Final Project Report

“A
A Comparative Study ooff Working Capital Management in
Steel Authority of India Limited and Tata Steel Limited’’
Limited

Submitted to:
DMSR
G. S. College of Commerce & Economics, Nagpur
(An Autonomous Institution)

Affiliated to
Rashtrasant Tukadoji
doji Maharaj Nagpur University
University,, Nagpur

In partial fulfilment for the award of the degree of

Master of Business Administration

Submitted by

Vikky H Neware

Under the Guidance of

Prof. Kamlesh Thote

Department of Management Sciences and Research,

G.S. College of Commerce & Economics, Nagpur
NAAC Re-Accredited
Accredited “A” Grade Autonomous Institution

Academic Year 2021-2022

202
Department of Management Sciences and Research,
G.S. College of Commerce & Economics, Nagpur
NAAC Re-Accredited
Accredited “A” Grade Autonomous Institution

Academic Year 2021-22

202

INDEX

Sr.No. Contents Page No.

1 Introduction 1 -7

2 Literature Review 8-19

3 Research Study 20-23

 Problem Definition
 Need of the study
 Objective of the study
 Hypothesis

4 Research Methodology 24

5 Data Analysis and Interpretation 25-43

6 Conclusion 44

7 Limitation 45-46

8 Findings 47

9 Suggestions 48

10 Bibliography 49
 G.S. College Of Commerce & Economics, Nagpur

CERTIFICATE

This is to certify that Vikky Hermaj Neware has submitted the project report

titled “A Comparative Study of Working Capital Management in Steel

Authority of India Limited and Tata Steel Limited’’, towards partial

fulfillment of MASTER OF BUSINESS ADMINISTRATION degree examination.

This has not been submitted for any other examination and does not form part

of any other course undergone by the candidate.

It is further certified that he/she has ingeniously completed his/her project as

prescribed by DMSR - G. S. COLLEGE OF COMMERCE & ECONOMICS, NAGPUR

(NAAC Reaccredited “A” Grade Autonomous Institution) affiliated to Rashtrasant

Tukadoji Maharaj Nagpur University, Nagpur.

Prof. Kamlesh Thote Dr. Sonali Gadekar

(Project Guide) (Co-ordinator)

Place: Nagpur
Date: 27/7/2020
 G.S. College Of Commerce & Economics,
Nagpur

DECLARATION

I here-by declare that the project with title “A Comparative Study of Working

Capital Management in Steel Authority of India Limited and Tata Steel Limited” has

been completed by me in partial fulfillment of MASTER OF BUSINESS

ADMINISTRATION degree examination as prescribed by DMSR -G. S. COLLEGE OF

COMMERCE & ECONOMICS, NAGPUR (NAAC Reaccredited “A” Grade Autonomous

Institution) affiliated to Rashtrasant Tukadoji Maharaj Nagpur University, Nagpur and this

has not been submitted for any other examination and does not form the part of any other

course undertaken by me.

Place: Nagpur

Vikky Newar
Date : 27/7/2022
 G.S. College Of Commerce & Economics, Nagpur

ACKNOWLEDGEMENT

With immense pride and sense of gratitude, I take this golden

opportunity to express my sincere regards to Dr. N.Y. Khandait, Principal,
G.S. College of Commerce & Economics, Nagpur.
I am extremely thankful to my Project Guide Prof. Kamlesh Thote for
his/her guideline throughout the project. I tender my sincere regards to
Co-ordinator, Dr. Sonali Gadekar for giving me guidance, suggestions and
invaluable encouragement which helped me in the completion of the
project.
I will fail in my duty if I do not thank the Non-Teaching staff of the college
for their Co-operation.
I would like to thank all those who helped me in making this project
complete and successful.

Vikky Neware

Place:Nagpur

Date:27/7/2022
 INTRODUCTION

Tata Steel is one of the world's largest steel companies with a global annual crude
steel production capacity of 34 million tonnes per annum (MnTPA). The company is a
diversified steel producer with major operations in India, Europe and South East Asia. The
company has manufacturing units in 26 countries and a commercial presence in over 50
countries. Tata Steel is the second largest steel producer in Europe with a crude steel
production capacity of over 12.1 million tonnes per annum.

The company together with its subsidiaries, is engaged in the manufacture and sale of
steel products in India and internationally. They offer hot and cold rolled coils and sheets,
galvanized sheets, tubes, wire rods, construction rebars and bearings. Tata Steel is one of the
few steel companies that are fully integrated - from mining to the manufacturing and
marketing of finished products.

The company also involves in prospecting, discovering, and mining iron ore, coal,
ferro alloys, and other minerals; designing and manufacturing plants and equipment for steel,
oil and natural gas, energy and power, mining, railways, ports, aviation, and space industries;
and agricultural implements. Further, they offers alumina, dolomite, and monolithic
refractories, as well as silica refractories for coke ovens and the glass industry; manufactures
bricks; sponge iron lumps and fines; and rolls for applications in integrated steel plants,
power plants, and government mint, as well as paper, textile, and food processing sectors.

Tata Steel's operations are grouped under six Strategic Business Units include
Bearings Division, Ferro Alloys and Minerals Division, Agrico Division, Tata Growth Shop
(TGS), Tubes Division and Wire Division. They have introduced several branded steel
products, including Tata Steelium (the world's first branded Cold Rolled Steel), Tata Shaktee
(Galvanised Corrugated Sheets), Tata Tiscon (rebars), Tata Pipes, Tata Bearings, Tata
Structural, Tata Agrico (hand tools and implements) and Tata Wiron (galvanised wire
products).
 AI DUAL CAMERA rporated in the year 1907 with the name Tata Iron & Steel
Company Ltd. In the year 1911, the company commenced the operations of the first Blast
Furnace or the 'A' Blast Furnace. In December 2, 1911, the fist collieries were obtained and
the first cast of pig iron was dunnd. In the ear 1917 the first inget of steel rolled out of the
Sakchi Plant and in October 1912, the Bar Mills started their commercial Show Ticker

Tata Steel Ltd was incorporated in the year 1907 with the name Tata Iron & Steel
Company Ltd. In the year 1911, the company commenced the operations of the first Blast
Furnace or the 'A' Blast Furnace. In December 2, 1911, the fist collieries were obtained and
the first cast of pig iron was produced. In they ear 1912, the first ingot of steel rolled out of
the Sakchi Plant and in October 1912, the Bar Mills started their commercial production.
Also, the B Blast Furnace became operational during the year. In the year 1918, India's first
steel (coke) plant was established in Jamshedpur.

Tata Steel Limited is an Indian multinational steel-making company, based

in Jamshedpur, Jharkhand and headquartered in Mumbai, Maharashtra. It is a part of the Tata
Group.Formerly known as Tata Iron and Steel Company Limited (TISCO), Tata Steel is
among the top steel producing companies in the world with an annual crude steel capacity of
34 million tonnes. It is one of the world's most geographically diversified steel producers,
with operations and commercial presence across the world. The group (excluding SEA
operations) recorded a consolidated turnover of US$19.7 billion in the financial year ending
31 March 2020.

It is the second largest steel company in India (measured by domestic production)

with an annual capacity of 13 million tonnes after Steel Authority of India Ltd.
(SAIL). TATA Steel, along with SAIL and Jindal Steel and Power, are the only 3 Indian steel
companies that have captive iron-ore mines, which gives the three companies price
advantages. The Key Managerial Personnel (KMP) at Tata Steel Limited India are Koushik
Chatterjee as CFO(KMP) and Parvatheesam Kanchinadham as COMPANY SECRETARY.
Koushik Chatterjee, Mallika Srinivasan, Chandrasekaran Natarajan and 7 other members are
presently associated as directors.

Tata Steel operates in 26 countries with key operations in India, Netherlands and the
United Kingdom, and employs around 80,500 people. Its largest plant (10 MTPA capacity) is
located in Jamshedpur, Jharkhand. In 2007, Tata Steel acquired the UK-based steel
maker Corus. It was ranked 486th in the 2014 Fortune Global 500 ranking of the world's
biggest corporations. It was the seventh most valuable Indian brand of 2013 according to
Brand Finance.

In July 2019 Tata Steel Kalinganagar (TSK) was included in the list of the World
Economic Forum's (WEF's) Global Lighthouse Network.Tata Steel has been recognised
amongst India's Best Workplaces in Manufacturing 2022 by Great Place to Work. This
recognition has been received for the fifth time, highlights the company's sustained focus on
fostering a culture of high-trust, integrity, growth, and care for the employees. Tata Steel has
also been inclusive towards its LGBTQ employees and also provides health insurance
benefits for partners of its LGBTQ employees under the new HR policy. In November 2021,
Tata Steel became the most profitable company in the Tata Group, overtaking Tata
Consultancy Services.

Indian steel industry plays a significant role in the country‟s economic growth. The
major contribution directs the attention that steel is having a stronghold in the traditional
sectors, such as infrastructure & constructions, automobile, transportation, industrial
applications etc. Although India's steel industry is growing at a rate higher than a lot of the
other developing countries, the effect of the world-wide economic slowdown can be felt in
the dampened rate of growth With higher inflation and interest rates, the automotive and
construction industry are likely to lower domestic demand in the shortterm. Indian steel
companies are ramping up their capacity through both Greenfield and Brownfield projects.
Small companies are developing niche sectors like the production of sponge iron.
India has emerged as the fourth largest steel producing nation in the world, as per world steel
association in April 2017. India became the 3rd largest producer of steel in 2015 and is now
well on track to emerge as the 2nd largest producer after China. There is significant potential
for growth given the low per capita steel consumption of 61 Kg in India, as compared to
world average of 208 Kg. In this study researcher has focused on the working capital
management of government owned SAIL and private player truly global steel company Tata
Steel Limited Steel.

