INTRODUCTION

Finance is the life blood of any industrial or commercial undertaking. It is

needed for starting the business and also to keep it going. Financial decisions also

affect the size and viability of the earning stream of profitability. The value of

firm is determined by financial policy decisions, such as risk and profitability.

The task of financial management is to strike a balance between risk and

profitability by contributing the highest long term value to the securities of the

firm. Financial decision, both past and present, affect the viability and control of

the firm. Financing is the critical management function which provides the means

of remedying weakness in other areas. Financing, thus is an integral part of

managerial function and responsibilities affecting an organization’s performance.

MEANING OF FINANCE

Finance may be defined as the provision of money at the time it is wanted.

Finance function may be defined as the procurement of funds and their effective

utilization. “Business finance is that business activity which is concerned with the

acquisition and conservation of capital funds in meeting financial needs and

overall objective of a business enterprise”. “Business finance can broadly be

defined as the activity concerned with planning, raising, controlling and

administering of the funds used in the business”.

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DEFINITION OF FINANCE

According to Guthmann and Dougall “Business finance can be broadly be

defined as the activity concerned with planning, raising, controlling and

administering of the funds used in the business”.

According to Wheeler “Business finance is that business activity which is

concerned with the acquisition and conservation of capital funds in meeting

financial needs and overall objectives of a business enterprise”

According to F.W.Paish “In modern money using economy finance may be

defined as the provision of money at the time it is wanted”.

APPROACHES TO FINANCE

A number of approaches are associated with finance function but for the sake

of convenience, various approaches are divided into two broad categories:

1. The Traditional Approach

2. The Modern Approach

1. THE TRADITIONAL APPROACH

The Traditional approach to the finance function relates to the initial stages

of its evolution during 1920s and 1930s when the term ‘Corporation Finance’ was

used to describe what is known in the academic world today as the ‘Financial

management’. The traditional concept of financial management included within

its scope the whole gamut of raising the funds externally. The finance manager

had also a limited role to perform. He was expected to keep accurate financial

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records, prepare reports on the corporation’s status and performance and manage

cash in a way that the corporation is in a position to pay its bills in time.

2. THE MODERN APPROACH

According to modern concept, financial management is concerned with

both acquisition of funds as well as their allocation. The new approach views the

term financial management in a broader sense. In this sense the central issue of

financial policy is the wise use of funds and the central process involved is a

rational matching of advantages of potential uses against the cost of alternative

potential uses so as to achieve the broad financial goals which an enterprise sets

for itself.

IMPORTANCE OF FINANCE

Finance is the life blood and nerve centre of a business, just as circulation

of blood is essential in the human body for maintaining life, finance is very

essential to smooth running of the business. It has been rightly termed as

universal lubricant which keeps the enterprise dynamic. No business, whether

big, medium or small can be stared without an adequate amount of finance. Right

from the very beginning i.e., conceiving an idea to business, finance is needed to

promote or establish the business, acquire fixed assets, make investigations such

as market surveys, etc., develop product, keep men and machine at work,

encourage management to make progress and create values. Even an existing

concern may require further finance for making improvement or expanding the

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business. Thus, the importance of finance cannot be over- emphasized and the

subject of business finance has become utmost important both to the

academicians and practicing managers.

The importance of corporate finance has arisen because of the fact that present

day business activities are predominantly carried on by company or corporate

form of organization, which has the following factors.

1. The increase in size and influence of the business enterprises.

2. Wide distribution of corporate ownership, and

3. Separation of ownership and management.

FORMS OF CAPITAL

Finance is defined as the provision of money at the time when it is required.

Every enterprise whether big, medium or small, needs finance to carry on its

operations and to achieve its targets. Capital required for a business can be

classified under two main categories, viz.

1. Fixed Capital

2. Working Capital

I.FIXED CAPITAL

It means the capital which is meant for meeting the permanent or long-

term needs of the business. According to Shubin, “Fixed Capital is the funds

required for the acquisition of those assets that are to be used over for a long

period”.

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 II.WORKING CAPITAL

Working capital funds are also needed for short-term purposes for the

purchase of raw materials, payment of wages and other day-to-day expenses, etc.

These funds are known as working capital.

DEFINITION

In the words of Shubin, “Working capital is the amount of funds necessary to

cover the cost of operating the enterprise”. According to Genesterberg,

“Circulating capital means current assets of a company that are changed in the

ordinary course of business from one form to another, as for example, from cash

to inventories, inventories to receivables, receivables into cash.

