A PROJECT ON

“A STUDY REPORT ABOUT PARLE-G”

A REPORT SUBMITTED

IN PARTIAL OF THE REQIREMENT FOR AWARD OF THE DEGREE OF

MASTER IN FINANCE CONTROL

SUBMITTED BY:

AISWORIYA SAHOO

ROLL NO- 20062280038

UNDER THE GUIDANCE OF

COMPANY GUIDE INTERNAL GUIDE

ARADHYA PRIYADARSHINI DR. RAJESH SAIN (H.O.D MBA)

NIIS INSTITUTE OF BUSINESS ADMINISTRATION

MADANPUR

1
 Chapter-1

Introduction

Introduction
1.1 About the ‘Biscuit Product’ of FMCG Industry
Current trends: Biscuits contribute Rs 8,000 crore to the FMCG industry and provide a
vast opportunity for growth, as the per capita consumption of biscuits is less than 2.1 kg in
our country, as compared to more than 10 kg in the US, UK and Europe and above 4.25 kg
in South East Asian countries. Higher disposable incomes and the willingness of consumers
to try new brands have attracted a number of players to the biscuits industry, both, at the
national & local level and generated intense activity in the marketplace. The branded market
grew around 15-16 per cent last year. Commodity inflation continues to have a significant
impact on input cost and this inflationary pressure has put industry profits under pressure.
Today, there is a greater consumer choice both at the local and national level, together with a
diversity of tastes & benefits ranging from health & nutrition to pure indulgence. However,
most players are facing extremely high and unprecedented cost scenario and some irrational
competition too. The result is a huge pricing pressure with limitations on price hikes for the
entire industry and a shrinking profit pool of the industry. Wheat and oil prices are already
showing an increase of more than 20 per cent. In addition, the steep increase in crude oil
prices and hike in petrol & diesel prices announced by the government have led to a
significant increase in the price of packaging materials, freight and also production costs
A biscuit is a small baked product, whose exact meaning varies markedly in different parts
of the world. The origin of the word biscuit is from a Latin phrase (via Middle French)
meaning cooked twice. The Indian biscuits Industry came into the limelight and started
gaining a sound status in the bakery industry in the latter part of the 20th century, when the
urbanized society called for readymade food products at a tenable cost.
Biscuits were assumed to be a sick man’s diet in earlier days. Now, it has become one of the
most-loved fast food products for every age group. Biscuits are easy to carry, tasty to eat,
cholesterol free and reasonably priced. States that have the larger intake of biscuits are
Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and
West Bengal, the most industrially-developed states, hold the maximum amount of
consumption of biscuits.
Two sectors of biscuit industry In terms of volume, biscuit production by the organized
segment is estimated to be 1.30 million tons. In the organized sector, the industry is
dominated by Britannia and Parle, which account for 70 per cent of the industry’s volumes.
Britannia’s market share stands at Rs. 27 billion. Parle derives a large portion of its revenues
from low-priced biscuits. Parle-G and Britannia derive a fairly large share of their revenues

3
from the medium- and premium varieties. In fact, Britannia’s market share in the medium
and premium varieties is significantly higher. Other organized players include domestic
players like bake man’s, Champion, Kwality, Priya and multinational corporations (MNCs)
like SmithKline Consumer, Kellogg’s, Sara, Heinz, Ecclesia (Nestle) and United Biscuits.
The unorganized sector consists of small bakery units, cottage and household type
manufacturing their goods without much packaging and distributing their goods in the
surrounding areas.
Indian Biscuit Industry as on 2018-19
Organized
Unorganized Sector
45%
Sector

55%

Indian Biscuit Industry market share as on 2018-19(in %)

Sun feast
Priyagold 10% Others
11% 9%

Britannia
30%
Parle 40%

1.2. About Parle

Parle Products has been India's largest manufacturer of biscuits and confectionery, for almost
80 years. Makers of the world's largest selling biscuit, Parle-G, and a host of other very
popular brands, the Parle name symbolizes quality, nutrition and great taste. With a reach
spanning even the remotest villages of India, the company has definitely come a very long
way since its inception. Many of the Parle products – biscuits, confectioneries& snacks are
market leaders in their category and have won acclaim at the Monde Selection, since 1971.
With a 40% share of the total biscuit market and a 15% share of the total confectionary
market in India, Parle has grown to become a multi-million dollar company. While to
consumers it's a beacon of faith and trust, competitors look upon Parle as an example of
marketing brilliance.
1.3 Share Holding
 Parle -38%
 Britania-26%
 ITC -10%
1.4 History of the company

A long time ago, when the British ruled India, a small factory was set up by “Mohanlal
Dayal Chauhan” in the suburbs of Mumbai city, to manufacture sweets and toffees. The
year was 1929 and the market was dominated by famous international brands that were
imported freely. Despite the odds and unequal competition, this company called Parle
Products, survived and succeeded, by adhering to high quality and improvising from time to
time.
A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets
and toffees. Having already established a reputation for quality, the Parle brand name grew in
strength with this diversification. Parle Glucose and Parle Monaco were the first brands of
biscuits to be introduced, which later went on to become leading names for great taste and
quality.
The original Parle Company was split into three separate companies, owned by the different
factions of the original Chauhan family:
 Parle Products, led by Vijay, Sharad and Anup Chauhan (owner of the brands Parle-
G, Melody, Mango Bite, Poppins, Kismi toffee bar, Monaco and Krack Jack)
 Parle Agro, led by Prakash Chauhan and his daughters Schauna, Alisha and Nadia
(owner of the brands such as Frooti and Appy)

5
  Parle Bisleri, led by Ramesh Chauhan
All three companies continue to use the family trademark name "Parle". The original Parle
group was amicably segregated into three non-competing businesses. But a dispute over the
use of "Parle" brand arose, when Parle Agro diversified into the confectionary business, thus
becoming a competitor to Parle Products. In February 2008, Parle Products sued Parle Agro
for using the brand Parle for competing confectionary products. Later, Parle Agro launched
its confectionery products under a new design which did not include the Parle brand name In
2009, the Bombay High Court ruled that Parle Agro can sell its confectionery brands under
the brand name "Parle" or "Parley Confectionary" on condition that it clearly specifies that its
products belong to a separate company, which has no relationship with Parle products.