Tata Iron and Steel Company (TISCO) was founded by Jamsetji Nusserwanji Tata and
established by Sir Dorabji Tata on 26 August 1907. TISCO started pig iron production in
1911 and began producing steel in 1912 as a branch of Jamsetji's Tata Group. The first steel
ingot was manufactured on 16 February 1912. During the First World War (1914–1918), the
company made rapid progress.

In 1920, The Tata Iron & Steel Company also incorporated The Tinplate Company of India
Ltd (TCIL), as a joint venture with then Burmah Shell to manufacture Tinplate. TCIL is now
Tata Tinplate and holds 70% market share in India.

By 1939, it operated the largest steel plant in the British Empire. The company launched a
major modernisation and expansion program in 1951. Later, in 1958, the program was
upgraded to 2 million metric tonnes per annum (MTPA) project. By 1970, the company
employed around 40,000 people at Jamshedpur, and a further 20,000 in the neighbouring coal
mines.

NatSteel in 2004: Tata Steel agreed to acquire the steel making operations of the Singapore-
based NatSteel for $486.4 million in cash NatSteel had ended 2003 with turnover of
$1.4 billion and a profit before tax of $47 million. The steel businesses of NatSteel would be
run by the company through a wholly owned subsidiary called Natsteel Asia Pte Ltd. The
acquisition was completed in February 2005. At the time of acquisition, NatSteel had a
capacity of about 2 million tonnes per annum of finished steel.

Millennium Steel in 2005: Tata Steel acquired a majority stake in the Thailand-based
steelmaker Millennium Steel for a total cost of $130 million. It paid US$73 million to Siam
Cement for a 40% stake and offered to pay 1.13 baht per share for another 25% of the shares
of other shareholders. Millennium Steel has now been renamed to Tata Steel Thailand and is
headquartered in Bangkok. On 31 March 2013, it held approx. 68% shares in the acquired
company.

Corus in 2006: Tata Steel signed a deal with Anglo-Dutch company, Corus to buy 100%
stake at £4.3 billion ($8.1 billion) at 455 pence per share. On 19 November 2006, the
Brazilian steel company Companhia Siderúrgica Nacional (CSN) launched a counter offer for
Corus at 475 pence per share, valuing it at £4.5 billion. On 11 December 2006, Tata pre-
emptively upped its offer to 500 pence per share, which was within hours trumped by CSN's
offer of 515 pence per share, valuing the deal at £4.9 billion. The Corus board promptly
recommended both the revised offers to its shareholders. On 31 January 2007, Tata Steel won
their bid for Corus after offering 608 pence per share, valuing Corus at £6.7 billion
($12 billion).
In 2005, Corus employed around 47,300 people worldwide, including 24,000 in the UK. At
the time of acquisition, Corus was four times larger than Tata Steel, in terms of annual steel
production. Corus was the world's 9th largest producer of Steel, whereas Tata Steel was at
56th position. The acquisition made Tata Steel world's 5th largest producer of Steel.

Tayo Rolls in 2008, formerly Tata-Yodogawa Limited is a metal fabrication and

processing company headquartered in Jamshedpur, India. It was founded in 1968 as a joint
venture between Tata Steel and the Japan-based Yodogawa Steels. In 2008, the company
made the rights issue which was subscribed for only about 50% of its total value – Rs 60-
crore. Due to undersubscription, the promoters acquired them, as result Tayo Rolls became a
Tata Steel Subsidiary. Tata Steel owns 55.24% of the Tayo Rolls.

Steel Engineering and Vinausteel in 2007: Tata Steel through its wholly owned
Singapore subsidiary, NatSteel Asia Pte Ltd, acquired controlling stake in both rolling mill
companies located in Vietnam: Structure Steel Engineering Pte Ltd (100% stake) and
Vinausteel Ltd (70% stake). The enterprise value for the acquisition was $41 million. With
this acquisition, Tata Steel got hold of two rolling mills, a 250,000 tonnes per year bar/wire
rod mill operated by SSE Steel Ltd. and a 180,000 tonnes per year reinforcing bar mill
operated by Vinausteel Ltd.

Bhushan Steel in 2018: Tata Steel acquired the entire company in 2017–18, when
Insolvency proceedings were initiated against the former company on 26 July 2017
under IBC. Tata steel emerged as the highest bidder and took over the company through its
wholly owned subsidiary Bamnipal Steel Ltd. The company was renamed as Tata Steel BSL.
Later in 2021 Tata Steel amalgamated Bamnipal Steel Ltd. and Tata Steel BSL thereby the
latter became a direct subsidiary of Tata Steel (72.65%).

Nilachala Ispat Nigam Ltd in 2022: Tata Steel through its wholly owned subsidiary,
Tata Steel Long Products (TSLP), acquired controlling stake in NINL. It beat the Jindal
Steel and JSW Steel to acquire Odisha-based Neelachal Ispat Nigam Ltd (NINL) for ₹12,100
crore (US$1.6 billion).
 Joint Ventures

In 2006, Tata Steel and BlueScope Steel launched Tata BlueScope Steel Ltd., as a joint
venture for the manufacturing pre-engineered steel products.

In 2014, Tata Steel launched Jamshedpur Continuous Annealing and Processing Company
Pvt Ltd (JCAPCPL), as a joint venture with Nippon Steel producing continuous annealed
products intended for automotive industry. The plant had a capacity of 600,000 tonnes and
was setup with an investment of 2,750 Crores. Tata Steel held 51% of the joint venture.

Steel Authority of India Limited (SAIL)

Is a government owned steel producer based in New Delhi, India. It is under

the ownership of Ministry of Steel, Government of India with an annual turnover of INR
68,452 Crore (US$9.32 billion) for fiscal year 2020–21. Incorporated on 24 January 1973,
SAIL has 61,989 employees (as of 1 May 2022). With an annual production of 16.30 million
metric tons, SAIL is the 20th largest steel producer in the world and the largest in India.

The Hot Metal production capacity of the company will further increase and is
expected to reach a level of 50 million tonnes per annum by 2025 SAIL operates and owns
five integrated steel plants at Bhilai, Rourkela, Durgapur, Bokaro and Burnpur (Asansol) and
three special steel plants at Salem, Durgapur and Bhadravathi. It also owns a Ferro
Alloy plant at Chandrapur. As a part of its global ambition, the company is undergoing a
massive expansion and modernisation programme involving upgrading and building new
facilities with emphasis on state of the art green technology. According to a recent survey,
SAIL is one of India's fastest growing Public Sector Units. Besides, it has R&D Centre for
Iron & Steel (RDCIS), Centre for Engineering in Ranchi, Jharkhand.

SAIL traces its origin to the Hindustan Steel Limited (HSL) which was set up on 19
January 1954. It was initially designed to manage only one plant that was coming up
at Rourkela.

For Bhilai and Durgapur Steel Plants, the preliminary work was done by the Iron and Steel
Ministry. From April 1957, the supervision and control of these two steel plants were also
transferred to Hindustan Steel. The registered office was originally in New Delhi. It moved to
Calcutta in July 1956, and ultimately to Ranchi in December 1959.

A new steel company, Bokaro Steel Limited (Bokaro Steel Plant), was incorporated on 29
January 1964 to construct and operate the steel plant at Bokaro. The 1 MT phases of Bhilai
 Rourkela Steel Plants were completed by the end of December 1961. The 1 MT
phase of Durgapur Steel Plant was completed in January 1962 after commissioning of the
Wheel and Axle plant. The crude steel production of HSL went up from 1.58 MT (1959–60)
to 1.6 MT. The second phase of the Bhilai Steel Plant was completed in September 1967 after
commissioning of the Wire Rod Mill.

The last unit of the 1.8 MT phase of Rourkela – the Tandem Mill – was
commissioned in February 1968, and the 1.6 MT stage of Durgapur Steel Plant was
completed in August 1969 after commissioning of the Furnace in SMS. Thus, with the
completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela, and 1.6 MT at Durgapur, the
total crude steel production capacity of HSL were raised to 3.7 MT in 1968–69 and
subsequently to 4 MT in 1972–73. IISCO was taken over as a subsidiary in 1978 and later
merged in 2006.

Indian steel industry plays a significant role in the country‟s economic growth. The
major contribution directs the attention that steel is having a stronghold in the traditional
sectors, such as infrastructure & constructions, automobile, transportation, industrial
applications etc. Although India's steel industry is growing at a rate higher than a lot of the
other developing countries, the effect of the world-wide economic slowdown can be felt in
the dampened rate of growth With higher inflation and interest rates, the automotive and
construction industry are likely to lower domestic demand in the shortterm. Indian steel
companies are ramping up their capacity through both Greenfield and Brownfield projects.
Small companies are developing niche sectors like the production of sponge iron.

India has emerged as the fourth largest steel producing nation in the world, as per
world steel association in April 2017. India became the 3rd largest producer of steel in 2015
and is now well on track to emerge as the 2nd largest producer after China. There is
significant potential for growth given the low per capita steel consumption of 61 Kg in India,
as compared to world average of 208 Kg. In this study researcher has focused on the working
capital management of government owned SAIL and private player truly global steel
company Tata Steel Limited Steel
 Literature Review

The present study aims to identify the financial strength and weakness of the Indian
Steel and Mines industries by properly establishing relationship between the items of the
balance sheet and Profit and loss account. The study has been undertaken for the period of 10
years from 2006-07 to 2015-16 and the data has been obtained from CMIE database. The
Mining industry in India is a major economic activity, which contributes significantly to the
economy of India. The GDP contribution of the mining industry varies from 2.2% to 2.5%
only but going by the GDP of the total industrial sector it contributes around 10% to 11%.
This research paper focuses on the financial performance analysis of Tata Steel and Jindal
Steel Works based on liquidity, profitability, efficiency, leverage ratio and market value ratio.

