Working Capital Management

INTRODUCTION
Working capital management is the way a company manages the relationship

between assets and liabilities in the short term. In simple words working capital
management is how a company manages its money for day to day operations as well
as any immediate debt obligations. When managing working capital, the company has
to manage accounts receivable, accounts payable, inventory, and cash. The goal of
working capital management is to have adequate cash flow for continued operations
and have the most productive usage of resources.
Working capital is the firms holdings of current assets such as Cash,
Receivables, Inventory, and Marketable Securities. Every firm required working
capital for its day-to-day transactions such as purchasing raw materials, for meeting
salaries, wages, rents, rates, advertising etc. But there is an agreement between
various financial authorities like (Financial managers, accountants, businessmen and
economists) as to the exact meaning of the term working capital.
Working capital management is one of the most important aspects of financial
management. Working capital management is concerned with the problems that arise
in attempting to manage the current assets, and the current liabilities and the
relationship between them. It also refers to management of short term financing,
negotiating favorable credit terms, controlling the movement of cash; administration
accounts receivables and monitoring the investments in inventories. The interaction
between current assets and current liabilities is therefore, the main theme of theory of
Working Capital Management.
The aim of working capital management is to manage the firms current assets,
and current liabilities in such a way that a satisfactory level of working capital is
maintained otherwise, if the firm cannot maintain a satisfactory level of working
capital it may become insolvent. The current assets should be large enough to cover
current liabilities.
The term current assets refer to those assets, which can be converted into cash
within a short period. E.g. Inventory, Resource, Marketable Securities etc. Current
liabilities are those liabilities are Bank Overdraft and Outstanding Expenses.
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The interaction between current assets and current liabilities is therefore, in other
words, the goal of working capital management is to manage the current assets, and
current liabilities in such a way that an acceptable level of net working capital is
maintained.
CONCEPT OF WORKING CAPITAL:
There are two concepts of working capital
1. Gross Working Capital
2. Net Working Capital
Gross Working Capital:

Gross Working Capital, simply called as working capital refers to the firms
investment in current assets. Current assets are the assets, which in ordinary course of
business can be converted into cash within an accounting year.
NET WORKING CAPITAL:
Net working capital refers to the difference between the current assets and current
liabilities. Current liabilities are those claims of outsiders, which are accepted, to
mature for payment with an accounting year and include creditors, bills payables and
outstanding expenses.
NEED FOR THE STUDY
The WORKING CAPITAL MANAGEMENT plays a vital role in the

accomplishment of organization objectives in the corporate scenario the concept
capital can be classified into fixed capital and working capital. The fixed capital
covers all the crucial decisions such as Capital Budgeting decisions, expansion and
modernization decisions.
The Working Capital covers the total expenditure, which concentrates on

routine organization activities. It is a difficult task before an organization to keep an
amount as working capital.
However, the amount of working capital can be determined on the length of
activities, the size of the activities, the area of policy and procedure and the volume of
an organization. The working capital management reviles around the performance of
day-to-day activities. If the size of activities of an organization is high the company
should maintain as working capital as vice-versa.
Therefore, in this crucial juncture, the study on working capital for The Ramco
Cements Limited (formerly Madras Cements Limited) has been selected for studying.
SCOPE OF THE STUDY
Public limited enterprises have not always given enough attention to the
problems of the working capital planning. The assured availability of even current
finance through budgetary support usually makes them lack not only in there working
capital policy intermediate planned level of individuals, current assets are not only
subjected to rigors exercise.
This study aims the various aspects of Working Capital Management

Practice under taken in The Ramco Cements Limited, Jayanthipuram
unit. A public limited organization, whose register office located
Ramamandiram ,Rajapalyam, and Tamilnadu which
needs careful
attention of the management.
Working Capital has acquired great significance and sound position in

recent years with an objective of profitability and liquidity. So, this
study was concentrated mainly on the working capital analysis of
madras cements limited.
Management is the area of study, it was proposed to the study as

extensively as possible on the management of working capital by
madras cements limited.
Keeping this in view, a modest attempt as is made to study various

components of working capital, their sources, and net increase or
decrease in working capital etc.
This study helps to make pertinent suggestion for the improvement of

the same in madras cements limited.
The information obtained from the primary and secondary sources

which were limited to madras cements limited.
OBJECTIVIES OF THE STUDY

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The objectives of the study are as follows:
To analyze how Working Capital Management is carried out in the

Organization.
To study various components of Working Capital and their

Management.
To evaluate the liquidity management through some of the related

Working Capital Ratios.
To know the efficiency of the company in utilizing its Current Assets.
To study and to determine the degree of efficiency with which each of

these components of Working Capital were managed.
To study the trends in Working Capital components.
METHODOLOGY OF THE STUDY

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The present study is an exclusive study on THE RAMCO CEMENTS

LIMITED, to meet the formulated objectives. The collection of data or information is
done through principle sources.
PRIMARY SOURCES:
The primary data is the data which is collected a fresh and for the first time
and thus happen to be original in chapter in character. Primary data can either through
direct communication with respondent in one form or through personal interviews.
The primary source data was collected through discussion by interacting with
the officials of THE RAMCO CEMENTS LIMITED.
SECONDARY SOURCES:
The secondary data is the data which have already been collected by someone
else and which have already been passed through the statistical process.
Most of the data used for the study is secondary in nature and has been
collected as
Annual reports of the company.
Financial statements, auditors report, information vouchers of the

organization.
Articles on cement industry concerned.
By referring text tools.
By business magazines
LIMITATIONS OF THE STUDY

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The study has some limitations, which are explained below.
This study confined to 5 years period which is from 2011-2012 to

2015-16 only, which is related to quantitative information base.
The findings may change due to changes in company structure

policies & planning.
Due to Cost and Time constraint this study has been minimized to
Working Capital management aspects only.
This study evaluation is based on some of the related Working

Capital Ratios.
CEMENT INDUSTRY
There is hardly any other product that has so greatly contributed to the
growth of modern human civilization as Cement. The massive urban infrastructure
that we see today across the world would have been unthinkable without cement.
Cement is the root substance that has given the essential element of strength and
durability to our houses, schools, offices and other buildings so that we can occupy
them with peace of mind.
The word Cement literally means a substance that can bind material together and can
acquire strength on hardening. The cement as we know today is a specialized building
material which is a result of various innovations over the past and is made in
sophisticated manufacturing facilities.
The Eddystone Lighthouse
In eighteenth century England, John Smeaton, a British engineer, was assigned the
task of re-constructing the Eddystone Lighthouse, a structure that had witnessed
repeated structural failure. In 1756, Smeaton conducted a number of experiments that
led to the discovery that cement made from limestone containing a considerable
proportion of clay would harden under water. Based on this discovery, Smeaton
rebuilt this lighthouse in 1759 and this time, it stood strong for 126 years.
Subsequently, until the early part of the nineteenth century, large quantities of natural
cement was used, that was made with a combination of naturally occurring lime and
clay.
The first patent for cement
In 1824, Joseph Aspdin, a British mason obtained a patent on his hydraulic cement
formula that closely resembled the modern cement as we know today. He called this
cement Portland Cement, and it was made through the proportionate mixing, burning
and the subsequent grinding of a combination of clay and limestone.
Cement as we know today
Cement went through many more improvements and developments in the nineteenth
and twentieth centuries. The industrial revolution and the subsequent development of
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the rotary kiln paved the way for huge and sophisticated cement manufacturing plants.
These plants possess the capability of a homogenous mixing and intense heating of
the raw material thus vastly improving the quality of the cement produced. The
sophisticated quality-testing equipment employed by modern cement plants further
helps in ensuring the quality of the cement produced.
Types of Cement, their Composition and Uses: There are 25+ compositions in the
market. Below are main compositions in the market.
Types of Cement
Composition
Purpose
Attains high strength
in early days it is used
in concrete where
form works are
removed at an early
stage.
Rapid Hardening Cement
Increased Lime content
Quick setting cement
Small percentage of aluminium

sulphate as an accelerator and
reducing percentage of Gypsum
with fine grinding
Low Heat Cement
Manufactured by reducing
tricalcium aluminate
Sulphates resisting Cement
It is prepared by maintaining the

percentage of tricalcium
aluminate below 6% which
increases power against
sulphates
Used in works is to be
completed in very
short period and
concreting in static
and running water
It is used in massive
concrete construction
like gravity dams
It is used in
construction exposed
to severe sulphate
action by water and
soil in places like
canals linings,
culverts, retaining
walls, siphons etc.,
Blast Furnace Slag Cement
It is obtained by grinding the

clinkers with about 60% slag
and resembles more or less in
properties of Portland cement
It can used for works

economic
considerations is
predominant.
High Alumina Cement
It is obtained by melting mixture

of bauxite and lime and grinding
with the clinker it is rapid
hardening cement with initial
and final setting time of about
3.5 and 5 hours respectively
It is used in works
where concrete is
subjected to high
temperatures, frost,
and acidic action.
White Cement
Coloured cement
Pozzolanic Cement
Air Entraining Cement