CLASSIFICATION OF WORKING CAPITAL

Kinds of Working Capital

On the Basis of Concept On the Basis of Time

Permanent or Fixed Working

Temporary
Capital
or Variable Working Capital
Gross Working CapitalNet Working Capital

Seasonal
Working
Regular Working Capital
Capital

Reserve Working Special Working Capital

Capital

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1.ON THE BASIS OF CONCEPT:

a.Gross Working Capital

The Gross Working Capital is the amount of funds invested in the various

components of current assets.

b.Net Working Capital

The Net Working Capital is the difference between current assets and

current liabilities. The concept of net working capital enables a firm to

determine the exact amount available at its disposal for operational

requirements.

2.ON THE BASIS OF TIME:

a.Permanent or Fixed Working Capital

Fixed working capital refers to that minimum amount of investment in all

current assets which is required at all times to carry out minimum level of

business activities. In other words, it represents the current assets required on a

continuing basis over the entire year. Tandon committee has referred to this type

of working capital as “core current assets”.

a. Issue of Shares

b. Issue of Debentures

c. Public Deposits

d. Ploughing Back of Profits

e. Loans from Financial Institutions, etc.

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a. Issue of Shares

Issue of shares is the most important source for raising the

permanent or long-term Capital. A Company can issue various types of shares

as Equity shares, Preference shares and Deffered shares. According to the

Companies Act 1956, However.

1 A public company cannot issue Deffered shares

2 Preference shares carry preferential rights in respect of dividend at a fixed

rate and in regard to the repayment of capital at the time of winding up of the

company.

3 Equity shares do not have any fixed commitment charge and the dividend

on these shares is to be paid subject to the availability of sufficient profits. As for

as possible a company should raise the maximum amount of permanent capital by

the issue of shares.

b. Issue of Debentures

A debenture is an instrument issued by the company acknowledging its debt

to its holder. It is also an important method of rising Long-term or Permanent

working capital. The debenture holders are the creditors of the company. A fixed

rate of interest is paid on debentures.

c. Public Deposits

Public deposits are the fixed deposits accepted by a business enterprise

directly from the public. In the past, public deposits were accepted by textile

industries in Ahmedabad and Bombay for periods of 6 months to 1 year.But now-

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a-days even long-term deposits for 5 to 7years are accepted by the business

houses.

d. Ploughing Back of Profits

Ploughing back of profits means the reinvestments by concern of its surplus

earnings in its business. It is an internal source of finance and is most suitable for

an established firm for its expansion, modernization and replacement etc.

e. Loans from Financial Institutions

Financial institutions such as Commercial Bank, Life Insurance corporation,

Industrial Finance Corporation of India, State Financial corporation, State

Industrial Development Corporation, Industrial Development bank of India. etc.

also provide short term , Medium-term and long –term loans. This source of

finance is more suitable to meet the medium-term demands of working capital.

b. Temporary or Variable Working Capital

 Temporary or variable working capital is the amount of working capital

which is required to meet the seasonal demands and some special

exigencies.

 Variable working capital can be further classified as seasonal working

capital and special working capital. Most of the enterprises have to provide

additional working capital to meet the seasonal and special needs.

The capital required to meet the seasonal needs of the enterprise is called

seasonal working capital.

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  Special working capital is that part of working capital which is required to

meet special exigencies such as launching of extensive marketing

campaigns for conducting research, etc.

The main sources of short-term working capital are as follows:

i. Indigenous Bankers

ii. Trade Credit

i. Installment Credit

ii. Advances

iii. Accounts Receivable credit

iv. Accrued Expenses

v. Deferred Incomes

vi. Commercial Paper

vii. Commercial Banks

i. Indigenous Bankers

Private money-lenders and other country bankers used to be the only

source of finance prior to the establishment of commercial banks. They

used to charge very high rates of interest and exploited the customers to the

largest extent possible.

ii. Trade Credit

Trade credit refers to the credit extended by the suppliers of goods in the

normal course of business. As present day commerce is built upon credit, the

trade credit arrangement of a firm with its suppliers is an important source of

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 short-term finance. When a firm delays the payment beyond the due date as

per the term of sales invoice, it is called stretching accounts payable

iii.Installment Credit

This is another method by which the assets are purchased and the

possession of goods is taken immediately but the payment is made in

installments over a pre-determined period of time, generally, interest is

charged on the unpaid price or it may be adjusted in the price.