Table no 1.1

Name of Members Designation No of share

Vijay K Chauhan Chairman & Managing Director
Sharad P Chauhan Managing Director
Raj K Chauhan Managing Director
Ajay V Chauhan Executive Director
Anup S Chauhan Executive Director
Samar S Chauhan Executive Director
Source: from website

Parle Products has been India's largest manufacturer of biscuits and confectionery for almost
80 years. Makers of the world's largest selling biscuit, Parle-G, and a host of other very
popular brands, the Parle name symbolizes quality, nutrition and great taste. With a reach
spanning even to the remotest villages of India, the company has definitely come a very long
way since its inception.
Many of the Parle products - biscuits or confectioneries, are market leaders in their category
and have won acclaim at the Monde Selection, since 1971. With a 40% share of the total
biscuit market and a 15% share of the total confectionary market in India, Parle has grown to
become a multi-million dollar company. While to the consumers it's a beacon of faith and
trust, competitors look upon Parle as an example of marketing brilliance.

Over the years Parle has grown to become a multimillion-dollar company with many of the
products as market leaders in their category. Parle Products began manufacturing biscuits, in
addition to sweets and toffees. Having already established a reputation for quality, the Parle
brand name grew in strength with this diversification. Parle Glucose and Parle Monaco were
the first brands of biscuits to be introduced, which later went onto become leading brand
names itself for great taste and quality.

Today, the great strength of Parle Products is the extremely widespread distribution network.
Even at the remotest places, you can buy Parle biscuits and sweets from the local grocer. It
has taken years to create this extensive
network. Parle sales force started with one
salesman in Bombay and some agents in
few other cities. Gradually, Parle Products
expanded. Soon sweets and biscuits were
being sent by rail to Calcutta, Delhi,
Karachi, Madras and other major cities.
As production increased, distribution was
amplified. Full time salesmen were
appointed in different areas. Currently,
Parle Products has over 33, 00,000 distribution outlet

Table 1.2

BISCUITS CONFECTIONARIES SNACKS

Parle-G Londonderry Parle’s wafers
Monaco Melody Namkeen
Golden Arcs Mango Bite Fulltoss
Parle Actifit Digestive Marie Kaccha Mango Bite Munchies
Parle Marie Chox Cheeslings
Hide & Seek Poppins
Hide & Seek Fab Mazelo
Hide & Seek Bourbon 2 in 1
Festo 2 in 1 Eclair
Happy- Happy Kismi
Milano Kismi Toffee Bar
Nimkin Fruit Drops
20-20 cookies
kreams
Top
source:from website

7
1.5 Corporate Social Responsibility Policy

Scope: The Policy extends to the whole of India. This Policy applies to Parle Products
Private Ltd. (PPPL), except where modified by applicable law or regulation. Purpose: The
following Policy is designed to describe the necessary guidelines and procedures for PPPL
when making contributions/donations under the Companies Act, 2013 (‘the Act’). The
purpose of the Policy is to facilitate organized and approved contributions/donations at all
levels. The goal of this Policy is to encourage contributions/donations in keeping with PPPL
strategic priorities.

Policy: PPPL believes that it is incumbent on PPPL to give back to the communities in which
it operates. The goals of our corporate philanthropy program, consistent with our Company’s
goals and values, are to contribute to philanthropic activities listed below.
PPPL’s philanthropic outreach will be guided by following strategic activities:
 Eradicating hunger, poverty and malnutrition,
 Promoting health care including preventive health care and sanitation including
contribution to Swach Bharat Kosh set-up by the Central Government for the
promotion of sanitation;
 Promoting education;
 Promoting gender equality;
 Promoting environmental sustainability;
 Protection of national heritage, art and culture;
 Training to promote rural sports, nationally recognized sports, Paralympic sports and
Olympic sports;
 Contribution to the Prime Minister's National Relief Fund or any other fund set up by
the Central Government for socio-economic development and relief and welfare of
the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and
women;
 Contributions or funds provided to technology incubators located within academic
institutions which are approved by the Central Government;
 Rural development projects;
 Slum area development
 Such other activities as may be specified under Schedule VII of the Act.
It is PPPL's intent that philanthropic endeavors within India in supporting organizations and
activities shall be related to our strategic priorities.
CSR contribution:
Amounts to be spent by PPPL shall be as stipulated under the Act as amended from time to
time (presently 2% of the average net profits for the immediately preceding 3 financial years)

1.6. LINGARAJ BISCUIT PVT. LTD.

(Manufacturing unit In Bhubaneswar, Odisha)

Overview:
Lingaraj Biscuit Pvt. Ltd. Is A Subsidiary Of Parle Product Pvt. Ltd.
This is a contract of Parle by LINGARAJ PVT.LTD established in 2006.director and owner
of Lingaraj Pvt. ltd. are Kishan Kumar Agarwal, Kunal Agarwal. It have a 2 acre area from
starting to ending position including raw material, go down, production section, dispatch
section, finished good section, worker colony section and gas tanker area more than 500
employees are employed here and work 24 hour except Sunday working time of workers are
6 A.M. to 2 P.M., 2 P.M. to 10 P.M., 10 P.M. to 6 A.M. totally 8 hours per shift.
There are 2 types of biscuit are made here. These are as follows:-
1. Parle G

2. Happy-Happy
Parle G:-
There are 3 variety of Parle G. These are
1. Rs. 3 (40gm)

2. Rs. 10
3. Rs. 20
Happy-Happy:-
1. Rs. 5

2. Rs. 10
Per day capacity:-
Per day capacity is 50-60 metric ton approximately 25-30 trucks per day sending biscuit to all
over India including Kolkata, Ranchi, Bihar, Odisha, Jorat, and Jharkhand, UP Nagaland.
Company Number: U15412OR2004PTC007735

Status: Active

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Incorporation Date: 23 August 2004 (almost 11 years ago)
Company Type: Company limited by shares
Jurisdiction India
Registered Address
PLOT NO. - 31, CHANDAKA INDUSTRIAL ESTATE, PATIA
BHUBANESWAR
Orissa, India

Lingaraj Biscuits PVT LTD is a manufacturing unit in

Odisha that produce only Parle-G biscuits. From this unit
the product is circulating in Orissa and to the eastern
zone of India.

Lingaraj Biscuits manufacture here the 3 rupees pack

and 10 rupees family pack& 20 rupees pack. Then the
products are transported to depots are situated

atCuttack,Sambalpur,Bhubaneswar,Kolkata,ranchi,Jharkhand,siligudi,bihar,jorat&
Nagaland.. Then the product is circulating among the distributers then wholesalers and
retailers to customers.

There are 5000 depots,4,25000 of wholesalers around India.

