1. A STUDY ON WORKING CAPITAL MANAGEMENT IN
INTEGRAL COACH FACTORY, CHENNAI
Abstract
Meaning:
Working capital means the funds the (i.e. capital) available and used for day to day
operations (i.e. working) of an enterprise, It consists broadly of that portion of assets of a
business which are used in or related to its operations, It refers to funds which are used
during an accounting period to generate current income of a type which is consistent with
major purpose of a firm existence.
Nature of working capital:
Working capital management is concerned with the problems that arise in
attempting to manage the current assets, the current liabilities and the interrelationship that
exists between them. The term current assets refers to those assets which in the ordinary
course of business can be, or will be, converted in to cash withies one year without undergoing
diminution in value and without disrupting the operation of the firm. The major current assets
are cash, marketable securities, accounts receivable and inventory. Current liabilities are those
liabilities which are intended at their inception to be paid in the ordinary course of business
within a year, out of the current assets or earnings of the concern, The basic current
liabilities are sundry debtors bills payable, bank over draft and outstanding expenses,
The goal of working capital management is to manage the firm’s current assets
and liabilities in such a way that a satisfactory level of working capital is maintained,
The current assets should be large enough to cover its current liabilities in order
to ensure a reasonable margin of safety. Each of the current assets must be managed
efficiently in order to maintain the liquidity of the firm while not keeping to high a
level of any one of them. Each of the short term sources of financing must be
continuously managed to ensure that they are obtained and used in the best possible way.

2. The interaction between current assets and current liabilities is therefore, the main theme
of working capital management.
Concepts of working capital:
Working capital may be regarded as life blood of business, A study of working
capital is of major importance to internal and external anajysis because of its close
relationship with the day-to-day operations of a business.
There are two concepts of working capital,
I. Gross working capital,
II. Net working capital.
Gross working capital:
Gross working capital refers to firm’s investment in current assets, The term gross
working capital , also referred to as working capital , means the total current assets.
Net working capital:
The term net workingcapital can be defined intwo ways:
1. The most common definition of net working capital(NWC)is the
difference between current assets and current liabilities and,
2. Alternate definition of (NWC)is that portion of current assets which
is financed with long-term finds.

3. Need for the study:
Working capital finance is an important segment in the total financial need of a
manufacturing concern, adequate working capital is essential to meet the day to day needs
of a business, A business should have adequate amount of working capital, That is neither
surplus working capital nor deficit working capital. Hence the present study titled
“working capital management in integral coach factory Chennai-38” has assumed greater
manufacturing.
Objectives of the Study,
1. To study the structure of and trend in working capital of ICF Chennai,.
2. To find out working capital strength of the company.
3. To examine liquidity ranking of the company.
4. To examine the liquidity and profitability of the company.
5. To offer concrete suggestions in the light of findings of the study.
HYPOTHESIS,
H01:
There is no association between liquidity and profitability of the study company.
H02:
There is no linear relationship between gross amount of working capital (Y),and
cash & bank balances(X1) sundry debtors(X2) and inventories (X3).
H03:
There is no relationship between interest coverage ratio (Y)and cash conversion
(X1)profitability (X2)and quick ratio(X3).

4. Statistical tools:
1. Both statistical measures and financial tools will be used for the analysis of
data, research data, Statistical measures percentage analysis ,arithmetic mean,
standard deviation, co-efficient of Spearman’s rank correlation, and multiple
regression, and trend analysis, further, the financial tools include accounting
ratios intertidal account reading liquidity working capital ratio and overall
profitability ratio(ROI).Configuration study on a working capital management
from a central park in committee. The renowned organization like of ICF
Chennai should follow sound working capital policy. a percent study reliable is
financial statistical analysis work like permission area working capital and
strive offer concrete suggestion to overcome the permanent working capital
ICF Chennai.