Hydrographic cement
It is more costly and is

used for architectural
purposes such as
precast curtain wall
It is prepared from raw materials and facing panels,
free from Iron oxide.
terrazzo surface etc.,
They are widely used
It is produced by mixing mineral for decorative works
pigments with ordinary cement. in floors
It is used in marine
structures, sewage
works, sewage works
and for laying concrete
It is prepared by grinding
under water such as
pozzolanic clinker with Portland bridges, piers, dams
cement
etc.,
This type of cement is
specially suited to
improve the
It is produced by adding
workability with
indigenous air entraining agents smaller water cement
such as resins, glues, sodium
ratio and to improve
salts of Sulphates etc during the frost resistance of
grinding of clinker.
concrete.
This cement has high
It is prepared by mixing water
workability and
repelling chemicals
strength
At Present China, India positioned first and second places in highest cement
producers in the world.
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At Present China, India positioned first and second places in highest cement
consumers in the world.
CEMENT INDUSTRY IN INDIA
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Manufacturing of the cement was first started in madras in 1904. A real beginning
was, however, made in 1912-1930 when three companies were formed. By the time
the plant started, there were 21 factories with an annually capacity of 3.28 million
tones. The government had a complete control on the production, distribution and
price of cement and this damped the growth of the cement industry. In 1997, the
government announced that 12 percent post tax returned on net worth was fairy
enough and retention prices would be fixed to ensure it. This provided an initial
momentum for investment in the industry. The real impetus was provided when
partial decontrol was announced in 1982. Under this policy, all existing cement units
were required to give up to 66.6 percent of there installed capacity as levy at
controlled price. The balance production was treated non levy cement and was
allowed to be sold in the market at the ruling prices.
An event of significant importance from the long term point of view has been
the process of consolidation and measures and acquisitions witnessed in the cement
industry during recent period. The leaders are now finding economical to accrue an
existing under utilized/ill-managed company rather than to float a new company.
The Indian cement industry is the 2nd largest market after China, accounting for about
8% of the total global production. It had a total cement manufacturing capacity of
375-390 million tonnes (MT) as of financial year ended 2014-15.
Cement is a cyclical commodity with a high correlation with GDP. The housing sector
is the biggest demand driver of cement, accounting for about two-thirds of the total
consumption. The other major consumers of cement include infrastructure,
commercial construction and industrial construction.
The cement industry capacity doubled in the last decade, with about 70 million tonnes
added in the last three years alone. Though India has witnessed sustained growth in
cement consumption since 2001, the growth has slowed down in the last 3-4 years.
This has been on account of a slump in housing, infrastructure and commercial sector.
The gap in the pace between capacity additions and actual demand has led to a excess
capacity situation in the industry, resulting in sub-optimal utilisation rates.
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Moreover, the per capita consumption of cement in India still remains substantially
low at about 195 kg when compared with the world average which stands at about
520 kg. This underlines the tremendous scope for growth in the Indian cement
industry in the long term.
Cement, being a bulk commodity, is a freight intensive industry and transporting it
over long distances can prove to be uneconomical. This has resulted in cement being
largely a regional play with the industry divided into five main regions viz. north,
south, west, east and the central region. The Southern region of India has the highest
installed capacity, accounting for about one-third of the country's total installed
cement capacity.
During the financial year 2014-15 (FY15), India's cement industry grew by about
5.6% year-on-year (YoY) as compared to 3.1% YoY growth in the financial year
2013-14 (FY14). The growth was supported by pre-election spending and delayed
monsoon in the first half of the fiscal. During the second half, the demand was
impacted by low government spending and less demand from real estate and
construction projects, and slow revival in infrastructure spending. The cement
industry capacity utilisation rate stood at around 71%.
PROBLEMS OF CEMENT INDUSTRY

The above brief discussion shows that the cement scenario has undergone a sea
change----- from that of shortages and premiums just few years ago to that of surplus
production now. However this surplus production has brought in its wake new
problems like cut throat competition, unremunerative prices and deepening financial
crisis. The main problems of the cement industry are outlined below.
1. BURDEN OF HIGH TARIFFS
The cement industry is facing high tariffs, high excise duty, sales tax, royalty
lime stone and coal etc the excise duty on cement has been steadily rising. the total
levies on cement per tone amount to as much as 120 per tones. The effective burden
on cement amounts to as much as Rs. 35% of the retail price of cement and 47% of
the ex. Factory price excluding excise sales tax and freight. This is much higher as
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compared to the burden in the other countries making the Indian cement industry
internationally uncompetitive.
2. POOR QUALITY OF COAL
Coal is an important input in the cement industry and accounts for 15 20 %
of cash expenses in the manufacture of cement. On an average 250kg of coal is
required to produce 1 tone of cement. Coal in India has to be moved over long
distances of 1000 to 12000 km to some plants in north, south and west India. There is
a severe shortage of coal in the cement industry. The quality of coal supplied to
cement units is also highly unsatisfactory as only D , E & F grades of coal are
supplied to these units. The ash cement in Indian coal is very high and this restricts
production. To meet the twin problems of shortage of coal and poor quality of coal
(due to high ash contents), the emphasis on imports of coal is now increasing.
However this option in addition to involving expenditure of foreign exchange
resources, also places those cement plants disadvantage which are located far from
ports as they have to incur extra costs for doubling handling and freight.
3. THE POWER SHORTAGE
Power is another important requirement and along with coal forms 40 percent
of the total cost. Power cuts, unsteady and inadequate power supply from state
electricity boards have created serious problems for cement units. This is all the more
so as the production of cement is a continues process requiring uninterrupted power
supply to operate efficiently. To cope with the problem of power shortage, cement
companies have been obliged is to make heavy investments in captive power
generation and also auxiliary generation in wind forms, particularly in plants located
in coastal areas.
4. TRANSPORTATION PROBLEMS
Transportation costs make up around 20 percent of the total cement price. The
industry predominately depends on railways, but due to shortage of wagons, cement
despatches by railway declined over the years. The Indian railway has introduced
Own your wagon scheme where in cement companies have been allowed to
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purchase wagons. This has lead to some marginal improvement and has enabled the
cement companies to tide over distribution bottlenecks.
However the increase
distribution cost is forcing companies to pass costs to the customers.

5. DEMAND CONSTRAINTS
Till the year 2015-16, the demand for cement was mainly dependent on
government spending as the government with a 40 percent off take was the single
largest consumer of cement. However, due to financial constraints, the government
was forced to cut down on a wide range of developmental activities. This resulted in
a demand constraint. In recent years the quality of liberalization and the opening up
of the infrastructure sector to the private sector and the foreign sector, have given new
hopes of substantial expansion in demand of cement.
6. UNDER UTILIZATION OF CAPACITY
Under utilization of capacity is a recurrent future of cement industry. A study
conducted by economic times bureau on capacity utilization of cement plants in the
northern region was 72.9 percent, in the eastern region 64.8 percent, in western region
91.2 percent and in the southern region
80.3 percent.
This shows that under
utilization of capacity is particularly marked in the cement plants located in the

eastern region. One of the main factors according for low capacity utilization in this
region has been the demand constraint.
7. CEMENT TECHNOLOGY
In 1986, 56 percent of the cement plants were employing the uneconomical
wet processing. Due to the high labor and maintenance costs and smaller size, these
plants had a high cost of production not only this. On the basis of the cement
production of 33 million tones achieved in 1985-86, there obsolete technology
resulted in a wastage of over 2.5 million tones of coal, and 800 million tones of
electricity every year. In recent year there has been a gradual shift from wet to
modern, fuel efficient dry process plants.
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CEMENT MANUFACTURING ASSOCIATION (C.M.A):

Cement Manufacturers Association (CMA), the apex representative body of
large cement manufacturers in India was established in 1961. It is a unique body in as
much as it has both the private and public sector cement companies as its members. It
is a registered body under the Societies Registration Act XXI of 1860. Its registered
office is in New Delhi, while the Corporate Office in Noida with Branch offices in
Mumbai and Hyderabad.
Main Objectives of CMA:
To promote the growth of the Cement Industry.
To protect the Consumer interest
To identify newer applications of cement usage.
To establish contacts with similar bodies abroad for exchange of information,
data and publications.
MISSION:
CMA acts as a bridge between Indian cement Industry and the Government. It creates
a conducive environment to promote growth of cement industry, through advice and
consultation. It closely works with government, various Regulators on policy issues,
enhancing efficiency, competitiveness, growth and development opportunities for
Indian cement industry. Its mission is to impact the policy and legislative environment
so as to foster balanced economic, industrial and social development in the cement
industry.
PROFILE OF THE RAMCO CEMENTS LIMITED

THE RAMCO GROUP:
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The year was 1938. It was a time when the reverberations of the Industrial
Revolution had not yet reached the interiors of South India. Despite scarce capital and
resources, Mr. P A C Ramaswamy Raja setup the first spinning mill at Rajapalayam,
which later became the focal point of the Ramco Group. His sharp focus on
technology and quality has inspired a generation of entrepreneurs and formed the
basis for the collective vision of the Group.
Today, under the stewardship of the current Chairman Mr. P R Ramasubrahmaneya
Rajha, the Ramco Group has expanded into a USD 1 Billion industrial conglomerate
with interests spanning cotton and synthetic yarn, cement, building products, software
solutions, wind-energy, bio-technology and more. The Group has become one of the
most reputed business houses in India and has achieved international recognition for
its quality products and services.
Group's Fact Sheet:

Turnover of US $1 Billion
Industrial conglomerate with presence across cotton and synthetic yarn,
cement, building products, software solutions, bio-technology and more
Fifth largest Cement producer
Sophisticated R & D Centre in Chennai
14,000 + employees
Publicly traded
RAMCO GROUP OF COMPANIES:

Company
Offerings
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Geographical Markets
The Ramco Cements Ltd
Ramco Industries Ltd
Ramco Systems Ltd
Cement, Ready Mix

Concrete, Dry Mortar
Plasters
Fibre Cement Sheets,

Pressure Pipes, Cotton Yarn,
Windmills.
A portfolio of enterprise
software products and
services
The Ramaraju Surgical

Cotton Mills Ltd
Cotton Yarn, Tissue culture

saplings
Absorbent Cotton Wool,
Gauze Bandage, Plaster of
Paris
Sri Vishnu Shankar Mill Ltd

