MBA Finance Project Report on Working Capital Management

Findings on Working Capital Management:

  • The liquidity or shot term solvency position has been analyzed by calculating current ratio, quick ratio and cash ratio.
  • The company’s current ratio for all the years is good. It is above the ideal ratio (2:1).
  • The company’s quick ratio is also good and with in the expectations. It is as per ideal ratio (1:1)
  • The ideal cash ratio is 0.5:1. But here the company ratio is less than the required. The company should increase cash balances.
  • The long term solvency position has been evaluated by calculation of debt equity ratio and proprietary ratio.
  • In the case of debt equity ratio, even though there is no any rule of thumb or ideal ratio, the acceptable limit for this ratio is between 50 to 55%. 
  • A high fixed assets turnover ratio indicates better utilization of the firms fixed assets. In some years it is more than 5 and some years it is less than 5. The company should maintain more than 5 always.
  • Higher the total assets turnover ratio greater is the ability of the firm to utilize the investments in the business. It should be as more as possible.
  • There is no standard norm for gross profit ratio and it may vary from business to business but the gross profit should be adequate to cover the operating administrative and office expenses, selling and distribution expenses) and to provide for fixed charges, dividends and accumulation of reserves. The company’s gross profit is increasing year by year.
  • The operating ratio, expresses the relationship between expenses increased for running the business, and the resultant net sales. A low operating ratio is an indication of operating efficiency of the business. 

Suggestions on MBA Finance Project Report:

From the above my Management of Working Capital & Expense Analysis and interpretation the liquidity position of the company is satisfactory.  But the following suggestions are born as per my perception and my internal faculty guidance and company middle level authority do so, are as follows,

  • Regarding the cash and bank balances of the current assets, it is observed that an optimum level of cash was not maintained in the company. The company should maintained always minimum levels of cash balances in future for meeting the working capital requirements.
  • The company should take steps to reduce the debt equity ratio as per the requirements.
  • The company should maintain high proprietary ratio as higher the ratio or the share of the shareholders in the total capital of the company better is the long-term solvency position of the company.
  • The company’s gross profit position is increasing year by year. It should increased some more by increasing sales and reducing cost.
  • The company is maintaining same levels of inventory for the period under study. 


As the Working capital analysis study completed with a feeling of satisfaction leaving behind. The company can achieve great or success in terms of increase in sales and profitability and continuity of growth and build stronger equity than ever.

      The company should utilize the operating activities, investing activities and financial activities in pharmacy industry properly to get benefit from the customers and government satisfaction. So that they can discharge current some of its creditors are current liabilities and avoid payment of interest. The company should use the full benefits available for pharmacy industry and should increase its efficiency.

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