INTRODUCTION

Background of the study

Working capital is the life blood and nerve center of a business. Just as circulation of blood is essential in the human body for maintaining life, working capital is very essential to maintain the smooth running of a business. No business can run successfully without an adequate amount of working capital. The need for working capital arises due to the time gap between production and realization of cash from sales. There is an operating cycle involve in the sales and realization od cash. Working capital is needed for making prompt payment and help in creating and maintaining goodwill. The basic theme of working capital management ids to provide adequate support for smooth and efficient functioning of normal day to day business by striking a trade-off between the three dimensions of working capital, i.e. liquidity, profitability and risk.

Working Capital Defined

Every business needs funds for two purposes for its establishment and to carry out its dayto-day operations. Long terms funds are required to create production facilities through purchase of fixed assets such as p&m, land, building, furniture, etc. Investments in these assets represent that part of firms capital which is blocked on permanent or fixed basis and is called fixed capital. Funds are also needed for short-term purposes for the purchase of raw material, payment of wages and other day to- day expenses etc. These funds are known as working capital. In simple words, working capital refers to that part of the firms capital which is required for financing short- term or current assets such as cash, marketable securities, debtors & inventories. Funds, thus, invested in current assts keep revolving fast and are being constantly converted in to cash and this cash flows out again in exchange for other current assets. Hence, it is also known as revolving or circulating capital or short term capital.

Management of Working capital

Management of working capital is concerned with the problem that arises in attempting to manage the current assets, current liabilities. The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, i.e. it is neither adequate nor excessive as 1

both the situation are bad for any firm. There should be no shortage of funds and also no working capital should be ideal. Working capital policies of a firm has a great on its profitability, liquidity and structural health of the organization. So working capital is three dimensional in nature as, it concerned with the formulation of policies with regard to profitability, liquidity and risk, and with the decision about the composition and level of current assets and current liabilities.

NEED OF THE STUDY

The ultimate objective of any firm is to maximize the profit. But, preserving liquidity of the firm is an important objective too. The problem is that increasing profits at the cost of liquidity can bring serious problems to the firm. Therefore, there must be a tradeoff between these two objectives of the firms. One objective should not be at cost of the other because both have their importance. If we do not care about profit, we cannot survive for a longer period. On the other hand, if we do not care about liquidity, we may face the problem of insolvency or bankruptcy. For these reasons working capital management should be given proper consideration and will ultimately affect the profitability of the firm. Firms may have an optimal level of working capital that maximizes their value. Large inventory and a generous trade credit policy may lead to high sales. Larger inventory reduces the risk of a stock-out. Trade credit may stimulate sales because it allows customers to assess product quality before paying .Another component of working capital is accounts payable. Delaying payments to suppliers allows a firm to assess the quality of bought products, and can be an inexpensive and flexible source of financing for the firm. On the other hand, late payment of invoices can be very costly if the firm is offered a discount for early payment. A popular measure of Working Capital Management (WCM) is the cash conversion cycle, i.e. the time lag between the expenditure for the purchases of raw materials and the collection of sales of finished goods. The longer this time lag, the larger the investment in working capital. A longer cash conversion cycle might increase profitability because it leads to higher sales. However, corporate profitability might also decrease with the cash conversion cycle, if the costs of higher investment in working capital rise faster than the benefits of holding more inventories and/or granting more trade credit to customers. This discussion of the importance of working capital management, its different components and its effects on profitability leads us to the problem statement which I analyzed.

HYPOTHESIS
To provide the scientific base to the findings, the researcher has constructed the following null hypothesis (H0): H01: There is no significance relationship between the risk and profitability of the selected two wheeler automobile companies. H02: There is no significant impact of working capital management on the profitability on the selected two wheeler automobile companies.

RESEARCH METHODOLOGY
The plan of research study is very important for the conduct of any research work, without an intelligent planning the difficulties to be encountered during the process of the work cannot be anticipated. Planning contributes to the possibility of better performance in all jobs. Methodology is the index of the whole work. When we talk of research methodology, we not only talk of the research methods but also the comparison of the logic behind the methods, we used in this context of our research study and explain why we are using a particular method or technique and why using the others. Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done systematically. In this, we study the various steps that are generally adopted by researcher in studying his research problem along with the logic behind them. The present study is the description of the actual procedure followed by the investor with a view of the aims and objectives of the study. The investigator has organized the procedure of the study under the following heads: Sample Data Sample Size Duration of Study Statistical tools Presentation Tools

Sample Data
In order to analyze the working capital management and its impact on selected companies performance secondary data has taken into consideration. Data have been collected from 3

reports and researches published in journals, web sites periodicals, magazines and annual reports of Bajaj, Hero Honda, TVS, Yamaha and Honda two Automobile companies.

Sample Size
For achieving the objective of Study five Companies; Bajaj, Hero Honda, TVS, Yamaha and Honda have been taken into consideration because these are the Indias largest manufactures of two-wheeler automobile companies.

Duration of study
For the purpose of analysis of data a period of last five financial years from 2006-07 to 201011 have been taken into consideration.

Statistical tools
For the data analysis following statistical tools has been used. Ratio Analysis. Correlation: This tool has been used for analyze the relation between risk and

profitability & liquidity and profitability.

Presentation tools
To present the data following tools have been used. Bar-Diagrams Tables

LIMITATIONS:
Based on financial statements these statements suffer from certain limitations. Company provides only secondary data, so certain type of bias is in study. The study duration is very short and its not possible to observe every aspect of working capital management practices.

Summary:
This chapter starts by presenting general idea about working capital management after that need or importance of the study and the objectives are provided. At the end of chapter, how the research has conducted. What is the research methodology adopted in this research is briefly explained. To attain the different objective, last five financial years data of Bajaj, Hero Honda, TVS, Yamaha and Honda has taken into consideration. 4

References:
1. Abdul Raheman & Mohamed Nasr (2007) Working Capital Management And Profitability Case Of Pakistani Firms The International Review of Business Research Papers Vol.3 No.1. March 2007. 2. Anusha Agarwal (2011) How To manage working Capital: An Empirical study of Maruti India limited The journal of accounting and finance Vol.25 No.2. April, 2011. 3. C.R. Kothori,Research Methodology, New Age International Publications.

REVIEW OF LITERATURE
An essential aspect of an investigation is a review of the related literature which is general prospective survey of previous researches pertaining to ones problem. It is obviously imprudent and wasteful to proceed in any study without knowing what has been done before. The literature in any field forms foundation upon which all future work will be built. If we fail to be shallow and nave will often be duplicate work. That has already been done better by someone else.

The review of related literature is called for a deep insight and perspective of the overall field. It is a crucial step which invariably minimizes the risk of dead ends, rejected studies, wasted efforts, traits and errors, activity, oriented towards approaches already discarded by previous investigation and even more important erroneous findings based on a faulty research design. In the field of research the investigator can have an understanding of the previous work that has been done. One cannot develop his insight into the problem to be investigated unless one has learnt what other have done and remains to be done in particular areas of his own research interest. It can be concluded hat review of the literature is the backbone of the whole research work and creates background for selection of procedure, help the investigator in adaptation of tools and provides comparative data to evaluate and interpret the significance of ones data. Keeping that in mind investigator surveyed the related literature. In view of the last few years research studies conducted so far on Impact of working capital on firms performance on the different issues. These studies have been classified into two groups: Studies at National Level Studies at International Level

Studies at National Level

R.N. Agarwal (1982)1 in his research paper titled Investment and Financing Behaviour of Indian Automobile Manufacturing Industry estimated total inventory investment equation for individual firms in automobile manufacturing industry, which was divided into two sectors car-sector and non car-sector. His study was based on the data for 1959-60 through 1978-79. Official Directory of Mumbai Stock Exchange had been the basic source of data. Analysis of two sector revealed that sales and stock-sales ratio were important explanatory variables. Cost of capital and trend were important in only car sector while fixed investment and flows of external funds were significant in non-car sector. Existing stock of inventories was statistically significant in both the sector but contrary to expectations, it possessed negative coefficient. Several other variables as dividends, capacity utilization and liquidity ratio were found to be of no importance in explaining inventory investment behaviour. Kamta Prasad Singh, Anil Kumar Sinha and Subas Chandra Singh (1986)2 in their research paper titled Management of Working Capital in India examined various aspects of working capital management in fertilizer industry in India during the period 1978-79 to 6

1982-93. Sample included public sector unit, Fertilizer Corporation of India Ltd. (FCI) and its daughter units namely Hindustan Fertilizers Corporation Ltd., the National Fertilizer Ltd., Rashtriya Chemicals and Fertilizers Ltd. and Fertilizer (Projects and Development) India Ltd. and comparing their working capital management results with Gujarat State Fertilizer Company Limited in joint sector. On the basis of ratio-analysis and responses to a questionnaire, study revealed that inefficient management of working capital was to a great extent responsible for the losses incurred by the FCI and its daughter units, as turnover of its current assets had been low. FCI and its daughter units had high overstocking of inventory in respect of each of its components particularly stores and spares. Similarly, quantum of receivables had been excessive and their turnover very low. However, cash and liquid resources held by FCI and its daughter units had been much lower in relation to operation requirements. So far as financing of working capital was concerned, long-term funds had been financing a low proportion of current assets due to rapid increase of current liabilities. The profitability providing an internal base for financing of working capital had been very low in these undertakings. Harbans Lal Verma (1989)3 in his research paper titled Management of Working Capital evaluated working capital management in iron and steel industry by taking a sample of selected units in both private and public sectors over the period 1978-79 to 1985-86. Sample included Tata Iron and Steel Company Ltd. (TISCO) in private sector and Steel Authority of India Ltd. (SAIL) and Indian Iron and Steel Company, a wholly owned subsidiary of SAIL, in public sector. By using the techniques of ratio analysis, growth rates and simple linear regression analysis, the study revealed that private sector had certainly an edge over public sector in respect of working capital management. Simple regression results revealed that working capital and sales were functionally related concepts. The study further showed that all the firms in the industry had made excessive use of bank borrowings to meet their working capital requirement vis--vis the norms suggested by Tandon Committee Shin and Soenen (1998)4 in his research paper titled Efficiency of Working Capital Management and Corporate Profitability highlighted that efficient Working Capital Management (WCM) was very important for creating value for the shareholders. The way working capital was managed had a significant impact on both profitability and liquidity. The relationship between the length of Net Trading Cycle, corporate profitability and risk adjusted stock return was examined using correlation and regression analysis, by industry and capital intensity. They found a strong negative relationship between lengths of the firms net 7

trading Cycle and its profitability. In addition, shorter net trade cycles were associated with higher risk adjusted stock returns. Ghosh and Maji, (2003)5 in his research paper titled Working Capital Management Efficiency: A study on the Indian Cement Industry examined the efficiency of working capital management of the Indian cement companies during 1992 1993 to 2001 2002. For measuring the efficiency of working capital management, performance, utilization, and overall efficiency indices were calculated instead of using some common working capital management ratios. Setting industry norms as target-efficiency levels of the individual firms, this paper also tested the speed of achieving that target level of efficiency by an individual firm during the period of study. Findings of the study indicated that the Indian Cement Industry as a whole did not perform remarkably well during this period. Mihir Dash and Rani Ravipati (2009)6 in their research paper titled A LiquidityProfitability Trade-Off Model for Working Capital Management proposed a goal programming model for working capital management. Goal programming is necessary to model the working capital decision, as a balance has to be achieved between the conflicting objectives of liquidity and profitability. The model determined, for given working capital turnover and fixed assets turnover ratios, how funds should be maintained between working capital/current assets and fixed assets to achieve targeted levels of liquidity and profitability, whilst minimizing the opportunity cost/loss of excess liquidity.

