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Bajaj Electricals Ltd. Company Reserach Paper

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K J Somaiya Institute of Management Studies and Research

Mumbai

[pic 1]

2016-2018

Financial Management

Project –SLP- Bajaj Electricals

Submitted to

Prof. Vineet Swaroop

Submitted by

Pranay Chaturvedi (08)

Gaurav Dalmia (10)

Rajeev Ranjan (37)

Vaibhav M(22)

Shardul Shandilya (41)

PGDM- Core (A)




Objective

To analyse the working capital management of a Consumer Durable Electrical Industries

company.

Company Name: Bajaj Electricals Ltd.

Key Competitors: Havells, Khaitan, TTK Prestige

Analysis

Correct Investment Policy

The given industry requires to maintain sufficient inventory because of the unpredictable consumer demands with seasonal market. Aggressive policy could hamper the industry because of losing the consumer to competitor or other substitutes because of strong competition and close competitors. Conservative policy may lead to loss due to huge carrying cost and outdating of inventories. Moreover, current demonetisation has also lead to slump in the market but the good agricultural output has kept the numbers decent. So, a moderate policy would be the correct policy for the company.


Current Policy of the firm (In comparison to competitors):

Bajaj

Havells

Khaitan

TTK Prestige

GWC Intensity

40.52

17.32

98.10

32.78

Policy

Moderate

Aggressive

Conservative

Moderate








Current Policy of the firm (Over the years):

2016

2015

2014

2013

2012

GWC Intensity

40.51974

41.43176

41.92112

40.12227

41.20899

Policy

Moderate

Moderate

Moderate

Moderate

Moderate

Conclusions: We see that the company’s investment policy is same over the years and it is moderate in comparison to other competitors, so we can conclude that the current investment policy is in line with the correct investment policy.

Current Financial Policy

2016

2015

2014

2013

2012

Temporary Working Capital

54.27

58.71

58.97

49.80

74.00

Short – Term Borrowing

100.94

215.97

213.74

125.44

146.7

Conclusions: Over the period, we see that temporary working capital is completely financed by short-term borrowings and also a part of permanent working capital is financed by short – term borrowings, which means that the company has an aggressive financing policy.

So, the firm has a moderate investment policy and an aggressive financing policy. The firm has taken a bit aggressive stance which might be suitable provided the company is able to maintain strong receivables.

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