This will help the investor to take decision regarding investment, and the
company to learn its profitability and growth prospect. Chapter Preview Literature Review
Financial performance analysis is vital for the achievement of an enterprise. Financial
performance analysis is an appraisal of the feasibility, solidity and productivity of a business.

The different opinion observed during the study are as discussed below: Samiloglu
& Damirgunes (2008) pointed that even the profitability is constantly positive, inaccurate
working capital management procedures may lead to bankruptcy of the firm. They suggest
that current, acid test, and cash ratios measures of liquidity ratios are incompetent cannot
provide detailed and accurate information about working capital management effectiveness.
Nandi (2011) attempted to examine the influence of working capital management on
corporate profitability. An attempt had been undert aken for measuring the sensitivity of
return of investment (ROI) to changes in the level of working capital leverage (WCL) of the
studying company.

The present study deals with the corporate profitability and working capital management
of Steel Authority of India Limited (SAIL). A finance manager is required to take a decision
regarding working capital management in such a way that there is a trade-off between
liquidity and profitability. Various research finding validates that working capital
management has a significant impact on firm liquidity and profitability. The term corporate
profitability refers to the ability of corporate to earn profit. It reflects the optimum utilization
of available resources by the company.
It acts as a gauge to compute the operational efficiency and
performance of the company. Higher the value of profitability indicates the higher
performance or vice-versa. There is difference between profit and profitability. Profit is the
excess of revenue over the cost (absolute measure) while profitability is the ability to make
profit (relative measure). The corporate profitability can be measured through profitability
ratio. In this study gross profit ratio, net profit ratio, operating profit ratio, return on capital
employed, return on total assets, return on equity and earnings per share has been used.
Many analysts prefer return on capital employed and return on total assets to
measure the overall profitability of the company (Bhalla, 2000). Working capital
management is one of the financial decision through which a financial manager manages the
working capital. Working capital management involves the decision regarding the
composition and amount of current assets and current liabilities. Basically it is the
management of short term (current) assets and liabilities. A working capital is the life blood
of any corporate.

It is the amount which is required for meeting the day-to-day expenses. There are two
concept of working capital i.e., gross working capital and net working capital. The gross
working capital is the sum total of current assets while the net working capital is the excess of
current assets over current liability. There are different approaches to working capital policies
i.e., aggressive, conservative, matching and zero working capital policy (Khan and Jain,
2010). An efficient working capital management reflects the corporate ability to continue its
operations and shows its ability to meet shortterm obligations.

This leads to the value creation for the shareholders (Neab abd Noriza, 2010). A
working capital management also affects the liquidity and profitability of the company. An
efficient working capital increases the profitability of the company and ensures sound
liquidity (Sen and Eda, 2009). Excess or shortage of working capital is dangerous for the
company. Working capital management can be measured with the help of current ratio, liquid
ratio, debtor turnover ratio, working turnover ratio, inventory turnover ratio etc. To analyze
the efficiency of working capital of SAIL, the above discussed ratio has been used. STEEL
INDUSTRY OF INDIA Develop
 Practically speaking, working capital management has turn into a standout
amongst the most critical issues in the associations where numerous monetary officials are
attempting to recognize the essential working capital drivers and the suitable level of working
capital (Lamberson 1995). Shin and Soenen (1998), Filbeck and Thomas (2005) in their
paper stated that working capital has a significant impact on profitability and liquidity both.
The efficient working capital management was mandatory for enhancing the net wealth. They
used correlation coefficient and regression analysis to analyze the relationship. Further they
stated that there was a strong negative relationship between lengths of firm’s net trading cycle
and profitability. Deloof (2003) stated that most of Belgian firms had a high proportion of
cash in working capital. It can be expected that the way in which working capital is managed,
will have a significant impact on the profitability of those firms. Through various analyses he
concluded that there is a negative relationship between corporate profitability and working
capital components. Padachi (2006); Raheman and Nasr (2007) stated the impact of different
variables of working capital management on the Net Operating Profitability of Pakistani
Firms.
They concluded that there was a strong negative relationship between working capital
management variables and profitability. He also stated that with the increase of cash
conversion cycle, profitability decreases. So firm and managers should try to reduce the cash
conversion cycle to create a positive value for shareholders. In the same line Dong (2010)
studied the companies listed in Vietnam stock market. The study reveals that the working
capital management has a significant impact (strong negative) on firms’ profitability and
liquidity.
He also suggested that decrease in account receivable and inventories period will
increases the profitability of the firm. The study carried out by Mathuva (2010) presented a
positive relationship between working capital management and profitability. Bagchi,
Chakrabarti et al (2012) studied the impact of working capital management components on
profitability of FMCG firms. He suggested that working capital management is very crucial
decision in financial management and have a significant effect on liquidity and profitability
of the firm.
The same relationship was seen in the study of Ghosh and Maji (2003). Maheshwari
(2014) studied the Indian steel industry by selecting the top four Indian steel Companies
including Steel Authority of India Limited (SAIL). The study shows that the performance of
steel industry is quite satisfactory. The efficient working capital management performs the
crucial role in maintaining proper liquidity, solvency and profitability of the concern.
 What is working capital management

Working capital management – defined as current assets minus current liabilities – is a

business tool that helps companies effectively make use of current assets and maintain
sufficient cash flow to meet short-term goals and obligations. By effectively managing
working capital, companies can free up cash that would otherwise be trapped on their balance
sheets. As a result, they may be able to reduce the need for external borrowing, expand their
businesses, fund mergers or acquisitions, or invest in R&D.

Working capital is essential to the health of every business, but managing it effectively is
something of a balancing act. Companies need to have enough cash available to cover both
planned and unexpected costs, while also making the best use of the funds available. This is
achieved by the effective management of accounts payable, accounts receivable, inventory,
and cash.

Working capital is calculated by subtracting current liabilities from current assets. That
means that the working capital formula can be illustrated as:

Working capital = current assets – current liabilities

Current assets include assets such as cash and accounts receivable, and current liabilities
include accounts payable../

Other important working capital metrics include:

 Days Sales Outstanding (DSO) – the average number of days taken for the company’s
customers to pay their invoices.
 Days Payables Outstanding (DPO) – the average number of days that the company takes to
pay its suppliers.
 Days Inventory Outstanding (DIO) – the average number of days that the company takes to
sell its inventory.
 Cash Conversion Cycle (CCC) – the average time taken for the company to convert its
investment in inventory into cash.

CCC is calculated as follows:

 CCC = DIO + DSO – DPO

The shorter a company’s CCC, the sooner it is converting cash into inventory and then back
to cash. Companies can reduce their cash conversion cycle in three ways: by asking
customers to pay faster (reducing DSO), extending payment terms to suppliers (increasing
DPO) or reducing the time -that inventory is held (reducing DIO).

Objectives of working capital management

Working capital is an essential metric for businesses to pay attention to, as it represents the
amount of capital they have on hand to make payments, cover unexpected costs, and ensure
business runs as usual. However, working capital management isn’t that simple, and there can
be multiple objectives of a working capital management program, including:

 Meeting obligations. Working capital management should always ensure that the business has
enough liquidity to meet its short-term obligations, often by collecting payment from
customers sooner or by extending supplier payment terms. Unexpected costs can also be
considered obligations, so these need to be factored into the approach to working capital
management, too.
 Growing the business. With that said, it’s also important to use your short-term assets
effectively, whether that means supporting global expansion or investing in R&D. If your
company’s assets are tied up in inventory or accounts payable, the business may not be as
profitable as it could be. In other words, too cautious an approach to working capital
management is suboptimal.
 Optimizing capital performance. Another working capital management objective is to
optimize the efficiency of capital usage – whether by minimizing capital costs or maximizing
capital returns. The former can be achieved by reclaiming capital that is currently tied up to
reduce the need for borrowing, while the latter involves ensuring the ROI of spare capital
outweighs the average cost of financing it.

 Speeding up the CCC can improve a company’s working capital position, but it may
also have other consequences. For example, there is a risk that reducing inventory
levels could negatively impact your ability to fulfil orders.
 Where DPO is concerned, your accounts payable is also your suppliers’ accounts
receivable – so if you pay suppliers later, you may be improving your own working
capital at the expense of your suppliers’ working capital. This may have an adverse
effect on your relationships with suppliers and could even make it difficult for cash-
strapped suppliers to fulfil your orders on time.

 Effective working capital management therefore means taking steps to improve the
company’s working capital position without triggering adverse consequences
elsewhere in your supply chain. This might include reducing DSO by putting in place

more efficient invoicing processes, so that customers receive your invoices sooner. Or
it might mean adopting an early payment program that enables your suppliers to
receive payment sooner than they would otherwise.

 Electronic invoicing. Electronic invoice submission can help companies achieve

working capital benefits. By streamlining the invoicing process, you can reduce the
risk of errors, automate manual processes, and make sure that your customers receive
your invoices as early as possible – which may ultimately mean you get paid sooner.
Electronic invoice submission methods can enable companies to turn purchase orders
into invoices automatically or submit high volumes of invoices using system-to-
system integration.
 Cash flow forecasting. By forecasting future cash flows – such as payables and
receivables – companies can plan for any upcoming cash gaps and make better use of
any surpluses. The more accurately you can predict your future cash flows, the better-
informed your working capital management decisions will be.
 Supply chain finance. For buyers, supply chain finance – also known as reverse
factoring – is a way of offering suppliers early payment via one or more third-party
funders. Suppliers can improve their DSO by getting paid sooner at a low cost of
funding – while buyers can preserve their own working capital by paying in line with
agreed payment terms.
 Dynamic discounting. Dynamic discounting is another solution that buyers can use to
provide early payment to suppliers – but this time there’s no external funder, as the
program is funded by the buyer via early payment discounts. Like supply chain
 finance, this enables suppliers to reduce their DSO. What’s more, it allows buyers to
achieve an attractive risk-free return on their excess cash.
 Flexible funding. Last but not least, working capital providers that offer flexible
funding may allow buyers to move seamlessly between supply chain finance and
dynamic discounting models, meaning companies can adapt to their varying working
capital needs while continuing to support their suppliers.

