Working capital analysis of a steel plant

Type :

Research papers

Pages :

43 pages

Format :

.doc

Published date :

04/17/2009

Category :

Business & market

Sub category :

Finance

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Summary :

Introduction
Scope of finance
Importance of finance in today's world
A company's Financial Department
1. Central accounts section
2. Sales accounts section
3. Merchant billing section
4. Raw materials accounts section
5. Cost and budgeting section
6. Provident fund section
7. Cash section
Working capital
1. Gross working capital
2. Net working capital
3. Current assets
4. Current liabilities
Positive working capital and negative working capital
Operating cycle
Computation of working capital
Financial highlights
Working capital in relation to other companies
Budget
1. Meaning of budget
2. Objective
3. Creation of environment conducive to budgetary control
Stock accretion/decretion
Quality management system
1. Quality management system-general requirements
2. Management responsibility
3. Responsibility and authority
4. Management review
5. Resource management
6. Product realisation
7. Design and development
8. Purchasing information
Monitoring and measurement
Pollution and its impact
Conclusion

Abstract

Finance is the life blood of any business. As like without blood a human being cannot survive similarly without finance a business survive or run. Finance is aptly called as the science of money. It is the study of the principle and the methods of obtaining control of money from those who have saved it and administration for those whose control it passes to.
Traditionally the literature of business finance has emphasized that finance is either the management of working capital or the acquisition of funds. The principle of business finance is applicable to small and medium firms as well as for large firms. The business finance deals with the raising, administering and disbursing funds by the business units. Finance helps business entrepreneur and management in getting over their business problems and accomplishing their goals of wealth maximization. Knowledge of finance basis for making decision in all business matter. One such very important matter pertains to investment. An entrepreneur has to decide as to what capital expenditure the enterprise should make, what volume of funds should be raised and flow funds should be allocated to various investment outlets. With the help of capital budgeting, simultaneous and sensitively techniques the management can gainfully choose the most viable project the maximum result (profit) coupled with minimum risk.

The management also faces formidable problem of allocation of funds as among cash, receivable and inventories because they have to strike trade-off between two conflicting but equally important goals of the business. Higher the relative shares of the liquid of cash drain, other things being equal. However the profitability in that case will be less.
Besides dealing with day to day business problems, finance provides to the management such tools and techniques as are of considerable help in dealing with the episodic problems such as problems of re-organization, merger, consolidation and liquation.