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A STUDY ON ANALYSIS OF RECEIVABLE MANAGEMENT IN TECHNICO LABOATORY PRODUCTSSUMMER PROJECT IN FINANCE PRIVATE LIMITED, THIRUMUDIVAKKAM, CHENNAI
BY J.YUVARANI SHANTHI
2/8/13

ABOUT A TOPIC
Receivable are one of the major components of working capital of a firm. The Receivable management is a process of taking decisions regarding the amount of investment is the process of taking decision regarding receivables. If there are large amounts tied up in receivables, working capital 2/8/13 requirements and consequently

ABOUT A COMPANY
The company was promoted and registered in the year of 1984 as a propriety company. Later it was converted to a private limited company in the year of 2003. Laboratory Equipment Division. Laboratory Glassware Division. Laboratory Modular Furniture and Exhaust/ Clean Ventilation Systems 2/8/13 Division

Objectives of the study

To evaluate the opportunity cost involved in granting credit sales and to maximise the profit in the Technico Laboratory Products and Pvt Ltd. Secondary objectives: To forecast sales and receivable management in Technico. To evaluate ratio analysis and trend analysis. 2/8/13

SCOPE OF THE STUDY

This

study was conducted to know the Profile of Technico Laboratory Products Pvt Ltd, Thirumudivakkam. study depends upon the data in annual report. study relies more on secondary source. No primary data 2/8/13 is used.

This

LIMITATIONS OF THE STUDY

This

RESEARCH METHODOLOGY I have chosen a analytical research for my study, which that includes a facts or information available, and analyse these to make a critical evaluation of the material. TOOLS AND TECHNIQUES USED
Ratio Trend

analysis analysis
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DATA ANALYSIS AND INTERPRETATION Inventory holding period is (561days), which implies the efficient inventory management and efficiency business operation
INVENTORY HOLDING PERIOD
12 In 2010 -2011 it was 10 lower (.65 times) 8 low value indicating 6 high quantity of 4 funds locked up in a 2 company. 2/8/13 0

Detor turnover ratio

10 8 6 4 2 0

In the year of 2010 -2011 the ratio is higher (3.49 times) but debtors turnover period is low (105 days) which implies that payment by debtors are prompt.

Debtor turnover period(in days

In the year of 2010 -2011 the ratio is higher (3.49 times) the company takes time to receive their 2/8/13 receivables

10 8 6 4 2 0

Debtors to sales ratio

10 8 6 4 2 0

In 2010 2011 the debtor to current asset ratio shows lower (23.64 %). Here debtors is lower and current asset is high than the previous year.

In the year of 2010 2011 the ratio shows lower (28.59%). It shows the company maintain lower credit sales, but the same year sale is higher so 2/8/13 it shows the higher

Detor to current asset ratio

12 10 8 6 4 2 0

Inventories to sales ratio

10 8 6 4 2 0

The operating cycle is high as 673 days in the year of 2009 2010 the cash is tied up more in receivable and inventory.

Operating cycle

The inventories 10 are fluctuating 8 but sales is in 6 increased in the 4 year of 2010 2 2011 than the previous year. 2/8/13 0

12

Trend analysis for debtors

10 8 6 4 2 0

In the year of 2010 2011 the sales increased by putting more effort on increasing facilities to customer, allowing credit sales within their limit
Trend analysis for sales

The table shows increasing trend, 10 that mean 8 company allowing 6 more credit sales 4 but not in loss 2 within certain 0 2/8/13 period they are

FINDINGS
The

stock turnover ratio in the period of 2010 -2011 was lower (.65 times) low value indicating high quantity of funds locked up in a company. debtor turnover ratio in the year of 2010 -2011 the ratio is higher (3.49 times) the company takes time to receive their receivables. the year of 2007 -2008 the debtor to sales ratio is little higher (30.28%) it shows that the company allows more credit sales as well as cash sales.
2/8/13

The

In

CONTD................

In 2010 2011 the debtor to current asset ratio shows lower (23.64 %). Here debtors is lower and current asset is high than the previous year. The Inventory to sales ratio in the year of 2010 2011 is high (84.58%). It means that the inventory and sales of the year is increased than the previous year. number of days in operating cycle and also inventory holding period increasing year by year, which shows that cash is tied up in receivables and inventory. In2/8/13 year of 2010 2011 the the

The

SUGGESTIONS
To

avoid delay in receivables, the accounting staff should schedule first about the vendors due dates. All the record should be computerised. It will make us to access easy in future. receivables staff and their head should have a meeting 2/8/13

Accounting

CONTD........... Its well again to make a receivables releases in weekly once at specified Click to edit Master subtitle style period of time. It leads to avoid wastage of time of account receivables staff to spend much more times with the vendors. It is suggested to put promotional / advertisements efforts for increasing the sales. Firm try to collect those who are long period of holding debt. 2/8/13

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