, several recommendations can be proposed to Welspun Enterprises:

1. Enhanced Working Capital Management: Implement strategies to optimize working capital

management, including efficient inventory management, timely receivables collection, and prudent
payables management to improve liquidity ratios.

2. Cost Control Measures: Focus on cost optimization initiatives to improve profitability margins,
ensuring sustainable and consistent profitability over the long term.

3. Operational Efficiency: Streamline operations and enhance efficiency to improve asset turnover
ratios, thereby maximizing the utilization of resources and driving revenue growth.

4. Investment in Growth Areas: Identify and invest in growth opportunities that align with the
company's core competencies and strategic objectives to enhance shareholder value and long-term
sustainability.

5. Regular Performance Monitoring: Establish robust monitoring mechanisms to track key financial
metrics regularly and identify early warning signs of potential challenges, enabling proactive
management interventions.

In conclusion, while Welspun Enterprises has demonstrated strengths in certain areas of its financial
performance, there are also areas that warrant attention and improvement. By addressing the
identified challenges and implementing the recommended strategies, the company can position itself
for sustained growth, profitability, and long-term success in the competitive business landscape.
1. www.moneycontrol.com

2. www.welpunenterprises.com

3. www.wikipedia.org

4. www.google.com
L
BALANCE SHEET OF WELSPUN ENTERPRISES
Mar- Mar- Mar- Mar- Mar-
particulars 23 22 21 20 19
Equities &
Liabilities
Share Capital 149 149 148 148 148
Reserves &
2,202 1,641 1,535 1,430 1,305
Surplus
Current
2,039 1,549 1,014 1,024 999
Liabilities
Other Liabilities 713 2,554 2,089 511 439
Total Liabilities 5,106 5,894 4,788 3,116 2,892
Assets
Fixed Assets 76 1,934 1,505 170 200
Current Assets 3,872 1,641 1,332 1,424 1,456
Other Assets 1,157 2,317 1,950 1,520 1,235
Total Assets 5,106 5,894 4,788 3,116 2,892
Other Info
Contingent
651 1,143 1,000 1,130 1,392
Liabilities
PROFIT & LOSS Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
ACCOUNT OF
WELSPUN
ENTERPRISES (in Rs.
Cr.)
12 mths 12 mths 12 mths 12 mths 12 mths
INCOME
REVENUE FROM 2,702.07 1,395.30 1,529.36 1,807.48 1,781.37
OPERATIONS
[GROSS]
Less: Excise/Sevice 0 0 0 0 0
Tax/Other Levies
REVENUE FROM 2,702.07 1,395.30 1,529.36 1,807.48 1,781.37
OPERATIONS [NET]
TOTAL OPERATING 2,758.19 1,401.40 1,529.51 1,807.59 1,786.60
REVENUES
Other Income 143.45 173.59 142.01 111.84 73.87
TOTAL REVENUE 2,901.64 1,574.99 1,671.52 1,919.43 1,860.47
EXPENSES
Cost Of Materials 390.12 63.71 6.05 8.62 17.32
Consumed
Purchase Of Stock-In 0 0 0 0 0
Trade
Operating And Direct 1,724.71 912.67 1,129.51 1,428.88 1,429.23
Expenses
Changes In Inventories 0 0 0 0 0
Of FGWIP And Stock In
Trade
Employee Benefit 149.46 109.94 82.81 87.14 80.84
Expenses
Finance Costs 118.76 139.97 110.45 77.36 53.66
Depreciation And 13.1 15.93 15.99 22.54 11.49
Amortisation Expenses
Other Expenses 246.26 166.1 139.74 73.37 66.3
TOTAL EXPENSES 2,642.41 1,408.32 1,484.55 1,697.91 1,658.84
PROFIT/LOSS 259.23 166.67 186.97 221.52 201.63
BEFORE
EXCEPTIONAL,
EXTRAORDINARY
ITEMS AND TAX
Exceptional Items 482.99 0 0 0 19.85
PROFIT/LOSS 742.22 166.67 186.97 221.52 221.48
BEFORE TAX
TAX EXPENSES-
CONTINUED
OPERATIONS
Current Tax 47.66 25.16 29.27 58.83 77.66
Less: MAT Credit 0 0 0 0 0
Entitlement
Deferred Tax 9.37 16.09 20.27 -7.22 2.56
Other Direct Taxes 0 0 0 0 0
TOTAL TAX 57.01 41.25 49.54 51.61 80.22
EXPENSES
PROFIT/LOSS AFTER 685.21 125.42 137.43 169.91 141.26
TAX AND BEFORE
EXTRAORDINARY
ITEMS
PROFIT/LOSS FROM 685.21 125.42 137.43 169.91 141.26
CONTINUING
OPERATIONS
PROFIT/LOSS FOR 726.85 125.42 137.43 169.91 141.26
THE PERIOD
Minority Interest -3.3 -1.4 -1.19 -2.25 -0.07
CONSOLIDATED 722.76 124.7 128.99 148.88 126.69
PROFIT/LOSS AFTER
MI AND ASSOCIATES
OTHER ADDITIONAL
INFORMATION
EARNINGS PER
SHARE
Basic EPS (Rs.) 48 8 9 10 9
Diluted EPS (Rs.) 48 8 9 10 9
DIVIDEND AND
DIVIDEND
PERCENTAGE
Equity Share Dividend 134.97 22.34 29.74 29.62 22.13
Tax On Dividend 0 0 0 4.96 4.54
PROFIT & LOSS ACCOUNT OF Mar-23 Mar-22 Mar-21 Mar-20 Mar-19
WELSPUN ENTERPRISES (in
Rs. Cr.)

