Project Report

On
“ Study of Working Capital Management Of Amber
Enterprises India Limited ”

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
Sanvi Tumane

Under the Guidance of

Dr. Manish Shah

G H Raisoni College Of Commerce, Science & Technology

Nagpur (2023-2024)

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 Declaration

I, Sanvi Tumane hereby declare that the project entitled

“Study of Working Capital Management Of Amber Enterprises

India Limited” is a record of independent research work carried

out by me under the supervision and guidance of Dr.Manish Shah.

This has not been previously submitted for the award of any

Diploma/ Degree of this or any other university.

Place : Nagpur Signature

Date : Sanvi Tumane

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 Acknowledgement

It is my pleasure to place on record my sincere gratitude

towards my guide Dr. Manish Shah , who spent his precious time
providing innovative ideas and expert guidance to my project
work. It was his 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, 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 Dr. Manish Shah & Dr. Jyoti Pillay ,
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 : Sanvi Tumane

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 INDEX
Chapter No. Particulars Page
No.
Chapter -1 INTRODUCTION 5-14
Chapter- 2 COMPANY PROFILE 15-18
Chapter- 3 AIMS & OBJECTIVES 19-20
Chapter- 4 RESEARCH METHODOLOGY 21-29
Chapter- 5 DATA ANALYSIS AND 30-41
INTERPRETATIONS
Chapter- 6 CONCLUSION 42-43

BIBLIOGRAPHY/ REFERENCES 44-45

ANNEXURE 46-56

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INTRODUCTION

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 INTRODUCTON
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.

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A Comprehensive Study of Working Capital Management of Amber Enterprises
India Limited:

Working capital management is a business tool that helps companies effectively make use of
current assets, helping companies to maintain sufficient cash flow to meet short term goals
and obligations. By effectively managing working capital, companies can free up cash that
would otherwise be trapped on their balance sheets. As a result, they may be able to reduce
the need for external borrowing, expand their businesses, fund mergers or acquisitions, or
invest in R&D. Working capital is essential to the health of every business, but managing it
effectively is something of a balancing act. Companies need to have enough cash available to
cover both planned and unexpected costs, while also making the best use of the funds
available. This is achieved by the effective management of accounts payable, accounts
receivable, inventory and cash.
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
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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.
Conclusion-

These importance of working capital management will assist you in maintaining optimum
inventory level. Also, you can build your strategies and techniques to clear aged inventories,
improve working capital, generate cash and much more. Your steps towards significance of
working capital management will definitely improve your brand loyalty as well as profitability
for your organization.

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 managerment 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

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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 by short-term sources of finance.

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 warming 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.

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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 is a problematic 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

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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

12)Inflation

13)Growth Prospects

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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 into finished/ 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.

3. Sale of the product either for cash or on credit. Credit sales create account receivable for
collection.

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The operating cycle or circulation flow of money can best he projected in the
following manner-

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Different forecasting method of Working Capital

1) Cash Forecasting Method

2) Balance Sheet Method
3) Profit and Loss Adjustment Method
4) Percentage of Sales Method
5) Operational Cycle Method
6) Regression Analysis Method

1)Cash Forecasting Methods

In this cash forecasting method, the working capital is calculated by using the closing balance
of the cash. In this case, consider the payments and receipts are made in the same period.

2)Balance Sheet Method

In the balance sheet method, the forecasting is made on the basis of difference between
assets and liabilities of the firm. This will show the cash surplus or cash deficiency of the
organization.

3)Profit and Loss Adjustment Method

This method is used to determine the forecasted profit and loss statement of the firm. The
cash loss will be adjusted with more cash supply.

4)Percentage of Sales Method

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This method has simple procedures which are easy to understand. To determine the
percentage of sales, the firm requires its past statistics of sales.

5)Operational Cycle Method

The total operational cycle of an organization consists of several processes. To calculate the
operational cycle of an organization, the working capital of purchase of raw material to its
conversion into cash is considered. Each of this activity is evaluated in terms of numbers of
days and required amount of investment. The total of each stage of investment is the overall
working capital of the firm.