The availability of money was high in the years prior to the financial crisis of 2008.
Companies did not have to look far for capital to fund expansions and thus, goals to increase
sales were common. (Kaiser & Young, 2009; Ivashina & Scharfstein, 2009) The outbreak of
the financial crisis affected more or less the entire world economy. Many companies where
faced with new difficulties, having to fight for their existence in an environment with highly
reduced liquidity. With the supply of money drying up, the importance of streamlining
operations and collecting every penny possible increased. The result of the changing business
environment thus forced companies’ to turn their attention towards minimizing cost and
managing assets. (Puri, Rocholl, & Steffen, 2011) Working capital management (WCM)
refers to the managing of short-term finances.

The basic idea is that assets should be allocated so that their optimal potential is
realized and thus minimize waste. (Brealey, Myers & Allen, 2013) Directing attention
towards WCM has been proven to be popular during recessions and similar patterns in
shifting attention has been observed at previous crises e.g. the oil crises of 1970’s.
(Scholleova, 2012) The focus on WCM slowly disappeared and remained mainly in smaller-
sized companies when the economic climate improved. One explanation for this is that
larger-sized companies can, in general, more easily acquire financial support by external
means, as they are likely to e.g. have higher credit ratings and have the ability to issue bonds.
Because of this, one explanation to the shifts in attention towards WCM is the varying
availability of liquidity, which affects the importance of WCM and the impact it has on
companies. (Banham, 2013; Sing, 2003; Scholleova, 2012)

Working capital refers to the capital that a company needs in order to run its
operations, i.e. the short-term financing of the company. Because of this, the properties of
working capital are such that it does not earn interest (e.g. capital tied up in Inventory).
Therefore, it is important that companies manage the working capital levels well in order to
ensure that it provides the company sufficient amounts of profit (to counter the cost of
capital). Working capital is made up of the net sum of current assets minus current liabilities
and is often referred to as the net working capital (NWC). (Penman, 2013) WCM is referring
to any actions aimed at managing companies’ working capital levels and thus does not refer
to any specific managing-model or framework. In contrast to long-term financial decisions,
WCM deals with the issues of short-term financing. For example, deciding the level of credit
a company gives their clients as well as how much credit they should demand from their
suppliers. These types of short-term financing decisions are important for the sustainability of
companies, as it affects liquidity and profitability. (Aravindan & Ramanathan, 2013) The net
balance between current assets and current liabilities is important as the current assets are
expected to turn into cash within one year, while current liabilities are commitments that are
due to mature within one year.

NWC is thereby a measurement of short-term financial stability as it indicates if the

company will be able to live up to its short-term commitments. From this nature, working
capital is of high interest from a short-term financing perspective and liquidity analysis.
However, working capital is also important for companies’ long-term financing because the
indication of short-term survival strength and financial-health through short-term liquidity
will impact the companies’ ability to attain attractive long-term Net Working Capital (NWC)
Current Assets Current Liabilities.

FIGURE 1: NET WORKING CAPITAL (PENMAN, 2013) CH 2. Theory 11

financing. A company with poor financial health is likely to have a higher cost of capital than
a company with better finances, because of the higher credit risk. (Penman, 2013) According
to Aravindan and Ramanathan (2013), WCM deals with decisions regarding the trade-off
between liquidity and profitability. In short, Aravindan and Ramanathan (2013) mean that
WCM is the managing and planning of liquidity and profitability.

A company with poor WCM may run the risk of locking-up surplus amounts of
capital (e.g. excess inventories) and on the other hand a shortage of working capital can
damage the flow of operations. (Aravindan & Ramanathan, 2013) For the financial manager,
WCM will put focus on three main current assets: inventories, accounts receivable (AR) and
cash (and cash equivalents), while the main current liability is accounts payable (AP).
Managing current assets is of importance for many companies as it often accounts for the
major part of the company’s total assets. (Brealey et al., 2013; Kieschnick et al., 2013)
However, the details of how these assets should be handled to achieve optimal levels .
 working capital is dependent on a number of factors such as the nature of business as
well as seasonal variations that might affect product demand. (Aravindan & Ramanathan,
2013) Additionally, the cost of capital in terms of the opportunity cost needs to be considered
when referring to optimal levels of working capital. (Brealey et al., 2013) One of the leading
institutes on working capital research, REL (a Hackett Group company), tracks the
development of working capital through an annual survey.

Working capital refers to the capital that a company needs in order to run its
operations, i.e. the short-term financing of the company. Because of this, the properties of
working capital are such that it does not earn interest (e.g. capital tied up in Inventory).
Therefore, it is important that companies manage the working capital levels well in order to
ensure that it provides the company sufficient amounts of profit (to counter the cost of
capital). Working capital is made up of the net sum of current assets minus current liabilities
and is often referred to as the net working capital (NWC). (Penman, 2013) WCM is referring
to any actions aimed at managing companies’ working capital levels and thus does not refer
to any specific managing-model or framework. In contrast to long-term financial decisions,
WCM deals with the issues of short-term financing. For example, deciding the level of credit
a company gives their clients as well as how much credit they should demand from their
suppliers.
These types of short-term financing decisions are important for the sustainability of
companies, as it affects liquidity and profitability. (Aravindan & Ramanathan, 2013) The net
balance between current assets and current liabilities is important as the current assets are
expected to turn into cash within one year, while current liabilities are commitments that are
due to mature within one year. NWC is thereby a measurement of short-term financial
stability as it indicates if the company will be able to live up to its short-term commitments.
From this nature, working capital is of high interest from a short-term financing perspective
and liquidity analysis. However, working capital is also important for companies’ long-term
financing because the indication of short-term survival strength and financial-health through
short-term liquidity will impact the companies’ ability to attain attractive long-term Net
Working Capital (NWC) Current Assets Current Liabilities.
FIGURE 1: NET WORKING CAPITAL (PENMAN, 2013) CH 2. Theory 11 financing.
A company with poor financial health is likely to have a higher cost of capital than a
company with better finances, because of the higher credit risk. (Penman, 2013) According to
Aravindan and Ramanathan (2013), WCM deals with decisions regarding the trade-off
between liquidity and profitability. In short, Aravindan and Ramanathan (2013) mean that
WCM is the managing and planning of liquidity and profitability. A company with poor
WCM may run the risk of locking-up surplus amounts of capital (e.g. excess inventories) and
on the other hand a shortage of working capital can damage the flow of operations.
(Aravindan & Ramanathan, 2013) For the financial manager, WCM will put focus on three
main current assets: inventories, accounts receivable (AR) and cash (and cash equivalents),
while the main current liability is accounts payable (AP). Managing current assets is of
importance for many companies as it often accounts for the major part of the company’s total
assets. (Brealey et al., 2013; Kieschnick et al., 2013) However, the details of how these assets
should be handled to achieve optimal levels of working capital is dependent on a number of
factors such as the nature of business as well as seasonal variations that might affect product
demand. (Aravindan & Ramanathan, 2013) Additionally, the cost of capital in terms of the
opportunity cost needs to be considered when referring to optimal levels of working capital.
(Brealey et al., 2013) One of the leading institutes on working capital research, REL (a
Hackett Group company), tracks the development of working capital through an annual
survey.