Ramachandran Azhagaiah, Chinta Venkateswara Rao and K. Chandrasekhra Rao (2010)7 in their research paper titled Financial Management Focus on Working Capital Utilization in the Indian Cotton Textile Industry: Methodological Analysis analyzed the trends and patterns of efficiency of WC utilization in respect of size of firms of cotton textile sector in India on the application of three indices viz., Performance Index (PI), Utilization Index (UI), and Efficiency Index (EI). For the purpose of analysis the selected firms are classified into three size categories viz Small, Medium and Large based on average assets size over the study period. The study reveals that Linear Growth Rate (LGR) of PI, UI and EI in respect of WC efficiency for small size firms is significant while that of for medium size firms, the trend of UI alone is significant. The trend of PI, UI and EI for large size firms is insignificant. On the whole, despite the positive growth in PI, the WCM efficiency of overall firms is found to be not encouraging because the constant factors are declining, which shows that the fixed components of WC are more than the varying components of the WC. Ahmed Imran Hunjra, Ghulam Shabbir Khan Niazi, Nina Rashid Majid, Syed Waqar Akbar and Muhammad Naeem Akhtar (2011)8 in their research paper titled Practices of Working Capital Policy and Performance Assessment Financial Ratios and Their Relationship with Organization Performance highlighted the application of working capital policy and the performance assessment financial ratios and to determined their relationship with organization performance. The target respondents were the finance executives/financial analysts of the companies. 64 properly filled questionnaires were processed for analysis. This study concluded that the finance executives consider that the proper practices of working capital and financial ratios are very important for the growth and performance of the organization. This research study also find that there is positive and significant relationship between these practices and organization performance. Palanisamy Saravanan (2011)9 in his research paper titled Managing Working Capital in Times of Slowdown Efficient working capital management involves planning and controlling current assets and current liabilities in a manner that eliminates risk of inability to meet short term obligations and avoid excessive investments in these assets on the other hand. Efficient management of working capital can make the difference between success and failure, especially when banks are tightening the credit lines. Nisarg Joshi, Jay Desai (2011)10 in his research paper titled Effect of Working Capital Management on Profitability of Firms in India investigated the relationship between 9

working capital management and firm profitability. Cash conversion cycle is used as a measure of Working Capital Management. The coefficient results of pooled Ordinary Least Square (OLS) regression analysis provide a strong negative significant relationship between cash conversion cycle and firm profitability. This reveals that reducing cash conversion period results to increase in profitability. Therefore, in order to create shareholder value, the manager should concern on cash conversion cycle till achieving optimum level.

Studies at International Level

Deloof (2003)11 in his research paper titled Does Working Capital Management Affects Profitability of Belgian Firms? discussed that most firms had a large amount of cash invested in working capital. It can therefore be expected that the way in which working capital is managed will have a significant impact on profitability of those firms. Using correlation and regression tests he found a significant negative relationship between gross operating income and the number of days accounts receivable, inventories and accounts payable of Belgian firms. On basis of these results he suggested that managers could create value for their shareholders by reducing the number of days accounts receivable and inventories to a reasonable minimum. The negative relationship between accounts payable and profitability is consistent with the view that less profitable firms wait longer to pay their bills. Eljelly (2004)12 in his research paper titled Liquidity-Profitability Tradeoff: An empirical Investigation in an Emerging Market elucidated that efficient liquidity management involves planning and controlling current assets and current liabilities in such a manner that eliminates the risk of inability to meet due short-term obligations and avoids excessive investment in these assets. The relation between profitability and liquidity was examined, as measured by current ratio and cash gap (cash conversion cycle) on a sample of joint stock companies in Saudi Arabia using correlation and regression analysis. The study found that the cash conversion cycle was of more importance as a measure of liquidity than the current ratio that affects profitability. The size variable was found to have significant effect on profitability at the industry level. The results were stable and had important implications for liquidity management in various Saudi companies. First, it was clear that there was a negative relationship between profitability and liquidity indicators such as current

10

ratio and cash gap in the Saudi sample examined. Second, the study also revealed that there was great variation among industries with respect to the significant measure of liquidity. Grzegorz Michalski (2005)13 in his research paper titled Net Working Capital Management Strategies as Factor Shaping Small Firm Value determined the intrinsic value of liquidity is one of the unsolved problems in finance. Firms hold liquidity for a variety of different reasons. Generally, liquidity balances held in a firm can be called considered, precautionary, speculative, transactional and intentional. The first are the result of management anxieties. Managers fear the negative part of the risk and hold liquidity to hedge against it. Second, liquidity balances are held to use chances that are created by the positive part of the risk equation. Next, liquidity balances are the result of the operating needs of the firm. Having information about value of liquidity we can better dissolve the problem of liquidity management. The net working capital management leaning on the information about the intrinsic value of liquidity drives to increase of the value of the firm. The theses of article show how firm should manage net working capital to maximise value of the firm. Haitham Nobanee (2009)14 in his research paper titled Working Capital Management and Firm's Profitability: An Optimal Cash Conversion Cycle analysed The traditional link between the cash conversion cycle and the firm's profitability is that shortening the cash conversion cycle increases firm's profitability. On the other hand shortening the cash conversion cycle could harm the firms operations and reduces profitability. However, identifying optimal levels of inventory, receivables, and payables where total holding and opportunities cost are minimized and recalculating the cash conversion cycle according to these optimal points provides more complete and accurate insights into the efficiency of working capital management. In this regard, we suggest an optimal cash conversion cycle as more accurate and comprehensive measure of working capital management. Haitham Nobanee and Maryam Al Hajjar (2009)15 in their research paper titled Optimizing Working Capital Management analyzed that Although the operating cycle, the cash conversion cycle, and the net trade cycle are more comprehensive measures of working capital management comparing with traditional measures of liquidity such as the current ratio and the quick ratio. However, these measures do not consider the optimal points of payables, inventory, and receivables. In this study we suggest more accurate measures of the efficiency of working capital management where optimal levels of inventory, receivables, and payables are identified, and total holding and opportunities cost are minimized and 11

recalculating the operating cycle, the cash conversion cycle, and the net trade cycle according to these optimal points. Mian Sajid Nazir and Talat Afza (2009)16 in their research paper titled Impact of Aggressive Working Capital Management Policy on Firms Profitability investigated the traditional relationship between working capital management policies and a firms profitability. Using the panel data set for the period 1998-2005, the impact of aggressive working capital investment and financing policies has been evaluated using return on assets as well as Tobins q. Managers can create value if they adopt a conservative approach towards working capital investment and working capital financing policies. The study also finds that investors give weight to the stocks of those firms that adopt an aggressive approach to managing their short-term liabilities. Haitham Nobanee and Maryam Al Hajjar (2009)17 in their research paper titled A Note on Working Capital Management and Corporate Profitability of Japanese Firms investigated the relationship between working capital management and firm profitability. The analysis based on a sample of 2123 Japanese non-financial firms listed in the Tokyo Stock Exchange for the period 1990-2004. The results suggest that managers can increase profitability of their firms by shortening the cash conversion cycle, the receivable collection period and the inventory conversion period. The results suggest that managers can also increase the profitability of their firms by lengthening the payable deferral period. However, managers should be careful when lengthening the payable deferral period because this could damage the firms credit reputation and harm its profitability in the long run. Saswata Chatterjee (2010)18 in his research paper titled The Impact of Working Capital Management on the Profitability of the Listed Companies in the London Stock Exchange analyzed the impact of working capital on the profitability for a sample of 30 UK companies listed in London Stock Exchange for a period of 3 years from 2006-2008. The effect of different variables of working capital management include the Average collection period or the receivable days, Inventory turnover in days, Average payment period or the payable days, Cash conversion cycle, Current ratio and Quick ratio on the Net operating profitability of the UK companies. Debt ratio and the size of the firm (measured in terms of natural logarithm of sales) have also been used as a comprehensive measure of the working capital management. Pearsons correlation was used for this analysis. The results show that, there is a strong negative relationship between variables of the working capital management 12

and the profitability of the firm. It means that, as the cash conversion cycle increases it will lead to decreasing profitability of the firm, and managers can create a positive value for the shareholders by reducing the cash conversion cycle to a possible minimum level. Robert Nyamao Nyabwanga (2011)19 in his research paper titled An Assessment of the Effect of Working Capital Management Practices on Financial Performance: A Study of Small Scale Enterprises adopted Across-sectional survey research design which allowed the collection of primary quantitative data through structured questionnaires. The target population was 159 managers of 101 trading and 58 manufacturing SSEs. Stratified random sampling technique was used to obtain a sample of 113 SSEs comprising 72 trading and 41 manufacturing enterprises. The data was analyzed using both descriptive and inferential statistics. Consequently, the findings of the study were that Working capital management practices are low amongst SSEs as a majority has not adopted formal working capital management routines and their financial performance is on average low. The study also revealed that SSE financial performance is positively related to efficiency of cash management (ECM), efficiency of receivables management (ERM) and efficiency of inventory management (EIM) at 0.01 significance level. Faris Nasif ALShubiri (2011)20 in his research paper titled The Effect of Working Capital Practices on Risk Management: Evidence from Jordan investigated the relationship between aggressive/conservative working capital practices and profitability as well as risk. The sample includes 59 industrial firms and 14 banks listed on the Amman Stock Exchange for the period of 2004-2008. The results indicate a negative relationship between profitability measures and working capital aggressiveness, investment and financing policy. Firms have negative returns if they follow an aggressive working capital policy. In general, there is no statistically significant relationship between the level of current assets and current liabilities on operating and financial risk in industrial firms. There is some statistically significant evidence to indicate a relationship between standard deviation of return on investments and working capital practices in banks.

13

References
1. R.N. Agarwal, Analysis of Profits, Investment and Financing Behaviour of Indian

Automobile Manufacturing Industry, Ph.D. Thesis, Delhi University, 1982. 2. Kamta Prasad Singh, Anil Kumar Sinha and Subas Chandra Singh, Management of Working Capital in India, Janaki Prakashan, New Delhi, 1986. 3. Harbans Lal Verma, Management of Working Capital, Deep and Deep Publication, New Delhi, 1989. 4. Shin, H.H and Soenen, L. 1998. Efficiency of Working Capital Management and Corporate Profitability, Financial Practice and Education, Vol 8 No 2, pp 37-45 5. Ghosh, S. K. and Maji, S. G. 2003. Working Capital Management Efficiency: A study on the Indian Cement Industry, The Institute of Cost and Works Accountants of India 6. Rani Ravipati, Mihir Dash, A Liquidity-Profitability Trade-Off Model for Working Capital Management May 10, 2009
7. Ramachandran Azhagaiah, K. Chandrasekhra Rao and Chinta Venkateswara Rao,

Financial Management Focus on Working Capital Utilization in the Indian Cotton Textile Industry: Methodological Analysis Journal Financial Management and Analysis, Vol. 23, No. 2, July-December 2010
8. Ahmed Imran Hunjra, Ghulam Shabbir Khan Niazi, Nina Rashid Majid, Syed Waqar

Akbar and Muhammad Naeem Akhtar, Practices of Working Capital Policy and Performance Assessment Financial Ratios and Their Relationship with Organization Performance World Applied Sciences Journal, Vol. 12, No. 11, pp. 1967-1973, 2011 Nisarg Joshi, Jay Desai, Effect of Working Capital Management on Profitability of Firms in India Ahmedabad Institute of Technology - Department of Management Studies, March 2, 2011
9. Palanisamy Saravanan, Managing Working Capital in Times of Slowdown The

Charered Secretary, Forthcoming January 10, 2011

10. Deloof, M. 2003. Does Working Capital Management Affects Profitability of

Belgian Firms? Journal of Business Finance & Accounting, Vol 30 No 3 & 4 pp. 573 587

14

11. Eljelly, A. 2004. Liquidity-Profitability Tradeoff: An empirical Investigation in an

Emerging Market, International Journal of Commerce & Management, Vol 14 No 2 pp. 48 61

12. Grzegorz Michalski, Net Working Capital Management Strategies as Factor Shaping

Small Firm ValueOficyna Wydawnicza Szkoly Glownej Handlowej w Warszawie, 2005

13. Haitham Nobanee, Working Capital Management and Firm's Profitability: An

Optimal Cash Conversion Cycle Abu Dhabi University, September 10, 2009
14. Haitham Nobanee,Maryam Al Hajjar, Optimizing Working Capital Management

World Applied Sciences Journal, Vol. 12, No. 11, pp. 1967-1973, 2011 Mian Sajid Nazir, Talat Afza, Impact of Aggressive Working Capital Management Policy on Firms ProfitabilityThe IUP Journal of Applied Finance, Vol. 15, No. 8, pp. 19-30, August 2009
15. Haitham Nobanee, Maryam Al Hajjar, A Note on Working Capital Management and

Corporate Profitability of Japanese Firms July 13, 2009

16. Saswata Chatterjee, The Impact of Working Capital Management on the Profitability

of the Listed Companies in the London Stock ExchangeApril 10, 2010 Robert Nyamao Nyabwanga, An Assessment of the Effect of Working Capital Management Practices on Financial Performance: A Study of Small Scale Enterprises Kisii University College May 1, 2011
17. Faris Nasif ALShubiri, The Effect of Working Capital Practices on Risk

Management: Evidence from JordanGlobal Journal of Business Research, Vol. 5, No. 1, pp. 39-54, 2011

15

INTRODUCTION TO INDIAN AUTOMOBILE INDUSTRY

Automobile is one of the largest industries in global market. Being the leader in product and process technologies in the manufacturing sector, it has been recognized as one of the drivers of economic growth. During the last decade, well directed efforts have been made to provide a new look to the automobile policy for realizing the sector's full potential for the economy. Aggressive marketing by the auto finance companies have also played a significant role in boosting automobile demand, especially from the population in the middle income group. A Nations economy is well known from its transport system. For instant and rapid growth in economy, a well-developed and well-networked transportation system is essential. As India's transport network is developing at a fast pace, Indian Automobile Industry is growing too. Also, the Automobile industry has strong backward and forward linkages and hence provides employment to a large section of the population. Thus the role of Automobile Industry is very essential in Indian economy. Various types of vehicles are manufactured by the Automobile Industry. Indian Automobile Industry includes the manufacturing of trucks, buses, passenger cars, defense vehicles, two-wheelers. The automobile industry in the country is one of the key sectors of the economy in terms of the employment opportunities that it offers. The industry directly employs close to around 0.2 million people and indirectly employs around 10 million people. The prospects of the industry also has a bearing on the auto-component industry which is also a major sector in the Indian economy directly employing 0.25 million people.