Lingaraj Biscuits produce:

 Parle-G 40gm, mrp-Rs3, quantity in a box 144pc,

 Price of the box Rs316.58 for distributer,
 Wholesale price is Rs342.90
 Parle-G 144gm, mrp-Rs10, quantity in a box 144pc,
 Price of the box Rs441.76 for distributer,
 Wholesale price is Rs476.25

Deductions:

 VAT-13.5
 Parle-G - margin 11% to the Retailers
  Parle-G – margin 4.5% to the wholesaler
 Confectionary- 15%, all other brand of biscuits 12%
 Basic price of Parle-G is Rs320.43
 KOT of the pack- 1.94kot, (Kerosene oil tin),
 Rate of KOT- Rs5.80 (sundry freight rate)
 Basic Rate + VAT + (KOT. sundry freight rate) = Landing cost to wholesaler
(LCTW)
 ROI- returns on investment 18% to 22%
Parle Products Limited company's factories are located in Bangalore, Mumbai, Neemrana
(Rajasthan), and Bahadurgarh (Haryana). The company's factories that are located in
Neemrana in Rajasthan and Bahadurgarh in Haryana are the biggest confectionery and biscuit
plants in India. Parle Products Limited also has five production units for confectioneries and
fourteen production units for biscuits on contract. The production units of Parle Products
Limited are of world class standards with facilities for automatic packaging and printing. The
company maintains hygiene at every stage of processing in order to make sure that the
products manufactured are of the best quality.

Biscuits manufacturing process:-

There are 6 steps of manufacturing process. These are as follows:-

1. Raw material testing

2. Mixing

3. Moulding

4. Backing

5. Cooling

6. Packing

7. Dispatching
Ingredients used for biscuits manufacturing of Parle:-
 Wheat flour
 Sugar
 Vegetable oil
 Skimmed milk powder
 Parle flavour

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 Choco chips
 Salt
 Water
 Invert syrup
Chemical composition:-
 Ammonium bicarbonate - Baking
 Sodium bicarbonate - Leaven
 Sodium Meta sulphate - Smooth
 Calcium sulphate - Soluble
 Citric acid - Smell
 Lactic acid - Duration
 Dietetic fibre – Diabetic Patient
Machines used in production process:-
 Mixing machine
 Rotary machine
 Dyeing machine
 Oven machine
 Cooling Convare machine
 Packing machine

Mixing machine: - used for mixed the ingredient.

Rotary machine: - for moulding process.
Dyeing machine:-for shape and size of biscuit. It is rotate 24 rpm (rate per minute) speed for
Parle-G and 15 rpm (rate per minute) for Happy-Happy.
Oven machine (180-330c):- the length of oven machine 216ft and width is 48 inches...it is the
largest over produce machine in Asia. There are 22 burner in there and used propane and
butane gas.
Cooling Convare machine:- it is a machine using for automatic air cooling.
Packing machine: - there are 2 Varity of packing machine. These are as follows:-
1. SVM (Small Velocity Motor):-produce 3rs,5rs biscuit

2. Family machine:-produce 10rs, 20rs biscuit.

Manufacture process at Lingaraj Biscuit Pvt. ltd.

Parle-G:-

Receiving Of Raw Materials:

List Of Raw Materials:

1. Maida
2. Sugar
3. Skimmed Milk Powder
4. Hydrogenated Vegetable Oil
5. Chemicals
6. Flavoring Agents

These raw materials are supplied by a numbers of suppliers. They send the raw materials
according to the specifications and conditions applied by Parle. Powered materials come in
bags and boxes of various sizes. Maida is supplied in tankers from where they are transferred
to silos. Liquids do come stored in drums; HVO is supplied in tanks which are emptied in
silos. All the raw materials are stored in raw material store or in silos and used as and when
required. For issuing the raw material, FIFO (First in First Out) system is applied. Material is
issued in sequence not irregularly. Raw material is not stored more than 5-6 days.

Quality Check:

All raw materials received undergo a quality check before storage/use. These tests are
conducted by the Quality Assurance Department. If the raw material is not found according
to the specifications of Parle then it is rejected and sent back to the supplier. The raw
materials are first checked for physical parameters like color, odor and presence of any
foreign extraneous material. Then they are tested for various chemical and functional
properties.

Maida Dumping and Shifting:-

Maida dumping is done by two methods: Automatic and Manual.

The Maida is pneumatically transferred from the silos to the service tanks from where it is
transferred to the sifter. The Maida is sifted and then transferred to the Maida service tank
from where it is send to the mixing section.

13
In the manual method the Maida bags are unloaded in the Maida hopper from where it is
transferred to the Maida service tank by a screw conveyor. The following procedure is same
as that of automatic Maida feeding method.

Sugar grinding:

The sugar bags are unloaded which is provided with a magnet which is there to remove the
metal pieces present in the sugar. It is made sure that the sugar is free from moisture. This
sugar is transferred to the grinder through a screw conveyor. The grinded sugar is stored in a
tank provided at a bottom of the grinder. The sugar is then transferred to the service tank
which sends it to the mixing section.

Pumping of Fat:

Fat stored in the silos is pumped at a temperature of 45 0 C. The fat is mixed with finamul,
which acts as an emulsifying agent. This mixture is added to the batch in a suitable quantity
so as to prepare consistent dough. The finamul is also found to have anti oxidation effects on
the biscuit. The mixture of fat and finamul is added to the liquid vessel of the mixing panel
from where it is mixed into the dough.

Following are the machinery used in manufacturing

Stephen Mixer:
The Stephan TK Mixer is an ideal component to fully automatically feed the down-stream
make-up equipment for biscuits, bread, rolls, buns, cake, sweet goods, cookies and crackers.
Rotary mould:
Structure in corrosion-proof; anodized aluminium and 304 stainless steel.
1. Satin stainless steel panelling
2. Swivel wheels and support feet
3. Trays loader with automatic chain feed
4. Feeder roller anodized aluminium
5. 1.00 kW speed validator
Cooling Conveyor:
The biscuit coming from stripping conveyor is directed on to the cooling conveyor to transfer
the heat in the biscuit to atmospheric air as it is passing on it. The total travel of the cooling
conveyor is 1.5 times the oven length. As per need specifications it need the travel of 150 ft.
Laminator:
Laminators are generally used for production of all kinds of hard biscuits, crackers and
cocktail snacks. With laminator it is possible to create a puffy pastry-like structure, which is
of decisive importance for the quality level and consequently for the sales success.
Laminating of Dough band improves the weight/volume ratio considerably.
Biscuit baking oven:
The oven body consists of steel steam tight tunnel with equally divided zones of the radiators.
Stainless steel expansion joints are provided between these zones in order to eliminate the
expansion of the oven section. The inspection doors are provided for inspection of the baking
goods during the process.
Baking system:
The baking in the heating chamber takes place by radiators located under and above the wire
mesh band which distribute heat for uniform baking. The recirculation heating gases of these
radiators can be controlled for each zone separately. The closed recirculation system is
having slight vacuum so that combustion gases cannot enter into the baking chamber. The
ventilating fan is for circulation of the heating gases through the recirculation system and
thermostatically controlled burners provide the set temperature of the heating gases.