Working capital refers to the capital that a company needs in order to run its operations, i.e.
the short-term financing of the company. Because of this, the properties of working capital
are such that it does not earn interest (e.g. capital tied up in Inventory). Therefore, it is
important that companies manage the working capital levels well in order to ensure that it
provides the company sufficient amounts of profit (to counter the cost of capital). Working
capital is made up of the net sum of current assets minus current liabilities and is often
referred to as the net working capital (NWC). (Penman, 2013) WCM is referring to any
actions aimed at managing companies’ working capital levels and thus does not refer to any
specific managing-model or framework.
In contrast to long-term financial decisions, WCM deals with the issues of short-term
financing. For example, deciding the level of credit a company gives their clients as well as
how much credit they should demand from their suppliers. These types of short-term
financing decisions are important for the sustainability of companies, as it affects liquidity
and profitability. (Aravindan & Ramanathan, 2013) The net balance between current assets
and current liabilities is important as the current assets are expected to turn into cash within
one year, while current liabilities are commitments that are due to mature within one year.
NWC is thereby a measurement of short-term financial stability as it indicates if the company
will be able to live up to its short-term commitments. From this nature, working capital is of
high interest from a short-term financing perspective and liquidity analysis. However,
working capital is also important for companies’ long-term financing because the indication
of short-term survival strength and financial-health through short-term liquidity will impact
the companies’ ability to attain attractive long-term Net Working Capital (NWC) Current
Assets Current Liabilities FIGURE 1: NET WORKING CAPITAL (PENMAN, 2013) CH 2.
Theory 11 financing. A company with poor financial health is likely to have a higher cost of
capital than a company with better finances, because of the higher credit risk. (Penman, 2013)
According to Aravindan and Ramanathan (2013), WCM deals with decisions regarding the
trade-off between liquidity and profitability.
In short, Aravindan and Ramanathan (2013) mean that WCM is the managing and
planning of liquidity and profitability. A company with poor WCM may run the risk of
locking-up surplus amounts of capital (e.g. excess inventories) and on the other hand a
shortage of working capital can damage the flow of operations. (Aravindan & Ramanathan,
2013) For the financial manager, WCM will put focus on three main current assets:
inventories, accounts receivable (AR) and cash (and cash equivalents), while the main current
liability is accounts payable (AP).
Managing current assets is of importance for many companies as it often accounts for the
major part of the company’s total assets. (Brealey et al., 2013; Kieschnick et al., 2013)
However, the details of how these assets should be handled to achieve optimal levels of
working capital is dependent on a number of factors such as the nature of business as well as
seasonal variations that might affect product demand. (Aravindan & Ramanathan, 2013)
Additionally, the cost of capital in terms of the opportunity cost needs to be considered when
referring to optimal levels of working capital. (Brealey et al., 2013) One of the leading
institutes on working capital research, REL (a Hackett Group company), tracks the
development of working capital through an annual survey.
Working capital refers to the capital that a company needs in order to run its operations,
i.e. the short-term financing of the company. Because of this, the properties of working
capital are such that it does not earn interest (e.g. capital tied up in Inventory). Therefore, it is
important that companies manage the working capital levels well in order to ensure that it
provides the company sufficient amounts of profit (to counter the cost of capital). Working
capital is made up of the net sum of current assets minus current liabilities and is often
referred to as the net working capital (NWC). (Penman, 2013) WCM is referring to any
actions aimed at managing companies’ working capital levels and thus does not refer to any
specific managing-model or framework. In contrast to long-term financial decisions, WCM
deals with the issues of short-term financing. For example, deciding the level of credit a
company gives their clients as well as how much credit they should demand from their
suppliers. These types of short-term financing decisions are important for the sustainability of
companies, as it affects liquidity and profitability. (Aravindan & Ramanathan, 2013) The net
balance between current assets and current liabilities is important as the current assets are
expected to turn into cash within one year, while current liabilities are commitments that are
due to mature within one year. NWC is thereby a measurement of short-term financial
stability as it indicates if the company will be able to live up to its short-term commitments.
From this nature, working capital is of high interest from a short-term financing perspective
and liquidity analysis. However, working capital is also important for companies’ long-term
financing because the indication of short-term survival strength and financial-health through
short-term liquidity will impact the companies’ ability to attain attractive long-term Net
Working Capital (NWC) Current Assets Current Liabilities
FIGURE 1: NET WORKING CAPITAL (PENMAN, 2013) CH 2. Theory 11 financing. A
company with poor financial health is likely to have a higher cost of capital than a company
with better finances, because of the higher credit risk. (Penman, 2013) According to
Aravindan and Ramanathan (2013), WCM deals with decisions regarding the trade-off
between liquidity and profitability. In short, Aravindan and Ramanathan (2013) mean that
WCM is the managing and planning of liquidity and profitability. A company with poor
WCM may run the risk of locking-up surplus amounts of capital (e.g. excess inventories) and
on the other hand a shortage of working capital can damage the flow of operations.
(Aravindan & Ramanathan, 2013) For the financial manager, WCM will put focus on three
main current assets: inventories,
accounts receivable (AR) and cash (and cash equivalents), while the main current liability
is accounts payable (AP). Managing current assets is of importance for many companies as it
often accounts for the major part of the company’s total assets. (Brealey et al., 2013;
Kieschnick et al., 2013) However, the details of how these assets should be handled to
achieve optimal levels of working capital is dependent on a number of factors such as the
nature of business as well as seasonal variations that might affect product demand.
(Aravindan & Ramanathan, 2013) Additionally, the cost of capital in terms of the opportunity
cost needs to be considered when referring to optimal levels of working capital. (Brealey
et al., 2013) One of the leading institutes on working capital research, REL (a Hackett Group
company), tracks the development of working capital.
 PROBLEM DEFINITION

 Herbert & Sue (1998), has Undertaken one study on Industry practice relating to
aggressive conservative working capital policies. The study looked at ten diverse
industry groups over an extended time period to examine the relative relationship
between aggressive and conservative working capital practices. Results strongly
show that the industries had significantly different current asset
 Management policies. Additionally, the relative industry ranking of the
aggressive/conservative asset policies exhibited remarkable stability over time.
Industry policies concerning relative aggressive/conservative liability management
were also significantly different.
 Kesseven Padachi (2006) has undertaken a study on trends in working capital
management and its impact on firms’ performance by analyzing mauritian small
manufacturing firms. The study was undertaken by taking data from 1998- 2003 for
58 firms. The key
 variables used in the analysis were inventory days, accounts receivable days,
accounts payable days and cash conversion cycle. A strong significant relationship
between working capital management and profitability has been found in previous
empirical work profitability has been found in previous empirical work
 An analysis of the liquidity, profitability and operational efficiency of the five
industries shows significant changes and how best practices in the paper industry
have contributed to performance.
 NEED OF THE STUDY

 Working capital management is essentially an accounting strategy with a focus on the

maintenance of a sufficient balance between a company's current assets and liabilities.

 An effective working capital management system helps businesses not only cover

their financial obligations but also boost their earnings

 Working capital management involves the relationship between a firms short term.

 Efficient working capital management helps ensure your business runs smoothly and

includes managing your inventory, accounts receivables, and accounts payables.

 Assets and its short term liabilities the goal of Working capital management is to.

ensure that a firm is able to continue it's a operations and that it has sufficient.

 It also takes maintaining both your short term assets and liabilities to ensure you have
the liquid assets necessary to run your daily operations
 OBJECTIVE OF THE STUDY

 To study the structure of the working capital of selected steel companies.

 To study the management of working capital components by steel companies.

 To know the comparative position of steel companies in working capital management.

 To study the efficiency of working capital in steel majors through financial ratio.

 To make a comparative study of working capital management between SAIL and Tata

Steel Ltd recommend ways and means to improve present condition.

 To give suggestions to improve the working capital management in such a cash

intensive sector.
 HYPOTHESIS
Hypothesis Number 01:-

Null Hypothesis : H0 : There is no significant difference between the working capital ratios
of steel authority of India ltd & Tata steel ltd.
Alternative Hypothesis : H1 :
There is significant difference between the working capital ratios
of steel authority of India ltd & Tata steel ltd.

Hypothesis Number 02:-

Null Hypothesis : H0 : There is no difference between the mean of working capital of both
companies.
Alternative Hypothesis : H1: There is difference between the mean of working capital of
both companies
 RESEARCH METHODOLOGY

 Primary data : Primary data was collected from the Tata steel ltd and Steel Authority
of India service sector by using collected all information.
 This report has prepared through extensive use of primary data. It is collected from
group of people who are related with this company the following method are used in
collecting primary data. Data used in research originally obtained through the direct
efforts of the researches.
 Secondary data : The basic data for this current study has been collected from the
Internet, Books, Journals and Electronic database.
 Secondary data is collected from the company’s collected from the company’s
manuals report and brochures through company’s records. Secondary data can be
collected through references as website, journal, books, magazine etc.
 Data Analysis and Interpretation

Profit & Loss - Steel Authority of India (SAIL) Ltd.

Rs (in Crores)

Mar'22 Mar'21 Mar'20 Mar'19 Mar'18

12Months 12Months 12Months 12Months 12Months

INCOME:

Sales Turnover 103473.32 69110.02 61660.55 66967.31 58962.36

Excise Duty .00 .00 .00 .00 1403.90

NET SALES 103473.32 69110.02 61660.55 66967.31 57558.46

Other Income 1042.0300 1011.6900 985.2200 532.8200 484.4500

TOTAL INCOME 104515.35 70121.71 62645.77 67500.13 58042.91

EXPENDITURE:

Manufacturing Expenses .00 5709.46 6191.55 6052.52 5809.81

Material Consumed 42491.47 30630.90 27381.61 32551.57 30220.12

Personal Expenses 12846.24 10445.94 8781.32 8830.34 8850.07

Selling Expenses .00 .00 .00 .00 .00

Administrative Expenses 26813.46 9595.67 9107.06 9798.77 8060.61

Expenses Capitalised .00 .00 .00 .00 .00

Provisions Made .00 .00 .00 .00 .00

TOTAL EXPENDITURE 82151.17 56381.97 51461.54 57233.20 52940.61

Operating Profit 21322.15 12728.05 10199.01 9734.11 4617.85

EBITDA 22364.18 13739.74 11184.23 10266.93 5102.30

Depreciation 4274.17 4102.00 3755.05 3384.72 3064.92

Other Write-offs .00 .00 .00 .00 .00

EBIT 18090.01 9637.74 7429.18 6882.21 2037.38

Interest 1697.88 2817.14 3486.76 3154.92 2822.75

EBT 16392.13 6820.60 3942.42 3727.29 -785.37

Taxes 4023.68 3029.01 1149.12 1159.07 -277.23

Profit and Loss for the Year 12368.45 3791.59 2793.30 2568.22 -508.14

Non Recurring Items -353.41 326.08 -900.20 -174.78 203.96

Other Non Cash Adjustments .00 .00 .00 .00 .00

Other Adjustments .00 -267.65 128.44 -214.62 -177.53

REPORTED PAT 12015.04 3850.02 2021.54 2178.82 -481.71

KEY ITEMS

Preference Dividend .00 .00 .00 .00 .00

Equity Dividend .00 .00 .00 .00 .00

Equity Dividend (%) .00 .00 .00 .00 .00

Shares in Issue (Lakhs) 41305.30 41305.25 41305.25 41305.25 41305.25

EPS - Annualised (Rs) 29.09 9.32 4.89 5.27 -1.17

Rs (in Crores)

For the fiscal year ended 31 March 2022, Steel Authority of India Limited revenues increased
50% to RS1.035T. Net income increased from RS41.48B to RS122.43B. Revenues reflect an
increase in demand for the Company's products and services due to favorable market
conditions. Dividend per share increased from RS2.80 to RS8.75. Basic Earnings per Share
excluding Extraordinary Items increased from RS10.04 to RS29.64.