OVERVIEW OF TWO WHEELER SECTOR

Talking of the two wheeler industry, the names that effortlessly come to us is Bajaj Auto, Hero Honda, TVS Motor, Yamaha Motor, Kinetic and others. The two wheeler segment has played an important role in giving a push to the automobile industry in India. In fact, the production, sales and exports of the two wheelers is a fair indication of the growing 16

importance that it enjoys in this country's manufacturing economy. An overview of the two wheeler industry makes this clear that the two wheelers are among the most sought after automobiles in India for some time and the trend is likely to stay for a while. The economic growth, need for better conveyance and gradually improving road infrastructure coupled with better credit and financing options, have acted as a major catalyst in encouraging the growth and development of the two wheeler segment in India. Further, the new and improved features on the two wheelers, their stylish and trendy looks and a rage with the country's youth who form a substantial influence in determining the consumer behavior have ensured that the two wheelers remain on top of the automobile industry's agenda in India.

Some of the features that deserve attention in respect of the Indian two wheeler segment are as mentioned:
The total sale of two wheelers in India has touched a figure of 7.86 million units by March, 2007, up 11.42% from the previous fiscal figures of 7.05 million. Production during the period reached 8.63 million units. The production of two wheelers in India is expected to reach a staggering 17.85 million units by 2011-12, more than double of the current production level. The two-wheeler production capacity is to reach 22.31 million units in 2011-12 compared with 10.78 million in 2006-07. India is likely to export 1.39 million two-wheelers in 2011-12 compared with 590,000 in 2006-07. Total investment for new capacity generation in two-wheeler segment is likely to be more than $2.2 billion (INR10, 000 crore). Hero Honda, Bajaj Auto and TVS Motor remain the leading players in terms of sales and popularity of their two wheelers

17

FLEET COMPOSITION OF ALL VEHICLES

Source: http://www.siamindia.com/scripts/market-share.aspx

TWO WHEELER FLEET COMPOSITION IN INDIA

18

Source: http://www.scribd.com/doc/21170260/two-wheeler-industry Two Wheelers Industry

Motorcycle Hero Honda Bajaj Auto TVS LML Royal Enfield Honda Yamaha

Scooters

Scooterettes/ Mopeds TVS Bajaj Auto Honda

Bajaj Auto Kinetic

Kinetic Suzuki

19

Source: http://www.siamindia.com/scripts/sales.aspx

USAGE PATTERN OF TWO-WHEELERS IN INDIA

Is quite different from other countries Initial cost and fuel economy are highest priority. Low maintenance costs are desired. Small entrepreneurs and farmers conduct their business carrying loads. Very limited usage for sports bike. Indians prefer the two wheelers because of their small manageable size, low maintenance, and pricing and easy loan repayments.

KEY PLAYERS IN THE TWO-WHEELER INDUSTRY:

Bajaj auto ltd.
9.50% Hero Honda motors ltd. 4% TVS motors company ltd. 7% Yamaha motors India 27.50%

BAJAJ HERO HONDA TVS YAMAHA HONDA

Honda motorcycle and scooters India

16%

MARKET SHARE OF TWO WHEELER AUTOMOBILE SECTOR OTHER

35.60%

20

Source:http://www.siamindia.com/scripts/two-wheeler-automobile-marketing-strategy.aspx

REFERENCES:
1. Report on two-wheeler-industry,2009 2. Report on two-wheeler-automobile-marketing-strategy,2010 3. www.siamindia.com/scripts/market-share.aspx 4. www.automobileindia.com/two-wheelers/overview.html

21

Type Industry Headquarters Key people Products Revenue Net income Employees Parent Website

Public Company Automobile Pune, Maharashtra, India Rahul Bajaj (Chairman), Rajiv Bajaj (Managing Director) Bikes, scooter, Auto-rickshaw 16,975 crore (US$3.44 billion) 3,340 crore (US$677.35 million) 10,250 (2006-07) Bajaj Group bajajauto.com

BAJAJ AUTO LIMITED COMPANY

Bajaj Auto is a major Indian automobile manufacturer started by a Rajasthani merchant. It is Indias largest two wheeler manufacturer and the worlds 4th largest two and three-wheeler maker. It is based in Pune, Maharashtra, with plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttaranchal. Bajaj Auto makes and exports motor-scooters, motorcycles and the auto rickshaw. The company has a network of 498 dealers and over 1,500 authorized service centers and 162 exclusive three-wheeler dealers spread across the country.

COMPANY'S HISTORY
22

Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading Corporation Private Limited. It started off by selling imported two- and three-wheelers in India. In 1959, it obtained license from the Government of India to manufacture two- and three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a single financial year. In 1985, it started producing at Waluj in Aurangabad. In 1986, it managed to produce and sell 500,000 vehicles in a single financial year. In 1995, it rolled out its ten millionth vehicle and produced and sold 1 million vehicles in a year. According to the authors of Globality: Competing with Everyone from Everywhere for Everything, Bajaj has grown operations in 50 countries by creating a line of value-for-money bikes targeted to the different preferences of entry-level buyers with quality such that Kawasaki buys Bajaj products for some of its market

MISSION STATEMENT:
We at Bajaj Auto continue to firmly believe in providing the customer Value for In our decision making, quality, safety and service will be given as much Quality shall be built into every aspect of our work life and business operations. money, for years through our products and services. This we shall maintain and improve, consideration as productivity, cost and delivery Quality improvements and customer satisfaction shall be the responsibility of every employee.

SWOT ANALYSIS: Strengths

Highly experienced management. Product design and development capabilities. Extensive R & D focus. Widespread distribution network. High performance products across all categories. High export to domestic sales ratio. Great financial support network (For financing the automobile) High economies of scale. 23

High economies of scope.

Weaknesses
Hasn't employed the excess cash for long. Still has no established brand to match Hero Honda's Splendor in commuter segment. Not a global player in spite of huge volumes. Not a globally recognizable brand (unlike the JV partner Kawasaki)

Opportunities
Double-digit growth in two-wheeler market. Untapped market above 180 cc in motorcycles. More maturity and movement towards higher-end motorcycles. The growing gearless trendy scooters and scooterette market. Growing world demand for entry-level motorcycles especially in emerging markets

Threats
Cost) The competition catches-up any new innovation in no time. Threat of cheap imported motorcycles from China. Margins getting squeezed from both the directions (Price as well as

PRODUCT RANGE OF BAJAJ Motorcycles:

PULSAR 135 LS PULSAR 150 DTS-i PULSAR 180 DTS-i PULSAR 220 DTS-i DISCOVER 135 DTS-i DISCOVER DTS-i PLATINA 125 PLATINA 100 AVENGER 200 DTS-i KAWAZAKI NINJA 250R

24

Type Founded Headquarters Key people

Public company BSE:HEROHONDA M January 19, 1984 in Gurgaon, Haryana, India New Delhi, India Brijmohan Lal Munjal (chair and founder) Toshiaki Nakagawa (joint managing director) Pawan Munjal (CEO) Automotive Motorcycles, Scooters U$ 2.8 billion www.Herohonda.com

Industry Products Revenue Website

HERO HONDA MOTORS LIMITED (HHML)

Hero Honda Motors Limited was established in 1984, as a joint venture between India's Hero Group (world's largest bicycle manufacturers) and Japan's Honda Motor Company. And created the world's single largest two wheeler company and also one of the most successful joint ventures worldwide. During the 80s, Hero Honda became the first company in India. Over 19 million Hero Honda two wheelers running on Indian roads today.

COMPANYS HISTORY
25

Hero Honda is worlds third largest two wheeler maker. India has the largest number of two wheelers in the world with 41.6 million vehicles. India has a mix of 30 percent automobiles and 70 percent two wheelers in the country. India was the second largest two wheeler manufacturer in the world starting in the 1950s with the birth of Automobile Products of India (API) that manufactured scooters. API manufactured the Lambrettas but, another company, Bajaj Auto Ltd. surpassed API and remained through the turn of the century from its association with Piaggio of Italy (manufacturer of Vespa scooters). The license raj that existed between the 1940s to 1980s in India did not allow foreign companies to enter the market and imports were tightly controlled. This regulatory maze, before the economic liberalization, made business easier for local players to have a sellers market. Customers in India were forced to wait 12 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not need a marketing department, only a dispatch department. By the year 1990, Bajaj had a waiting list that was twenty-six times its annual output for scooters. The motorcycle segment had the same long wait times with three manufacturers: Royal Enfield, Ideal Jawa, and Escorts. Royal Enfield made a 350cc Bullet with the only four-stroke engine at that time and took the higher end of the market but there was little competition for their customers. Ideal Jawa and Escorts took the middle and lower end of the market respectively. In the mid-1980s, the Indian government regulations changed and permitted foreign companies to enter the Indian market through minority joint ventures. The two-wheeler market changed with four Indo-Japanese joint ventures: Hero Honda, TVS Suzuki, Bajaj Kawasaki and Kinetic Motor Company (Kinetic Honda). The entry of these foreign companies changed the Indian market dynamics from the supply side to the demand side. With a larger selection of two-wheelers on the Indian market, consumers started to gain influence over the products they bought and raised higher customer expectations. The industry produced more models, styling options, prices, and different fuel efficiencies. The foreign companies new technologies helped make the products more reliable and with better quality. Indian companies had to change to keep up with their global counterparts. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at 108.

MISSION STATEMENT:
26

 human

Hero Honda's mission is to strive for synergy between technology, systems and Resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities. This mission is what drives Hero Honda to new heights in excellence and helps the organizations forge a unique and mutually beneficial relationship with all its stake holders.

SWOT ANALYSIS: Strengths

Hero Honda introduced First stroke bike in the Indian market. Hero Honda gives 80 Km/Liter Avg. Huge sale network (3500 Dealers). Better sale service. It has the highest share in automobile sector. It has a good brand image. It gives better service for customers. Best customer preference. Debt equity ratio is only 0.1. The company has clarified about its intention of setting a third plant in addition to its existing two plants. The company has embarked upon a green field expansion plan and has earmarked Rs It should be noted that the company has a strong cash flow position; it generated Rs 9 2 bn for the same. bn from operation in FY04 and is virtually a debt free company.

Weaknesse s
Suppose to be very sophisticated. Not fit for ruler India. They have big gap between cubic capacities of its products. 27

Its market share is reducing from last few years. Spare parts are too costly.

Opportunities
Hero Hondas the first manufacture to launch eco friendly bikes with 4-stroke engines. They have attained a stronger good will and popularity in the industry and the They should go in new segments of bikes. There is large no. of young consumers in the market. Company has to focus on them. They have big opportunities in heavy bike segments. As government policies are amended against pollution in metro cities

consumers.

Threats
Main threats to Hero Honda are their competitors like: Bajaj Auto Ltd. TVS motors Ltd. Yamaha Motors India. Honda motorcycle and scooter India.

The cost of the product is very high in comparison to other companies. Decreasing market share.