Rotary Cutter:
The single head rotary cutter prints fine design on a continuously fed dough sheet and also
cuts out the individual dough piece. The unit powered by 1.5KW helical geared motor and
speed controlled by AC frequency controller. Drive is given to cutting roller only to
accommodate different sizes of dies in this machine.
Counting unit:
The counting unit counts and see that the biscuit making process is going fine or not, i.e. as
per the program set in the machine, program is set as per the grams required. Generally 16
biscuits are taken by the counting unit so that it leads to 100 grams.
Multipack Wrapping Machine:
This machine helps in wrapping the biscuits on the particular wrapper fixed on the roller of
the machine. The wrapper is feed into the machine and the sealing of the wrapper is done by
four heater roller, which is fitted on the machine. This heater roller heat up the plastic and
seals the packet. And at the same time the jaw cutter cut the packet on the cutting edge
marked i.e. as per the grams of the packet which is feed in the automatic machine (100 – 120,

15
120 – 150, 150 -170, 170 - 190). The packets coming out from the wrapping machine in a
minute is programmed in computer and can be changed as per the need.
Poly Bags:
Poly bags contain 24 packets of Parle-G biscuits in one poly bag. There are 4 workers
employed on this section who take care of the work by putting 24 packets of biscuits in the
bag and forwarding it to sealing machine section.
Sealing Machine:
The sealing machine has heater rod for sealing the poly bag in which 24 packet of biscuit are
placed, and it have a conveyer belt on other side so that when the poly bag passes through the
heater and get sealed then it is passed to the tapping machine.
Tapping Machine:
Six such poly bags are placed in one such corrugated box and the box is passed through the
tapping machine where are tapped and then sent through a long diversion conveyer belt. This
belt helps to transfer the box to the dispatch section directly. 36 boxes are arranged on pallet
in the dispatch section, from where they are transferred to the various dealers all over the
India and worldwide.
Supply Chain From Outside:-
Ingredients Supply from outside
Wheat flour Easternpur, Jagatpur(Cuttack)and krunz
roller(mancheswar Bhubaneswar)
Sugar Rayagada, Andhra Pradesh

Vegetable oil Kargil(paradip),Andhra Pradesh(tika Bali)

Skimmed milk powder Haryana
wrapper Kanpur
Propane gas Nagpur
Parle flavour Vile parle(Maharashtra)
Choco chips- Mumbai
chemical Kalyan nagar

artoon box- kalinga (mancheswar Bhubaneswar)

Salt Kolkata

Depot Location:-
Inside Odisha:-
1. Cuttack

2. Bhubaneswar
3. Sambulpur
Out of state:-
1. Kolkata

2. Jharkhand

3. Uttar Pradesh

4. Nagaland
Godown Capacity:-
 Raw martial go down capacity: - 2 lakh bags.1 bag (100kg) each.
 Finished goods capacity: - 4 lakh cartoon box (144 pct.), 1 cartoon bag (6 poly bag),
 1 poly bag (24 pct.).
 In 1 cartoon box Parle G 10 rs (60pkt), 20rs (40 pct.).
Worker Facility:-
 Skill wise employee: - it is divided by 4 skills. These are as follows:-
 High skills (director, executive)
 On skill (coordinator, production manager)
 Semi skill (mechanical, electrical manager, raw material manager, dispatch manager)
 Sub skill (head operator, super visor, Packet filler)
Facility:-
 EPF(Employee Provident Fund)
 ESIC (Employee State Insurance Corporation)
 BONUS/EARLY INCREMENT
 Job Promotion
 price distribution per performance
 Safety and hoariness
 Leave 15 days with in 1 year

Manufacturing Process in Detail at Lingaraj Biscuit Pvt.Ltd:-

Happy-Happy Choco Chips

Cookies are often referred to as small sweet cakes. They are characterized by a formula high
in sugar and shortening and low in water. In UK, cookies means something softer and thicker
baked good while biscuit refer to a flat and crisp baked good. In USA, cookies cover any flat,
crisp, baked good.

17
PARLE also have the production of cookies that is HAPPY-HAPPY Chocolate Chips.

Raw Materials and Ingredients

1. Wheat flour
2. Partially hydrogenated edible vegetable oil
3. Sugar
4. Butter
5. Inverted syrup
6. Liquid glucose
7. Milk solids
8. Leavening agents
9. Salt
10. Emulsifier
11. Antioxidants
12. Chocolate Powder
13. Choco Chips
The manufacturing process of happy-happy remains the same as that of Parle-g but small
changes in the ingredients (i.e. coco powder chocolate chips)and change in the die and other
remain same.

FLOW SHEET FOR PARLE-G & HAPPY-HAPPY PRODUCTION

Receiving of Raw materials

Not OK

Quality Check Rejected

Ok
 Store

Maida
Dumping

Sifting
Other
Ingredients
Sugar Mixing Fat
(Grinded)

Moulding

Baking

Cooling

Packagin
ggg

Dispatch

1.7 Objective of the Study

 To find out the operating and day to day financial functions which reflects how the
company operates its operating cycle and manage financial flow in day to day
business activity.

19
  To know the functioning of the finance dept. Of Parle Biscuits Pvt. Ltd.
 To analyze the liquidity position of the organization
 To examine profitability position of the management.
 To prepare report on study thus conducted.

1.8. Limitation of the Study

The major limitations of my study are as under:

 Limited Time: Although the staff of Parle Company Pvt. Ltd. was very efficient and
highly co-operative and devoted enough of their valuable time to us. But because of
time constant. We were not able to devote as much time with their employees.

 Secrecy: Some of the information was kept confidential and was not disclosed to any
person who so ever.

 Limited Data: This project has completed with annual reports; it just constitutes one
part of data collection i.e. secondary. There were limitations for primary data
collection because of confidentiality.