Thanjavur Spinning Mill Ltd
Yarn
Yarn
Sandhya Spinning Mill Ltd
Yarn
Rajapalayam Mills Ltd
India
Japan, Korea, Hong
Kong, Thailand,
Vietnam, Malaysia,
Singapore, Sri Lanka,
India & Dominican
Republic
Africa, US, Canada, Asia
Pacific, Europe, Middle
East & India
Japan, Korea, Malaysia,
Indonesia, Hong Kong,
India & Thailand
India, European & Gulf
countries
Korea, Japan, India &
China
India
India, Italy & Far East
markets
THE RAMCO CEMENTS LIMITED:

The Ramco Cements Limited (formerly Madras Cements Limited) is the flagship
company of the Ramco Group, a well-known business group of South India. It is
headquartered at Chennai. The main product of the company is Portland cement,
manufactured in eight state-of-the art production facilities that includes Integrated
Cement plants and Grinding units with a current total production capacity of 16.45
MTPA. The company is the fifth largest cement producer in the country with 2846 No
of Employees.
Integrated Cement Plants:
Ramasamy Raja Nagar, Virudhunagar District, Tamil Nadu
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Alathiyur, Ariyalur District, Tamil Nadu
Ariyalur, Govindapuram, Ariyalur District, Tamil Nadu
Jayanthipuram,Krishna District, Andhra Pradesh
Mathodu, Chitradurga District, Karnataka
Grinding Units:
Uthiramerur, Kanchipuram District, Tamil Nadu
Valapady, Salem District, Tamil Nadu
Kolaghat, Purba Medinipur District, West Bengal
Vizag, Visakhapatnam , Andhra Pradesh
Packing Terminals:
Nagercoil Packing Unit, Kumarapuram, Aralvaimozhi, Kanyakumari District,

Tamil Nadu
State-of-the-Art Research Centre:
Ramco Research Development Centre (RRDC), Chennai
Jayanthipuram Unit:
In 1986 the company ventured into the second unit Jayanthipuram in Andhra
Pradesh 75 km from Vijayawada towards Hyderabad with an investment of Rs. 100
crores per manufacture of 7.50 lakh tones of cement per annum. This plant was
commissioned in 1986 six months a head of schedule plans.
The Ramco Cements Limited (formerly Madras Cements Limited) is Ramco
groups of most ambitious diversification had. It is a profitable company today. Two
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were process plans were setup in 1987 with a capacity of 600 tones to produce
Portland cement.
In the 70s totals with over was made to the dry process of
manufacture. The single largest dry kiln in India at the time of its establishment.
With a capacity of 1200 tones was installed at Ramaswamy Rajanagar in
Tamilnadu, for the first time in India, over the years the plant has modified and
updated with pre calciner technology. This has increased the capacity by 115% in
1993. Ramco group has setup its second and Indias most technologically advanced
cement unit which started its production in 1987 jayanthipuram, Krishna district and
Andhra Pradesh with 1.1 million tones per annum in 2016 it has the capacity of 3.65
million tones per annum.
This is the first factory in India to be totally computerized. It is one of the
most sophisticated plants in India with full computer controlled special software of
F.L.Smiths and Fuzzy logic system from DENMARK for Kiln control. This flagship
company of Ramco producer of market cement with the bondman Ramco. The two
plants have combined capacity of 1.5 million tones per annum. It is very clear that
sales revenue is increasing steadily year after year indicated the efficient performance
of the company.
1992:
The Ramco Cements Limited (formerly Madras Cements Limited) always
believes that blended cement is best suited for many applications and by far much
better than graded OPC. MCL is the pioneer in promoting the Portland Pozzolana
cement and have established a firm market preference in Tamil Nadu and Kerala for
the last 30 years.
MCL is the first cement company in Andhra Pradesh to manufacture PPC and
the product is well established in Andhra Pradesh. Today 70 to 80% of the cement
production from Jayanthipuram cement plant is PPC.
It started producing POZZALONA PORTLAND CEMENT by adding Fly
ash from 1992. The initial blending was 10% of Fly ash. This was gradually
increased, at present it is blending with 30% of Fly ash. Fly ash Handling System was
installed in 1992 with an investment if Rs.1.00 Crore.
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1994-95
The Kiln was gradually upgraded from 2,300 TPD in 1986 to 2,700 TPD in
1994 and to 3,200 TPD in 1995. During this period, Raw Mill and Coal Mill were
also upgraded from 220 to 240 TPH and 26 to 30 TPH respectively.
Horizontal Impact Crusher (HIC), was installed in 1995, in Cement Mill
Circuit to increase the output from 125 TPH to 180 TPH and the Cement Mill was
optimized in 1996. With this, the capacity has been increased to 11 lakh tones per
annum.
The Plant has Electrostatic Precipitators(ESP), and dedusting bag houses to
ensure clean and pollution free environment.
Madras Cements has an
uncompromising attitude towards prevention of anti-environmental pollution.The

above up gradation of Kiln and other Mills was carried out with an Investment of
Rs.25 Crores.
EXPANSION
SLAG GRINDING UNIT:
The Ramco Cements Limited (formerly Madras Cements Limited) has always
stayed in the forefront of the industry. A special task force within the company keeps
track of the latest international development in Cement Technology and prompt action
is taken to adopt the state of art technology.
India generates about 70 million tones of Fly ash and 10 million tones of slag
annually. Disposal of Fly ash and Slag poses a problem to the environment. Concern
for environment and ecology is percolating very fast into customer awareness globally
an thereby a check on eco-hostile products is becoming an imperative exercise. Both
Central and State Govts. Are strongly propagating to use these products in cement
manufacture.
A working group has ben constituted by the Govt. of Andhra Pradesh to study
the generation and disposal of fly ash and BF slag. Based on the recommendations of
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the working group, the Govt. of Andhra Pradesh had issued a G.O. instructing all the
Govt. departments for utilization of 100% Pozzolana / slag cement, within a period of
five years.
In line with the policies of the Govt. and our philosophy of using otherwise
non-usable materials like fly ash and slag to produce value added blended cement and
thereby conserve limestone and other minerals like coal etc, and also to save energy
apart from being eco-friendly and creating clean atmosphere by reducing carbon
dioxide emission into atmosphere, we ventured into manufacturing of Blended
Cement and are therefore proud of serving our nation by preserving minerals and
maintaining clean atmosphere for our future generations.
MISSION STATEMENT OF THE RAMCO CEMENTS LTD
To continuously improve productivity through quality, technology renewal
and customer-focused operations.
To seek green field location for growth on the basis of developed synergy of
the existing operation.
To continuously seek the quality enhancement in product processes and
responses to various stake holders.
To update management practices continuously and maintain a professional
management culture.
To conserve, protect and enhance quality of life for our employees and
community.
To preserve the credence in our motto OUR REAL RESOURCES ARE THE
HUMAN ASSETS.
QUALITY POLICY OF THE RAMCO CEMENTS LTD

Customer is the most important person in the organization It is the policy of
the company to achieve total customer satisfaction and commitment through
continuous quality improvement by,
Providing premium product through consistent standards o quality in
process product and service.
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Adopting the state of art technology.

Undertaking research and development in all areas of operations in
general and particularly in process control, product quality energy
conservation and cost control.
Maintaining clean environment and health standards both within the
factory and in the neighborhood.
Impacting need based training and development a dedicated team of
skilled resources.
Encouraging participative management at all levels.
CORE VALUES & BELIEFS:

Customers continued satisfaction and sensitivity to their needs is our
source of strength and security, if there is no customer there is no
business.
The Management do not look at productivity as a game in numbers.
Management try to learn from others, be committed to quality and
always stay ahead in terms of technology.
We have strong faith in the innate creative abilities and infinite
potential of Human Resources. We are committed to investing in
people development and growth, since this is the foundation for strong
and qualitative growth of the organization.
Freedom to professional managers, open channels of communication,
transparency, participative management, involvement of the workers
in their leisure time in community and social work are evidence of
their faith in Human Resources.
Management believe that when organization grows, the society and
the community around us should also grow.
Even while continuing to achieve sustained growth through fair, just
and ethical means we strongly believe in respecting the sentiments and
values of others.
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ACHIEVEMENTS:
Has been winning many National / State level awards in the areas of :
Energy conservation
Tax compliance
Return to investors
Corporate Excellence
Safety
Quality Circles
Environment protection
ISO 9001 Certification for RRN/JPM/ALA/RMC Plants
ISO 14001 Certification for Alathiyur
ENERGY CONSERVATION:
Introduction of CFG Cooler in I grate during Kiln up gradation. Thermal
Energy Consumption has reduced from 760 to 720 KCL per kg. of Clinker.
Variable frequency drive in Cooler I grate fans were installed to minimize the power
consumption and to have a stable operation of Cooler.
The constitution of Energy Conservation Cell and Fuel Conservation Cell
has resulted in reduction of overall power consumption from 96 units per tone of
cement in 91-92 to 76-71 in units at present, there by saving the energy. These
committees are continuously monitoring the power and fuel consumption to achieve
better results in future.
This plant is started producing POZZALONA PORTLAND CEMENT by
adding Fly-Ash from 1982. The Fly ash addition increased to 30% to the extent of 2
in 2004. TRCL adopted unique grinding method using state-of-the-art machinery
from Germany to save power and to ensure quality.
This is in line with the
philosophy of using otherwise non-usable materials like fly ash and slag to produce
value added blended cement and there by conserve our limestone and other minerals
24
like coal etc., and also save and other minerals likecoal etc., and also save energy
apart from being eco-friendly and creating clean atmosphere by reducing Carbon
dioxide emission into atmosphere.
ISO CERTIFICATION:
The Ramco Cements Limited (formerly Madras Cements Limited), Jayanthipuram
unit got ISO 9002 certification in May, 1998. It is not maintaining the ISO standards
and also tries to improve upon it day by day in order to equip itself for ISO 14000
certification.
SAILENT FEATURES OF T.R.C.L. AT JAYANTHIPURAM:

For the first time in India the very latest computerized control systems are
introduced in the Jayanthipuram unit for efficient operation on energy conservation.
The salient feature of our jayanthipuram project are furnished below.
A stacker reclaimer for pre blending and continuous flow silo for blending.
Vertical roller mills for granding raw materials and coal.
Five stage per heater for their mail efficiency per calcinatory for efficient use
of low grade coal.
A scanner connected to a computer for refractory monitoring.
X-ray analyzer for quality control on line process computerized control for
consistent quality.
FUZZY LOGIC software for Kiln control.
Electro static precipitator at 5 strategic points for pollution control.
Belt bucket elevators for energy conservation.
POLLUTION CONTROL
In the present context of improved cement process technology, pollution
control equipments have become vital process equipments apart from controlling
pollution.
25
CONTROL & MONITORING
CONTROL :
The Ramco Cements Limited total process is supervised and controlled
by a computer which helps the operator for better and quicker control and
monitoring of various process parameters which in terms helps in achieving
optimum performance of all equipment including ESPs.
MONITORING :
To number of high volume samplers are installed about kilometer from
the meter of the plant or two at two different locations which are the diagonally
opposite to monitor the ambient air quality. Stack emission levies are being
monitored every for the night and reports submitted to pollution control board
regularly.
CONTROL OF FOGTIVE DUST ROAD:

Water is being sprinkled on the crusher ramp and on the developing
loans side the side the plant and on roads during days.
THE EQUIPMENT AVAILABLE AT M.C.L:
TO CONTROL POLLUTION
SUPPLIERS
a) Esp for rawmill and klin
flakt India
b) Esp before coal mill
fls/l&t
c) Esp after coal mill
fls/l&t
d) Esp after collar
flakt India
e) Esp far cement mill
flakt India
f) wet scrober far crusher
IAEC
g) 28 dust filters for various equipments

through the rathi industries plant.
TO MONITOR THE POLLUTION LEVEL:
a) stack monitoring kit to mature emissions level in the stock.
b) Two numbers high volume suppliers located outside the factory.
26
FUZZY LOGIC CONTROL SYSTEM:

The only one if its kind control system developed by F.L.Smith and company,
Denmark, world renowned cement technologist and operating efficiency at the only
cement plant at jayantipuram in the part of the word.
SALIENT CONTROL SYSTEM FEATURES OF FUZZY LOGIC:

1) Operates the plant automatically without the help of the operator.
2) Reduce the ESP tripping drastically.
3) Coating in the kiln will be very stready and uniform clinker quality is very
good and the cement quality also very high.
Many more advantages which are beneficial not only to the company but also
to the nations economy.
FUNCTIONS OF FUZZY LOGIC CONTROL SYSTEM:

The fuzzy logic control is very specialized software program prepared by
F.L.Smith and (O.denmark) to the world renowned cement technologist.
Basically fuzzy logic control is an artificial intelligent and light very much skilled
operator, F.L.Smith and company have spent a few years in deputing a few scientists
various plants operating at the different people the observations were confined the
report of which is fuzzy logic control.
The computerized fuzzy logic control is totally from all the limitations weaknesses, of
human being ad acts as electronic eyes and keeps one vigil in the process without any
failure.
It needs some basic input a from the flint which are connected to the
computer depending on the operating conditions, it keeps on controlling the basic

variables like klin speed, ID fan speed and coal firing.
SALIENT FEATURES:
27
Co control: carbon monoxide is under control resorting in drastic reduction

of ESP tripping now ESP are charged far 23 hours to 24 hours a day.
Coating formation in klin this is very steady and uniform which improve the
brick lining life and improves the klin availability.
Quality: clinker quality is very good, thus the cement quality is very high.
AFFORESTATION:
They have started a forestation drive right from the beginning of the project
structure stage. They have so far planted 16,000 trees consisting of neem, gulmour
etc. and our nursing 2000 saplings. They will add 2000 trees every year, this will
transform the land space into lush green which was dry and baron when we started the
project.
ALTERNATIVE FUEL:
Trails are under way to utilize alternative fuels like rice husk, ground nut,
shells, coconut shells, waste oil sledge etc., to minimize the consumption of
conventional fuels like coal in order to conserve its consumption and there by
increasing its life coal availability besides maintaining pollution free atmosphere.
HRD AND WELFARE MEASURES:
The co and the group believe in the infinite potential of human research pro
active personnel policies ensure group performance equality circles, suggestions,
schemes and training and development programs are given primary importance not
only for workers and staff, but also for there families.
The company has some unique welfare measures like holiday homes for
employees, person for workers and Own your home scheme.
SOME
OF
THE
IMPORTANT
SERVICES
RAMCO
GROUP
UNDERTAKEN.
Raja charity trust
A.C.Rama Swamy Raja education charity trust.
P.A.C.Rama Swamy Raja Poly technique.

28
HAS
P.A.Chinaih Raja memorial higher secondary school.
PA.C.R.Ammani ammals higher secondary school.
Chinnaih
vidyalaya
P.A.C.R.
raju
matriculation
higher
secondary school.
Plans are on to build a hospital in rajayapalem equipped with the most
advanced medical facilities. The primary aim of this hospital would be to provide free
medical to the worker scheme of the society.
In order to give impetus to ecology development a senor horticulturist is being
appointed his services will be extended to the farmers of near by villages to help them
in going various fruit and vegetation using hybrid varieties.
We are going a head shortly for massive a forestation of 150acres of our land located
at the entrance of our factory premises.
MARKETING :
RAMCO cement has been a national wide dealer, network based on the
respite, trust and mutual understanding business understandings. It is having 850
dealer in A.P., 1400 dealers in kerala and Tamilnadu. A total care in being taken care
to ensure that a pollution free atmosphere in all the factories.
HRD, INDUSTRIAL RELATIONS AND AWARDS :

The safety committee, which has members from top to bottom representing all
sections of employees meets twice in a month to assess and identify the areas for
improvement. Corrective actions are taken then and there. The company will never
compromise for any things at the cost of safety.
Industrial relations in Jayanthipuram Unit continue to be Cordial and Reality.
Employees at all levels are extending their full support and are actively participating
in the various programmes for energy conservation and cost reduction. There is a
special thrust on Human Resources Development with a view to promoting creative
and group effort. Although the company, development with a view to promoting
creative and group effort. Although the company, the focus is on customer driven
29
organization. The quality circle movement has taken deep roots and their all 11
quality circles functioning in Jayanthipuram Unit at present.
The company believes in the infinite potential of human resources. This forms
the guiding principle behind all HRD and management activities. The company
improvement.
The involvement of employees is ensured through freedom to
professional managers, open channels of communication ad various forums like

works committee, Joint Council, Safety Committee, Quality Circles, and Suggestion
Schemes etc.
The company continued to secure many Awards for Accident-free performance
Environment and Pollution controls, welfare amenities, productivity, Supervision
standards and in Quality Circles.
During the year 1999-2000, they got awards from various organizations as
follows.
1. Management of Sub-grade Minerals
2. Waste Dump Management
From Director General of Mines Safety, Hyderabad
1. Overall performance
2. Loading Transportation & Dust Suppression
3. Environment & Pollution Control
4. Injury Rate Performance
5. Productivity
6. Welfare activities
7. House Keeping
8. Publicity and Propaganda
The Ramco Cements Limited (formerly Madras Cements Limited) limited has bagged
of the five national awards substituted by the NATION COUNCIL FOR CEMENT
AND BUILDING MATERIALS in association with ministry of power, energy
efficiency in the cement industry company bagged three awards for the best
improvement in energy performance. Electrical energy ad thermal energy. Company
bagged three awards for the performance electrical energy and thermal energy and in
1994 it bagged industrial economist business excellent award.
30
This award was
presented for excellence achieved the major activated concentrated in south India.
Now the company looking for to start three more units with total outlay of Rs. 275
crores.
ORGANIZATION STRUCTURE
Organization structure is a basic frame within which the managers decision
making behaviors takes place.
Structure basically deals with relationships.
Organization structure is the pattern of relationships among various components or

parts of the organization. This prescribes the relationship among various activities
and positions. Since these processions are held by various persons, the structure is the
relationship among people in the organization.
There are two types of organizations, formal and informal. Organization chart
is a vital tool for providing information about organizational relationships. Such a
chart is a diagrammatically from which shows the major functions and there
respective relationships the channel of formal authority of each manager who is in
charge of each respective function the organization chart shows only formal
relationships, the informal relationships are mostly transistor and fixable. So they are
not depicts on the chart. Moreover it depicts the formal relationships only a given
point of time.
31
FINANCIAL MANAGEMENT
Financial management is broadly concerned with the acquisition and use of
funds
by a business firm. The subject of Financial Management is of immense interest to

both academicians and practicing managers.
KEY ACTIVVITIES OF FINANCIAL MANAGEMENT
There are mainly three broad activities of financial management .They
are,
Financial analysis, planning and control.
Management of the firms asset structure and
Management of the firms financial structure.
1. FINANCIAL ANALYSIS, PLANNING AND CONTROL

It is concerned with
32
Assessing the financial performance and condition of the firm
Forecasting and planning the financial future of the firm
Estimating the financial needs of the firm
Instituting appropriate systems of control to ensure that the actions of

managers are congruent with the goals of the firm
2. MANAGEMENT OF THE FIRMS ASSET STRUCTURE