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COMPANY PROFILE

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 COMPANY PROFILE
AMBER ENTERPRISES INDIA LIMITED

Established in the Year 1990 Amber Enterprises India Limited is the most backward
integrated market leader in the Indian Room Air Conditioner (RAC) industry. The Company
has a presence across both, the components space and finished goods, in the HVAC industry.
Our diversified product portfolio includes Room AC (indoor & outdoor units as well as window
ACs), Reliable Critical Components, and Mobility Applications for railways, metros, buses, and
defence, among others. We also provide solutions under Commercial Air Conditioners (CAC)
for higher tonnage ACs. The Company’s 27 state-of-the-art manufacturing facilities are
spread across strategic locations pan India in proximity to the customers – ensuring quicker
turn-around time. This enables us to deliver higher quality products at a much more efficient
and faster pace to our top marquee clientele across RAC and other divisions in the industry.
Amber’s backward integration coupled with strong R&D capabilities, secures a higher
proportion in the ODM industry for the Company.
Amber Enterprises India Limited was incorporated as a Private Limited Company with the
name Amber Enterprises India Private Limited on April 2, 1990 at Jalandhar, Punjab. The
Company converted into a Public Limited and consequently, name of the Company was
changed to Amber Enterprises India Limited on September 22, 2017.The Company is a market
leader in Room Air Conditioner (RAC) original equipment manufacturer (OEM)/original design
manufacturer (ODM) industry in India. The Company is engaged in the business of
manufacturing of consumer durable products. It design and manufacture wide range of
products which includes RAC, RAC & Non-RAC components & HVAC solutions for mobility
applications. It currently has 23 manufacturing facilities across 8 locations in India, located
close to customers enabling faster turnaround. The Company designs and manufactures
complete RACs including window air conditioners (WACs) and indoor units (IDUs) and outdoor
units (ODUs) of split air conditioners (SACs) with specifications ranging from 0.75 ton to 2
ton, across energy ratings and types of refrigerant. It designs and manufactures Inverter
RACs on ranging from 1 ton to 2 ton. It manufactures critical and reliability functional
components of RACs such as heat exchangers, motors, inverter and non-inverter printed
circuit boards and multi-flow condensers. It manufactures other RAC components such as
sheet metal components, copper tubing and injection molding components. It also
manufactures components for other consumer durables and automobiles such as case liners