 Limited Period: This project is based on three year annual reports. Conclusions and
recommendations are based on such limited data. The trend of last three year may or
may not reflect the real working capital position of the company.
 Limited Area: Also it was difficult to collect the data regarding the competitors and
their financial information. Industry figures were also difficult to get.
 Chapter- 2

Review of Literature

2.1. Literature Review

1
For every research report researchers follows some of the renowned research paper which has
already been conducted by some experts of different corner of the world to make the research
useful as well as biasness. Some of experienced reviews that have use in this project are as
follows:
Keller (1998) believes that brands serve to identify the source or maker of a product and
allow consumers to assign responsibility as to which particular organisation should be held
accountable for the experience gained by using the product. Because of past experience with
a product and the marketing programme over a period of time, consumers learn more about a
brand. Consumers collect information to help in the decision making process regarding which
brands satisfy their needs and which do not. As a result, brands provide a shorthand device or
means of simplification for making product decisions.
Amine (1998) comments that perceived differences between brands depend on the consumer
familiarity with the product category. High involvement in a product category enables
consumers to identify more subtle differences between brands in both functional and
psychological attributes, leading to higher functional, experiential and symbolic benefits
(Keller, 1993)

According to Warrington and Shim (2000), product involvement occurs when a product
category is related to a person’s centrally held values and self-concept. On the other hand,
Bristow, Schneider, and Schuler (2002), suggest that if consumers believed that there are
differences among brands, then the brand name becomes the centre piece of information in
the purchase decision or repurchase intention and the dependence on the usage of brand name
in the search information will likely increase. Another branch of consumer behaviour
research related to brand is that, consumers use brands to create or communicate their self-
image or status (O’Cass, and Frost, 2002).
Kotler (2003) distinguishes six elements that according to him must be evaluated when
employing packaging decisions: size, form, material, colour, text and brand.
According to Rundh (2005) package attracts consumer’s attention to Particular brand,
enhances its image, and influences consumer’s perceptions about product. Also package
imparts unique value to product. Works as a tool for differentiation, i.e. helps consumers to
choose the product from wide range of similar products, stimulates customers buying
behaviour (Wells, Farley and Armstrong, 2007). Thus package performs an important role
in marketing communication.
The research result of Kuvykaite R. (2009) shows the impact of package elements on
consumers purchase decisions can be stronger. In their study they took two types of package
elements, visual and verbal. Graphic, colour, size, form and material are considered as visual
elements, while product information, producer, country-of-origin and brand as considered as
verbal ones. They conclude that Package could be treated as one of most valuable tool in
today’s marketing communications, necessitating more detail analysis of its elements and an
impact of those elements on consumers buying behaviour.
Hirekenchanagoudar (2008) says that the present investigation made an attempt to analyse
the buying behaviour of ready-to-eat food products by consumers of Hubli and Dharwad. A
total sample of 200 respondents was selected for the study. Majority of the respondents were
aware of Parle-G, Lays, and Frooti and Amul brands in case of biscuits, chips fruit juice and
ice creams accordingly. Television was the major source for getting information about
various brands in all the four products. Biscuits were consumed by all the respondents
because of their convenience to use as snacks. Parle-G, Lays, Maaza and Amul brands were
highly preferred brands of biscuits, chips, fruit juice and ice creams respectively. The main
factors influencing brand preference for biscuits, chips, fruit juice and ice creams were
quality, taste and reasonable price. Most of the respondents would go to other shops if
preferred brand in all the four products was not available
Gupta yughasha (2010) says that after going thick on the things, now time is to make a
complete picture. While making a product a SKU (stock keeping unit) of the shop retailers
think about the GMROI (gross margin return on investment) and they promote the brand
which provides them highest. They expect return in the form of profit margin, company
schemes, window display and reference of the shop. Among these, company schemes make
the difference and are the highest sources of motivation after profit margin. Retailing
demands a constant push from the company. The manufacturer should understand consumer
behaviour because retailers can’t help quality and price. It is only up to manufacturers to
deliver what consumer wants.
Garg Suresh (2010) Detailed that Day by day the intensifying global competition is
throwing challenges in the form of uncertainty and fluctuation in demand, necessity to
provide wide variety to attract and hold the ever demanding customer. To survive and
succeed under such competitive environment, organizations’ are forced to find and adopt
efficient and effective ways for their operations. Organizations are seeking ways to increase
the value of their products and services by eliminating unnecessary processes and practices

3
from all systems. The implementation of Lean manufacturing system helps organizations to
reduce lead-time and inventory, improve quality, and achieve better on-time deliveries.
Mohamed et.al. (2012) explain that unlike urban markets, rural markets are difficult to
predict and possess special characteristics. The featured population is predominantly
illiterate, have low income, characterized by irregular income, lack of monthly income and
flow of income fluctuating with the monsoon winds. The rural consumer expects value for
money and owing to has unsteady and meagre status of weekly income; increasing the
household income and improving distribution are the viable.
 Chapter-3

Research Methodology

3.1 Introduction

5
 Data Research methodology is a way to systematically solve the research problem.
 It may be understood as a science of studying now research is done systematically.
 In that various steps, those are generally adopted by a researcher in studying his
problem along with the logic behind them.
 It is important for research to know not only the research method but also know
methodology.
 “The procedures by which researchers go about their work of describing, explaining
and predicting phenomenon are called methodology.” Methods comprise the
procedures used for generating, collecting and evaluating data.
 All this means that it is necessary for the researcher to design his methodology for his
problem as the same may differ from problem to problem.
 Data collection is important step in any project and success of any project will be
largely depend upon now much accurate you will be able to collect and how much
time, money and effort will be required to collect that necessary data, this is also
important step

3.2. Data and Data sources :-

Data collection is an elaborate process in which the researches make a planned research for
all relevant data. Data is the foundation of all market research. Data are facts may be obtained
from several sources. Data can be classified as:
 Primary data
 Secondary data
Primary data:-
It is gathered for the first time by the researchers. If the secondary data is found to be
inadequate or unavailable, the researcher goes for primary data.
Secondary data:-
Secondary data is the data borrowed from secondary sources by the researcher.
Secondary data can be internal or external i.e., internal records of the company or information
available from library and other statistical organization.

3.2.1 Data Size

For this study I have collected 3 year financial data of parle biscuits pvt.ltd. from the
company annual report. The present study is completely based on secondary data which are
already available in the company website and annual report.

3.2.2 Data Sources:

To deal with real life problems it is often found that data at hand are inadequate and hence it
becomes necessary to collect data appropriate. As the project is on working capital
information include was collected from the finance dept. for this purpose data collection was
done through secondary data.

Secondary Data used here

- Various files of accounts
- Magazine and Books
- Performa’s and Websites
- Annual financial reports of Parle
I have used secondary data in the completion of this summer training report.