iv. Advance

Some business houses get advances from their customers and agents

against orders and this source is a short-term source of finance for them. It is

a cheap source of finance and in order to minimize their investment in

working capital, some firms having long production cycle, specially the firms

manufacturing industrial products prefer to the advances from their

customers.

v. Accounts Receivable credit

A factor is a financial institution which offers services relating to

management and financing of debts arising out of credit sales. Factoring is

becoming popular all over the world on account of various services offered

by the institutions engaged in it.

vi.Accrued Expenses

Accrued expenses are the expenses which have been incurred but not yet

due and hence not yet paid also. These simply represent a liability that a firm

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 has to pay for the services already received by it. The most important items

of accruals are wages and salaries, interest, and taxes.

vii.Deferred Incomes

Deferred incomes are incomes received in advance before supplying

goods or services. They represent funds received by a firm for which it has to

supply goods or services in future.

viii.Commercial Paper

Commercial Paper represents unsecured promissory notes issued by

firms to raise short-term funds. It is an important money market instrument in

advanced countries like U.S.A, in India, the Reserve Bank of India

Introduced Commercial Paper in the Indian money market on the

recommendations of the working group on money market (Vaghul

Committee).

ix.Commercial Banks

Commercial Banks are the most important source of short-term capital.

The major portion of working capital loans are provided by commercial banks.

The different forms in which the banks normally provide loans and advances

are as follows:

a.Loans

b.Cash Credit

c.Overdraft

d.Purchasing and Discounting of Bills

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a. Loans

When a bank makes an advance in lump-sum against some security it is

called a loan. In case of a loan, a specified amount is sanctioned by the bank to

the customer

b. Cash Credit

A cash credit is an arrangement by which a bank allows his customer to

borrow money up to a certain limit against some tangible securities or

guarantees.

c.Overdraft

Overdraft means an agreement with a bank by which a current account-

holder is allowed to withdraw more than the balance to his credit upto a certain

limit. There is no restrictions for operation of overdraft limits.

d.Purchasing and Discounting of Bills

Purchasing and discounting of bills is the most important form in which a

bank lends without any collateral security. Present day commerce is built upon

credit. The seller draws a bill of exchange on the buyer of goods on credit.

IMPORTANCE OF WORKING CAPITAL

 Adequate working capital helps in maintaining solvency of the business by

providing uninterrupted flow of production.

 Sufficient working capital enables a business concern to make prompt

payments and hence helps in creating and maintaining goodwill.

 A concern having adequate working capital, high solvency and good credit

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 standing can arrange loans from banks and others on easy and favourable

terms.

 Adequate working capital also enables a concern to avail cash discounts on

the purchases and it reduces costs.

 Sufficient working capital ensures regular supply of raw materials and

continuous production.

 Adequate working capital can exploit favourable market conditions.

 Adequacy of working capital creates an environment of security,

confidence, high morale and creates overall efficiency in a business.

NEED FOR WORKING CAPITAL

 For the purchase of raw materials, components and spares.

 To pay wages and salaries.

 To incur day-to-day expenses and overhead costs such as fuel, power and

Office expenses etc.

 To meet the selling costs as packing, advertising, etc.

 To provide credit facilities to the customers.

 To maintain the inventories of raw material, work-in-process, stores and

spares and finished stock.

OBJECTIVES OF WORKING CAPITAL

1. It ensures the technical and commercial solvency and creditworthiness of

the concern.

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 2. Make it possible to avail of cash discount facilities offered to it by the

suppliers.

3. Improves the moral of the executives and their efficiency reaches its highest

peak and

4. Enables to maintain a sound bank and trade relations.

Improper management or lack of working capital management may

lead to the failure and even the close of a business undertaking.

CIRCULATION SYSTEM OF WORKING CAPITAL

Working capital refers to the investment made in current or circulatory

assets such as cash, inventory, receivables etc. All such assets are likely to be

convertible into cash within one trading cycle, generally a year.

In a manufacturing concern, the working capital cycle starts with the

purchase of raw material and ends with the realization of cash from the sale of

finished goods. The cycle involves purchase of raw materials and stores, its

conversion into stock of finished goods through work-in-progress with

progressive increment of labour and service costs, conversion of finished stock

into sales, debtors and receivables and ultimately realization of cash and this

cycle goes on continues again from cash to purchase of raw material and so on.