Value is created mostly of the asset side of the balance sheet.
Management of the firms asset structure involves,
Determining the capital budget
Managing the liquid resources
Establishing the credit policy
Controlling the level of inventories
3. MANAGEMENT OF THE FIRMS FINANCIAL STRUCTURE
The management of the financing side of the balance sheet involves
establishing the debt-equity ratio or leverage
determining the dividend policy
choosing the specific instruments of financing
negotiating and developing relationships with various suppliers of capital
FINANCE FUNCTIONS
The functions of raising funds, investing them in assets and distributing
returns earned from those assets to shareholders are respectively known as financing,
investment and dividend decisions.
A firm performs finance functions simultaneously and continuously in the
normal course of he business. Finance functions call for skilful planning, control and
execution of a firms activities.
INVESTEMENT DECISIONS:
Investment decisions or capital budgeting involves the decisions of capital
or commitment of funds to long-term assets.
33
Two important aspects of the investment decisions are
the evaluation of the prospective of new investments
the measurement of a cut-off rate against that the prospective return of new
investments could be compared
FINANCING DECISIONS:
These decisions are used as to when, where and how to acquire funds to
meet the firms investment needs. The central issue before the finance manger is to
determine the proportion of equity and debt. The mix of debt and equity is known as
the firms capital structure.
DIVIDEND DECISIONS:
The financial manager must decide whether the firm should distribute all
profits or retain them or distribute a portion and retain the balance. The optimum
dividend policy is one that maximises the market value of the firms shares.
34
WORKING CAPITAL MANAGEMENT

Working capital is the firms holdings of current assets such as Cash, Receivables,
Inventory, and Marketable Securities. Every firm required working capital for its dayto-day transactions such as purchasing raw materials, for meeting salaries, wages,
rents, rates, advertising etc. But there is an agreement between various financial
authorities like (Financial managers, accountants, businessmen and economists) as to
the exact meaning of the term working capital.
Working capital management is one of the most important aspects of financial
management. Working capital management is concerned with the problems that arise
in attempting to manage the current assets, and the current liabilities and the
relationship between them. It also refers to management of short term financing,
negotiating favorable credit terms, controlling the movement of cash; administration
accounts receivables and monitoring the investments in inventories. The interaction
between current assets and current liabilities is therefore, the main theme of theory of
Working Capital Management.
The aim of working capital management is to manage the firms current assets,
and current liabilities in such a way that a satisfactory level of working capital is
maintained otherwise, if the firm cannot maintain a satisfactory level of working
capital it may become insolvent. The current assets should be large enough to cover
current liabilities.
The term current assets refer to those assets, which can be converted into cash
within a short period. E.g. Inventory, Resource, Marketable Securities etc. Current
liabilities are those liabilities are Bank Overdraft and Outstanding Expenses.
The interaction between current assets and current liabilities is therefore, in other
words, the goal of working capital management is to manage the current assets, and
current liabilities in such a way that an acceptable level of net working capital is
maintained.
35
CURRENT ASSETS:
1. Cash and Bank Balances
2. Short term Loans & Advances
3. Bills Receivables
4. Sundry Debtors
5. Inventories such as,
Raw materials
Work-in-progress
Finished Goods
6. Prepaid Expenses
7. Accrued Incomes
8. Money receivables within 12 months
The term working capital refers to the networking capital. Networking capital is
the excess of current assets over current liabilities. Current liabilities are those
liabilities, which are intended to be paid in the ordinary course of business within a
short period of normally one accounting year.
CURRENT LIABILITIES:
1. Bills Payable
2. Sundry Creditors
3. Accounts Payable
4. Short term Borrowings
36
5. Dividends Payable
6. Stationary Liabilities
7. Accrued on Outstanding Expenses
8. Bank Overdraft
9. Provident fund due
10. Any other Payment due within 12 months
SIGNIFICANCE OF WORKING CAPITAL:

The world in which real firms function is not perfect because it is characterized by the
firms considerable uncertainty regarding the demand, market price, quality, and
availability of its own products and those of supplies. These real world circumstances
introduce problems to the firm must deal. While the firm has many strategies
available to address these circumstances, strategies that utilize investment or
financing with working capital management is reflected in the fact that financial
managers spend a great deal of time in managing current assets and current liabilities.
The management of working capital plays an important role in maintaining the
financial health during the normal course of business. This critical role can be
enunciated by examining the flow of resources through the firm. By far the major
flow is the working capital cycle.
This is the loop which starts at the cash and the marketable securities account,
goes through the current account as direct labour and materials which are purchased
and use to produce inventory, which in turn is sold and generates accounts
receivables, which are finally collected to replenish cash. The major point to notice
37
about this cycle is that the turnover or velocity of resources through this loop is very
high related to the other inflows and outflows of the cash account.
OBJECTIVES OF WORKING CAPITAL MANAGEMENT:

The objectives of working capital management are two fold:
1. Maintenance of working capital
2. Ability of sample funds at the time of need
The basic goal of working capital management is to manage each of the funds
current assets and current liabilities in such a way that an acceptable level of
networking capital is always maintained in the business.
CONCEPT OF WORKING CAPITAL:

There are two concepts of working capital
1. Gross Working Capital
2. Net Working Capital
Gross Working Capital:

Gross Working Capital, simply called as working capital refers to the firms
investment in current assets. Current assets are the assets, which in ordinary course of
business can be converted into cash within an accounting year.
38
Examples of Current Assets are:

Cash and Bank balances
Short Term Loans and Advances
Bills Receivables
Sundry Debtors
Inventory
Prepaid Expenses
Accrued Incomes
Money Receivables in 12 months
The gross working capital concept focuses attention of two aspects of current assets
management.
a) Optimum investment in current assets and
b) Financing of current assets
The consideration of the level of investment in current assets should avoid two
danger points - excessive and inadequate investment in current arranging funds to
finance current assets. Whenever a need for working capital funds arises due to the
increasing level of business activity or for any other reason arrangement should be
made quickly.
NET WORKING CAPITAL:

Net working capital refers to the difference between the current assets and current
liabilities. Current liabilities are those claims of outsiders, which are accepted, to
39
mature for payment with an accounting year and include creditors, bills payables and
outstanding expenses.
Net working capital can be positive or negative. A positive net working
capital will arise when current assets exceeds current liabilities. It is a quantitative
concept. It
a) Indicate the liquidity position of the firm and
b) Suggests the extent to which working capital needs may be financed
by permanent sources of funds.
TYPES OF WORKING CAPITAL:
Working capital can be classified into two categories i.e.
1. Permanent Working Capital
2. Temporary or Variable Working Capital
Permanent Working Capital:
It is the minimum amount of investment in all current assets which is required at
all times to carry out minimum level of business activities. Tandon Committee has
reserved to this type of working capital as Core Current Assets.
Characteristics of permanent working capital:

Amount of permanent working capital its remains in the business in one form or other.
It also grows with the size of the business. It is permanently needed for the business,
and therefore, it should be financed out of long-term funds.
Variable Working Capital:
40
The amount of working capital over permanent working capital is known as

variable working capital. The amount such working capital keeps on fluctuating from
time to time on the business activities.
It may again be subdivided into seasonal working capital and special working
capital. Seasonal working capital is required to meet the seasonal demands of busy
periods occurring at stated intervals on the other hand, Special working capital is
required to meet extraordinary needs for contingencies. Even like strikes, fire,
unexpected competition, rising tendencies or initiating a big advertisement campaign
require such capital.
APPROACHES FOR FINANCING WORKING CAPITAL:
There are three approaches to financing working capital
1. Matching Approach
2. Conservation Approach
3. Aggressive Approach
1) Matching Approach:
The firm can adopt a financial plan, which matches the expected life of assets with
the expected life of the source of funds raised to finance assets. The firm follows
matching approach, long-term financing will be used to financing temporary fixed
assets and permanent current assets and short term financing temporary or variable
current assets. However, it should be realized that exact matching is not possible
because of the uncertainty about the expected lives of assets. The firms fixed assets
and permanent current assets are financed with long-term funds and as the level of
these assets, the long term financing level also increases. The temporary or variable
current assets are financed with short-term funds and as their level increases, the level
of short-term financing also increases.
2) Conservative Approach:
41
A firm is practice may adopt a conservative approach in financing is current and

fixed assets. The financing policy of the firm is said to be conservative when it
depends more on long-term funds for financing needs. Under a conservative plan, the
firm finances its permanent assets and also a part of temporary current assets with
long term financing. In the periods when the firm has no invested in the tradable
securities to conserve liquidity. The conservative plan relies heavily on long term
financing.
3) Aggressive Approach:
A firm may be aggressive in financing its assets. A firm follows aggressive policy
when it uses more short-term financing than warranted by the matching plan. Under
an aggressive policy, the firm financing is a part of its permanent current assets with
short-term financing. Some extremely aggressive firms may even finance a part f their
fixed assets with short-term financing.
Importance of Adequate Working Capital:

A business firm must maintain an adequate level of working capital in order to run
its business smoothly. It is worthy to note that both excessive and inadequate working
capital positions are harmful. Out of two, inadequate of working capital is more
dangerous for a firm. Excessive working capital results in idle funds on which no
profits are earned. Similarly insufficiency of working capital results in interruption of
production. This will lead to inefficiencies, increase in cost and reduction in profits.
Working capital is just like the lifeblood of business.
If it becomes weak, the business can hardly prosper and survive. No business can
successfully without an adequate amount of working capital. The following are the
few advantages of adequate working capital in the business:
Cash Discount:
Adequate working capital enables a firm to avail cash discount
facilities are offered to it by the suppliers. The amount of cash discount reduces the
cost of purchase.
42
Goodwill:
Adequate working capital enables a firm to make prompt payment.
Making prompt payment is a base to create and maintain goodwill.