3.4. Working Capital Management

A successful sales program is necessary for earning profits by any business enterprise. Sales
don’t convert into cash instantly. There is a time lag between the sale of goods and receipt of
cash. Therefore, there is a need for working capital in the form of current assets to deal with
the problem arising out of the lack of immediate realization of cash against goods sold.
Therefore sufficient working capital is necessary to sustain sales activity.

3.4.1Features:

1. Working capital is regarded as the excess of current assets over current liabilities.
2. Working capital indicates circular flow of funds in the day-to-day activities of
business. That’s why it is also called circulating capital.
3. Working capital represents the minimum amount of investment in raw materials,
work-in progress, finished goods, stores and spares, accounts receivables and cash
balance.

3.4.2Types:

7
Working capital can be classified either on the basis of concept or on the basis of periodicity
of its requirement.

On The Basis Of Concept:-On the basis of concept working capital is of 2 types.

A) Gross working capital - Gross working capital is represented by the total Current assets.

Gross working capital = Total current assets

B) Net working capital - Net working capital is the excess of current assets over current
liabilities.

Net working capital = Current assets – Current liabilities

On The Basis Of Requirement:-On the basis of requirement working capital is also of 2

types.

A) Permanent working capital -It is that amount of investment which should always be
there in the fixes or minimum current assets like inventory, accounts receivables or cash
balance etc. to carry out business smoothly. Such an amount cant be reduced if the firms
wants to carry on business operations without interruption.

B) Variable working capital - The excess the amount of working capital over permanent
working capital is known as variable working capital. It may also be subdivided into two
parts.

 Seasonal working capital - Such capital is required to meet out the seasonal
demands of busy periods occurring at stated intervals.
 Special working capital - Such capital is required to meet out the extra-ordinary
needs for contingencies. Events like strike, fire, unexpected competition, rising price
tendencies, or initiating a big advertisement campaign require such capital.

Determinants:-

1. Nature of business– They have the lower requirements of current assets. Industrial
and manufacturing enterprises, on the other hand, generally require a large amount of
working capital.

2. Production policies – if the production is evenly spread over the entire year, working
capital requirements are greater, because the inventories will be unnecessarily
 accumulated during of season period. But if the production schedule favors a varying
production plan as per the seasonal requirements, working capital is required to a
greater extent during a specified season only. The production policies are affected by
so many factors availability of raw materials, labour, stocking facility etc& therefore,
whatever the productions policies are, the firm has to arrange its working capital
requirements accordingly.

3. Proportion of the cost of raw materials to total cost - In those industries where cost
of proportion is a large proportion of total cost of the goods produced, requirements of
working capital will be comparatively large.

4. Length of period of manufacturing – The time which elapses between the

commencement and end of the manufacturing process has an important bearing upon
the requirements of working capital. The manufacturing cycle may be shorter for
certain concerns & longer for others- it depends on the type of the product to be
manufactured, work to be done through machine labor& hand labor, degree of
rationalization of manufacturing procedures through times, motion & fatigue studies
etc.

5. Terms of purchase - If suppliers allow continuous credit, payment can be postponed

for some time and can be made out of the sale proceeds of the goods produced. In
such a case, the requirements of working capital will be reduced.

6. Dynamic Attitudes – As a company grows, it is logical to expect the large amount of

working capital will be required.

7. Business cycles – Requirement of working capital also varies with the business.
When the price level is up due to boom conditions, the inflationary conditions create
demand for more working capital. During depression also a heavy amount of working
capital is needed due to the inventories being locked unsold and book debts
uncollected.

8. Requirement of cash - The working capital requirements of a company are also

influenced by the amount of cash required by it for various purposes. The greater the
requirement of cash, the higher will be the working capital needs of the company.
9. Dividend policy of concern – If the management follows a conservative dividend
policy the needs of working capital can be met with the retained earnings. The

9
 relationship between dividend policy and working capital is well established and
mostly companies declare dividend after a careful study of their cash requirements.
10. Other Factors - Other factors, which affect the requirement of working capital, are
lack of co-operation in production and distribution policies, transport and
communication facilities, the fiscal and tariff policies of the government etc.

Components:-

Main components of working capital are as follows:

Cash –Cash is the most liquid and important component of working capital. Holding cash
involves cash in the sense that the present worth of cash held for a year is less than the value
of cash on today. During inflationary situations as exist today the cost of holding includes the
deterioration in the value of the cash due to inflation. Cash, therefore, results in enhanced
liquidity, but lower profitability. Despite in the cost involved it is pertinent to hold cash
because it facilitates the attainment of some important motives.

They serve two useful functions. Firstly, they act as a substitute for cash, and secondly, are
used as temporary investment. Where these securities are held in lieu of the cash balance,
they act as a substitute for transactional or precautionary balances. Normally, these aren’t
used as speculative balances, but only as a guard against the possible shortage of bank credit.

Marketable securities (as temporary investment) may be held for one of the following
reasons:

 Seasonal or cyclical operations

 To meet known financial requirements. Construction of an additional plant.
 Immediately after the sale of long-term securities.
Account Receivable – Though accounts receivable are a vital investment of any business
organization, little analytical work as been done to determine credit policies. Maintaining
account receivable has its cost implications in that the firm’s monetary resources are tied up.
This is of greater significance in the inflationary economy, because of the depreciation in the
value of money. Basically, this is a two-step account. When goods are shipped, inventories
are reduced and accounts receivable is created. When payment is made, this account is
reduced and the cash level increases. Accounts receivables are, therefore a function of the
volume of credit sales and the average length of time between sales and collections.
Inventory – Inventories represent a substantial amount of a firm’s current assets.
Management of inventories should be efficiently carried out so that this investment doesn’t
become too large, as it would result in blocked capital which could put to productive use
elsewhere. On the other hand, having too small an inventory could result in loss of sale or
loss of customer goodwill. An optimum level of inventory should therefore be maintained.

Working capital cycle: -

Working capital cycle indicates the

length of time between a firm’s paying
for materials entering into stock and
receiving the cash from sale of finished
goods. In a manufacturing firm, the
duration of time required to complete the
sequence of events is called operating
cycle.

In case of a manufacturing company, the

operating cycle is the length of time
necessary to complete the following
cycle of events: -

 Conversion of cash into raw

materials
 Conversion of raw materials into work-in-progress
 Conversion of work-in-progress into finished goods
 Conversion of finished goods into accounts receivable
 Conversion of accounts receivable into cash
The above operating cycle is repeated again & again over the period depending upon the
nature of the business & type of product etc. the duration of the operating cycle for the
purpose of estimating working capital is equal to the sum of duration allowed by the
suppliers.