The revolving nature of current assets consisting of working capital has been

made clear by the following diagram.

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 Debtors
Cash

` Raw Materials
Sales

Finished goods Work in Process

PRINCIPLES OF WORKING CAPITAL MANAGEMENT:

The following are the general principles of sound working capital

management policy.

Principle of Working Capital Management

Principle of Risk Variation

Principle of Cost of Capital
Principle of Principle of
Equity Position Maturity of Payment

A.PRINCIPLE OF RISK VARIATION:

Risk here refers to the inability of a firm to meet its obligations as and

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 decreases when they become due for payment. Larger investment in current

assets with less dependence on short-term borrowings increases liquidity,

reduce risk and thereby decrease the opportunity for gain or loss.

B. PRINCIPLE OF COST OF CAPITAL:

The various sources of raising working capital finance have different

cost of capital and the degree of risk involved. Generally, higher the risk

lower is the cost and lower the risk higher is the cost. A sound working

capital management should always try to achieve a proper balance between

these two.

C.PRINCIPLE OF EQUITY POSITION:

This principle is concerned with planning the total investment in current

assets. According to this principle, the amount of working capital invested

in each component should be adequately justified by a firm’s equity

position

D.PRINCIPLE OF MATURITY OF PAYMENT:

This principle is concerned with planning the sources of finance for

working capital. According to this principle, a firm should make every

effort to relate maturities of payment to its flow of internally generated

funds. Maturity pattern of various current obligations is an important factor

in risk assumptions and risk assessments.

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ANALYSIS OF WORKING CAPITAL

The analysis of working capital is an important one because it helps to

measure the efficiency of the financial policies and procedures adopted by the

industry. The techniques used to analyze the working capital are given below:

1. Statement or Schedule of Changes in Working Capital

2. Working Capital Ratio

3. Comparative Statement

4. Common Size Statement

5. Cash Flow Statement

6. Working Capital Budgeting

1. Statement or Schedule of Changes in Working Capital

This is an effective analytical tool to examine the trend in working

capital. This analysis explains the changes in individual item of Current Assets

and Current Liabilities and also the effect of such changes in working capital.

The change in the amount of any current asset or current liability in the

current balance sheet as compared to that of the previous balance sheet either

results in increase or decrease in working capital. The difference is recorded

for each individual current asset and current liability. In case a current asset in

the current period is more than in the previous period, the effect is an increase

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in working capital and it is recorded in the increase column. But a current

liability in the current period is more than in the previous period, the effect is

decrease in working capital and it is recorded in the decrease column and vice

versa. The total increase and the total decrease are compared and the

difference shows the net increase or net decrease in working capital.

The general rule is that the increase in current assets will increase the

working capital and any decrease in the current assets will decrease the

working capital and any increase in current liabilities will decrease the

working capital and decrease in current liabilities will increase the working

capital.

2. Working Capital Ratio

The working capital position of the company may be evaluated through

the use of working capital ratios.

Ratios relating to working capital are the measures of liquidity and as

such the primary objects is to determine the liquidity that is the probable

ability to meet its short-term obligations. The analysis of working capital is

very useful to the management in order to appraise, interpret and review the

effectiveness of the working capital.

The following ratios have been calculated.

A. Current Ratio

B. Liquid Ratio

C. Absolute Liquid Ratio

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 D. Inventory Turnover Ratio

E. Debtors Turnover Ratio

F. Average Collection Period

G. Creditors Turnover Ratio

H. Average Payment Period

I. Working Capital Turnover Ratio

A. Current Ratio

Current ratio may be defined as the relationship between current

assets and current liabilities. It is also known as working capital ratio or 2 to

1 ratio

Current Assets
Current Ratio = -------------------------
Current Liabilities

B.Liquid Ratio

Liquid ratio may be defined as the relationship between quick/liquid

assets and current or liquid liabilities. An asset is said to be liquid if it can

be converted into cash within a short period without loss of value.

Inventories and prepaid expenses cannot be termed to be liquid asset

because they cannot be converted into cash immediately without a

sufficient loss of value. It is 1 to 1 ratio.