Ability to face crisis:
The provision of adequate working capital facilitates to meet
situations of crisis and emergencies. It enables a business to withstand periods of

depression smoothly.
Credit-worthiness:
It enables a firm to operate its business more efficiently
because there is no delay in getting loans from banks and others on easy and favorable
terms.
Regular supply of raw materials:
It permits the carrying of inventories at a level
that would enable a business to serve satisfactory the needs of its customers. That is it
ensures regular supply of raw materials and continuous production.
Expansion of Markets:
A firm, which has adequate working capital, can create
favorable market condition. That is purchasing its requirements in bulk when prices
are lower and holding its inventories for higher.
Increase Productivity:
Through the adequate working capital, the can meet his
needs and it is in position to face all situations in the production process. It will
maintain sufficient levels of raw materials for continuous production. It will cause to
increases the productivity.
Research Programs:
A firm, which is having sufficient levels of working capital,
looks for new research and development programs. At the same time the firms go for
searching new technical developments and production methodologies, to get more
profits.
High Morale:
It is a well-known fact that a firm with adequate working capital is in
a position at a successfully running. And it will always do things efficiently and

effectively when compared with other firms. Through it has high morale in the society
and competitive world.
43
PROBLEMS OF INADEQUATE WORKING CAPITAL:
It may not be able to take advantage of profitable business

opportunities.
Production facilities cannot be utilized fully.
Short-term liabilities cannot be paid because of lack of working

capital.
It may fail to pay dividend because of non-availability of funds.
Its low liquidity may lead to low profitability. In the same way, low
profitability results in low liquidity.
It may not be able to take advantages of cash discounts.
Credit worthiness of the firm may be damaged because of lack of

liquidity. Thus it may lose its reputation; thereafter a firm may not be
able to get credit facilities.
DETERMINANTS OF WORKING CAPITAL:

The need of working capital is not always the same; it varies from year to year of
even month-to-month depending upon a number of factors. There is no set of rules or
formulae to determine the working capital needs of the firm. Each factor has its own
importance and the importance of the factors changes for overtime.
44
In order to determine the proper amount of working capital of a concern, the

following factors should be considered carefully.
1. Nature of Business:
The amount of working capital is basically related to the nature and volume of
business in concerns where the cost of the raw material to the manufacturing of a
product is very large in proportion to its total cost of manufacturing the requirement
of working capital will be very large.
2. Size of the Business Unit:
The size of the business unit has an important impact on its working capital needs.
Size may be measured in terms of scale of operation. A firm with large scale of
operation will need more working capital than a small firm.
3. Seasonal Variation:
Seasonal industries require more working capital to stock the raw materials during
the season.
4. Time consumed in manufacturing:

The average time taken in the process of manufacturing is also an important factor
in determining the amount of working capital. The longer period of the manufacturing
the large the inventory required.
5. Turnover of circulating capital:
Rapidly of turnover determines the amount of working capital. The faster
movement of capital leads the turnover hence less working capital.
6. Need to stockpile raw material and finished goods:
45
In industries where raw materials are bulky and best purchasable in large
quantities such as cement or where labour stoppage is frequent large amount of
working capital is required.
7. Growth and Expansion:
Growing concern requires more working capital than those that are static. It is
logical to expect larger amount of working capital in a growing concern to meet its
growing needs of funds.
8. Business Cycle Fluctuations:
Working capital is required more during boom period and lesser in depression
period.
9. Terms of Purchase and Sale:

Terms of purchase and sale affect the amount of working capital. The practice of
each cash purchase with credit sale requires more working capital.
10. Pricing level changes:
Rising price level requires more working capital to maintain the same level of
current assets.
11. Inventory Turnover:
With a better inventory control, a firm is able to reduce its working capital
requirements. If the inventory turnover is high the working capital requirements will
be low.
12. Dividend Policy:
46
Dividend policy and working capital are interrelated. Management takes a view of
current assets before declaring a dividend.
SOURCES OF WORING CAPITAL:

After determining the level of working capital on the basis of various determinants
the next step is to consider how it will be financed. A large manufacturing concern
may procure funds from various sources to meet its working capital requirements
from time to time. For the convenience of study the sources of working capital may be
classified under two heads.
a) Sources of long-term or regular working capital
b) Sources of short-term or seasonal working capital
Sources of long-term Working capital:
The long-term working capital requirements can meet from the following sources.
1. Issue of Shares:
It is the safest way of procuring permanent and regular working capital without
fixed charges.
2. Issue of Debentures:
Regular and long term working capital may be obtained at lower cost of trade on
equity.
47
3. Retained Profits:
Accumulated large profits are also considered to be a good source of financing
long-term working capital requirements. It is the best and the cheapest source of
finance. It creates no change in future profits.
4. Sale of Fixed Assets:
If there is any idle fixed assets in the firm can be sold out and the proceeds may be
utilized for financing the working capital requirements.
5. Term Loans:
Mid term and long-term loans for a period above 3 years provide import sources
of working capital such term loans can be borrowed from the special financial
institutions such as IDBI, IFCI, and LIC etc.
SOURCES OF SHORT-TERM WORKING CAPITAL:
The sources of short-term working capital may be classified in to two heads.
I.
Internal Sources
II. External Sources
INTERNAL SOURCES:
Under this category the sources of working capital are tapped from within the
internal sources are depreciation funds, provision for taxation and accrued expenses.
Depreciation Fund:
48
Depreciation funds created out of profits provided they are invested in or

represented by assets.
Provision for Taxation:
There remains a time lag between making the provision for and payment of
taxation. A company may utilize such provision during the intermittent period
temporarily.
Accrued Expenses:
The company sometimes postpones the payment of certain expenditure due to
finalization of the accounts. These accrued (due but not paid) expenses also constitute
an important source of working capital.
EXTERNAL SOURCES:
An external source means the sources providing finance for companys working
capital other than those of internal sources. These may be enumerated as given below.
Normal Trade Credit:
Creditors provided short-term finance to the company by selling the goods,
inventories and equipment on the basis of deferred payment. It is a very common
source of short-term finance and normally every concern use this source as a normal
trade practice.
Credit Papers:
Bills payable or promissory notes discounted from bankers for meeting short-term
capital by the drawer.
Bank Credit:
49
The greater part of the working capital is supplied by commercial banks to their
customers through direct advances in the shape of loans, cash credit of overdraft and
through discounting the credit, papers, e.g. bill-payable and promissory notes etc.
Customer Credit:
Advances may also be obtained from customers against the contracts entered
into by the enterprise such advances are generally asked for, by the companys
manufacturing large plants and machinery involving longer time in completing the
process of manufacturing e.g. , ship building industries. The amount can be used for
purchasing raw materials, paying wages and so on.
Public Deposits:
Most of the companies in recent years depend on this source to meet their working
capital requirements. Under the Companies Act 1956 a company is authorized to raise
funds equal to 25% of paid up capital and free reserves by this source.
Government Assistance:
Central and State Government of the country provide short-term finance to
industries or business by allowing tax concessions, sanctioning direct loans or grants
to industries or a class of industries to assist their production programs etc.
STANDARDS OF WORKING CAPITAL MANAGEMENT:
I.
There is no one single criteria for judging the efficient arrangement of

working capital
II.
Factors to be taken into account for organizing on efficient lines:
50
Ability to meet short-term commitments in time, make payment
of bills on due dates.

Ability to find adequate cash at the right time to present
forecast levels of business.

Ability to maximize sales turnover with minimum possible
cash.
Minimum possible inventory turnover-Turnover norms are
fixed.
Whether adequate credit on favorable terms is obtained from
suppliers.
Whether reasonable credit is extended to customers as a sales
and monitoring strategy.

Financing plans are prepared in anticipation of future so that
funds become available at the right time and at least cast.

Policies for credit to present and new customers are prepared
and forecast of receivables are whole along with forecast of
sales.
Norms are laid down for average age of receivables, collection
period.
Proportion of goods in process and finished goods to new
orders and dispatches.

Proportions of raw materials, goods in process, and finished
goods to total inventories are established and operated.
Current Ratio: Current Assets / Current Liabilities

Quick Ratio: (Current Assets-Inventories) / Current Liabilities
Sales to Cash: Sales during a period / Average cash balance
Average Collection Period
Debtors divided by annual credit sales and the resulting figure multiplied by 365. This
ratio indicates how many days of credit are being obtained from the suppliers.
Average Payment Period:
51
Creditors dividend by annual credit purchase and the resultant figure is multiplied by
365. This ratio indicates how many days of credit are being obtained from the
suppliers.
OPERATING CYCLE:
There is a difference between current and fixed assets in terms of their
liquidity. A firm requires many years to recover the initial investment in fixed assets
such as plant and machinery or land and buildings. on the contrary, investment in
current assets such as inventories and debtors is realized during the firms operating
cycle.
Operating cycle is the time duration required to convert sales, after the
conversion of resources into inventories into cash. The operating cycle of a
manufacturing company involves three phases:
Sales
Acquisition of resources:
Raw materials, labour, power and fuel etc.
Manufacture of the product: It includes conversion of raw material into workin-progress into finished goods.
Sale of the product either for cash or on credit. Credit sales create account
Finished
Goods receivable for collection.
Cash
Manufacturing
52
Procurement of
Raw Materials
The length of the operating cycle of a manufacturing form is the sum of
Inventory conversion period

Debtors conversion period
The inventory conversion period is the total time needed for producing and
selling the product.
raw material conversion period

work-in-process conversion period
finished goods conversion period
The debtors conversion period is the time required to collect the outstanding
amount from the customers.
The total inventory conversion period and debtors
conversion period is referred to as gross operating cycle.