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for refrigerator, plastic extrusion sheets and printed circuit boards for consumer durables
and automobile industry, sheet metal components for microwave, washing machine tub
assemblies and for automobiles and metal ceiling industries.The Companys key customers
include leading RAC brands such as Daikin, Hitachi, LG, Panasonic, Voltas and Whirlpool. It has
built strong and longstanding relationships with the customers by aligning its offerings with
their business needs. It provides them with a range of additive manufacturing solutions at
their doorsteps by supplying them components and RACs through OEM/ODM models. In
recognition of efficient services and products, the company has received several awards from
its customers such as Best of Best Performance Award from LG for 2015 and 2016 and
Leadership Business Innovation Award from Panasonic for 2015-2016.In 1994, the Company
established its first factory at Rajpura. During the year 2003-04, it commenced plant
operations at Dehradun for RAC manufacturing for LG. In 2004, Dehradun Factory Unit - 4
was established.In 2005-06, it started manufacturing microwave ovens for LG. in 2008, the
Companys Noida Ecotech unit commenced operations. During the year 2007-08, it started
manufacturing heat exchangers. In 2009, Dehradun Factory Unit - 5 was established. In 2010,
Kasna Unit, Kala Amb Unit, Pune Unit and Dehradun Factory Unit - 6 were established. In
2011, Green India Venture Fund made investment in the Company. In 2012, Jhajjar Unit was
established. During the year under review, Reliance Alternative Investments Fund - Private
Equity Fund Scheme - I made investment in the Company.The company entered into a share
purchase agreement (SPA) dated November 10, 2012 with Rakesh Dewan, Kavita Dewan and
PICL (India) Private Limited (PICL) for acquiring the entire shareholding of PICL for an
aggregate consideration of Rs 48.97 crore. As an integral part of the SPA, the parties also
entered into a non-compete and non-solicitation agreement dated November 10, 2012. PICL
is involved in the business of manufacturing various kinds of fractional horse power motors
for WACs, ODUs of SACs and commercial air conditioners.In 2017, Ascent Investment
Holdings Pte. Limited acquired the stake of Reliance Alternative Investments Fund - Private
Equity Fund Scheme - I in the company, thus providing exit to Reliance Alternative
Investments Fund - Private Equity Fund Scheme - I. During the year 2017-18, Appserve
Appliance Private Limited was incorporated as a Subsidiary of the Company. Amber
Enterprises India Limited entered into a Share Purchase Agreement dated November 11, 2017
with IL JIN, Hyun Chul Sim (HCS) and Su A Lee (SAL) for purchase of 1,320,613 equity shares
of IL JIN from HCS, equivalent to 70% of IL JINs outstanding equity shareholding, which
completed on December 28, 2017. The Board of Directors of Amber Enterprises India Limited
at its Meeting held on March 9, 2018, acquired 70% Equity Share Capital of Ever Electronics
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Private Limited (EVER). On 29 June 2018, the Company informed the stock exchanges that
Promoters of Ever Electronics Private Limited (EVER) has requested for extension of time
limit for completing the Condition Precedent for acquiring balance 51% of stake of total
Share Capital of Ever by the Company i.e. Amber Enterprises India Limited. Pursuant to
above request, Company has extended the timeline to complete the acquisition of balance
stake of 51% by December 31, 2018 in one or more tranches. As on date, the Company has
made an investment of 571.50 Lakh for acquisition of 1,040,149 Equity Shares of Ever
Electronics Private Limited (EVER) which represents 19% of the total Share Capital of
EVER.The Company has executed Letter Agreement dated 1st October 2018 entered into by
and between the Company i.e. Amber Enterprises India Limited, Ever Electronics Private
Limited, Vision Creative Limited and Mr. Hyun Chul Sim, by virtue of said Agreement, and
Ever has become the subsidiary of Amber. In FY 2018-19, on 17 October 2019, Company
acquired 51% stake of equity share capital of EVER, and consequently became the subsidiary
of AEIL on 1 October 2018. In FY 2019-20, it acquired 80% stake of equity share capital of
Sidwal Refrigeration Industries Private and became subsidiary of the Company effective from
02 May, 2019.In financial year 2020-21, Company acquired balance 20% stake of equity share
capital of Sidwal Refrigeration Industries Private Limited on 18 September 2020, and Sidwal
became Wholly Owned Subsidiary of the Company.During financial year 2021-22, IL JIN
Electronics (India) Private Limited (IL JIN) and Sidwal Refrigerations Industries Private
Limited (SIDWAL), were material subsidiaries of the Company. The Company have started
three new facilities one in Kadi (Ahmedabad), other in Supa (Pune) and third one in Chennai
(Kancheepuram) for expanding Room Air Conditioners and Components capacities along with
geographical reach.During FY 2021-22, the Company invested USD 100,000 in Amber
Enterprises USA Inc. and has become Wholly Owned Subsidiary of the Company w.e.f. 13
September, 2021. The Company acquired 73% stake in the equity share capital of AmberPR
Technoplast India Private Limited on slump sale basis during 2021-22 and became a subsidiary
of the Company with effect from 1 December 2021. It acquired 60% stake in the equity
capital of Pravartaka Tooling Services Private Limited and became a subsidiary of the
Company effective from 01 February, 2022.During the Financial Year 2022-23, the Company
started 5 new manufacturing facilities for expanding Room Air Conditioners and Components
capacities along with geographical reach, one in Sri City (Andra Pradesh), second in Supa
(Maharashtra), third in Rudrapur (Uttarakhand), fourth in Thiruvallur (Chennai) of its
subsidiary Pravartaka and fifth of Kanchipuram, (Tamil Nadu) of the material subsidiary, IL
JIN Electronics (India) Private Limited.
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AIMS AND OBJECTIVES

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 AIMS AND OBJECTIVES

AIM

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

OBJECTIVES

 To explain working capital management.

 To understand the working capital management of Amber Enterprises India Limited.

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RESEARCH METHODOLOGY

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 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.

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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
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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

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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 address 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.

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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.
i) Generalizations and interpretations- The hypothesis testing may be favorable or
unfavorable. The researcher arrives at generalizations based on the result of the hypothesis
testing.

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j) Preparation of the research report-It contains a detailed report of the study or research
along with the conclusion of the study.

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Flow Chart for better understanding of Research Process

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There are 2 methods of research: -Primary research and Secondary research.

Primary Research

Primary research is defined as a methodology used by researchers to collect data directly,

rather than depending on data collected from previously done research. Technically, they
"own" the data. Primary research is solely carried out to address a certain problem, which
requires in-depth analysis.

Primary Research can be both Qualitative and quantitative.

Qualitative primary research: Qualitative primary research involves gathering information

from open-ended interviews which include questions that cannot be answered with yes or no.
You can get a lot of information from such interviews and also find out about the dislikes,
likes, requirement, and trends.

Quantitative primary research: Quantitative primary research involves the collection of

numerical information from surveys. This information is then analysed.

Secondary Research

Secondary research or desk research is a research method that involves using already existing
data. Existing data is summarized and collated to increase the overall effectiveness of
research. Secondary research includes research material published in research reports and
similar documents. These documents can be made available by public libraries, websites, data
obtained from already filled in surveys etc. Some government and nongovernment agencies
also store data, that can be used for research purposes and can be retrieved from them.
Secondary research is much more cost-effective than primary research, as it makes use of
already existing data, unlike primary research where data is collected first hand by
organizations or businesses or they can employ a third party to collect data on their behalf.