Liquid Assets

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Liquid Ratio = -------------------------
Current Liabilities

C. Absolute Liquid Ratio

This ratio is concerned with relationship between the absolute liquid

assets and current liabilities. The ratio does not take into consideration the

inventory and debtors in the liquid assets. Likewise bank overdraft is not

included in the current liabilities since it may be a permanent arrangement

made by the company with the bank.

Absolute Liquid Assets

Absolute Liquid Ratio = -------------------------------
Current Liabilities

D.Inventory Turnover Ratio

Inventory turnover ratio indicates the number of times the stock has

been turned over during the period. A high turnover indicates the quick

turnover of financial goods.

Net sales (OR)

Cost of Goods Sold
Inventory Turnover Ratio = -------------------------------
Average Inventory at Cost

Opening stock + closing stock

Average Inventory = ------------------------------------
2

E. Debtors Turnover Ratio

Debtor’s turnover ratio indicates the velocity of debt collection of

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firm. It is also known as receivables turnover ratio. This ratio indicates the

number of times average debtors (Receivables) are turned over during a

year

Net Credit Annual Sales

Debtors Turnover Ratio = -------------------------------
Average Trade Debtors

Opening Trade closing Trade

Debtors + Debtors
Average Trade Debtors = ------------------------------------
2

F. Average Collection Period

The average collection period represents the average number of days

for which a firm has to wait before its receivables are converted into cash. A

high average collection period may reflect a liberal credit policy and leads

to a large number of receivables being past due and some being collected.

Number of Working Days

Average Collection Period = ------------------------------------
Debtors Turnover Ratio
G. Creditors Turnover Ratio

In the course of business operations, a firm has to make credit

purchases and incur short-term liabilities. A supplier of goods, i.e. Creditor

is naturally interested in finding out how much time the firm is likely to

take in repaying its trade creditors.

Net Credit Annual Purchases

Creditors Turnover Ratio = -------------------------------------

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 Average Trade Creditors

H. Average Payment Period

The ratio indicates the velocity with which the creditors are turned over

in relation to purchases, generally, higher the creditors velocity better it is

or otherwise lower the creditor’s velocity, less favorable are the results.

Number of Working Days

Average Payment Period = -----------------------------------
Creditors Turnover Ratio
I. Working Capital Turnover Ratio

Working Capital turnover ratio indicates the velocity of the utilization

of net working capital. This ratio indicates the number of times the working

capital is turned over in the course of a year.

Cost of Sales
Working Capital = --------------------------------
Average Working Capital

Opening Working closing Working

Capital + Capital
Average Working Capital = ------------------------------------------------
2

3. Comparative Statement

The comparative financial statements are statement of the financial

position at different periods; of time. In this method the financial position are

shown in a comparative form so as to give an idea of financial position at two

or more periods. From practical point of view, generally, two financial position

statements (Balance sheet and income statement) are prepared in comparative

form for financial analysis purposes.

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4. Common Size Statement

The common-size statements, balance sheet and income statement are

shown in analytical percentages. The figures are shown as percentages of total

assets, total liabilities and total sales. The total assets are expressed as a

percentage of the total. Similarly various liabilities are taken as a part of total

liabilities. These statements are also known as component percentage or 100

percent statements because every individual item is stated as a percentage of the

total 100. The short-coming in comparative statements and trend percentages

where changes in items could not be compared with the totals have been

covered up. The analyst is able to assess the figures in relation to total values.

The common-size statements may be prepared in the following way:

 The totals of assets or liabilities are takes as 100.

 The individual assets are expressed as a percentage of total assets.

5. Cash Flow Statement

Cash flow statement is a statement which describes the inflows (sources)

and outflows (uses) of cash and cash equivalents in an enterprise during a

specified period of time. Such a statement enumerates not effects of the various

business transactions on cash and its equivalents and takes into account receipts

and disbursements of cash. A cash flow statement summarizes the causes of

changes in cash position of a business enterprise between dates of two balance

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sheets.

6. Working Capital Budget

A budget is a financial and/or quantitative expression of business plans and

policies to be pursued in the future period of time. Working capital budget, as a

part of total budgeting process of a business, is prepaid estimating future long-

term and short-term working capital needs and the sources to finance them, and

then comparing the budgeted figures with the actual performance for

calculating variances, if any, so that corrective actions may be taken in the

future.