Working capital cycle can be expressed as:

R+W+F+D-C

11
 Avg . stock of raw material
R=Raw Material=
Avg . cost of production per day

Avg . work∈ progress inventory

W=Work in Progress Holding Period =
Avg . cost of production per day

Avg . stock of finished goods

F=Finished Goods Storage Period =
Avg . cost of goods sold per day

Avg . book debts

D=Debtors Collection Period =
Avg . credit sales per day

Avg . trade creditor

C=Credit Period Availed =
Avg . credit purchases per day

Nature of working capital management:

Working capital management is three dimensional in nature-

 It is concerned with the formulation of policies with regard to profitability, liquidity

and risk.
 It is concerned with the decisions about the composition and level of current assets.
 It is concerned with the decisions about the composition and level of current
Liabilities.

Goal of working capital management:-

Working capital is that portion of firm’s assets which is financed by long-term funds.
Interaction between current assets and current liabilities is the main theme of the theory of
working capital management.

Goal of working capital management is to manage the firm’s current assets and
liabilities in such a way so that a satisfactory level of working capital is maintained.

The second important segment of working capital management is deciding the optimum level
of investment in various current assets. There are three important current assets cash,
accounts receivables and inventory.
Need of Working Capital Management:
The need for working capital gross or current assets cannot be over emphasized. As already
observed, the objective of financial decision making is to maximize the shareholders wealth.
To achieve this, it is necessary to generate sufficient profits can be earned will naturally
depend upon the magnitude of the sales among other things but sales cannot convert into
cash. There is a need for working capital in the form of current assets to deal with the
problem arising out of lack of immediate realization of cash against goods sold. Therefore
sufficient working capital is necessary to sustain sales activity. Technically this is refers to
operating or cash cycle. If the company has certain amount of cash, it will be required for
purchasing the raw material may be available on credit basis. Then the company has to
spend some amount for labor and factory overhead to convert the raw material in work in
progress, and ultimately finished goods. These finished goods convert in to sales on credit
basis in the form of sundry debtors. Sundry debtors are converting into cash after expiry of
credit period. Thus some amount of cash is blocked in raw materials, WIP, finished goods,
and sundry debtors and day to day cash requirements. However some part of current assets
may be financed by the current liabilities also. The amount required to be invested in this
current assets is always higher than the funds available from current liabilities.

Cash Management of PARLE BISCUIT PVT.LTD.

Cash management in Parle Biscuits Pvt. Ltd. is as follows-

Average daily collection of the Parle Biscuits Pvt. Ltd. is 2 crores.

 Salaries and Wages are distributed in Parle Biscuits Pvt. Ltd on monthly basis. 50,
00,000-75,00,000 salaries and wages are distributed in one month. Like this all other
daily transactions are completed by daily collection.

 In case of strike or any contingency supply of demand is completed by another plant

of Parle Biscuits Pvt. Ltd. and by 11 CMU’S. Supply doesn’t disturb.

 Authority for getting the benefit of any opportunity is given to Mumbai office of Parle
Biscuits Pvt. Ltd. That decides the policy regarding to any market opportunity.

 Parle Biscuits Pvt. Ltd. doesn’t have any credit policy. It deals in cash. That’s why it
doesn’t have any cash problem.

13
  Distribution channel of Parle Biscuits Pvt. Ltd. is very short only depots are there as a
middleman between plant & open market. That’s why there isn’t any necessity of
more cash.

 Biscuits come in FMCG product. So circulation of cash is smooth & fast.

 Production cycle is short. That’s why Parle Biscuits Pvt. Ltd has less demand of cash.

3.5 Ratio Analysis

It is a powerful tool of financial analysis. A ratio is defined as “the indicated quotient of two
mathematical expressions” and as “the relationship between two or more things”. Ratio helps
to summaries the large quantities of financial data and to make qualitative judgment about the
firm’s financial performance. The point to note is that a ratio indicates a quantitative
relationship, which can be turn, used to make a qualitative judgment.

Here are some of the calculated ratios of the financial year of Parle Biscuits Pvt. Ltd.

The purpose and importance of ratio analysis:

The purpose and importance of ratio analysis are to evaluate or analyze the financial
performance of the firm in terms of Risk, Profitability, Solvency, and Efficiency. It helps us
to compare the trends of two or more company over a period of time.

 Analysis of Financial Statements

 Helps in Understanding the Profitability of the Company
 analysis of Operational Efficiency of the Firm
 Liquidity of the Firms
 tHelps in Identifying the Business Risks of the Firm
 FFor Planning and Future Forecasting of the Firm
r

– Liquidity of the Firms

 Chapter-4

Data Analysis and Interpretation

Calculation of working capital

Table 4.1 Statement Showing Changes in Working Capital Statement 2016-17

15
 Mar 31st Mar 31st Working Capital

Increase Decrease
Particulars 2016(in crore) 2017(in crore)

A)Current Assets
Sundry debtors 11512.44 14816.28 3303.84 -
Cash &bank bal. 6815.11 10892.66 4072.55 -
Interest accrued on investment 7.63 9.83 2.2 -
Stores & spares parts 1715.11 1847.58 132.47 -
Stock –in-trade 16971.53 22213.66 5242.13 -
Total current asset 37021.82 49780.01 12758.19 -
B)Current Liabilities
Current Liability 23392.49 26671.06 3278.57 -
provision 6594.16 7089.92 495.76
Total Current Liability 29956.65 33760.98 - -
C)W.C (A-B) 7065.17 16019.03 8953.86 -
D) Inc. in W.C 8953.86 8953.86
Source: authors own calculation

Table 4.2 Statement Showing Changes in Working Capital Statement 2017-18

Particulars Mar 31st Mar 31st Working Capital

2017(in 2018(in Increase Decrease
crore) crore)
 A)Current Assets
Sundry debtors 14816.28 28927.2 14110.92 -
Cash & bank bal. 10892.66 18872.5 7979.84 -
Interest accrued on investment 9.83 12.8 2.97 -
Stores & spares parts 1847.58 - - -
Stock –in-trade 22213.66 86834.5 64620.84 -
Total current asset 49780.01 134647.0
B)Current Liabilities
Current Liability 26671.06 35723.9 - 6000.1
provision 7089.92 115181.5 - 4000.1
Total Current Liability 33760.98 15090.54
C)W.C (A-B) 16019.03 119556.46 103537.43
D) Inc. in W.C 103537.43 103537.43

Source: authors own calculation

Table 4.3 Comparison of working capital for the year 2016-2018

2016 2017 2018

W.C Inc./Dec % W.C Inc./Dec % W.C Inc./Dec %

7065.17 16019.03 8953.86 56% 119556.46 103537.43 86%

17
 Working Capital
120000
100000
80000
60000 Column1
40000
20000
0
2016
2017
2018

Fig.4.1source: own calculation

Interpretation:

The working capital of the company is positive this is because the current assets of the
company are more than the current liabilities of the company. It was observed that in the year
2016 working capital was 7065.17, in 2017 it was 16019.03 & in 2018 it was 103537.43.