PRODUCT RANGE OF HERO HONDA Scooters

HeroHonda Pleasure

Motorcycles
* Hero Honda CD Dawn * Hero Honda CD Deluxe * Hero Honda Glamour * Hero Honda Glamour-Fi * Hero Honda Karizma * Hero Honda Passion Plus * Hero Honda Pleasure 28

* Hero Honda Super Splendor * Hero Honda Splendor NXG * Hero Honda CBZ X-Treme

29

TVS MOTOR COMPANY:

Type Traded as Industry Founded Founder(s) Headquarters Key people

Listed Indian Public Limited Company (Subsidiary of SundaramClayton Limited) BSE: 532343, NSE: TVSMOTOR Automobiles 1978 Venu Srinivasan Chennai, India Venu Srinivasan, Chairman K N Radhakrishnan, President & CEO S G Murali, CFO H S Goindi, President Marketing Harne Vinay Chandrakant, President NPI R Anandakrishnan, VP Business Planning BLP Simha, President Director, PT.TVS Indonesia TVS Apache, TVS Scooty, TVS Jive, TVS 50 6,298.66 Crores 194.58 Crores 999.41 Crores Sundaram-Clayton Limited PT TVS Motor, Indonesia tvsmotor.in

Products Revenue Profit Total equity Parent Subsidiaries Website

TVS Motor Ltd, originally incorporated in 1982 to manufacture two wheeler in collaboration with Suzuki motor of Japan, TVS Motor Company is the third largest two wheeler manufacturer in India and one among the top ten in the world, with annual turnover of more than USD 1 billion in 2008-2009, and is the flagship company of the parent TVS Group employing over 40,000 people with an estimated 15 million customers. It manufactures motorcycles, scooters, mopeds and auto rickshaws.

COMPANYS HISTORY
TVS Motors is the third largest company in the two-wheeler industry with a market share of 16%. Infect, it is the only Indian company without a foreign collaboration in the two-wheeler industry. When the company opted out of the collaboration with Suzuki in 2002, many believed that TVS was headed towards extinction. But the company proved the doomsayers 30

wrong and came out with a very successful `TVS Victor'. TVS Motors Ltd. originally incorporated in 1982 to manufacture two-wheelers in collaboration with Suzuki Motors of Japan, TVS was one of the leaders in two-wheeler industry. It is the holding company for the TVS Group of companies engaged in the manufacturing of various automotive components, two wheelers and a few other industrial products. They are also into the financial services sector. The turnover of the entire group was close to $2 billion in 2003. TVS was founded by T. V. Sundaram Iyengar in 1911. It is the only automotive manufacturer in India to get the prestigious Deming Prize. One of its subsidiaries Sundaram Clayton was the first company in India to receive the Deming followed by Sundaram Brake Linings also getting the Deming Prize. This prize is "given to organizations or divisions of organizations that have achieved distinctive performance improvement through the application of TQM in a designated year." Sundaram Clayton went on to be awarded the Japan Quality Medal. With the joint venture with Suzuki Motor Corporation in 1983, TVS-Suzuki became the first Indian company to introduce 100 cc Indo-Japanese motorcycles in September 1984. Through an amicable agreement the two companies parted ways in September 2001. Today TVS Motor Company has the largest market share in the moped category with a whopping 65.3% and is also the undisputed leader in the scooterette segment with 34.3% share. It also holds 18.3% market share in motorcycles. With a strong sales and service network of 500 Authorized Dealerships, 1018 Authorized Service Centres and over 864 Certified Service Points, TVS is growing from strength to strength.The company manufactures its motorcycles, scooterettes and mopeds at its state-of-the-art factories in Mysore and Hosur.

MISSION STATEMENT:
We are committed to being a highly profitable, socially responsible, and leading manufacturer of high value for money, environmentally friendly, lifetime personal transportation products under the TVS brand, for customers predominantly in Asian markets and to provide fulfillment and prosperity for employees, dealers and suppliers.

SWOT ANALYSIS: Strengths

Huge sale network (3500 Dealers). Better sale service. It has the highest share in automobile sector. 31

 It has a good brand image. It gives better service for customers. Best customer preference. Debt equity ratio is only 0.1.

Weaknesses
Suppose to be very sophisticated. Not fit for ruler India. They have big gap between cubic capacities of its products. Its market share is reducing from last few years. Spare parts are too costly.

Opportunities
If they are able to improvise the fuel efficiency of Scooty pep+, it will be a golden opportunity to take over the market. Growing world demand for entry-level motorcycles especially in emerging markets

Threats
Main threats to TVS are their competitors like: Bajaj Auto Ltd. Hero Honda. Yamaha Motors India. The cost of the product is very high in comparison to other companies.

PRODUCT RANGE OF TVS

TVS offers a wide range of two-wheelers - Motorcycles - TVS Centra / TVS Victor / TVS Fiero F2/ TVS Max 100/ TVS Max 100 R - Scooterettes - TVS Scooty Pep/ TVS Scooty 2S - Mopeds - TVS XL Super/ TVS XL Super HD

YAMAHA MOTOR INDIA

32

Yamaha Motor Corporation is the automobile company of Japan (1953) which works in India since 1955 and providing latest technology in India from last two decades. Yamaha motor

Type Founded Headquarters Area served Key people Products

Public July 1, 1955 Iwata, Shizuoka, Japan Global Hiroyuki Yanagi, President & Representative Director Motorcycles, Commuter Vehicles & Scooters, Recreational Vehicles, Boats, Marine Engines, Personal Watercraft, Electrically Power Assisted Bicycles, Automobile Engines, Unmanned Aerial Vehicle, Golf Cars, Power Products, Pools, Compact Industrial Robots, Wheelchairs, Parts including

Apparel, Helmets Revenue US$12 billion Operating income US$900 million Net income US$550 million Employees 39,300 Website Yamaha Motor Global India was incorporated in august 2001 as a 100% subsidy of Yamaha motor corporation, Japan.

COMPANYS HISTORY
Yamaha Motor made its initial foray into India in 1985. Subsequently in 1996, it entered into a 50:50 joint venture with the Escorts Group. However, by mutual consent, Yamaha acquired stake in the remaining half as well three years ago, bringing the Indian operations under its complete control as a 100 % subsidiary of Yamaha Motor Co., Ltd, Japan. The company pioneered the performance bike segment with the launch of its 100 cc 2-stroke motorcycle RX 100. Since then, it has introduced an entire range of 2-stroke and 4-stroke bikes in India. Today, its product kitty includes CRUX in the Basic segment, Libero & RX135 in the Standard segment and Enticer in the pleasure segment. With the launch of various 4-stroke motorcycles, which give true value for money in terms of superior mileage, performance & durability, the company has gained the reputation of a reliable 4-stroke Motorcycle manufacturer. An agreement has recently been reached between Yamaha Motor Co., Ltd. (YMC) and its joint venture partner in India, Escorts Limited (Chairman and Managing Director: Mr. Rajan 33

Nanda. Location: Faridabad, suburbs of New Delhi) under which YMC will acquire all of the 26% of the stock presently held by Escorts Limited in the two companies' motorcycle manufacturing and marketing joint venture, Yamaha Motor Escorts Ltd. (YMEL). The aims of this move to make Yamaha Motor Escorts a 100% YMC subsidiary are to increase the overall speed of managerial and business decisions, to improve product development capabilities and production efficiency, while also strengthening the marketing organization. Plans call for the change in the company's name and other procedures to be completed by the end of June. Ever since the establishment of the first technical assistance agreement between the two companies in 1985, YMC and Escorts Limited has built a cooperative relationship dedicated to the manufacture and sales of Yamaha brand motorcycles in an environment of growing motorcycle demand in the Indian market. In November of 1995, the two companies established the joint venture company Escorts Yamaha Motor Limited, based on a 50-50 capital investment. In June of 2000, that investment ratio was changed to 74% for YMC and 26% for Escorts Limited and YMC assumed managerial control of the company with the name being changed to YMEL and undertook numerous measures to build the company's motorcycle manufacturing and marketing operations. In addition to YMC acquiring Escorts' 26% of YMEL stock, the company's name will be changed to Yamaha Motor India Private Limited (YMI) and concerted efforts will be made to heighten its competitiveness in the Indian market and promote the spread of the Yamaha brand with target themes of developing products with greater appeal and a distribution network that can respond more quickly to user needs.

MISSION STATEMENT:
Be the Exclusive & Trusted Brand renowned for marketing and manufacturing of YAMAHA products, focusing on serving our customer where we can build long term relationships by raising their lifestyle through performance excellence, proactive design & innovative technology. Our innovative solutions will always exceed the changing needs of our customers and provide value added vehicles.

34

Build the Winning Team with capabilities for success, thriving in a climate for action and delivering results. Our employees are the most valuable assets and we intend to develop them to achieve international level of professionalism with progressive career development. As a good corporate citizen, we will conduct our business ethically and socially in a responsible manner with concerns for the environment.

Grow through continuously innovating our business processes for creating value and knowledge across our customers thereby earning the loyalty of our partners & increasing our stakeholder value.

SWOT ANALYSIS: Strengths

Size and scale of parent company. Effective Advertising Capability Committed and dedicated staff. High emphasis on R and D. Experience in the market. Established brand. Established market channel. Power, Speed & Acceleration

Weaknesses
Small showrooms. Not much emphasis on aggressive selling. Weak product diversity

Opportunities
Growing premium segment. Global expansion into the Caribbean & Central America. Expansion of target market (include 35

women). Increasing dispensable income. 1st mover advantage.

Threats
Cut throat competition Increasing number of players in the market Rising raw material costs Increasing rates of interest on finance

MODELS OF YAMAHA
RXI35 Crux Libero G5 Yamaha Fazer 125 YAMAHA ALBA Yamaha G5 Yamaha Gladiator Yamaha YZF Yamaha MT

HONDA MOTOR

36

Honda Motor Company, Ltd is a Japanese public multinational corporation primarily known as a manufacturer of automobiles and motorcycles. Honda has been the world's largest

Type Industry Founded Founder(s) Headquarters Area served Key people Products

Public (TYO: 7267) & (NYSE: HMC) Automotive

Aviation 24 September 1948 Soichiro Honda

company

Takeo Fujisawa Minato, Tokyo, Japan Worldwide Takanobu Ito (President, CEO, & Representative Director) Automobiles

Motorcycles Scooters ATVs Electrical Generators Water pumps Lawn and Garden Equipments Tillers Outboard motors Robotics

Revenue Operating income Net income Employees Subsidiaries

Jet Engines US$ 107.82 billion (2011) US$ 6.87 billion (2011) US$ 6.44 billion (2011) 179,060 (2011) Acura

Honda Aircraft Company Website world.honda.com motorcycle manufacturer since 1959, as well as the world's largest manufacturer of internal

combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda surpassed Nissan in 2001 to become the second-largest Japanese automobile manufacturer. As of August 2008, Honda surpassed Chrysler as the

37

fourth largest automobile manufacturer in the United States. Honda is the sixth largest automobile manufacturer in the world.

COMPANYS HISTORY
Honda motors of Japan is not a new name in the two wheeler scenario in the country, they were in a tie up with the Firodias owned Kinetic group. However in the late 90s they parted ways after problems arose over issues like introduction of new models, advertising expenditure, marketing strategies and other related issues. In the mid 80 Honda motors of Japan joined hands with the largest bicycle maker of India the Hero cycles to create Hero Honda which in a couple of decades or so have gone on to become the single largest motorcycle company in the world. Though Honda has come on its own on the Indian market yet it will be providing technological support to Hero Honda for the next ten years. Thus presenting a unique situation in which the company will be in direct competition with the company which it has been associated for nearly two decades. Honda Motorcycles and Scooters India limited, a 100% subsidiary of Honda motor company Japan eventually entered the Indian market with Honda Unicorn in 2004. Honda is the world's largest manufacturer of 2-wheelers. Its symbol, the Wings, represents the company's unwavering dedication in achieving goals that are unique and above all, conforming to international norms. These wings are now in India as Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI), a wholly owned subsidiary of Honda Motor Company Ltd., Japan. These wings are here to initiate a change and make a difference in the Indian 2wheeler industry. Honda's dream for India is to not only manufacture 2-wheelers of global quality, but also meet and exceed the expectations of Indian customers with outstanding after sales support. They aim to produce technologically superior, efficient and reasonably priced 2- wheelers, with Honda tested technology, backed up with after sales service of Honda's global standard.

MISSION STATEMENT:
Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality at a reasonable price for worldwide customer satisfaction.