STATEMENT OF THE PROBLEM

Sugar industry, one of the leading industries, in India is operating in public

sector, private sector and co-operative sector. It is playing a significant role in

the economic development of our country. The reward of capital is profit,

which can be earned through proper utilization of land, labor, capital and

machine. The success of business enterprise therefore depends upon its

functions. A determination of the adequacy of working capital poses a problem

both to the corporate body and the investing sector. The Ponni Sugars limited

which is one of the leading sugar companies in Tamilnadu is engaged in the

production of white cry stall sugar. Hence the present study aims at analyzing

the working capital position of Ponni sugar limited and to propose suitable

suggestions for improving its working capital position.

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OBJECTIVES OF THE STUDY

The present study in Ponni sugars (Erode) Ltd., is confined to working

capital position. It attempts to determine the efficient management of each

component of working capital. The main objectives of the study are,

 To exhibit the trend of components of working capital during the study

period.

 To ensure optimum investment in current assets.

 To ensure flow of funds for current operation.

 To evaluate the liability and management of working capital of the

company during the study period.

 To elucidate the findings of the study and to offer suggestions for

improving the working capital position.

REVIEW OF LITERATURE

A review is the confirmation of a study with detailed examination on the

subject again and again. By going through the reviews of the past research

analysis or study, journals, magazines and other published data, we gather the

knowledge and ideas on the various topics. Some of the reviews are presented

here.

Srinivasan in his study explains the usage and role of fund flow analysis as

an effective analytical tool to diagnose the working capital management for any

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 organization in co-operative sugar mills. Based on the study, data collected from

co-operative sugar mills in Tamilnadu, this study also proceeds to emphasis the

importance of the fund flow analysis in the co-operative sugar mills. In this

connection, the researcher had complied three fund flow statement from the

financial statement of selected three co-operative sugar mills to say their

working capital positions. These statements would sufficiently substantiate the

cause for any change in the working capital conditions of the selected units and

also explained the main sources of funds obtained for investment purposes.

Dr. T.R. Gurumoorth, in his study, on “Sugar import socially unjustified”

(November-1999) has observed that through we are in the area of liberalization,

sugar mills are still under Government control. Decanalisation is introduced in

the sugar sector but not decontrol. The sugar mills should supply 40 per cent of

their production for the public distribution system at a price less than the market

price and the sugar distribution in the open market is also under the direction of

the Government. Decanalisation has created a serious problem in Indian sugar

sector under decanalisation private traders are permitted to import sugar and sell

in the open market. Sugar import is continued though we have surplus

production. This affects sugar mills. Their sales are getting down and stock is

accumulated and sugar mills may not be in a position to pay sugarcane arrears

in time. Sugar mills are affected by the problem of working capital shortage.

SCOPE OF THE STUDY

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 The present study aims at analyzing the working capital position of Ponni

sugars (Erode) Ltd., for a period of 5 years only. The study is mainly based on

secondary data, the required information for the study are extracted from the

“Annul Reports” of Ponni sugars (Erode) Ltd.,

METHODOLOGY

DATA COLLECTION PROCEDURE

The present study is mainly based on the secondary data. The data were

obtained from the published Annual Reports and other records.

The information other than those stated in the financial statements was

collected from the executives of the company when ever necessary.

TOOLS USED FOR DATA ANALSIS

To evaluate the financial performance ratios, percentages, tables and

charts are used in this study.

PERIOD OF THE STUDY

The study covers a period of five years i.e. from 2004-2005 to 2008-2009.

LIMITATION OF THE STUDY

1.The study is confined to a period of 5 years only from 1st April 2004 to 31st

March 2009 and hence changes that had taken place before or after were

not considered.

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 2. The accurate details of the amounts of credit sales and credit purchases

were not available. Therefore all the sales and purchases were assumed to

be credit sales and credit purchases during all the 5 years of the study

period.

3. The reliability and correctness of the calculations and findings depend

upon the information provided by the accountant and figures given in the

annual reports of the concern.

CHAPTERISATION SCHEME

This study is divided into four chapters:

Chapter I Deals with Introduction of finance, meaning, definition,

importance of finance and source of finance, overview of working capital,

statement of the problem, objectives of the study, review of literature,

scope of the study, methodology, period of the study, limitation of the

study and the chapterisation scheme.

Chapter II Is confined with the profile of Ponni sugars Ltd., Pallipalayam.

Chapter III Portrays the working capital analysis and interpretation of the

study unit.

Chapter IV Deals with the summary of findings, suggestions and

conclusion.

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