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Research Methodology used for study

For the completion of this study the research methodology used is the Analytical research.
Moreover, the data collected and compiled for the purpose of this study is secondary data
collected from books, websites and webpage.

Limitations

When you lack working capital, you can't pay your bills. This can cause legal problems,
including the seizure and closure of your business. It's important to make sure that you have
credit sources ready to help you out whenever you run out of cash.

DATA ANALYSIS AND INTERPRETATION

The analysis of Working Capital Management of Amber Enterprises India ltd. is completely
based on Balance Sheet and Profit and Loss Account. The analysis is done with the help of
Annual Reports of five years i.e., from 2019-2023.

Balance Sheet

A balance sheet is a financial statement that reports a company's assets, liabilities and
shareholders' equity at a specific point in time, and provides a basis for computing rates of
return and evaluating its capital structure. It is a financial statement that provides a
snapshot of what a company owns and owes, as well as the amount invested by shareholders.

Profit and Loss Account

The profit and loss (P&L) statement is a financial statement that summarizes the revenues,
costs, and expenses incurred during a specified period, usually a fiscal quarter or year. The P&L
statement is synonymous with the income statement. These records provide information
about a company's ability or inability to generate profit by increasing revenue, reducing costs,
or both. Some refer to the P&L statement as a statement of profit and loss, income

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statement, statement of operations, statement of financial results or income, earnings
statement, or expense statement.

DATA ANALYSIS AND

INTERPRETATIONS

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 DATA ANALYSIS

Components of Current Assets

2019 2020 2021 2022 2023

Inventories 56,062.17 65,569.55 71,628.89 84,084.77 1,09,128.27
Investments 5,294.47 11,976.51 19,117.96
Trade 78,716.35 85,420.16 1,06,899.17 1,31,491.25 1,76,309.34
Receivables
Cash and Cash 4,013.48 7,001.67 17,996.29 29,858.30 32,317.99
Equivalents
Other Bank 453.82 5,025.63 10,996.87 26,400.81 23,626.76
Balances
Loans 1,311.90 1,867.96 2,191.70 180.94 186.76
Other Financial 4,616.08 4,527.93 818.29 2,455.01 3,248.09
Assets
Other Current 3,111.37 3,906.39 3,768.81 10,356.48 19,667.30
Assets
Total Current 1,48,285.17 1,73,319.29 2,19,594.49 2,96,804.07 3,83,602.47
Assets

Components Of Current Assets Of 2018 -2019

3%
3%
3% Inventories

Trade Receivables
38%
Cash and Cash Equivalents

Other Financial Assets

53%
Others

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Components Of Current Assets Of 2019 -2020

6%
4% 3%
Inventories
Trade Receivables
38%
Cash and Cash Equivalents
Other Bank Balances
49% Others

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Components Of Current Assets Of 2020 -2021

5%

5%
8% Inventories
33% Trade Receivables
Cash and Cash Equivalents
Other Bank Balances

49% Others

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 Components Of Current Assets Of 2021 -2022

8%
9% Inventories
28%
Trade Receivables
10%
Cash and Cash Equivalents
Other Bank Balances
Others
44%

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 Components Of Current Assets Of 2022 -2023

11%

6% Inventories
28%
8% Trade Receivables
Cash and Cash Equivalents
Other Bank Balances
Others
46%

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Components of Current Liabilities

Particulars 2019 2020 2021 2022 2023

Borrowings 8,947.86 18,169.47 18,441.35 69,950.53 76,712.69
Trade Payables 94,072.47 1,10,678.03 1,31,694.96 1,70,209.44 2,30,387.69
Lease Liabilities 244.25 251.79 627.09 2,079.39
Other Financial 5,703.79 9,571.99 8,977.33 11,679.08 12,424.55
Liabilities
Other Current 5,244.85 5,634.08 6,718.68 9,704.11 21,940.79
Liabilities
Provisions 47.03 194.50 225.44 354.56 591.15
Government 27.62
Grants
Current Tax 798.98 188.87 1,328.78 265.95 715.94
Liabilities
Total Current 1,14,814.98 1,44,681.19 1,67,638.33 2,62,790.76 3,44,879.82
Liabilities

Components of Current Liabilities Of 2018 - 2019

4%
5% 8%

1%
Borrowings
Trade Payables
Other Financial Liabilities
Other Current Liabilities
Others
82%

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Components of Current Liabilities Of 2019 - 2020