38

SWOT ANALYSIS: Strengths

in India Honda having high tech engines HMSI is the subsidiary company of Honda Motors Ltd. Which is the largest company Reliable brand name Affordable price Honda have a big share of market in scooters segment Honda is the first company who introduced the technology of central shock absorption

in the proposed sector

Weaknesses
Less number of service center Market share very less as compare to their competitor Spares parts are not easily available Low product range Maintenance cost is very high

Opportunities
Increase in product range Untapped market above 180 cc in motorcycles. More maturity and movement towards higher-end motorcycles Honda can be use brand image of Hero Honda

Threats
There is high competition in the market Threat of cheap imported motorcycles and components from China 39

PRODUCT RANGE Scooters:

DIO ACTIVA AVIATOR

Motorcycles:
CB TWISTER SHINE CBF STUNNER UNICORN CBF STUNNER PGM FI CB1000R CBR1000RR

INDIAN TWO WHEELER MARKET COMPETITIVE SCENARIO

India is now the second largest two-wheeler market in the world

40

Source: http://www.siamindia.com/scripts/competitivescenario.aspx

References
1. www.bajaj.com 2. www.herohonda.com 3. www.tvs.in 4. www.yamaha.com 5. www.honda.com 6. http://www.scribd.com/doc/6521964/summer-training-report-on-bajaj-vs-hero-honda 7. http://www.scribd.com/doc/60771853/Strategic-Management-Project-ReportYamahaMotors 2011

WORKING CAPITAL AT A GLANCE INTRODUCTION

Working capital is the life blood and nerve centre of a business. Just as circulation of blood is essential in the human body for maintaining life, working capital is very essential to maintain the smooth running of a business. No business can run successfully without an adequate amount of working capital. Every business needs adequate liquid resources in order to maintain day-to-day cash flow. Maintaining adequate working capital is not just important in the short-term. Sufficient liquidity must be maintained in order to ensure the survival of the business in the long-term as well. The working capital management plays an important role for success or failure of firm in business because of its effect on firms profitability as well on liquidity. The working capital ratio is calculated as: Working Capital = Current Asset Current Liabilities Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).

Defination of Working Capital: According to C.W. GestenberghWorking capital is ordinarily defined as the excess of the current assets over current liabilities.

According to Lawrence. J. Gitmen

41

The most common defination of working capital is the difference of the firms current assets and current liabilities.

MANAGEMENT OF WORKING CAPITAL

Management of working capital is concerned with the problem that arises in attempting to manage the current assets, current liabilities. The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, i.e. it is neither adequate nor excessive as both the situations are bad for any firm. There should be no shortage of funds and also no working capital should be ideal. WORKING CAPITAL MANAGEMENT POLICES of a firm has a great on its probability, liquidity and structural health of the organization. So working capital management is three dimensional in nature as 1. It concerned with the formulation of policies with regard to profitability, liquidity and risk. 2. It is concerned with the decision about the composition and level of current assets. 3. It is concerned with the decision about the composition and level of current liabilities. Policies regarding to Profitability Liquidity and Risk

Composition of Level of Current Assets

Composition of Level of Current Liabilities

42

Defination of working capital management:Working capital management involves the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management is to ensure that a firm is able to continue its operations and that it has sufficient ability to satisfy both maturing short-term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash. -From WWW.STUDYFINANCE.COM

CONSTITUENTS OF CURRENT ASSETS

It includes Cash in hand and cash at bank, Bills receivables, Sundry debtors, Short term loans and advances, Inventories of stock as(Raw material, Work in process, Stores and spares, Finished goods),Temporary investment of surplus funds, Prepaid expenses, Accrued incomes, Marketable securities.

CONSTITUENTS OF CURRENT LIABILITIES

It includes accrued or outstanding expenses, Short term loans, advances and deposits, Dividends payable, Bank overdraft, Provision for taxation, Bills payable, sundry creditors.

TYPES OF WORKING CAPITAL

Working capital can be classified either on the basis of concept or on the basis of periodicity of its requirement. 1) ON THE BASIS OF CONCEPT On the basis of concept working capital is of 2 types. (A) Gross working capital - Gross working capital is represented by the total Current assets. Gross working capital = Total current assets (B) Net working capital - Net working capital is the excess of current assets over current liabilities. Net working capital = Current assets Current liability

43

2) ON THE BASIS OF REQUIREMENT On the basis of requirement working capital is also of 2 types. (A) Permanent working capital - It is that amount of investment which should always be there in the fixes or minimum current assets like inventory, accounts receivables or cash balance etc. to carry out business smoothly. Such an amount cant be reduced if the firms wants to carry on business operations without interruption. (B) Variable working capital - The excess the amount of working capital over permanent working capital is known as variable working capital. It may also be subdivided into two parts. Seasonal working capital - Such capital is required to meet out the seasonal demands of busy periods occurring at stated intervals. Special working capital - Such capital is required to meet out the extra-ordinary needs for contingencies. Events like strike, fire, unexpected competition, rising price tendencies, or initiating a big advertisement campaign require such capital.

FEATURES
1) Working capital is regarded as the excess of current assets over current liabilities. 2) Working capital indicates circular flow of funds in the day-to-day activities of business. Thats why it is also called circulating capital. 3) Working capital represents the minimum amount of investment in raw materials, work-in progress, finished goods, stores and spares, accounts receivables and cash balance.

OBJECTIVES OF WORKING CAPITAL:

The objective of working capital management is to maintain the optimum balance of each of the working capital components. This includes making sure that funds are held as cash in bank deposits for as long as and in the largest amounts possible, thereby maximizing the interest earned. Every business needs some amount of working capital. It is needed for following purposes:

For the purchase of raw materials, components and spares. 44

To pay wages and salaries. To incur day to day expenses and overhead costs such as fuel, power, and office expenses etc.

To provide credit facilities to customers etc. Maintenance of working capital at appropriate level, and Availability of ample funds as and when they are needed.

In the accomplishment of these two objectives, the management has to consider the composition of current assets pool. The working capital position sets the various policies in the business with respect to general operations like purchasing, financing, expansion and dividend etc. When considering these techniques and strategies, departments need to recognize that each department has a unique mix of working capital components. The emphasis that needs to be placed on each component varies according to department. For example, some departments have significant inventory levels; others have little if any inventory.

SOURCES OF WORKING CAPITAL

There are two types of Sources of working Capital: Long Term Source of Working Capital

Long term financing is a form of financing which is provided for a period of more than a year. This financing should be taken from different sources i.e. Issue of shares, debenture, long term debts and reserves etc. Short Term Source of Working Capital

Short term financing is a form of financing which is provided for a period of less than a year. This financing should be taken from different sources i.e. Banks credit, Trade credits, Public deposits and Advances from customers etc.

45

IMPORTANCE OR ADVANTAGE OF ADEQUATE WORKING CAPITAL

Solvency of the business: Adequate working capital helps in maintaining the solvency of the business by providing uninterrupted of production. Goodwill: Sufficient amount of working capital enables a firm to make prompt payments and makes and maintain the goodwill. Easy loans: Adequate working capital leads to high solvency and credit standing can arrange loans from banks and other on easy and favorable terms. Cash Discounts: Adequate working capital also enables a concern to avail cash discounts on the purchases and hence reduces cost. Regular Supply of Raw Material: Sufficient working capital ensures regular supply of raw material and continuous production.

46

Regular Payment of Salaries, Wages and Other Day to Day Commitments: It leads to the satisfaction of the employees and raises the morale of its employees, increases their efficiency, reduces wastage and costs and enhances production and profits.

Exploitation of Favorable Market Conditions: If a firm is having adequate working capital then it can exploit the favorable market conditions such as purchasing its requirements in bulk when the prices are lower and holdings its inventories for higher prices.

Ability to Face Crises: A concern can face the situation during the depression. Quick And Regular Return on Investments: Sufficient working capital enables a concern to pay quick and regular of dividends to its investors and gains confidence of the investors and can raise more funds in future.

High Morale: Adequate working capital brings an environment of securities, confidence, high morale which results in overall efficiency in a business.

EXCESS OR INADEQUATE WORKING CAPITAL

Every business concern should have adequate amount of working capital to run its business operations. It should have neither redundant or excess working capital nor inadequate nor shortages of working capital. Both excess as well as short working capital positions are bad for any business. However, it is the inadequate working capital which is more dangerous from the point of view of the firm. DISADVANTAGES OF REDUNDANT OR EXCESSIVE WORKING CAPITAL 1. Excessive working capital means ideal funds which earn no profit for the firm and business cannot earn the required rate of return on its investments. 2. Redundant working capital leads to unnecessary purchasing and accumulation of inventories. 3. Excessive working capital implies excessive debtors and defective credit policy which causes higher incidence of bad debts. 4. It may reduce the overall efficiency of the business. 5. If a firm is having excessive working capital then the relations with banks and other financial institution may not be maintained. 6. Due to lower rate of return n investments, the values of shares may also fall. 7. The redundant working capital gives rise to speculative transactions

FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENTS

47

1. Nature of Business: The requirements of working is very limited in public utility undertakings such as electricity, water supply and railways because they offer cash sale only and supply services not products, and no funds are tied up in inventories and receivables. On the other hand the trading and financial firms requires less investment in fixed assets but have to invest large amt. of working capital along with fixed investments. 2. Size of the Business: Greater the size of the business, greater is the requirement of working capital. 3. Production Policy: If the policy is to keep production steady by accumulating inventories it will require higher working capital. 4. Length of Production Cycle: The longer the manufacturing time the raw material and other supplies have to be carried for a longer in the process with progressive increment of labor and service costs before the final product is obtained. So working capital is directly proportional to the length of the manufacturing process. 5. Seasonal Variations: Generally, during the busy season, a firm requires larger working capital than in slack season. 6. Working Capital Cycle: Requirement of working capital also varies with the business. When the price level is up due to boom conditions, the inflationary conditions create demand for more working capital. During depression also a heavy amount of working capital is needed due to the inventories being locked unsold and book debts uncollected 7. Rate of Stock Turnover: There is an inverse co-relationship between the question of working capital and the velocity or speed with which the sales are affected. A firm having a high rate of stock turnover will needs lower amt. of working capital as compared to a firm having a low rate of turnover. 8. Credit Policy: A concern that purchases its requirements on credit and sales its product / services on cash requires lesser amt. of working capital and vice-versa. 9. Business Cycle: In period of boom, when the business is prosperous, there is need for larger amt. of working capital due to rise in sales, rise in prices, optimistic expansion of business, etc. On the contrary in time of depression, the business contracts, sales decline, difficulties are faced in collection from debtor and the firm may have a large amt. of working capital. 10. Rate of Growth of Business: In faster growing concern, we shall require large amt. of working capital. 11. Earning Capacity and Dividend Policy: Some firms have more earning capacity than other due to quality of their products, monopoly conditions, etc. Such firms may generate 48

cash profits from operations and contribute to their working capital. The dividend policy also affects the requirement of working capital. A firm maintaining a steady high rate of cash dividend irrespective of its profits needs working capital than the firm that retains larger part of its profits and does not pay so high rate of cash dividend. 12. Price Level Changes: Changes in the price level also affect the working capital requirements. Generally rise in prices leads to increase in working capital. Others Factors: These are: Operating efficiency. Management ability. Irregularities of supply. Import policy. Asset structure. Importance of labor. Banking facilities, etc.

MAIN COMPONENTS OF WORKING CAPITAL ARE AS FOLLOWS:

1) Cash Cash is the most liquid and important component of working capital. Holding cash involves cash in the sense that the present worth of cash held for a year is less than the value of cash on today. During inflationary situations as exist today the cost of holding includes the deterioration in the value of the cash due to inflation. Cash, therefore, results in enhanced liquidity, but lower profitability. Despite in the cost involved it is pertinent to hold cash because it facilitates the attainment of some important motives. 2) Marketable Securities Though marketable securities provides a such lower yield that the firms operation assets. They serve two useful functions. Firstly, they act as a substitute for cash, and secondly, are used as temporary investment. Where these securities are held in lieu of the cash balance, they act as a substitute for transactional or precautionary balances. Normally, these arent used as speculative balances, but only as a guard against the possible shortage of bank credit. Marketable securities (as temporary investment) may be held for one of the following reasons: Seasonal or cyclical operations To meet known financial requirements. Construction of an additional plant. 49

Immediately after the sale of long-term securities. organization, little analytical work as been done to determine credit policies. Maintaining account receivable has its cost implications in that the firms monetary resources are tied up. This is of greater significance in the inflationary economy, because of the depreciation in the value of money. Basically, this is a two-step account. When goods are shipped, inventories are reduced and accounts receivable is created. When payment is made, this account is reduced and the cash level increases. Accounts receivables are, therefore a function of the volume of credit sales and the average length of time between sales and collections.

