Essay About Aggressive Policy And Current Policy Of The Firm

Bajaj Electricals Ltd. Company Reserach Paper
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K J Somaiya Institute of Management Studies and ResearchMumbai[pic 1]2016-2018Financial ManagementProject –SLP- Bajaj ElectricalsSubmitted to Prof. Vineet SwaroopSubmitted byPranay Chaturvedi (08)Gaurav Dalmia (10)Rajeev Ranjan (37)Vaibhav M(22)Shardul Shandilya (41)PGDM- Core (A)Objective To analyse the working capital management of a Consumer Durable Electrical Industriescompany.Company Name: Bajaj Electricals Ltd. Key Competitors: Havells, Khaitan, TTK PrestigeAnalysisCorrect Investment PolicyThe given industry requires to maintain sufficient inventory because of the unpredictable consumer demands with seasonal market. Aggressive policy could hamper the industry because of losing the consumer to competitor or other substitutes because of strong competition and close competitors. Conservative policy may lead to loss due to huge carrying cost and outdating of inventories. Moreover, current demonetisation has also lead to slump in the market but the good agricultural output has kept the numbers decent. So, a moderate policy would be the correct policy for the company. Current Policy of the firm (In comparison to competitors):BajajHavellsKhaitanTTK PrestigeGWC Intensity40.5217.3298.1032.78PolicyModerateAggressiveConservativeModerateCurrent Policy of the firm (Over the years):20162015201420132012GWC Intensity40.5197441.4317641.9211240.1222741.20899PolicyModerateModerateModerateModerateModerateConclusions: We see that the company’s investment policy is same over the years and it is moderate in comparison to other competitors, so we can conclude that the current investment policy is in line with the correct investment policy.Current Financial Policy20162015201420132012Temporary Working Capital54.2758.7158.9749.8074.00Short – Term Borrowing100.94215.97213.74125.44146.7Conclusions: Over the period, we see that temporary working capital is completely financed by short-term borrowings and also a part of permanent working capital is financed by short – term borrowings, which means that the company has an aggressive financing policy. So, the firm has a moderate investment policy and an aggressive financing policy. The firm has taken a bit aggressive stance which might be suitable provided the company is able to maintain strong receivables.