12 mths 12 mths 12 mths 12 mths 12 mths

INCOME
REVENUE FROM OPERATIONS 2,702.07 1,395.30 1,529.36 1,807.48 1,781.37
[GROSS]
Less: Excise/Sevice Tax/Other 0 0 0 0 0
Levies
REVENUE FROM OPERATIONS 2,702.07 1,395.30 1,529.36 1,807.48 1,781.37
[NET]
TOTAL OPERATING REVENUES 2,758.19 1,401.40 1,529.51 1,807.59 1,786.60

Other Income 143.45 173.59 142.01 111.84 73.87

TOTAL REVENUE 2,901.64 1,574.99 1,671.52 1,919.43 1,860.47
EXPENSES
Cost Of Materials Consumed 390.12 63.71 6.05 8.62 17.32

Purchase Of Stock-In Trade 0 0 0 0 0

Operating And Direct Expenses 1,724.71 912.67 1,129.51 1,428.88 1,429.23

Changes In Inventories Of FGWIP 0 0 0 0 0

And Stock In Trade

Employee Benefit Expenses 149.46 109.94 82.81 87.14 80.84

Finance Costs 118.76 139.97 110.45 77.36 53.66

Depreciation And Amortisation 13.1 15.93 15.99 22.54 11.49
Expenses
Other Expenses 246.26 166.1 139.74 73.37 66.3
TOTAL EXPENSES 2,642.41 1,408.32 1,484.55 1,697.91 1,658.84
PROFIT/LOSS BEFORE 259.23 166.67 186.97 221.52 201.63
EXCEPTIONAL,
EXTRAORDINARY ITEMS AND
TAX
Exceptional Items 482.99 0 0 0 19.85
PROFIT/LOSS BEFORE TAX 742.22 166.67 186.97 221.52 221.48
TAX EXPENSES-CONTINUED
OPERATIONS

Current Tax 47.66 25.16 29.27 58.83 77.66

Less: MAT Credit Entitlement 0 0 0 0 0

Deferred Tax 9.37 16.09 20.27 -7.22 2.56

Other Direct Taxes 0 0 0 0 0
TOTAL TAX EXPENSES 57.01 41.25 49.54 51.61 80.22
PROFIT/LOSS AFTER TAX AND 685.21 125.42 137.43 169.91 141.26
BEFORE EXTRAORDINARY
ITEMS
PROFIT/LOSS FROM 685.21 125.42 137.43 169.91 141.26
CONTINUING OPERATIONS

PROFIT/LOSS FOR THE PERIOD 726.85 125.42 137.43 169.91 141.26

Minority Interest -3.3 -1.4 -1.19 -2.25 -0.07

CONSOLIDATED PROFIT/LOSS 722.76 124.7 128.99 148.88 126.69
AFTER MI AND ASSOCIATES

OTHER ADDITIONAL
INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 48 8 9 10 9
Diluted EPS (Rs.) 48 8 9 10 9
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 134.97 22.34 29.74 29.62 22.13
Tax On Dividend 0 0 0 4.96 4.54