3) Account Receivable - Though accounts receivable are a vital investment of any business

4) Inventory Inventories represent a substantial amount of a firms current assets. Management of inventories should be efficiently carried out so that this investment doesnt become too large, as it would result in blocked capital which could put to productive use elsewhere. On the other hand, having too small an inventory could result in loss of sale or loss of customer goodwill. An optimum level of inventory should therefore be maintained.

WORKING CAPITAL CYCLE

Working capital cycle indicates the length of time between a firms paying for materials entering into stock and receiving the cash from sale of finished goods. In a manufacturing firm, the duration of time required to complete the sequence of events is called operating cycle. In case of a manufacturing company, the operating cycle is the length of time necessary to complete the following cycle of events: 50

1) Conversion of cash into raw materials 2) Conversion of raw materials into work-in-progress 3) Conversion of work-in-progress into finished goods 4) Conversion of finished goods into accounts receivable 5) Conversion of accounts receivable into cash

GOAL OF WORKING CAPITAL MANAGEMENT

Goal of working capital management is to manage the firms current assets and liabilities in such a way so that a satisfactory level of working capital is maintained. The second important segment of working capital management is deciding the optimum level of investment in various current assets. There are three important current assets cash, accounts receivables and inventory.

RECEIVABLES MANAGEMENT INTRODUCTION

The term receivable is defined as debt owed to the firm by customers arising from sale of goods or services in the ordinary course of business. When a firm makes an ordinary sale of goods or services and doesnt receive payment, the firm grants trade credit accounts receivable, which could be collected in the future. Receivables Management is also called trade credit management.

OBJECTIVE
51

The objective of receivables management is to promote sales and profits until that point is reached where the return on investment in further funding receivables is less than the cost of funds raised to finance that additional credit.

BENEFITS
Investments in receivables involve both benefits and costs. The extension of trade credit has a major impact on sales, costs and profitability. Other things being equal, a relatively liberal policy and, therefore, higher investments in receivables, will produce larger sales. However, costs will be higher with liberal policies than with more stringent measures. Therefore, accounts receivables management should aim at a trade-off between profit (benefit) and risk (cost).

CREDIT POLICY
The credit policy of a firm provides the framework to determine: 1) Credit standards 2) Credit terms 3) Credit Analysis Credit Standard The term credit standards represent the basic criteria for the extension of credit to those customers to whom goods could be sold on credit. If a firm has more slow-paying customers, its investment in accounts receivables will increase. The firm will also be exposed to higher risk of default. Credit Terms Credit terms specify duration of credit and terms of payment by customers. Investment in accounts receivables will be high if customers are allowed extended time period for making payments. Credit Analysis Credit analysis and investigation is an aspect of credit policies of a firm. Two basic steps are involved in the credit investigation process: Obtaining credit information B. Analysis of credit information It is on the basis of credit analysis that the decisions to grant credit to a customers as well as the quantum of credit would be taken.

52

INVENTORY MANAGEMENT INTRODUCTION

Inventories constitute the principal item in the working capital of the majority of trading and industrial companies. In inventory we include raw materials, finished goods, work-inprogress, supplies and other accessories. To maintain the continuity in the operations of business enterprises, a minimum stock of inventory is required. Management of inventory is designed to regulate the volume of investment in goods on hand and the types of goods carried in stock to meet the needs of production and sales while at the same time, the investment in them is to be kept at a reasonable leve

CONCEPT
The inventory management is used in two ways- Unit Control and Value Control. Production and purchase officials use this word in term of unit control whereas in accounting this word is used in term of value control .Investment in inventory is one the largest asset item of business enterprises particularly those engaged in manufacturing. The proper management and control of the capital invested in the inventory should be the prime responsibility of accounting department because resources invested in inventory arent earning a return for the company. Rather, on the other hand, they are costing the firm money both in terms of capital costs being incurred and loss of opportunity income that is being foregone

OBJECTIVES
The basic managerial objectives of inventory control are twoa) The avoidance of over-investment or under-investment in inventories. 1) 2) 3) 4) 5) Minimum Stock Limit Re-ordering Level Economic Order Quantity The Selective Inventory Control or ABC System of Control Maximum Stock Limit

TECHNIQUES OF INVENTORY CONTROL

ABC System of Control The various inventory items are, according to this system, categorized into three classesI. II. III. A B C 53

The item included in-group involve the largest investment. Therefore, inventory control should be the most rigorous and intensive and the most sophisticated inventory control techniques should be applied to these items. The C group consists of items of inventory which involve relatively small investments although the numbers of items is fairly large. These items deserve minimum attention. The B group stands midway. It deserves less attention than A but more than C. It can be controlled by employing less sophisticated techniques.

Maximum Stock Limit

This represents the quantity if inventory above which it should not be allowed to be kept. The following formula may be applied to calculate the maximum stockMaximum Stock = Reorder Level Minimum Consumption during Minimum Lead Time + Lot Size.

Minimum Stock Limit

This represents the quantity below which stock should not be allowed to fall. The main purpose of this level is to ensure that production isnt held up due to storage of any material. Minimum Stock Limit = Re-order Level Normal storage during Lead Time Re- Ordering Level It is the point at which if stock of the material in store reaches, the storekeeper should initiate the purchase requisition for fresh supplies of the material. This level is fixed somewhere between the maximum and minimum levels in such a way that the difference of quantity of the material between the reordering level and the minimum level will be sufficient to meet requirements of production upto the time of fresh supply of the material. The reorder point = Lead time in days * Average daily usage of inventory

Economic Order Quantity

It is the quantity of inventory, which can be reasonably ordered at a time and purchased economically. It is also known as Standard Order Quantity or Economic Lot Size. By definition Economic Order Quantity is that size or order at which the total cost of ordering and holding are the minimum. In determining the economic order quantity the problem is one to set a balance between two opposing costs, namely, namely ordering costs and carrying costs. The ordering costs are basically the costs of getting an item into the firms inventory. 54

Carrying costs, sometimes also known as holding costs are the costs of possessing the materials. These costs are combined known as Associated Costs. Hence, the management tries to reconcile them and this reconciliation point is economic order quantity.

MANAGEMENT OF CASH
Cash is the important current asset for the operation of the business. Cash is the basic input needed to keep the business running in the continuous basis, it is also the ultimate output expected to be realized by selling or product manufactured by the firm. The firm should keep sufficient cash neither more nor less. Cash shortage will disrupt the firms manufacturing operations while excessive cash will simply remain ideal without contributing anything towards the firms profitability. Thus a major function of the financial manager is to maintain a sound cash position. Cash is the money, which a firm can disburse immediately without any restriction. The term cash includes coins, currency and cheques held by the firm and balances in its bank account. Sometimes near cash items such as marketing securities or bank term deposits are also included in cash. Generally when a firm has excess cash, it invests it is marketable securities. This kind of investment contributes some profit to the firm.

NEED TO HOLD CASH

The firms need to hold cash may be attributed to the following three motives: The Transaction Motive: The transaction motive requires a firm to hold cash to conduct its business in the ordinary course. The firm needs cash primarily to make payments for purchases, wages and salaries, other operating expenses, taxes, dividends, etc. The Precautionary Motive: A firm is required to keep cash for meeting various contingencies. Though cash inflows and outflows are anticipated but there may be variations in these estimates. For example a debtor who pays after 7 days may inform of his inability to pay, on the other hand a supplier who used to give credit for 15 days may not have the stock to supply or he may not be in opposition to give credit at present. Speculative Motive: - The speculative motive relates to the holding of cash for investing in profit making opportunities as and when they arise. The opportunities to make profit changes. The firm will hold cash, when it is expected that interest rates will rise and security price will fall.

55

References:
1. V .K. BHALLA, Working Capital Management, Anmol Publication Pvt Ltd, Edition 2008-2009 2. Hrishikes Bhattacharaya, Working Capital Management Strategies & Techniques,Prentice Hall of India, Edition 2006-2007 3. K.V.RAO, Working Capital Management in Public Enterprise, Deep & Deep Publication, Edition 2007-2008 4. http://www.scribd.com/doc/17275993/Summer-Training-Report-on-Working-CapitalMangement 5. http://www.scribd.com/doc/26361476/Effect-of-Working-Capital-on-BusinessProfitability 6. http://www.scribd.com/doc/45872275/ report on working -capital -management

DATA ANALYSIS AND INTERPRETATION

Interpretation and analysis of data may be called the part of research. The process of interpretation is essential a way of stating what result shows, what they mean, what is their significance, what is the answer of original problem s that all limitation of data enter into and became part of interpretation of results. Interpretation of result may be understand as the main part of the wheels of the whole research machinery without which data and other material have no specific function to perform. It involves braking down of existing complex

56

factors in simple and putting the parts together in new arrangement for the purpose of interpretation. In the word of wolf (1999) the process of analysis and synthesis of the collected is the foundation stone of all specific methods. Thus analysis and interpretation give shape and form to aims and objectives of the study. Appropriate analysis and interpretation is necessary to make selection, administration and scoring worthwhile. Interpretation needs critical examination of result of the analysis of data which means the study of the tabulated material in order to determine facts of meanings. It involves breaking down of existing complex factors into simple form and putting parts together in new arrangement for the purpose of tabulation. The process of analysis and synthesis of the collected data is the foundation stone of specific methods. This chapter presents the information gathered through secondary source which consist of annual report of Bajaj, Hero Honda, TVS, Yamaha and Honda., and different articles published in journals and magazines. Initially it present the working capital management in the selected firms, the different ratios related to working capital. Thereafter, the specific study of working capital in selected firms has done with the help of correlation as a tool to analysis the data and then the Final interpretation is done to analysis the performance of selected firms.

OBJECTIVE-1 RATIO ANALYSIS

A ratio is a simple arithmetical expression one number to another. The technique of ratio analysis can be employed for measuring short-term liquidity or working capital position of a firm. The following ratios can be calculated for these purposes:

A. PROFITABILITY RATIOS 1. Gross Profit Ratio 2. Net Profit Ratio 3. Return on Capital Employed
B. LIQUIDITY RATIOS

1. Current ratio 2. Quick ratio 57

C. CURRENT ASSETS MOVEMENT RATIOS 1. Inventory turnover. 2. Receivables turnover. 3. Payable turnover ratio. 4. Working capital turnover ratio.

A. PROFITABILITY RATIO
The profitability ratios are useful to get insight of a business. It helps an analyst to get indication on the sufficiency or adequacy of profits. It finds out the rate of return and makes the business comparable to the industry as well as its own past. These ratios are used by banks and financial institutions while lending to the business as the ratios ensures them about the regular payments of interest and installments. Not only the bankers but owners also look at these ratios to know about the fruits, their investment is going to reap. Management follows and analyses these ratios to spot out the lacuna in their operations and thereby bring about the necessary improvements.

1. GROSS PROFIT RATIO

A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings. It is also known as "gross margin".

Figure-1.1: Gross Profit Ratio of Selected Firms over five years

58

Interpretation
Above Table shows the Gross Profit ratio of selected automobile companies from the year 2006-07 to 2010-011. Here the Gross Profit ratio of Yamaha Motors is quite good among Bajaj Auto, Hero Honda, TVS and Honda whereas Honda also has also sufficient profit but less than from Yamaha corporation. So Yamaha is first rank by its financial position than Bajaj auto limited, Hero Honda, TVS Motors limited and Honda.

2. NET PROFIT RATIO

For a business to survive in the long term it must generate profit. Therefore the net profit margin ratio is one of the key performance indicators for your business. The net profit margin ratio indicates profit levels of a business after all costs have been taken into 26 accounts. It is worth analyzing the ratio over time. A variation in the ratio from year to year may be due to abnormal conditions or expenses. Variations may also indicate cost blowouts which need to be addressed. A decline in the ratio over time may indicate a margin squeeze suggesting that productivity improvements may need to be initiated. In some cases, the costs of such improvements may lead to a further drop in the ratio or even losses before increased profitability is achieved.

59

Figure-1.2: Net Profit Ratio of Selected Firms over five years

Interpretation
Above graph shows that the performance of Bajaj Auto limited is better than TVS Motors, Yamaha and Honda Motor Ltd and Hero Honda Ltd has also good ratio but in 2011 it is so less from Bajaj auto limited. So profit level of Bajaj auto limited is come at first rank than Hero Honda, TVS Motors, Yamaha and Honda limited.