The payables deferral period is the length of time the firm is able to defer
payments on various resource purchases. The difference between (gross) operating
cycle and payables period is net operating cycle.
53
PROFORMA STATEMENT OF CHANGES IN WORKING CAPITAL

Particulars
Previous
Current
Effect
of
Changes in
Year
Year
Working
Capital___
Increase
Decrease_
Current Assets
Cash & Bank Balances
****
****
****
****
Inventory (Stock)
****
****
****
****
Bills Receivables
****
****
****
****
Debtors
****
****
****
****
Prepaid Expenses
****
****
****
****
Marketable Securities
****
****
****
****
TOTAL (A)
****
****
Bills Payables
****
****
****
****
Creditors
****
****
****
****
Bank Overdraft
****
****
****
****
Outstanding Expenses
****
****
****
****
Provision for Tax
****
* * * *_
****
****
TOTAL (B)
****
****
Current Liabilities:
Net Working Capital(A-B)
****
****
Increase / Decrease in
Working Capital
****
****
****
****
54
___________________
****
** * *
DATA ANALYSIS & INTERPRETATION
STATEMENT OF CHANGES IN WORKING CAPITAL IN THE YEARS ON

2011-2012
(In Crores Rs)
CHANGE IN W.C
PARTICULARS
31-3-2011
31-3-2012
Increase
Inventories
392.28
491.09
98.81
Trade Receivables
175.13
207.94
32.81
Cash and Bank Balances
40.01
47.49
7.48
317.63
289.63
925.05
1036.15
Short Term Borrowings
338.3
613.19
Trade Payables
139.52
93.93
45.59
Other Current Liabilities
839.46
671.97
167.49
Short Term Provisions
121.14
126.23
1438.42
1505.32
-513.37
-469.17
Decrease
A.CURRENT ASSETS
Other Current Assets

TOTAL
28
B.CURRENT LIABILITIES
TOTAL
NET WORKING CAPITAL(A-B)
Increase in Net working capital
Total
274.89
5.09
44.2
-469.17
55
44.2
-469.17
352.18
352.18
INTERPRETATION:
The above table shows comparison between current Assets and current
Liabilities pertaining to 2011-12 which results in change in working capital.
In the year 2011-12 the working capital increased 44.2 Crores Indian Rupees
due to some following reasons. Increase in current assets like Inventories, Trade
Receivables and Cash and Bank Balances rather than last year. In Current liabilities
company reduced Trade Payables, Other Current Liabilities but Short Term
Borrowings increased by 274.49 Crores Indian Rupees comparing with last year. So
the firm net working capital is not increased that much expected. So the company
need to reduce short term Borrowings.
56

2012-2013
(In Crores Rs)
CHANGE IN W.C
PARTICULARS
31-3-2012
31-3-2013
Increase
Decrease
Inventories
491.09
594.75
103.66
Trade Receivables
207.94
301.43
93.49
47.49
53.96
6.47
289.63
278.58
10.2
1036.15
1238.92
613.19
588.08
Trade Payables
93.93
143.08
49.15
671.97
734.35
62.38
126.23
146.89
20.66
1505.32
1612.4
-469.17
-373.48
A.CURRENT ASSETS

TOTAL
11.05
10.2
TOTAL
Total
25.11
95.69
-373.48
57
95.69
-373.48
238.93
238.93
INTERPRETATION:
The above table shows comparison between current Assets and current Liabilities
pertaining to 2012-13 which results in change in working capital.
In the year 2012-13 the working capital increased 95.69 Crores Indian Rupees due to
some following reasons. Increase in current assets like Inventories, Trade Receivables
and Cash and Bank Balances rather than last year. But in the current liabilities Trade
Payables, Other Current Liabilities, Short Term Provisions increased compared with
last year. These are the reasons drag the net working capital performance.
58

2013-2014
(In Crores Rs)
CHANGE IN W.C
31-32013
PARTICULARS
31-3-2014 Increase Decrease
A.CURRENT ASSETS
Inventories
594.75
685.53
90.78
Trade Receivables
301.43
303.96
2.53
53.96
44.61
9.35
278.58
206.59
71.99
10.2
8.85
1.35
1238.92
1249.54
588.08
723.62
135.54
Trade Payables
143.08
175.92
32.84
734.35
740.92
6.57
146.89
64.22
1612.4
1704.68
-373.48
-455.14

TOTAL
TOTAL
Decrease in Net working capital
Total
-373.48
59
82.67
81.66
81.66
-373.48
257.64
257.64
INTERPRETATION:
In the year 2013-14 the working capital decreased 81.66 Crores Indian Rupees due to
some following reasons. Decrease in current assets like Short Term Loans and
Advances, Cash and Bank Balances rather than last year along with bad performance
in Trade Receivables. Current liabilities like Short Term Borrowings, Trade Payables,
and Other Current Liabilities, increased compared with last year. These are the
reasons drag the net working capital performance into negative.
60

2014-2015
(In Crores Rs)
CHANGE IN W.C
31-32014
31-32015
Inventories
685.53
520.58
Trade Receivables
303.96
380.22
76.26
44.61
61.85
17.24
206.59
149.09
57.5
8.85
4.56
4.29
1249.54
1116.3
723.62
553.61
Trade Payables
175.92
229.49
740.92
560.91
64.22
79.41
1704.68
1423.42
-455.14
-307.12
148.02
Total
-307.12
PARTICULARS
Increase
Decrease
A.CURRENT ASSETS

TOTAL
164.95
TOTAL
61
170.01
53.57
180.01
15.19
148.02
-307.12
443.52
443.52
INTERPRETATION:
In the year 2014-15 the working capital increased 148.02 Crores Indian
Rupees due to following reasons. Increase in current assets like Trade Receivables
and Cash and Bank Balances rather than last year. In Current liabilities company
reduced Short Term Borrowings, Other Current Liabilities but Trade Payables
increased by 53.57 Crores Indian Rupees comparing with last year. So this is good
sign for the company reducing current liabilities.
62

2015-2016
(In Crores Rs)
CHANGE IN W.C
PARTICULARS
31-3-2015
31-3-2016
Increase
Inventories
520.58
549.02
28.44
Trade Receivables
380.22
468.48
88.26
61.85
90.77
28.92
149.09
192.11
43.02
4.56
1.68
1116.3
1302.06
553.61
701.66
Trade Payables
229.49
209.1
20.39
560.91
547.06
13.85
79.41
26.56
52.85
1423.42
1484.38
-307.12
-182.32
Decrease
A.CURRENT ASSETS

TOTAL
2.88
TOTAL
Total
148.05
124.8
-182.32
63
124.8
-182.32
275.73
275.73
INTERPRETATION:
In the year 2015-16 the working capital increased 124.8 Crores Indian Rupees
due to following reasons. All over performance is good in current assets increased all
the areas except other current Assets. In Current liabilities Short Term Borrowings
only element performance is not good compare with last year. Compare need to
reduce current liabilities.
64
LIQUIDITY RATIOS
The Liquidity Ratios reveals the liquidity position of The Ramco Cements Ltd.
The Liquidity Ratios includes:
Current Ratio
Quick Ratio and
Absolute Liquidity Ratio
CURRENT RATIO:
Current Ratio explains the relationship between the current assets and current
liabilities and also reveals the amount of current assets needed to pay current
liabilities.
CURRENT RATIO = CURRENT ASSETS/ CURRENT LIABILITIES
Years
Current Assets
Current Liabilities
Ratio
2011-2012
1036.15
1505.32
0.69
2012-2013
1238.92
1612.4
0.77
2013-2014
1249.54
1704.68
0.73
2014-2015
1116.3
1423.42
0.78
2015-2016
1302.06
1484.38
0.88
INTERPRETATION:
The actual standard ratio of current ratio is 2:1. It indicates that current
assets double the current liabilities are considered to be god sign. The higher value of
current ratio indicates more liquid of the firms ability to pay its current obligation in
time. Companys Current ratio is increased from 0.69 to 0.88 (from 2012 to 2016) but
this is below the standard. It indicates an unsatisfactory liquidity position of the
company during the years of study.
65
CURRENT RATIO OF THE RAMCO CEMENTS LIMITED FOR THE LAST

FIVE YEARS 2012-2016
Current Ratio
Current Ratio
0.69
2011-2012
0.77
0.73
2012-2013
2013-2014
66
0.78
2014-2015
0.88
2015-2016
LIQUIDRATIO:
Liquid ratio is also called acid-test ratio, establishes the relationship between
liquid, assets and current liabilities. As asset is liquid it can be converted into cash
immediately or reasonably soon without a loss of value. The liquid ratio is found out
by dividing liquid assets by current liabilities.
LIQUID RATIO=LIQUID ASSETS/CURRENT LIABILITIES
LIQUID ASSETS=CURRENT ASSETS-INVENTORIES
Years
Liquid Assets
Current Liabilities
Ratio
2011-2012
545.06
1505.32
0.36
2012-2013
644.17
1612.4
0.40
2013-2014
564.01
1704.68
0.33
2014-2015
595.72
1423.42
0.42
2015-2016
753.04
1484.38
0.51
INTERPRETATION:
The standard ratio of liquid ratio is 1:1. The companys liquid ratio is
increased year to year from 2012 to 2016. The quick ratio maintained by the company
is satisfactory because it is reached the standard ratio i.e., 1:1. But in the year 2012
and 2016 quick ratio maintained by the company is not satisfactory because it is not
reaching rapidly the standard ratio i.e., 1:1. The current quick ratio is 0.51.
67
QUICK RATIO OF THE RAMCO CEMENTS LIMITED FOR THE LAST

FIVE YEARS 2012-2016
Quick Ratio
Quick Ratio
0.51
0.36
2011-2012
0.42
0.4
0.33
2012-2013
2013-2014
68
2014-2015
2015-2016
WORKING CAPITAL TURNOVER RATIO:

The working capital turnover ratio shows the relationship between the funds used to
finance a company's operations and the revenues a company generates as a result of
conducting these operations. A higher working capital turnover ratio indicates that a
company generates a higher dollar amount of sales for every dollar of the working
capital used.
When the working capital turns negative, so does the working capital turnover ratio.
Because a company's sales cannot be negative, only negative working capital makes
the working capital turnover ratio negative. A negative working capital turnover ratio
is typically meaningless and cannot be compared across companies.
WORKING CAPITAL TURN OVER RATIO = SALES / WORKING CAPITAL

Working Capital = Current Assets Current Liabilities
Year
Sales
Working Capital
Ratio
2011-12
3,256.58
-469.17
-6.94
2012-13
3,872.66
-373.48
-10.37
2013-14
3,769.23
-455.14
-8.28
2014-15
3,731.77
-307.12
-12.15
2015-16
3,687.09
-182.32
-20.22
INTERPRETATION:
The working capital turnover ratio for the year 2011-2012 is -6.94 but it was
increased in the year 2012-2013 is -10.37 and in the year 2013-14 the ratio is -8.28 in
the year 2014-2015 the ratio is -12.15 in the year 2015-2016 the ratio is -20.22. A
negative working capital turnover ratio is typically meaningless and cannot be
compared across companies.
69
WORKING CAPITAL TURN OVER RATIO OF THE RAMCO CEMENTS

LIMITED FOR THE LAST FIVE YEARS 2002-2016
Working Capital Turn Over Ratio

Working Capital Turn Over Ratio
2011-12
2012-13
-6.94
-10.37
2013-14
2014-15
2015-16
-8.28
-12.15
-20.22
70
CASH TURN OVER RATIO:

It is used broadly to cover currency and generally accepted equivalence of
cash such as cheques, drafts and demand deposits in banks.
A companys cash turnover ratio measures how many times per year it
replenishes its cash balance with its sales revenue. A higher cash turnover ratio is
generally better than a lower one.
CASH TURNOVER RATIO=SALES/CASH
Year
Sales
Cash
Ratio
2011-12
3,256.58
47.49
68.57
2012-13
3,872.66
53.96
71.77
2013-14
3,769.23
44.61
84.49
2014-15
3,731.77
61.85
60.34
2015-16
3,687.09
90.77
40.62
INTERPRETATION:
The cash turnover ratio for the year 2011-2012 is 68.57 but it was increased in
the year 2012-2013 is 71.77 and in the year 2013-2014 the ratio is 84.49 in the year
2014-2015 the ratio is 60.34 in the year 2015-2016 the ratio is 40.62.The firm cash
turnover has been very effectively utilized.
71
CASH TURN OVER RATIO OF THE RAMCO CEMENTS LIMITED FOR

THE LAST FIVE YEARS 2012-2016
Cash Turn Over Ratio

84.49
68.57
71.77
60.34
40.62
2011-12
2012-13
2013-14
72
2014-15
2015-16
NET OPERATING CYCLE:

A company's operating cycle, or cash conversion cycle, shows the length of time it
takes a company to buy inventory, convert it into sales and collect the "accounts
receivable" revenue from the sales. Accounts receivable is the accounting term for
money that customers owe a company for purchases made on credit. Operating cycles
differ in length by industry. A shorter operating cycle is typically better because it
allows your company to generate cash faster, which you can use to pay bills or grow
your company.
Net operating cycle = gross operating cycle payable deferral period
Year
Gross Operating
Cycle
Payable Deferral Period
Net Operating Cycle
2011-12
433.65
78.49
355.17
2012-13
438.05
98.55
339.50
2013-14
392.25
93.11
299.14
2014-15
316.40
123.08
193.31
2015-16
383.58
128.43
255.15
INTERPRETATION:
Performance of Net operating cycle in 2011-12 is 355.17. In 2012-13 it is improved to
399.50. In 2013-14 it is improved to 299.14. In 2014-2015 it shown best performance
with 193.31. In 2015-16 Net Operating cycle is 255.15. Over all the company
improved Net operating cycle from 355.17 to 255.15. But it is not enough to improve
the operating cycle. Company has to show better performance in gross operating
cycle.
73
NET OPERATING CYCLE RATIO OF THE RAMCO CEMENT LIMITED

FOR THE LAST FIVE YEARS 2012-2016
NET OPERATING CYCLE RATIO

355.17
339.50
299.14
255.15
193.31
2011-12
2012-13
2013-14
74
2014-15
2015-16
TREND ANALYSIS OF THE RAMCO CEMENTS LIMITED
PARTICULARS
31-32011
CURRENT ASSETS
925.05
TREND
CURRENT
LIABILITIES
TREND
NET WORKING
CAPITAL
TREND
31-32015
31-32016
1036.15 1238.92 1249.54
1116.3
1302.06
112.01
133.93
135.08
120.67
140.75
1438.42 1505.32
1612.4
1704.68 1423.42 1484.38
100
31-32012
31-32013
31-32014
100
104.65
112.09
118.51
98.96
103.19
-513.37
-469.17
-373.48
-455.14
-307.12
-182.32
100
91.39
72.75
88.66
59.82
35.51
INTERPRETATION:
In The Ramco cements Ltd the pace of improvement in the indices of current
assets is lesser than that of the current liabilities throughout the study period under
observation. The net working capital indices also confirm it. The Ramco Cements Ltd
could not enjoy positive net working capital throughout the period under reference.
But the company net working capital had fluctuated very intensively and trying to
increase its Net Working Capital. At the end of 2016, Ramco Cements Ltd had
negative working capital, as current liabilities were 1484.38 Crores Indian Rupees
while total current assets were only 1302.06 Crores Indian Rupees. The fact that the
company has negative working capital could indicate that the company will have
problems in expanding. However, negative working capital in and of itself is not
necessarily bad, and could indicate that the company is very efficient at turning over
inventory, or that the company has large financial subsidiaries.
75
FINDINGS
It is found that cash reserve position in the company is very low which may
create shortage funds in the short term.
The analysis of data financial reports shows that the company is having
Negative Net Working Capital every year. It includes that company maintain
lesser current assets over current liabilities. This indicates The Ramco
Cements Ltd have shortage of working capital.
It is identified that the company Debtors position is unstable.
It is observed that the company improving its Net Working Capital from 201314 Onwards. Its a positive sign.
Company need to reduce its gross operating cycle period. and company have
good at payable period improved from 78.49 days to 128.43 during last five
years.
It is observed that the liquidity position is the company is improving.
76
SUGGESTIONS
It is suggested to the company to increase the current assets and to reinvest the
funds is other productive way.
It is recommended to the company to maintain adequate reserves of cash and

bank to meet short term Funds.
It is suggested to the company to reduce the credit sales in order to maintain

debtors position stable and it leads to minimize un necessary costs.
It is recommended to the company to decrease the current liabilities and

provisions and increase in short term funds.
It is suggested to the company to maintain the good position current assets and
current liabilities for the solvencies of the business.
It is recommended to the company to improve the liquidity position.
It is recommended to the company to improve operating cycle.
77
BIBLIOGRAPHY
NAME OF THE BOOK
NAME OF THE
AUTHOR
I.M.PANDEY
PUBLISHER
VIKAS PUBLISHING
HOUSE PVT.,LTD.,
KHAN & JAIN
TATA MC GRAWHILL
PRASANNA CHANDRA
TATA MC GRAWHILL
OTHER SOURCES
ANNUAL REPORTS OF RAMCO CEMENTS LIMITED
WEBSITES
www.ramcocements.com
http://www.cmaindia.org/
http://www.ibef.org/industry/cement-india.aspx
78

Working Capital Management

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INTRODUCTION

Working capital management is the way a company manages the relationship

Gross Working Capital:

NEED FOR THE STUDY

The WORKING CAPITAL MANAGEMENT plays a vital role in the

The Working Capital covers the total expenditure, which concentrates on

SCOPE OF THE STUDY

This study aims the various aspects of Working Capital Management

attention of the management.

Working Capital has acquired great significance and sound position in

Management is the area of study, it was proposed to the study as

Keeping this in view, a modest attempt as is made to study various

This study helps to make pertinent suggestion for the improvement of

The information obtained from the primary and secondary sources

OBJECTIVIES OF THE STUDY

The objectives of the study are as follows:

To analyze how Working Capital Management is carried out in the

To study various components of Working Capital and their

To evaluate the liquidity management through some of the related

To know the efficiency of the company in utilizing its Current Assets.

To study and to determine the degree of efficiency with which each of

To study the trends in Working Capital components.

METHODOLOGY OF THE STUDY

The present study is an exclusive study on THE RAMCO CEMENTS

Annual reports of the company.

Financial statements, auditors report, information vouchers of the

Articles on cement industry concerned.

By referring text tools.

LIMITATIONS OF THE STUDY

The study has some limitations, which are explained below.

This study confined to 5 years period which is from 2011-2012 to

The findings may change due to changes in company structure

This study evaluation is based on some of the related Working

Rapid Hardening Cement

Increased Lime content

Quick setting cement

Small percentage of aluminium

Low Heat Cement

Sulphates resisting Cement

It is prepared by maintaining the

Blast Furnace Slag Cement

It is obtained by grinding the

It can used for works

High Alumina Cement

It is obtained by melting mixture

Air Entraining Cement

It is more costly and is

CEMENT INDUSTRY IN INDIA

PROBLEMS OF CEMENT INDUSTRY

However the increase

distribution cost is forcing companies to pass costs to the customers.

This shows that under

utilization of capacity is particularly marked in the cement plants located in the

CEMENT MANUFACTURING ASSOCIATION (C.M.A):

PROFILE OF THE RAMCO CEMENTS LIMITED

Group's Fact Sheet:

RAMCO GROUP OF COMPANIES:

The Ramco Cements Ltd

Ramco Industries Ltd

Ramco Systems Ltd

Cement, Ready Mix

Fibre Cement Sheets,

The Ramaraju Surgical