Gross margin TTM 58.82%

Operating margin TTM 16.49%

Net Profit margin TTM 11.83%

Return on Investment TTM 13.91%

BalanceSheet - Steel Authority of India (SAIL) Ltd.
Rs (in Crores)

Particulars Mar'22 Mar'21 Mar'20 Mar'19 Mar'18

Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months

Share Capital 4130.53 4130.53 4130.53 4130.53 4130.53

Reserves & Surplus 47886.61 39364.35 35646.85 34021.04 31583.14

Net Worth 52017.14 43494.88 39777.38 38151.57 35713.67

Secured Loan 13385.65 35576.20 51200.81 41433.88 30180.65

Unsecured Loan .00 .00 .00 .00 11840.83

TOTAL LIABILITIES 65402.79 79071.08 90978.19 79585.45 77735.15

Assets

Gross Block 77673.89 112636.59 112199.71 100978.84 95077.25

(-) Acc. Depreciation .00 45036.83 43180.67 39619.63 36465.70

Net Block 77673.89 67599.76 69019.04 61359.21 58611.55

Capital Work in Progress .00 8878.48 8751.56 16013.50 18395.43

Investments 1624.49 1595.01 1584.98 1584.75 1491.30

Inventories 19569.31 19508.30 23747.20 19441.80 16996.67

Sundry Debtors 4736.83 7124.00 8812.39 4495.05 3869.94

Cash and Bank 647.83 680.52 363.25 219.42 254.06

Loans and Advances 13488.79 11773.59 12819.39 13324.00 14570.85

Total Current Assets 38442.76 39086.41 45742.23 37480.27 35691.52

Current Liabilities 45836.86 34795.58 27655.89 30248.10 30177.19

Provisions 6501.49 3293.00 6463.73 6604.18 6277.46

Total Current Liabilities 52338.35 38088.58 34119.62 36852.28 36454.65

NET CURRENT ASSETS -13895.59 997.83 11622.61 627.99 -763.13

Misc. Expenses .00 .00 .00 .00 .00

TOTAL ASSETS(A+B+C+D+E) 65402.79 79071.08 90978.19 79585.45 77735.15

Rs (in Crores)
Profit & Loss - Tata Steel Ltd.

Rs (in Crores)
s Mar'22 Mar'21 Mar'20 Mar'19 Mar'18

12Months 12Months 12Months 12Months 12Months

INCOME:

Sales Turnover 129021.35 84132.92 60435.97 70610.92 60519.37

Excise Duty .00 .00 .00 .21 902.55

NET SALES 129021.35 84132.92 60435.97 70610.71 59616.82

Other Income 1452.0200 755.1100 404.1200 2405.0800 763.6600

TOTAL INCOME 130473.37 84888.03 60840.09 73015.79 60380.48

EXPENDITURE:

Manufacturing Expenses 4663.69 3746.26 3104.40 3033.34 2925.20

Material Consumed 44485.53 30054.75 23021.77 25134.09 21376.65

Personal Expenses 6365.80 5741.94 5036.62 5131.06 4828.85

Selling Expenses .00 .00 .00 .00 .00

Administrative Expenses 22376.48 17466.26 14411.61 16749.28 14707.16

Expenses Capitalised .00 .00 .00 .00 .00

Provisions Made .00 .00 .00 .00 .00

TOTAL EXPENDITURE 77891.50 57009.21 45574.40 50047.77 43837.86

Operating Profit 51129.85 27123.71 14861.57 20562.94 15778.96

EBITDA 52581.87 27878.82 15265.69 22968.02 16542.62

Depreciation 5463.69 5469.26 3920.12 3802.96 3727.46

Other Write-offs .00 .00 .00 .00 .00

EBIT 47118.18 22409.56 11345.57 19165.06 12815.16

Interest 2792.08 4541.02 3031.01 2823.58 2810.62

EBT 44326.10 17868.54 8314.56 16341.48 10004.54

Taxes 11079.47 1531.87 -132.82 5694.06 2468.70

Profit and Loss for the Year 33246.63 16336.67 8447.38 10647.42 7535.84

Non Recurring Items -229.78 805.31 -2048.76 -110.35 -3210.90

Other Non Cash Adjustments .00 .00 .00 .00 .00

Other Adjustments -5.67 -64.01 345.18 -3.88 -155.39

REPORTED PAT 33011.18 17077.97 6743.80 10533.19 4169.55

KEY ITEMS

Preference Dividend .00 .00 .00 .00 .00

Equity Dividend 3007.08 1145.92 1191.96 921.06 1141.64

Equity Dividend (%) 246.00 95.59 104.00 80.36 99.61

Shares in Issue (Lakhs) 12223.45 12041.27 12041.27 12041.26 12041.19

EPS - Annualised (Rs) 270.06 141.83 56.01 87.48 34.63

Rs (in Crores)

BalanceSheet - Tata Steel Ltd.

Rs (in Crores)

Particulars Mar'22 Mar'21 Mar'20 Mar'19 Mar'18

Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months

Share Capital 1222.37 1202.56 1146.13 1146.12 1146.14

Reserves & Surplus 124211.39 93207.56 73416.99 69308.59 60368.70

Net Worth 125433.76 94410.12 74563.12 70454.71 61514.84

Secured Loan 32275.47 33305.09 41514.23 28934.28 4803.86

Unsecured Loan .00 .00 .00 .00 22709.97

TOTAL LIABILITIES 157709.23 127715.21 116077.35 99388.99 89028.67

Assets

Gross Block 126557.53 124244.11 90353.13 86575.39 83444.46

(-) Acc. Depreciation 32267.10 27100.83 19119.75 15353.37 11715.38

Net Block 94290.43 97143.28 71233.38 71222.02 71729.08

Capital Work in Progress 14541.96 10908.28 8247.05 5796.29 5673.27

Investments 43497.54 36184.13 50096.07 39406.72 24276.93

Inventories 19942.94 12857.51 10716.66 11255.34 11023.41

Sundry Debtors 3280.30 2878.58 1016.73 1363.04 1875.63

Cash and Bank 2855.29 2396.90 1226.87 718.11 4696.74

Loans and Advances 43577.76 18122.25 7855.80 7736.84 5839.28

Total Current Assets 69656.29 36255.24 20816.06 21073.33 23435.06

Current Liabilities 60509.57 49126.58 31537.79 35412.96 33389.18

Provisions 3767.42 3649.14 2777.42 2696.41 2696.49

Total Current Liabilities 64276.99 52775.72 34315.21 38109.37 36085.67

NET CURR

5379.30 -16520.48 -13499.15 -17036.04 -12650.61

ENT ASSETS

Misc. Expenses .00 .00 .00 .00 .00

TOTAL ASSETS(A+B+C+D+E) 157709.23 127715.21 116077.35 99388.99 89028.67

Formulae :

1) Current Ratio = Current Assets / Current Liabilities

2) Liquid Ratio = Liquid Assets / Liquid Liabilities

3) Fixed Assets Ratio = Fixed Assets / Proprietory fund

4) Fixed Assets turnover ratio = Sales / Net Fixed assets*100

5) Fixed Assets to long term liabilities = Fixed assets / Long term liabilities

6) Current Assets to Proprietory fund ratio = Current ratio / Propretory fund

7) Debtor turnover ratio = Debtors + Bill Receivable / Credit sales * Working days

of year

8) Debtor Velocity ratio = Net Credit Sales / Debtors + Bills Receivable

9) Creditor turnover ratio = Creditors + Bills Payable /Credit Purchase *Working

days of year

10) Working Capital ratio = Working capital/ Next fixed Assets

11) Inventory to working capital ratio = Inventory /Working capital

12) Ratio of Current Assets to Fixed assets = Current assets / Fixed assets

13) Dividend payout ratio = Dividend per share/ Earning per share

14) Dividend yield ratio = dividend per share / Market per share

15) Price Earning Ratio = Market price per equity share / Earning per equity share

16) Stock to current asset ratio = Stock / Current Assets

Current Ratio :-

The current ratio measures the ability of an organization to pay its bills in
the near-term. It is a common measure of the short-term liquidity of a business. The ratio
is used by analysts to determine whether they should invest in or lend money to a
business. To calculate the current ratio, divide the total of all current assets by the total
of all current liabilities.
Liquid Ratio :-
A liquidity ratio is a type of financial ratio used to determine a company's
ability to pay its short-term debt obligations. The metric helps determine if a company can
use its current, or liquid, assets to cover its current liabilities.