RETURN ON CAPITAL EMPLOYED

It is the best technique to measure overall profitability and efficiency of any organization and also indicates the efficiency of use of assets in business. Return on capital employed refers to the calculation of rate of net profit on capital employed of an organization. The higher ratio of return on capital employed reflects higher profitability and low ratio reflects lower profitability of an organization.

60

Figure-1.3: Return On Capital Employed Ratio of selected firms over five years

Interpretation:
Bajaj and Hero Honda has high ratio of return on capital employed for 5 consecutive years, whereas TVS, Yamaha, and Honda Ltd has low and negative return on capital employed ratio. This indicates that the TVS, Yamaha, and Hondas overall performance and efficiency of utilization of total assets are not good as comparison to Bajaj and Hero Honda.

B. LIQUIDITY RATIOS
Liquidity refers to the ability of a firm to meet its current obligations as and when these become due. The short-term obligations are met by realizing amounts from current, floating or circulating assts. The current assets should either be liquid or near about liquidity. These should be convertible in cash for paying obligations of short-term nature. The sufficiency or insufficiency of current assets should be assessed by comparing them with short-term liabilities. If current assets can pay off the current liabilities then the liquidity position is satisfactory. On the other hand, if the current liabilities cannot be met out of the current assets then the liquidity position is bad. To measure the liquidity of a firm, the following ratios can be calculated: 61

1. CURRENT RATIO Current Ratio, also known as working capital ratio is a measure of general liquidity and its most widely used to make the analysis of short-term financial position or liquidity of a firm. It is defined as the relation between current assets and current liabilities. Thus,

Current ratio = Current Assets Current Liabilities

Current assets include cash, marketable securities, bill receivables, sundry debtors, inventories and work-in-progresses. Current liabilities include outstanding expenses, bill payable, dividend payable etc. A relatively high current ratio is an indication that the firm is liquid and has the ability to pay its current obligations in time. On the hand a low current ratio represents that the liquidity position of the firm is not good and the firm shall not be able to pay its current liabilities in time. A ratio equal or near to the rule of thumb of 2:1 i.e. current assets double the current liabilities is considered to be satisfactory. Figure-1.4: Current Ratio of Selected Firms over five years.

C urrent Ratio
3 2.5 2 1.5 o i t a R 1 0.5 0 BAJAJ H OH ER OND A TVS Y AMAH A H OND A 2007 0.84 0.57 1.04 1.69 1.21 2 008 0.8 8 0.4 8 1.0 7 2.2 9 1.1 2 2009 0.84 0.46 1.15 2.24 1.09 2 010 0.69 0.58 1.13 2.57 1.35 2011 0 .8 0.24 1.12 2 .6 1.31

Interpretation:62

As we know that ideal current ratio for any firm is 2:1. Here the current ratio of Yamaha Motors is increasing regularly and quite well among Bajaj Auto, Hero Honda, TVS and Honda Motor Ltd. This indicates that the Yamaha Motor Company can successfully pay off its debt while at the same time still have cash left over to continue operating.

2. QUICK RATIO
Quick ratio is a more rigorous test of liquidity than current ratio. Quick ratio may be defined as the relationship between quick/liquid assets and current or liquid liabilities. An asset is said to be liquid if it can be converted into cash with a short period without loss of value. It measures the firms capacity to pay off current obligations immediately. Quick ratio = quick assets Current liabilities Where Quick Assets = Marketable Securities + Cash in hand and Cash at bank + Debtors OR Quick Assets = Current Assets Inventories- Prepaid expenses A high ratio is an indication that the firm is liquid and has the ability to meet its current liabilities in time and on the other hand a low quick ratio represents that the firms liquidity position is not good.

Figure-1.5: Quick Ratio of Selected Firms over five years 63

Interpretation:
As a rule of thumb ratio of 1:1 is considered satisfactory. A quick ratio is an indication that the firm is liquid and has the ability to meet its current liabilities in time, the liquid ratio of Yamaha is quite good among Bajaj, Hero Honda, TVS and Honda Motors Ltd. This shows that the company can successfully meet its short-term obligations.

C) CURRENT ASSETS MOVEMENT RATIOS

Funds are invested in various assets in business to make sales and earn profits. The efficiency with which assets are managed directly affects the volume of sales. The better the management of assets, large is the amount of sales and profits. Current assets movement ratios measure the efficiency with which a firm manages its resources. These ratios are called turnover ratios because they indicate the speed with which assets are converted or turned over into sales. Depending upon the purpose, a number of turnover ratios can be calculated. These are: 1. Inventory Turnover Ratio 2. Inventory Conversion Period 3. Receivables Turnover Ratio. 64

4. Payable Turnover Ratio. 5. Working Capital Turnover Ratio The current ratio and quick ratio give misleading results if current assets include high amount of debtors due to slow credit collections and moreover if the assets include high amount of slow moving inventories. As both the ratios ignore the movement of current assets, it is important to calculate the turnover ratio.

1. INVENTORY TURNOVER OR STOCK TURNOVER RATIO:

Every firm has to maintain a certain amount of inventory of finished goods so as to meet the requirements of the business. But the level of inventory should neither be too high nor too low. Because it is harmful to hold more inventory as some amount of capital is blocked in it and some cost is involved in it. It will therefore be advisable to dispose the inventory as soon as possible. Inventory turnover ratio = Cost of good sold Average inventory Inventory turnover ratio measures the speed with which the stock is converted into sales. Usually a high inventory ratio indicates an efficient management of inventory because more frequently the stocks are sold; the lesser amount of money is required to finance the inventory. Whereas low inventory turnover ratio indicates the inefficient management of inventory. A low inventory turnover implies over investment in inventories, dull business, poor quality of goods, stock accumulations and slow moving goods and low profits as compared to total investment. Average Stock = Opening Stock + Closing Stock

Figure-1.6: Inventory turnover ratio of selected firms over five years 65

Interpretation:
The inventory turnover ratio is also an index of profitability, where a high ratio signifies more profit; a low ratio signifies low profit. Here, Hero Honda Ltd. has High Inventory Turnover ratio for 5 consecutive years, whereas TVS, Yamaha and Honda Motors Ltd. has low inventory turnover ratio for 5 consecutive years and Bajaj Auto Ltd. also shows considerable results, but has less stock turnover ratio than Hero Honda Ltd. 2. INVENTORY CONVERSION PERIOD: Generally a period is defined for converting the raw material into finished goods. If Inventory Conversion Period is low, it is assumed that Policy is good; in contrary to this if conversion is delayed it is an indicator of poor realization policy. Inventory Conversion Period = 365 (net working days) Inventory turnover Ratio Figure-1.7: Inventory Conversion Period of selected firms over five years

66

Interpretation
Inventory conversion period shows that how many days inventories take to convert from raw material to finished goods. In the TVS Motor Company inventory conversion period is less than from Yamaha and Honda Motors, but Bajaj & Hero Honda Company take very less time to convert raw material into finished goods in comparison to TVS, Yamaha and Honda Motor Ltd which indicates that efficiency of management to convert the inventory into cash is good. 3. RECEIVABLE RATIO (IN DAYS) The average collection period ratio represents the average number of days for which a firm has to wait before its receivables are converted into cash. It measures the quality of debtors. Generally, shorter the average collection period the better is the quality of debtors as a short collection period implies quick payment by debtors and vice-versa.

Receivable Turnover Ratio =

Figure-1.8: Average Collection Period of selected firms over five years 67

Interpretation:
This ratio helps in analyzing the efficiency of collection efforts and credit policy adopted by company. Where a less ratio signifies best efficiency and a high ratio signifies low efficiency of collection. Here, Hero Honda Company has good efficiency of collection where as Bajaj and TVS Company has also good efficiency of collection but less than from TVS Motor Company in comparison to Yamaha and Honda Company which shows that the TVS Motor Company has good credit policy.

4. PAYABLE RATIO: (IN DAYS)

This Ratio indicates the average period employed in payment of credit purchases. Efficiency or delay in payment can be noticed by comparing average payment period with credit period given by supplier. Payable Turnover Ratio =

Figure-1.9: Bills Payable Period of selected firms over five years. 68

Interpretation:
This ratio is defined for payment of creditors by every organisation. If the bills paybale period is high then this indicates good relationship with suppliers but less liquidity of organisation and vice versa. Here Bajaj and Hero Honda ltd take more time for payment to suppliers this indicates that the both company has good relationship with suppliers but liquidity of organization is less.

5.

WORKING CAPITAL TURNOVER RATIO

Working capital turnover ratio indicates the velocity of utilization of net working capital. This ratio indicates the number of times the working capital is turned over in the course of the year. This ratio measures the efficiency with which the working capital is used by the firm. A higher ratio indicates efficient utilization of working capital or condition of over trading and a low ratio indicates poor management of working capital or underlying is prevalent in business. But a very high working capital turnover is not a good situation for any firm. Working Capital Turnover Ratio = Cost of Sales Net Working Capital 69

Figure-1.10: Working Capital Turnover Ratio of selected firms over five years.

Interpretation:
The working capital ratio depicts the efficiency and perfection of working capital. Here TVS Firm has high ratio of working capital for 5 consecutive years and Honda Company Ltd. also shows considerable results, but less than the TVS Company this shows that the liquidity of organization is good. Whereas Yamaha, Hero Honda and Bajaj Ltd. has low and negative Working capital turnover. 70

OBJECTIVE-2
For the purpose to find out the relationship between risk and profitability the Spearmans rank correlation (r) between Risk factor and return on capital employed has been calculated where ROCE is used for measuring profitability and oft. t test is applied for determine significance of r. Then computed value oft has been compared with the tabulated value

BAJAJ AUTO LTD

Table-2.1: Relationship between risk and profitability of Bajaj Auto Ltd Year 2007 2008 2009 2010 2011 Ej 55343 1587.59 1869.69 2928.34 4910.22 Lj 1625.4 1334.34 1570 1338.58 325.15 FA 1381.22 1303.35 1648.77 1521.11 2872.59 CA 3818.63 1649.71 2325.27 1583.83 2872.59 Rk 1.51 0.98 0.77 1.73 1.28 R1 4 2 1 5 3 ROCE 20.90 39.71 35.36 59.19 69.67 R2 5 3 4 2 1 D -1 -1 -3 3 2 D2 1 1 9 9 4 D2=24

r = -0.2 t = -0.33 HERO HONDA

Table-2.2: Relationship between risk and profitability of Hero Honda Company

71

Year 2007 2008 2009 2010 2011

Ej 2470.06 2986.24 380.75 3465.02 2956.06

Lj 165.17 132 78.49 66.03 1491.16

FA 1355.45 1564.75 1694.25 1706.96 4205.42

CA 914.65 942 1022.14 2890.46 1510.52

Rk 1.4 1.65 2.14 0.63 0.16

R1 3 4 5 2 1

ROCE 43.48 41.57 43.33 75.07 55.82

R2 3 5 4 1 2

D 0 -1 1 1 -1

D2 0 1 1 1 1 D2=4

r = 0.8
t = 2.30

TVS
Table-2.3: Relationship between risk and profitability of TVS Motor Company Year 2007 2008 2009 2010 2011 Ej 809.27 821.58 810.16 865.30 999.41 Lj 633.56 666.34 905.98 1003.29 785.42 FA 1002.93 1043.05 1036.37 982.78 994.88 CA 822.40 774.79 893.67 965.19 1201.55 Rk 0.53 0.57 0.76 0.92 0.66 R1 2 5 4 3 1 ROCE 10.4 2.8 5.6 8.0 16.3 R2 1 2 4 5 3 D 1 3 0 -2 -2 D2 1 9 0 4 4 D2=18

r = 0.1
t = 0.1747

YAMAHA
Table-2.4: Relationship between risk and profitability of Yamaha Motor Company Year 2007 2008 2009 2010 Ej 346467 339642 248995 251737 Lj 6132 2145 3491 5462 FA 149871 13974 127610 116289 CA 231030 275750 202096 193258 Rk 0.88 0.73 0.62 0.73 R1 5 3.5 1 3.5 ROCE 13.55 25.18 -5.07 -0.08 R2 2 1 5 4 D 3 2.5 -4 -0.5 D2 9 6.25 16 0.25 72

2011

242065

1376

108264

194715

0.69

2.98

-1

1 D2=32.5

r = -0.625 t = -0.917 HONDA

Table-2.5: Relationship between risk and profitability of Honda Company Year 2007 2008 2009 2010 2011 Ej 44,82,611 45,50,479 40,07,288 43,28,640 44,49,975 Lj 19,05,743 18,36,652 19,32,637 23,13,035 20,43,240 FA 20,78,728 22,01,299 21,47,221 20,86,663 19,39,356 CA 51,92,609 52,31,568 46,21,178, 46,13,724 46,90,047 Rk 0.89 0.80 0.82 0.99 0.97 R1 3 1 2 5 4 ROCE 26.57 32.45 6.4 10.25 20.60 R2 2 1 5 4 3 D 1 0 -3 1 1 D2 1 0 9 1 1 D2=12

r = 0.4
t = 0.76

Relationship Between Risk and Profitability of Selected Two Wheeler Automobile Firms
Table-2.6: Relationship between risk and profitability of selected two wheeler automobile companies Bajaj Correlation Computed t -0.2 -0.33 Hero Honda 0.8 2.3 TVs 0.1 .01747 Yamaha -0.625 -0.917 Honda 0.4 0.76

Interpretation
The table value of t at 5% level of significance for 4 degree of freedom (n-1,where n=5) is equal to 2.776. Since the computed value of t of all selected firms is less than the table

73

value the null hypothesis (H0) is to be accepted and therefore we can finally say that there is no relationship between risk and profitability.