4%
13%
7%

0% Borrowings
Trade Payables
Other Financial Liabilities
Other Current Liabilities
Others
76%

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Components of Current Liabilities Of 2020-2021

5%
11%
5%

Borrowings
Trade Payables
Other Financial Liabilities
Others

79%

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Components of Current Liabilities Of 2021-2022

4%

4%
27%
Borrowings
Trade Payables
Other Financial Liabilities
Others
65%

Components of Current Liabilities Of 2022-2023

6%
5%
22%
Borrowings
Trade Payables
Other Current Liabilities
Others
67%

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 Working Capital Calculation

Working Capital = Current Assets – Current Liabilities

Year Working Capital

2018-2019 33,470.19
2019-2020 28,638.10
2020-2021 51,956.16
2021-2022 34,013.31
2022-2023 38,722.65

Working Capital
60,000.00

50,000.00

40,000.00

30,000.00

20,000.00

10,000.00

0.00
2018-2019 2019-20202020-2021 2021-20222022-2023

Interpretation

Above table and graph shows the working capital for five consecutive financial years. Wherein
2020-2021 has highest working capital and there is gradual increasing trend in 2021-2022 and
2022-2023. 2020-2021 has highest working capital among all.

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Debtors Turnover Ratio Calculation

Debtors Turnover Ratio = Sales

——————-¬¬¬¬¬————
Accounts Receivable

Year Debtors Turnover Ratio

2018-2019 3.50
2019-2020 4.64
2020-2021 2.86
2021-2022 3.22
2022-2023 3.95

Debtors Turnover Ratio

5

4.5

3.5

2.5

1.5

0.5

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

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Interpretation
As the debtors turnover ratio is increasing year on year it’s good for the company. 2019-
2020 has the highest debtors turnover ratio which means that during that financial year
company collected it’s payments quickly. From 2020-2021 to 2022-2023 there is increasing
trend of debtors turnover ratio.

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Creditors Turnover Ratio Calculation
Creditors Turnover Ratio = Credit Purchases
———————————
Accounts Payable
Year Creditors Turnover Ratio
2018-2019 2.47
2019-2020 3.00
2020-2021 1.92
2021-2022 2.07
2022-2023 2.57

Creditors Turnover Ratio

3.5

2.5

1.5

0.5

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

¬¬

Interpretation
The creditors turnover ratio is highest in 2019-2020 which means that during that financial

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year company made it’s payments quickly. Creditors turnover ratio from year 2021-2022 and
2022-2023 is in increasing trend.

Stock Turnover Ratio Calculation

Stock Turnover Ratio = Cost Of Goods Sold
———————————
Inventory

Year Stock Turnover Ratio

2018-2019 4.92
2019-2020 6.05
2020-2021 4.27
2021-2022 5.04
2022-2023 6.39

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 Stock Turnover Ratio
7

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

Interpretation
The stock turnover ratio is in increasing trend from financial year 2020-2021 to 2022-20
and it’s good for the company. 2022-2023 has the highest stock turnover ratio which means
that during that financial year company effectively managed it’s inventory.

Working Capital Turnover Ratio Calculation

Working Capital Turnover Ratio = Sales
———————————
Working Capital

Year Working Capital Turnover Ratio

2018-2019 8.25
2019-2020 13.86
2020-2021 5.89
2021-2022 12.46
2022-2023 18.02

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 Working Capital Turnover Ratio
20

18

16

14

12

10

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

Interpretation
As the working capital turnover ratio is increasing year on year from 2020-2021 to 2022-
2023. Financial year 2022-2023 has the highest working capital turnover ratio which means
that during that financial year company effectively utilized its working capital.

Conclusion

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 Conclusion

 Working capital peaked in 2020-2021 and showed a gradual increase in 2021-2022 and
2022-2023.

 The debtors turnover ratio increased each year, indicating prompt payment collection,
with the highest ratio in 2019-2020.

 The creditors turnover ratio peaked in 2019-2020, suggesting quick payment to

creditors, with an increasing trend in 2021-2022 and 2022-2023.

 The stock turnover ratio increased from 2020-2021 to 2022-2023, indicating

efficient inventory management, with the highest ratio in 2022-2023.

 The working capital turnover ratio increased yearly from 2020-2021 to 2022-2023,
reaching its peak in 2022-2023, indicating effective utilization of working capital.

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 BIBLIOGRAPHY

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 BIBLIOGRAPHY

1) https://www.ambergroupindia.com/
2) https://www.indiainfoline.com/company/amber-enterprises-india-ltd/summary/45967

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ANNEXURE

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ANNEXURE

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