WORKING CAPITAL

MANAGEMENT
&

WHY THESE TWO COMPANIES

Two of the major jute producing industries who got
listed in the stock market along with AI CHAMPDANY
INDUSTRIES LTD and CHEVIOT CO.LTD.
These type of companies are very much depended on
their inventories, creditors and debtors as they are n
the manufacturing field.
The net revenues of these companies are almost same
(384.14 lakhs for Gloster and 283.24 lakhs for Ludlow
as per 2012-13).
These are the only two industries (who depends only on jute
and jute products) belong to Group B in the stock exchange

(cont..)
Both the industries were ISO certified for its
use of production quality and standard
They both have a large number of exports
They produce the same products varying from
jute yarns to geo-textile.

GROSS OPERATING CYCLE (2008-13)

200
180
160
140
120
100
80
60
40
20
0

Ludlow Gross Operating

Cycle Period
Gloster Limited

2009

2010

2011

2012

2013

NET OPERATING CYCLE (2008-13)

140
120
100
80

Ludlow Net Operating

Cycle Period

60

Gloster Limited

40
20
0
2009

2010

2011

2012

2013

REASONS FOR VARIATIONS

2011: Lack of rain caused reduction in quality
jute therefore Ludlow went for a dip. Gloster
on the other hand started buying raw
materials from Bangladesh at a competitive
price

2009

2010

2011

2012

2013

Opening Stock of Raw materials

232,289.00

227,405.00

503,339.00

198,342.00

131,820.00

Closing Stock of Raw materials

227,405.00

503,339.00

198,342.00

131,820.00

192,835.00

Average Stock of Raw materials

229,847.00

365,372.00

350,840.50

165,081.00

162,327.50

Average Consumption of Raw materials

819,007.00

1,015,446.00

1,839,951.00

1,515,945.00

1,477,819.00

102

131

70

40

40

Opening Stock of WIP

10,419.00

16,483.00

18,192.00

28,605.00

23,865.00

Closing Stock of WIP

16,483.00

18,192.00

28,605.00

23,865.00

23,828.00

Average Stock of WIP

13,451.00

17,337.50

23,398.50

26,235.00

23,846.50

833,118.00

562,192.00

1,377,862.00

1,056,859.00

918,741.00

11

Opening Stock of Finished Goods

73,473.00

114,093.00

75,386.00

115,470.00

85,347.00

Closing Stock of Finished Goods

114,093.00

75,386.00

115,470.00

85,347.00

131,314.00

Average Stock of Finished Goods

93,783.00

94,739.50

95,428.00

100,408.50

108,330.50

1,647,143.00

1,850,929.00

2,894,289.00

2,703,864.00

2,656,086.00

21

19

12

14

15

Opening Balace of sundry debitors

83,490.00

94,179.00

73,718.00

102,899.00

78,070.00

Closing Balace of sundry debitors

94,179.00

73,718.00

102,899.00

78,070.00

115,853.00

Average

88,834.50

83,948.50

88,308.50

90,484.50

96,961.50

1,709,149.00

1,931,802.00

3,138,715.00

2,809,470.00

2,826,690.00

19

16

10

12

13

Opening Balace of sundry creditors

156,895.00

210,308.00

311,322.00

179,425.00

108,170.00

Closing Balace of sundry creditors

210,308.00

311,322.00

179,425.00

108,170.00

138,662.00

Average

183,601.50

260,815.00

245,373.50

143,797.50

123,416.00

Credit purchases

814,123.00

1,291,380.00

1,534,954.00

1,449,423.00

1,538,834.00

82

74

58

36

29

148

177

98

74

77

66

103

40

38

48

Raw material holding period

Total cost of production

WIP conversion period

Total cost of goods sold

Finished Goods holding period

Credit sales
Debtors collection period

Creditors Payment period

Gross Operating Cycle Period

Net Operating Cycle Period

2009

2010

2011

2012

2013

Opening Stock of Raw materials

126,115,593

157,352,420

261,993,991

410,229,705

216,357,000

Closing Stock of Raw materials

157,352,420

261,993,991

410,229,705

216,357,000

344,076,000

Average Stock of Raw materials

141,734,007

209,673,206

336,111,848

313,293,353

280,216,500

Average Consumption of Raw materials

822,862,893

1,008,294,684

1,829,854,173

1,703,573,000

1,813,630,000

63

76

67

67

56

Opening Stock of WIP

43,464,679

37,253,047

27,255,561

63,678,679

79,569,000

Closing Stock of WIP

37,253,047

27,255,561

63,678,679

79,569,000

68,843,000

Average Stock of WIP

40,358,863

32,254,304

45,467,120

71,623,840

74,206,000

311,439,396

269,769,859

305,055,901

1,333,147,025

1,161,666,000

47

44

54

20

23

Opening Stock of Finished Goods

78,154,936

117,207,887

128,993,385

210,393,320

183,178,000

Closing Stock of Finished Goods

117,207,887

128,993,385

210,393,320

183,178,000

198,140,000

Raw material holding period

Total cost of production

WIP conversion period

Average Stock of Finished Goods

97,681,412

123,100,636

169,693,353

196,785,660

190,659,000

1,530,770,285

1,801,537,796

2,891,236,169

2,809,707,000

3,159,127,000

23

25

21

26

22

Opening Balace of sundry debitors

62,828,253

72,012,175

91,164,202

97,548,392

119,464,000

Closing Balace of sundry debitors

72,012,175

91,164,202

97,548,392

119,464,000

109,334,000

Average

67,420,214

81,588,189

94,356,297

108,506,196

114,399,000

1,679,385,914

1,952,860,396

3,168,635,644

3,086,034,000

3,462,284,000

15

15

11

13

12

148

160

154

125

114

Opening Balace of sundry creditors

152,349,906

132,879,573

231,643,431

143,914,798

141,798,000

Closing Balace of sundry creditors

132,879,573

231,643,431

143,914,798

141,798,000

135,089,000

Average

142,614,740

182,261,502

187,779,115

142,856,399

138,443,500

Credit purchases

854,099,720

1,112,761,396

1,978,089,887

1,509,700,000

1,941,349,000

Creditors Payment period

61

60

35

35

26

Net Operating Cycle Period

87

100

119

91

88

Total cost of goods sold

Finished Goods holding period

Credit sales
Debtors collection period

Gross Operating Cycle Period