OBJECTIVE-3

For the purpose to find out the relationship between working capital and profitability the Spearmans rank correlation (r) between current ratio and return on capital employed ratio has been calculated where the Current Ratio is used as an indicator of Working capital and ROCE is used for measuring profitability and t test is applied for determine significance of r. Then computed value oft has been compared with the tabulated value oft.

BAJAJ
Table-3.1: Relationship between working capital and profitability of Bajaj Auto Ltd Year 2007 2008 2009 2010 2011 C.R 0.84 0.88 0.84 0.69 0.80 R1 2.5 1 2.5 5 4 ROCE 20.90 39.71 35.36 59.19 69.67 R2 5 3 4 2 1 R1-R2(D) -2.5 -2 -1.5 3 3 D=0 D2 6.25 4 2.25 9 9 D2=30.50

r = -0.5
t = -0.77

HERO HONDA
Table-3.2: Relationship between working capital and profitability of Hero Honda Company Year 2007 2008 2009 2010 2011 C.R 0.57 0.48 0.46 0.58 0.24 R1 2 3 4 1 5 ROCE 43.48 41.57 43.33 75.07 55.82 R2 3 5 4 1 2 R1-R2(D) -1 -2 0 0 3 D=0 D2 1 4 0 0 9 D2=14 74

r = 0.3 t = 0.5445 TVS

Table-3.3: Relationship between working capital and profitability of TVS Company Year 2007 2008 2009 2010 2011 C.R 1.04 1.07 1.15 1.13 1.12 R1 5 4 1 2 3 ROCE 10.4 2.8 5.6 8.0 16.3 R2 2 5 4 3 1 R1-R2(D) 3 -1 -3 -1 2 D=0 D2 9 1 9 1 4 D2=24

r = -0.2
t = -0.339

YAMAHA
Table-3.4: Relationship between working capital and profitability of Yamaha Company Year 2007 2008 2009 2010 2011 C.R 1.69 2.29 2.24 2.57 2.6 R1 5 3 4 2 1 ROCE 13.55 21.18 -5.07 -.08 2.98 R2 2 1 5 4 3 R1-R2(D) 3 2 -1 -2 -2 D=0 D2 9 4 1 4 4 D2=22

r = -0.1
t = -0.173

HONDA
Table-3.5: Relationship between working capital and profitability of Honda Company Year 2007 2008 2009 2010 2011 C.R 1.21 1.22 1.09 1.349 1.31 R1 4 3 5 1 2 ROCE 26.57 32.45 6.40 1025 20.6 R2 2 1 5 4 3 R1-R2(D) 2 2 0 -3 -1 D=0 D2 4 4 0 9 1 D2=18

r = 0.1
t = 0.1747

75

Relationship Between Working Capital and Profitability of Selected Two Wheeler Automobile Firms
Table-3.6:Relationship between working capital and profitability of selected two wheeler automobile companies Correlation Computed t Bajaj Hero Honda TVs Yamaha Honda -0.5 0.3 -0.2 -0.1 0.1 -0.77 0.5445 -0.339 -0.173 0.1747 Interpretation The table value of t at 5% level of significance for 4 degree of freedom (n-1,where n=5) is equal to 2.776. Since the computed value of t of all selected firms is less than the table value the null hypothesis (H0) is to be accepted and therefore we can finally say that there is no impact of working capital on firms profitability.

References
Annual Reports of various two wheelers companies in the automobile industry (Bajaj Auto Ltd, Hero Honda Ltd., TVS Motor Ltd, Yamaha and Honda Motors.) of the years: 2006-07, 2007-08 2008-09, 2009-2010 and 2010-2011. S P Gupta, Management Accounting, Sahitya Bhawan Publication, Edition 2009-2010 Dr. Promod Kumar & P C Gupta, Management Accounting, Jawahar Publication, Edition 2009-2010 R.P. Rustagi, Financial Management, Galgotia Pubilshing Company, Edition 2007-08 S.N. Maheshwari, Financial Management, Sultan Chand Publishers, Edition 2006-07 T.S Grewal, Analysis of Financial Statements, S.Chand & Sons Publishers, Edition 2007-08 Khan and Jain, Financial Management, Tata Mcgraw Hill Publishing House, Edition 2006-07

FINDINGS
After studying the components of working capital management system of Bajaj, Hero Honda, TVS, Yamaha and Honda of last five year from 2006-2007 to 2010-2011. It is found that Hero Honda is a good company as compare to TVS, Yamaha and Honda, Because the most 76

of ratios of Hero Honda higher than TVS, Yamaha and Honda and the Bajaj auto limited also shows fine performance during the preceding few years. The company has fair quick ratio which shows that the company can successfully meet its current liability and give attention to its net profit for last 5 years. Gross profit and net profit of Bajaj auto limited have increased from previous year but the current ratio is not fine which shows that the company cannot successfully meet its current liability. Whereas the Inventory conversion period means time taken in conversion of raw material into finished goods or in sale and again in cash is less this indicates that the working capital cycle of Bajaj auto Ltd is fast and the working capital management cycle is also good. Hero Honda Companys performance is almost same as Bajaj auto limited but its gross profit ratio is decrease in the current year 2011. Whereas the working capital cycle of Hero Honda is faster than Bajaj auto limited and the working capital management system of Hero Honda is also good. On the other hand, TVS Motors Ltd. does not have good gross profit and net profit ratio, but has ideal current ratio which shows that the company can successfully pay off its debt, while at the same time still have cash left over to continue operating. The Working Capital cycle of TVS is fine but the company has excessive working capital means the firm has idle funds which earn no profits for the firm. Or we can say that working capital management system of TVS is not good. Yamaha Motor Corporation and Honda have excellent gross profit ratio and the current ratio. But the net profit ratio is not good because of more selling and administrative expenses and the working capital cycle is very slow because of not good relationship from suppliers and customers. Which indicate that the working capital management of Yamaha and Honda motor is not good.

COMPANY BCG MATRIX

77

High

Market Share

Low HIGH LOW

Relative Market Share

BCG matrix is used to determine the relative position of the companies of an industry or different SBUs of any institution, in terms of the market growth rate and the market share of the company in the industry. In the Indian two automobile sector, the major players are Bajaj auto Hero Honda, TVS Yamaha and Honda. In the BCG matrix, the companies are placed in one of the following four categories: Star, Cash Cows, Dogs and Question marks. In the Stars we place the companies with high market growth and high market share, cash cows are the companies who have low market growth rate and high relative market share, the category of the question marks include the companies with low relative market share and high market growth rate and dogs include the companies who have low relative market share and low market growth rate.

SUGGESTIONS
78

 Bajaj auto limiteds overall performance is good but it has also focus on sufficient current ratio as well as on working capital ratio for paying all the current liabilities in time, day to day operations activity and to recover the suddenly events. By which company can increase their profit more. Hero Honda should also focus on its short term current assets and the proper working capital for day to day operations. TVS Company has ideal current assets and working capital which ultimately affects to the profitability so the company should focus on optimum current assets and working capital. As Hero Honda, Bajaj and Yamaha have taken the 1 st, 2nd and 3rd position. Thus TVS motor co. has to make some more efforts to increase the awareness among the people in the context of bikes. When asked about the experience at the TVS dealership most of the respondents had a good and average experience with a small number having bad experience. The small number of bad experience can be avoided by giving warm welcome and good behavior by the staff. For increasing its working capital Yamaha should increase their production capacity As Yamaha India has plans to capture four different markets in India i.e. Sports Bikes, Rural area with entry segment bikes and scooters, Yamaha should plan to increase the annual production capacity which is very as compared to its competitors. They should also use their Faridabad plant to assemble the bikes after taking the license. More models in 150cc+ segment (only bikes at 150cc bikes) as other competitors like Hero Honda, Bajaj provides motorbikes up to 250cc, and Yamaha should go beyond 150cc+ bikes. Currently, Yamaha have only 3 bikes in 150cc in different variants. Should improve the after sale services Yamaha is not satisfying their customers in after sales services, parts of the bike are not easily available in the market. This is the major drawback in capturing the market share so Yamaha should take some better steps to satisfy and retain their customers. Measures should be taken to improve its dealership Yamaha which is trying to build a brand new image of a high tech and stylish brand of bikes should take appropriate steps to show it in their showrooms. Also, Yamaha should provide credit periods to their dealers so that they give more orders. Yamaha dont provide any credit period to its vendors. 79

 Honda motor company has to increase its suppliers dealership network, in order to increase its sale points. Should go for related diversification, that they have to launch different type of models in contrast with Indian economy, they have to produce motorbikes up to 250cc, Introduction of flexible fuel vehicle. In order to increase their market share and profitability. To increase operating efficiency the Honda motor should have to strict employee policies to contain overhead and unfavorable economic conditions Honda motor company should have to utilize their assets properly as their half of the assets were not utilizing and they became a burden for the company so they have to utilize those assets in order to increase efficiency.

BIBLOGRAPHY:
80

Journals
1. The IUP Journal of Management Research, Vol. X, No. 2, 2011 2. The Indian Journal of Commerce Vol. 63. No. 3. July-September 2010 3. The Journal of Accounting and Finance 4. The Journal of Management Accountant

Books
V .K. BHALLA, Working Capital Management, Anmol Publication Pvt Ltd, Edition 2008-2009 Hrishikes Bhattacharaya, Working Capital Management Strategies & Techniques,Prentice Hall of India, Edition 2006-2007 K.V.RAO, Working Capital Management in Public Enterprise, Deep & Deep Publication, Edition 2007-2008 S P Gupta, Management Accounting, Sahitya Bhawan Publication, Edition 20092010 Dr. Promod Kumar & P C Gupta, Management Accounting, Jawahar Publication, Edition 2009-2010 R.P. Rustagi, Financial Management, Galgotia Pubilshing Company, Edition 200708 S.N. Maheshwari, Financial Management, Sultan Chand Publishers, Edition 200607 T.S Grewal, Analysis of Financial Statements, S.Chand & Sons Publishers, Edition 2007-08 Khan and Jain, Financial Management, Tata Mcgraw Hill Publishing House, Edition 2006-07

Reports:
Annual Reports of various two wheelers companies in the automobile industry (Bajaj Auto Ltd, Hero Honda Ltd., TVS Motor Ltd, Yamaha and Honda Motors.) of the years: 2006-07, 2007-08 2008-09, 2009-2010 and 2010-2011.

Websites:
81

1. http://papers.ssrn.com 2. http://www.siamindia.com/scripts/market-share.aspx 3. http://www.scribd.com/doc/21170260/two-wheeler-industry 4. http://www.scribd.com/doc/27797997/two-wheeler-automobile-marketing-strategy 5. www.automobileindia.com/two-wheelers/overview.html 6. http://www.scribd.com/doc/17275993/Summer-Training-Report-on-WorkingCapital-Mangement, 2010 7. http://www.scribd.com/doc/26361476/Effect-of-Working-Capital-on-BusinessProfitability, 2011 8. http://www.scribd.com/doc/45872275/ report on working-capital-management, 2010 9. www.moneycontrol.com 10. www.bajaj.com 11. www.herohonda.com 12. www.tvs.com 13. www.yamaha.com 14. www.honda.com 15. http://www.scribd.com/doc/6521964/summer-training-report-on-bajaj-vs-herohonda, 2011 16. http://www.scribd.com/doc/60771853/Strategic-Management-Project-Report Yamaha-Motors, 2011

82