1) Current Ratio:-

Current Assets
Current ratio =
Current Liabilities

Table 4.4 Statement showing current ratio

Particulars 2016 2017 2018

Current Assets 37021.82 49780.01 134647.0
Current Liabilities 29956.65 33760.98 15090.54
Current Ratio 1.23times 1.47times 8.92times

current ratio
10
8
6
4
2
0
2016
2017
2018

Fig.4.2 source own calculation

 Interpretation: Current ratio indicates the availability of current assets in rupees for every
rupee of current liability. This ratio reflects the financial stability of the enterprise. The
standard of the normal ratio is 2:1. Now if we analyze the three years data it can be predicted
that it holds an increasing position in the year 2016 – 2018

2) Working Capital Turnover Ratio:-

Net Sales
Working Capital Turnover Ratio=
Working Capital

Table 4.5 Statement showing working capital turnover ratio

19
Particulars 2016 2017 2018
Net Sales 21345.75 132899.70 134711.54
Working Capital 7065.17 16019.03 119556.46
w/c turnover ratio 3.02times 8.29times 1.12times

working capital turnover ratio

9
8
7
6
5
4
3
2
1
0
2016 2017 2018

Fig.4.3 source: own calculation

 Interpretation: Here we can interpret that the working capital turnover ratio is increasing
because current assets are decreasing over the current liabilities therefore working capital
decreasing from 2017-2018

3) Current Assets Turnover Ratio:-

 Net Sales
Current Assets Turnover Ratio=
Current Assets

Table 4.5 Statement showing current assets turnover ratio

Particulars 2016 2017 2018

Sales 121345.72 132899.70 134711.54
Current Assets 37021.82 49780.01 134647.0
c/a turnover ratio 3.27times 2.66times 1.0times

Current Asstes Turnover Ratio

3.5
3
2.5
2
1.5
1
0.5
0
2016 2017 2018

Fig.4.5source: own calculation

Interpretation: Here we can interpret that current assets turnover ratio is decreasing because
current assets and sales are decrease in 2017-2018.

4) Gross Profit Margin:-

21
 gross profit
Gross Profit Margin = ∗100
sales

Table 4.6 Statement showing gross profit ratio

Particulars 2016 2017 2018

Gross Profit 82928.7 84682.4 86298.4
Sales 121345.72 132899.70 134711.54
Ratio 69% 64% 65%

Gross Profit Ratio

69%
68%
67%
66%
65%
64%
63%
62%
61%
2016 2017 2018

Fig.4.6 source: own calculation

Interpretation: Profit Margin of the firm has decreased from 69% to 65% which means that
margin of profit on sales has decreased.

6) Net Profit Margin:-

PAT
Net Profit Margin= ∗100
sales
Table 4.7 Statement showing net profit ratio

Particulars 2016 2017 2018

PAT 26205.6 34714.2 46201.2
Sales 121345.72 132899.70 134711.54
Ratio 22% 27% 35%

Net Profit Ratio

35%
30%
25%
20%
15%
10%
5%
0%
2016 2017 2018

Fig.4.7 source: own calculation

Interpretation:

Net Profit Margin of the firm has increased from 22% to35% which means that margin of
profit on sales has increased.

23
 Chapter-5

Conclusion

5.1. Findings:

The project is developed keeping in mind the security of Working Capital of the company.
Means that no one can enter in the confidential data of the company and without permission
of the senior officer one can’t enter in the main programmed whether he is Manager,
Employee or the Guest.

 It is very difficult to make the project or the analysis in such a way that can solve all
the problems according to the requirements. In this project it is being tried to give
more and more facilities but in a short period of training time, as much as possible has
been done.
 In year 2016-17 Working Capital of Parle Biscuits Pvt. Ltd. was 16019.03 Rs/- while
in the same period the sales was noticed 8953.86 Rs/- then % of Working Capital to
sale was 56 but in the next year 2017-18 sales was 103537.43 Rs/- and Working
Capital was 119556.46 Rs/-. So in year 2017-18 % of Working Capital to sales was
86.
 The Position of Net Working Capital in the year 2016-17 is better as compared with
the year 2017-18. The important thing to say is that this organization has healthy
current assets.
 As a Conventional rule a current ratio 2:1 or more is considered satisfactory the
current ratio don’t represent margin of safety i.e. a “cushion” of protection for
creditors.
 The average Collection period shows the efficiency of the debtors, it tells that Parle
Biscuit Pvt. Ltd doesn’t has credit policy and if is given then in rare cases.

5.2. Conclusion:

Working capital management is important aspect of financial management. The study of

working capital management of PARLE BISCUIT Pvt. Ltd. has revealed that the current ratio

25
was as per the standard industrial practice but the liquidity position of the company showed
an increasing trend. The study has been conducted on working capital ratio analysis, working
capital leverage, working capital components which helped the company to manage its
working capital efficiency and affectively.

1. Working capital of the company was increasing and showing positive Working capital
per year. It shows good liquidity position.
2. Positive working capital indicates that company has the ability of payments of short
terms liabilities.
3. Working capital increased because of increment in the current assets is more than
increase in the current liabilities.
4. Company’s current assets were always more than requirement it effect on profitability
of the company.
5. Current assets are more than current liabilities indicate that company used long term
funds for short term requirement, where long term funds are most costly then short
term funds.
6. Current assets components shows sundry debtors were the major part in current assets
it shows that the inefficient receivables collection management.
7. In the year 2010-11 working capital increased because decreased the expenses as
manufacturing expenses and decrease the price of raw material as increased in the
inflation rate.

5.3. Suggestion:
Suggestion can be used by the firm for the betterment increased of the firm after study and
analysis of project report on study and analysis of working capital. I would like to
recommend.

1. Company should raise funds through short term sources for short term requirement of
funds, which comparatively economical as compare to long term funds.
2. Company should take control on debtor’s collection period which is major part of
current assets.
3. Company has to take control on cash balance because cash is non-earning assets and
increasing cost of funds.

Bibliography

27
Khan & Jain (2016).journal of financial management, Parle pvt. ltd.