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Working Capital Insights for ACC Ltd

Working capital is essential for businesses and ACC Ltd. It refers to a company's current assets and current liabilities. ACC Ltd's working capital includes inventory, debtors, cash, and payables that flow through the operating cycle from raw materials to finished goods to sales and cash. Effectively managing working capital can increase a company's efficiency, debt capacity, and ability to invest in fixed assets. The study analyzed ACC Ltd's inventory and debtors over time. It suggested increasing current assets and improving debtors collection to strengthen working capital management. Collaborating with customers and suppliers was also recommended to better forecast cash flows and reduce inventory levels.

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Sourabh Dhiman
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132 views12 pages

Working Capital Insights for ACC Ltd

Working capital is essential for businesses and ACC Ltd. It refers to a company's current assets and current liabilities. ACC Ltd's working capital includes inventory, debtors, cash, and payables that flow through the operating cycle from raw materials to finished goods to sales and cash. Effectively managing working capital can increase a company's efficiency, debt capacity, and ability to invest in fixed assets. The study analyzed ACC Ltd's inventory and debtors over time. It suggested increasing current assets and improving debtors collection to strengthen working capital management. Collaborating with customers and suppliers was also recommended to better forecast cash flows and reduce inventory levels.

Uploaded by

Sourabh Dhiman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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WORKING CAPITAL MANAGEMENT

OF ACC LTD.

Presented By
Kartik Koundal
Exam Roll No.17MBA0132
Concept of working capital:-
The word working capital is made of two words
• 1.Working Capital
Working capital : -
Working capital may be regarded as the life blood of business.
Working capital is of major importance to internal and
external analysis because of its close relationship with the
current day-to-day operations of a business. Every business
needs funds for two purposes.

• 2. Capital
The word capital means monetary value of all assets of the
business.
OPERATING CYCLE
• RAW MATERIAL
• WORK IN PROGRESS
• FINISH GOODS
• SALES
• DEBTORS & BILLS RECEIVABLES
• CASH
Significance of Working Capital
PAYMENT
TO
SUPPLIERS

EASY LOAN DIVIDEND


FROM DISTRIBUTI-
BANKS ON
SIGNIFICAN-
-CE OF
WORKING
CAPITAL

INCREASE INCREASE
EFFECIENC- DEBT
Y CAPACITY

INCREASE
IN FIX
ASSETS
Research Methodology

• OBJECTIVES OF THE STUDY


• The following are the main objective which has been undertaken in the present
study:
•
• To determine the amount of working capital requirement and to calculate various
ratios relating to working capital.
• To evaluate the financial performance of ACC limited using financial tools.
• To suggest the steps to be taken to increase the efficiency in management of
working capital.
• To collect the maximum accurate data related to the ACC Ltd.

Place of study:-
• The project study is carried out at the Finance Department of ACC cements Ltd.
corporate office Situated at Barmana (H.P). The study is undertaken the period
from 22nd MAY to 5th JULY 2018
Sources of Additional Working
Capital:-
More businesses fail for lack of cash than for
want of profit.
• Existing cash reserves
• Profits (when we secure it as cash!)
• Payables (credit from suppliers)
• New equity or loans from shareholders
• Bank overdrafts or lines of credit
• Long-term loans
Remember, a good supplier is
someone who will work with us
to enhance the future viability
and profitability of our company.
INVENTORY ANALYSIS

• By analyzing the 12 years data we can see that the value of


inventories is increasing over a no of year. It indicates that the
company is growing rapidly in cement sector. A company uses
inventory when they have demand in market. From other
point of view we can say that the liquidity of firm is blocked in
inventories but it is important to keep stocks due to
uncertainty of availability of raw material in time.
INVENTORY ANALYSIS
1200

1000

800

600
INVENTORY
400

200

0
2006 2010 2014 2018
SUNDRY DEBTORS ANALYSIS

• 1Debtors will arise only when credit sales are made. The above graph depicts that there is
continuous rise in the debtors of ACC Ltd in the successive years other than 2017.. It
represents an extension of credit to customers. The reason for increasing credit is
competition and company liberal credit policy but after that in the year 2017 and 2018 there
are no debtors of the company

300

250

200

150
SUNDRY DR.

100

50

0
2014 2016 2018
Suggestions
• It is suggested that the company has to
increase its current assets to meet its short-
term obligations.
• Company has to improve debtors’ collection
period continuously so that effective
receivable management will possible.
• Reserves should be utilized for the growth of
the company.
• While forecasting cash flow, the management
should take into account the impact of
unforeseen events, market cycles and actions by
competitors. The effect of unforeseen demands
of working capital should be factored in.
• Collaborating with the customers & suppliers
instead of being focused only on own operations
will also yield good results. If feasible, helping
them to plan their inventory requirements
efficiently to match their production with their
consumption will help reduce inventory levels.
THANK YOU

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