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WORKING CAPITAL MANAGEMENT OF
SOUTH EASTERN COALFIELD LIMITED
Presented By:-Aman Jaiswal
On19th November 2011
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Introduction of coal India ltd.
History
Milestone
Vision and Mission
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SECL is the largest coal producing company in the country. Itis one of the eight subsidiaries of CIL (A Govt. undertakingunder Ministry of Coal). SECL
Indias premier coal company is operating its coal mines inthe state of Madhya Pradesh and Chhattisgarh state which isalso geographically located at the heart of the country.
It is having 89 coal mines situated in the state of Madhya
Pradesh and Chhattisgarh.
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Mission of coal India ltd.To produce and market the planned quantity of coal and products
efficiently and economically with due regard to safety conservationand quality.
Vision of coal India ltd.To be the leading energy supplier in the country through bestpractice from mine to market.
Vision of south eastern coalfield ltd.To be the leading energy supplier in the country through bestpractice from mine to market.
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Working Capital Management
Working capital management is concerned with the problems arise in
attempting to manage the current assets, the current liabilities and the
inter relationship that exist between them.Working capital = current assets current liability
There are two concepts of working capital management:
Gross working capital Net working capital
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Ratio Analysis:Ratio analysis is the one of the powerful tools of the financial analysis.
Accounting ratios can be expressed in various ways such as: - A pure ratio, say ratio of current assets to current liabilities is 2:1.
A ratio, say current assets are two times of current liabilities.
A percentage, say current assets are 200% of current liabilities.
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1. Current Ratio
2. Working Capital Turnover Ratio.
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3. Net Profit Ratio
Interpretation:The increase in the ratio shows the better performance of the company
in the year 09-10 as compared to 08-09.
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The study of working capital management of south eastern coalfield
ltd. has revealed that the current ratio was as per the standard
industrial practice but the liquidity position of the company showed anincreasing trend.
Working capital of the company was increasing and showingpositive working capital per year.
Positive working capital indicates of the company.
Companys current assets were always more than requirement.
Current assets are more than current liabilities.
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On study and analysis of working capital. I would like to recommend.
Company should raise funds through short term sources
Company has to take control on cash balance.
Company should reduce the inventory holding period with use ofzero inventory concepts.
Over all company has good liquidity position and sufficient funds to
repayment of liabilities. Company has accepted conservative financial
policy and thus maintaining more current assets balance. Company isincreasing sales volume per year.
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