Fixed assets ratio :-

Fixed Assets ratio is a type of solvency ratio (long-term solvency) which is
found by dividing total fixed assets (net) of a company with its long-term funds. It shows the
amount of fixed assets being financed by each unit of long-term funds.
Fixed Assets turnover ratio :-
The fixed asset turnover ratio reveals how efficient a company is at generating
sales from its existing fixed assets. A higher ratio implies that management is using its fixed
assets more effectively. A high FAT ratio does not tell anything about a company's ability to
generate solid profits or cash flows.
Fixed Assets to long term liabilities :-
The fixed-assets- to long-term-liabilities ratio is a way of measuring the solvency
of a company. A company's long-term debts are often secured with fixed assets, which is why
creditors are interested in this ratio. This ratio is calculated by dividing the value of fixed
assets by the amount of long-term debt.
Current Assets to Proprietory Fund ratio :-
The ratio is calculated by dividing the total of current assets by the amount of shareholders'
funds. For example, if current assets are Rs 2,00,000 and shareholders' funds are Rs 4,00,000,
the ratio of current assets to proprietors' funds in terms of percentage would be.
Debtor Turnover ratio :-
Accounts Receivables Turnover ratio is also known as debtors
turnover ratio. This indicates the number of times average debtors have been converted into
cash during a year. This is also referred to as the efficiency ratio that measures the company's
ability to collect revenue.
Debtor Velocity Ratio :-
Debtors velocity indicates the number of times the debtors are turned over during a year.
Generally, the higher the value of debtors turnover the more efficient is the management of
debtors/sales or more liquid are the debtors.
Creditor turnover ratio :-
The accounts payable turnover ratio, also known as the payables
turnover or the creditor's turnover ratio, is a liquidity ratio that measures the average number
of times a company pays its creditors over an accounting period.
Working Capital Ratio :-
The working capital ratio is Working Capital Ratio = Current
Assets / Current Liabilities. Using figures from the balance sheet above for example, the
working capital ratio would be 300,000 / 200,000 = a working capital ratio of 1.5.

Inventory to working capital ratio :- Inventory to working capital is a liquidity ratio that
measures the amount of working capital that is tied up in inventory. The difference between
total current assets and total current liabilities is known as working capital or net working
capital.
Ratio of Current Assets to fixed assets :-
We can now calculate the fixed asset turnover ratio
by dividing the net revenue for the year by the average fixed asset balance, which is equal to
the sum of the current and prior period balance divided by two.

Dividend payout ratio :-

The dividend payout ratio shows how much of a company's
earnings after tax (EAT) are paid to shareholders. It is calculated by dividing dividends paid
by earnings after tax and multiplying the result by 100.
Dividend yield ratio :-
The dividend yield is a financial ratio that tells you the percentage of
a company's share price that it pays out in dividends each year. For example, if a company
has a $20 share price and pays a dividend of $1 per year, its dividend yield would be 5%.

Stock to current Assets Ratio :-

Current ratio is a popular way for investors to assess the
health of a stock's balance sheet. Current ratio is a measure of a company's ability to pay its
current liabilities and obligations due within one year. Mathematically, current ratio is a
company's current assets divided by its current liabilities.

1) Current ratio :-
Formulae : Steel Authority of India Tata Steel Limited
Limited
Current assets / Current 38442.76/65402.79 = 0.58778 69656.29/157709.23 = 0.4416
liabilities Year 1
Year 2 39086.41/79071.08= 0.49 36255.24/127715 = 0.28

Year 3 34 119.62/90978.19 = 0.37 20816.06/116077.35 = 17.93

20

15

10 Steel Authority ltd

Tata Steel ltd
5

0
Year 2 Year 3

Interpretation:-
 From the above table and graph it is found that the current ratio of Steel Authority of
India is 0.58 whereas Current ration of Tata Steel Ltd is 0.46 for the year ending
March 2022.
 From the above table and graph it is found that the current ratio of Steel Authority of
India is 0.49 whereas current ration of Tata steel ltd is 0.28 for the year ending March
2021.
 From the above table and graph it is found that the current ratio of Steel Authority of
India is 0.37 whereas Current Ratio of Tata Steel Ltd is 17.93 for the year ending
march 2020.
2) Liquid Ratio :-
Formulae : Steel Authority of India Tata Steel Limited
Limited

Liquid Assets / Liquid 18873.45/5238.35 = 0.361 49713.35/64276.99 = 0.77

Liabilities Year 1
Year 2 79071.08/38088.58 = 2.07 127715.21/36255.24 =35.22

Year 3 90978.19/11622.61 = 7.82 116077.35/13499.15 = 8.5

40
35
30
25
20
15 SteelAuthority ltd
10 Tata steel ltd
5
0
Liquid Year 2 Year 3
Ratio
Year 1

Interpretation:-
 From the above table and graph it is found that the liquid ratio of Steel Authority of

India is 0.361 whereas liquid ration of Tata Steel Ltd is 0.77 for the year ending

March 2022.

 From the above table and graph it is found that the Liquid Ratio of Steel Authority of

India is 2.07 whereas Liquid ration of Tata steel ltd is 35.22 for the year ending

March 2021.

 From the above table and graph it is found that the Liquid ration of Steel Authority of

India is 7.82 whereas Liquid ration of Tata Steel Ltd is 8.5 for the year ending march

2020.
 3) Fixed Assets Ratio = Fixed Assets / Proprietory fund

Formulae : Steel Authority of India Tata Steel Limited

Limited

Fixed Assets / 77673.89/47886.61 = 1.62 94290.43/124211.39 = 0.75

Proprietory fund

Year 2 67599.376 /39364.35 =1.71 97143.28 /94410.12 = 1.02

Year 3 69019.04/39777.38 = 1.73 71233.38/74563.21 = 0.95

1.5

1 Steel Authority ltd

Tata steel ltd
0.5

0
Fixed Asset Year 2 Year 3
Ratio

Interpretation:-
 From the above table and graph it is found that the Fixed Assets Ratio of Steel
Authority of India is 1.62 whereas Fixed Assets Ratio of Tata Steel Ltd is 0.75 for
the year ending March 2022.
 From the above table and graph it is found that the Fixed assets ratio of Steel
Authority of India is 1.71 whereas Fixed assets ration of Tata steel ltd is 1.02 for the
year ending March 2021.
 From the above table and graph it is found that the Fixed assets ratio of Steel
Authority of India is 1.73 whereas Fixed assets Ratio of Tata Steel Ltd is 0.95 for the
year ending march 2020.
 4) Current Assets to Proprietory fund ratio = Current ratio / Propretory fund

Formulae : Steel Authority of India Tata Steel Limited

Limited

Current Assets to Proprietory 38442.76/47886.61 = 0.802 69656.29/124211.39-= 0.560

fund ratio
Year 2 30888.58/39364.35 = 0.78 16520.48/93207.56 =0.18

34119.62 /35646.85 = 0.95 13499.15 /73416.99 =0.18

Year 3

0.8

0.6
Steel authority ltd
0.4
Tata steel ltd
0.2

0
Year 2 Year 3

Interpretation:-
 From the above table and graph it is found that the Current Assets to Proprietory fund
ratio of Steel Authority of India is 0.80 whereas Current Assets to Proprietory fund
ratio of Tata Steel Ltd is 0.56 for the year ending March 2022.
 From the above table and graph it is found that the Current Assets to Proprietory fund
ratio of Steel Authority of India is 0.78 whereas Current Assets to Proprietory fund
ratio of Tata steel ltd is 0.18 for the year ending March 2021.
 From the above table and graph it is found that the Current Assets to Proprietory fund
ratio of Steel Authority of India is 0.95 whereas Current Assets to Proprietory fund
ratio of Tata Steel Ltd is 0.18 for the year ending march 2020.
 5) Fixed Assets to long term liabilities = Fixed assets / Long term liabilities

Formulae : Steel Authority of India Tata Steel Limited

Limited

Fixed assets / Long term 77673.89/65402.79 = 1.18 94290.43/ 157709.23 = 0.59

liabilities
Year 2 67599.76/79071.08 =0.85 97143.28/127715.21 =0.76

Year 3 69019.04/90978.19 = 0.75 71233.38/116077.35 =61.36

70
60
50
40
30 Steel Authority ltd
20 Tata Sttel ltd
10
0
Fixed assets Year 2
to long term
liabilities

Interpretation:-

 From the above table and graph it is found that the Fixed Assets to long term
liabilities of Steel Authority of India is 0.80 whereas Fixed Assets to long term
liabilities of Tata Steel Ltd is 0.56 for the year ending March 2022.
 From the above table and graph it is found that the Fixed Assets to long term
liabilities of Steel Authority of India is 0.78 whereas Fixed Assets to long term
liabilities of Tata steel ltd is 0.18 for the year ending March 2021.
 From the above table and graph it is found that the Fixed Assets to long term
liabilities of Steel Authority of India is 0.95 whereas Fixed Assets to long term
liabilities Tata Steel Ltd is 0.18 for the year ending march 2020.
 6) Debtor turnover ratio = Debtors + Bill Receivable / Credit sales * Working

days of year

Formulae : Steel Authority of India Tata Steel Limited

Limited
Debtors + Bill Receivable / 4736.83/ 103473.32 = 0.046 3280.30/129021.35 =0.025
Credit sales

7124.00/69110.62 =0.10 2878.58/84132.92 = 0.034

Year 2

Year 3 8812.39/61660.55 = 0.14 1016.73/60435.97 =0.16

0.18
0.16
0.14
0.12
0.1
0.08 Steel authority ltd
0.06 Tata stee ltd
0.04
0.02
0
6) Debtor Year 2 year3
turnover ratio

Interpretation:-

 From the above table and graph it is found that the Debtor turnover ratio of Steel
Authority of India is 0.046 whereas Debtor turnover ratio of Tata Steel Ltd is 0.025
for the year ending March 2022.
 From the above table and graph it is found that the Debtor turnover ratio of Steel
Authority of India is 0.10 whereas Debtor turnover ratio of Tata steel ltd is 0.034 for
the year ending March 2021.
 From the above table and graph it is found that the Debtor turnover ratio of Steel
Authority of India is 0.14 whereas Debtor turnover ratio of Tata Steel Ltd is 0.16
for the year ending march 2020.
7) Debtor Velocity ratio = Net Credit Sales / Debtors + Bills Receivable

Formulae : Steel Authority of India Tata Steel Limited

Limited
103473.32/4736.83= 21.84 129021.35/3280.30= 39.332
Net Credit Sales / Debtors +
Bills Receivable
69110.02/7124 = 9.70 84132.92/2878.58= 29.22
Year 2
61660.55/8812.39=6.99 60435.97/1016.73= 59.44
Year 3

70
60
50
40
30 Steel Authority ltd
20 Tata steel ltd
10
0
Debtor Year 2 Year3
Velocity
Ratio

Interpretation:-
 From the above table and graph it is found that the Debtor Velocity ratio of Steel
Authority of India is 21.84 whereas Debtor Velocity ratio of Tata steel ltd is 39.33
for the year ending March 2022.
 From the above table and graph it is found that the Debtor Velocity ratio of Steel
Authority of India is 9.70 whereas Debtor Velocity ratio of Tata steel ltd is 29.22 for
the year ending March 2021.
 From the above table and graph it is found that the Debtor Velocity ratio of Steel
Authority of India is 6.99 whereas Debtor Velocity ratio of Tata Steel Ltd is 59.44
for the year ending march 2020.
8) Working Capital ratio = Working capital/ Next fixed Assets

Formulae : Steel Authority of India Limited Tata Steel Limited

Working Capital ratio 51507.2/77673.33 = 0.66 152329.93/94290.43= 1.6

For 1 Year
78073.25/67599.76 = 1.15 96784.61/97143.28= 0.99
2 Year
39578.2/69019.04 = 0.57 102578.2/71233.38 = 1.44
3 Year

1.8
1.6
1.4
1.2
1
0.8 Steel Authority ltd
0.6
Tata steel ltd
0.4
0.2
0
Working Year 2 Year 3
Capital
ratio

Interpretation:-
 From the above table and graph it is found that the Working Capital ratio of Steel
Authority of India is 0.66 whereas Working Capital ratio of Tata steel ltd is 1.6 for
the year ending March 2022.
 From the above table and graph it is found that the Working Capital ratio of Steel
Authority of India is 1.15 whereas Working Capital ratio of Tata steel ltd is 0.99 for
the year ending March 2021.
 From the above table and graph it is found that the Working Capital ratio of Steel
Authority of India is 0.57 whereas Working Capital ratio of Tata Steel Ltd is 1.44 for
the year ending march 2020.
9) Inventory to working capital ratio = Inventory /Working capital

Formulae : Steel Authority of India Limited Tata Steel Limited

Inventory to working 19569.31/77673.33 = 0.25 19942.94/94290.43= 0.21

capital ratio
Year 2 19508.30/67599.76 = 0.29 12857.51/97143.28= 0.13

Year 3 23747.20/69019.04 = 0.34 10716.66/71233.38 = 0.15

0.4
0.35
0.3
0.25
0.2
0.15 Steek Authority ltd
0.1
Tata steel ltd
0.05
0
Inventory Year 2 Year 3
to
working
capital
ratio

Interpretation:-
 From the above table and graph it is found that the Inventory to working capital ratio
of Steel Authority of India is 0.25 whereas Inventory to working capital ratio of Tata
steel ltd is 0.21 for the year ending March 2022.
 From the above table and graph it is found that the Inventory to working capital ratio
of Steel Authority of India is 0.29 whereas Inventory to working capital ratio of Tata
steel ltd is 0.13 for the year ending March 2021.
 From the above table and graph it is found that the Inventory to working capital ratio
of Steel Authority of India is 0.34 whereas Inventory to working capital ratio of Tata
Steel Ltd is 0.15 for the year ending march 2020.
10) Stock to current asset ratio = Stock / Current Assets

Formulae : Steel Authority of India Tata Steel Limited

Limited
Stock to current asset ratio 19569.31/69656.29 = 0.28 19942.94/6956.29 = 2.86
Year 1
Stock to current asset ratio 19508.30/39086.41 = 0.49 12857.51/36255.24 = 0.35
Year 2
Stock to current assets ratio 23747.20/45742.23 = 0.05 10716.66/20816.06 = 0.51
Year 3

3.5

2.5

1.5 Steel Authority ltd

Tata steel ltd
1

0.5

0
Stock to Year 2 Year 3
current
asset ratio

Interpretation:-
 From the above table and graph it is found that the Stock to current asset ratio of Steel
Authority of India is 0.28 whereas Stock to current asset ratio of Tata steel ltd is 2.86
for the year ending March 2022.
 From the above table and graph it is found that the Stock to current asset ratio of Steel
Authority of India is 0.49 whereas Stock to current asset ratio of Tata steel ltd is 0.35
for the year ending March 2021.
 From the above table and graph it is found that the Stock to current asset ratio of Steel
Authority of India is 0.5 whereas Stock to current asset ratio of Tata Steel Ltd is 0.51
for the year ending march 2020.

 CONCLUSION

The Lower fixed assets ratio of Tata Steel Limited is satisfactory but differs with
SAIL as test statistic shows clearly. On the rest of Ratios both the companies is below
standard and not encouraging for the entire study period i.e. 2006-07 to 2015-16 except for
one or two years.
The study shows that the additional funds raised are invested in fixed assets instead
of providing necessary working capital, therefore, the Working Capital turnover ratio is not
satisfactory in both the companies. Accordingly, the management may resort to effective
utilization of cash and bank balances in attractive investments or to pay back in short term
liabilities (current ratio).
The corporate profitability reflects the ability to make profit from the business
activity. It is an indicator of management efficiency to utilize the available resources. The
corporate profitability can be measured with the help of profitability ratio (relative measure)
such as gross profit ratio, net profit ratio, operating profit ratio, return on capital employed,
return on total assets, return on equity etc.
Most of analysts prefer ROCE/ROI and ROTA to measure the corporate profitability.
There are several factors which affect the corporate profitability; working capital
management (WCM) is one of them. WCM deals with the management of working capital.
Working capital is the amount which is required to meet the expenses of day-to-day
operation. It is just like the heart of business.
The efficiency of working capital is measured through current and liquid ratio, debtor
turnover ratio, working capital turnover ratio, inventory turnover ratio. From the study it has
been found out that SAIL corporate profitability and working capital management component
has strong relationship.
 LlMITATIONS

 This study is based on only secondary data; the limitations of the

secondary data would have affected the study.
 Ratios are computed on the basis of financial statements of the selected
companies.
 Hence, future performance of these units will not reflect. The financial
statements are subject to window dressing by the corporate.
 It will affect the results in the process of analysis.
 The absolute figures may prove decorative as ratio analysis is primarily
quantitative analysis and not qualitative analysis. Many people may
interpret the results in different ways as ratio is not an end by itself.
 FINDINGS

SA SA SA TS TS TS
Year 1 2 3 1 2 3
Current Ratio 0.58 0.49 0.37 0.44 0.28 17.93
Liquid Ratio 0.36 2.07 7.82 0.77 35.22 8.5
Fixed Assets 1.62 1.71 1.73 0.75 1.02 0.95
ratio

Curent Assets to 0.80 0.78 0.95 0.56 0.18 0.18

propretry Fund
ratio
Fixed Assets to 1.18 0.85 0.75 0.59 0.76 61.36
long term
liabilities
Debtor turnover 0.40 0.10 0.14 0.25 0.34 0.16
ratio
Velocity ratio 21.84 9.70 6.99 39.32 29.22 59.44

Working Capital 0.66 1.15 0.570 1.6 0.94 1.44

ratio
Inventory to 0.25 0.29 0.39 0.21 0.13 0.15
working ratio
Stock to current 0.28 0.49 0.05 0.86 0.35 0.57
ratio
 HYPOTHESIS TESTING

Null Hypothesis : H0 : There is no significant difference between the working capital ratios
of steel authority of India ltd & Tata steel ltd.
Alternative Hypothesis : H1 :
There is significant difference between the working capital ratios
of steel authority of India ltd & Tata steel ltd.

Interpretation :-
From the above research study it is found that form hypothesis number 0.1 alternate
hypothesis there is significant difference between the working capital ratio of steel authority
of India ltd and Tata steel ltd. Is found to be true hence accepted whereas as null hypothesis
i.e There is no significant difference between the working capital ratio of steel authority of
Inndia ltd & Tata steel ltd.

Hypothesis Number 02:-

Null Hypothesis : H0 : There is no difference between the mean of working capital of both
companies.
Alternative Hypothesis : H1: There is difference between the mean of working capital of
both companies

Interpretation :-
From the above research study it is found that from the hypothesis number there is difference
between the mean of working capital of both companies is found to be true hence accepted
whereas as null hypothesis i.e There is no difference between the mean of working capital of
both companies.
 SUGGESTIONS

 It is affected in current ration in increasing in 2022 and 2021.

 IF Liquid ratio is equal to both company it better for company.
 Working capital ratio remains constant.
 All ratio calculated by company’s balance sheet .
 BIBLIOGRAPHY

MAGAZINES

Bsiness world
India Today
INTERNET SEARCH :
https://www.tatasteel.com/media/15928/tata-steel-ir
https://www.bajajfinserv.in/what-is-working-capital-management
https://en.wikipedia.org/wiki/Steel_Authority_of_India
https://www.moneycontrol.com/news/tags/mc-learn.html
https://economictimes.indiatimes.com/tata-steel-ltd/balancesheet/companyid-
https://www.taxmann.com/bookstore/product/6956-fundamentals-of-financial-
management
https://aajkalawhouse.co.in/product/taxmanns-financial-management-by-rp-rustagi/
https://onlinelibrary.wiley.com/journal/1467646x

BOOKS REFERRED :

Financial Management by I.M. Pandey,

Financial Management by Dr. S.K. Gupta,
Working capital management by V. K Bhalla .

ANNUAL REPORT :
Annual Report of Steel Authority of India ltd 2021-2022
Annual Report of Tata steel ltd 2021-2022