Working Capital in Yamaha

8/10/2019 Working Capital in Yamaha

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INTERNSHIP PROJECT

WORKING CAPITAL OF YAMAHA MOTORS PVT. LTD.

At

YAMAHA MOTORS INDIA PVT. LTD.

Internship Project Report

Session : 2011-14

Submitted To: Submitted by :

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TABLE OF CONTENTS

Introdu t!on

O"#$ t!%$ o& t'$ Stud(

Con $)t o& *or+!n, -)!t-

Pr!n !) $/ o& *or+!n, C-)!t-

R$/$-r ' M$t'odo o,(

Co0)-n( Pro&! $

R$%!$* o& L!t$r-tur$

D-t- -n- (/!/ 1 Int$r)r$t-t!on

F!nd!n,/

Su,,$/t!on/ 1 R$ o00$nd-t!on/

Con u/!on

B!" !o,r-)'(

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Student Undertak n!

This is to certify that I ____________________________ had completed the Project titled title of the project in (name of the company) under the guidance of Mr./Ms. ( aculty guide) in the partial fulfillment of the re!uirement for the a"ard of degree of M#$ from #harati %idyapeeth &eemed 'ni ersity " &*+$cademic tudy ,enter #%IM-+ e" &elhi. This is an original piece of "or and I had neither copied nor su0mitted it earlier else"here.

Student Na#e and S !natureCour$e

Dated %

Page 12

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AC&NO'LED(EMENT

It is a pleasure to record my than s and gratitude to persons and organi3ations "hose generous help and support

ena0led me to complete this research report "ithin the stipulated time period. My special than s are due to It is

a pleasure to record my than s and gratitude to persons and organi3ations "hose generous help and support

ena0led me to complete this project "ithin the stipulated time period. My special than s are due to

for their acti e help and support in ma ing me understand a0out Indian t"o "heeler industry+ "ho guided me at

each step during my research report period and "ithout "hom preparation of this report "ould not ha e 0een

possi0le.

This research report is the culmination of the synchroni3ed effort of all the a0o e mentioned that had faith and

confidence in me.

I am greatly inde0ted to all those persons "ho ha e helped me in some "ay or other in the completion of the

research report.

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Introdu)t on

T*e T+o ,'*ee-er Market (-o a--/

4lo0ally+ the T"o1"heeler Industry is concentrated in the de eloping "orld+ especially ,hina and India+ 5hich

together account for o er half the total "orld"ide sales of T"o1"heelers.

The 6apanese Manufacturers+ 7onda+ 8amaha+ u3u i and 9a"asa i+ dominate the T"o15heeler Industry

glo0ally currently+ all major t"o "heeler mar et+ e:cept India are dominated either 0y 6apanese firms or their joint entures. 7o"e er+ in the leading mar ets+ such as ,hina and India and outh1$sia+ a host of local players

e:ists.

4lo0ally+ four1 tro e engines are fast replacing the T"o1 tro e ariants "ith stricter emission norms

0eing imposed and ehicles po"ered 0y t"o1stro e 0eing 0anned+ four1stro e po"ered t"o1"heeler ha e found

increasing fa or.

Po"ered T"o15heeler Popular in $sian ,ountries such as ,hina and India "here Motorcycle

dominate the PT5 mar et. ;utside India+ presence of cooters is limited. cooters are far more popular in

*urope than in the ' . *urope has ery 7igh fuel prices+ congested city streets "ith limited par ing space+ and

a long history of accepting scooters as a respecta0le mode of transportation+ all leading to a considera0le interest

in scooters.

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T+o%+*ee-er Indu$tr e$0 T*e Ind an $)enar o

The Indian t"o1"heeler industry can 0e di ided into three 0road categories< scooters+ motorcycles and mopeds.

*ach of these categories can 0e further segmented on the 0asis of se eral aria0les+ li e price+ engine po"er+

type of ignition and engine capacity.

The t"o1"heeler industry has come a long "ay since its inception in the early =>?@s "hen scooters "ere first

produced in the country. Today+ India is the second largest producer and consumer of t"o1"heeler in the "orldA

the Indian t"o1"heeler industry has gro"n rapidly o er the past =? years. The demand for t"o1"heelers

increased at a ,$4- of around ==B from @.CCmillion ehicles in 8 =>D= to o er C.2E million in 82@@2.

SALES IN VARIOUS COUNTRIES IN 2009

02000400060008000

10000

C H I N

A

I N D O N E S I

A

T H A I L A N

D

B R A Z

I L

I T A L Y

G E R M A N Y

COUNTRIES

T W O

W H E E L E R S

S

O L D ( ' 0 0 0

N O S

.

The Indian t"o1"heeler industry has undergone a significant change o er the past =@ years "ith the practical

changing from mopeds to scooters and more recently+ from scooters to motorcycles. cooters+ "hich "ere

considered the family ehicle for middle class Indians+ are increasingly losing their position as a cheap mode of

personal transportation. 5ith the reduction in the price differential 0et"een scooters and motorcycles+ there has

0een a percepti0le shift to"ards motorcycle motorcycles 0ecause of their 0etter styling+ higher fuel efficiency+

and higher load carrying capacity.

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urther+ the decline in e:cise duty on scooters and motorcycles has reduced their price differential in

comparison "ith mopeds. The change in customer preferences+ 0etter fuel efficiency and increased afforda0ility

of motorcycles has titled the demand in fa our of motorcycles. The share of scooters sales in t"o1"heeler sales

has 0een reducing steadily since 8=>>@ "hen scooters accounted for more than half of all t"o1"heelers sold in

the country.

Till 8=>>D+ scooters formed the largest segment accounting for C=B of total industry sales+ "hile motorcycles

and mopeds accounted for EFB and 2=B of all t"o1"heelers sales respecti ely. 7o"e er+ during 8=>>>+ for

the first time+ the sales of motorcycle outperformed scooter sales.

The shares of scooters+ motorcycles and mopeds in 82@@@ "ere EEB+ CDB+ and =>B+ respecti ely. $lthough+

the shares of scooters and mopeds declined in 82@@= and

82@@2+ the shares of motorcycles increased to ?DB and G>B respecti ely in these years

In 82@@E+ motorcycle sales in India increased at the rate of 2DB %is1H1 is 82@@2. A

signifcant development in the motorcycle industry during the late 1990s was the shi t

rom two-stro e to our-stro e technology!

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O1JECTIVE O2 THE STUDY

The study "as conducted at 8$M$7$ M;T;-+ eeping in mind the follo"ing o0jecti es


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CONCEPT O2 'OR&IN( CAPITAL

There are t"o concepts of "or ing capital (a) 4ross concept (0) et concept. 4ross

concept+ "or ing capital refers to a company s in estment in current assets. ,urrent assets are

assets+ "hich can 0e con erted in to cash "ith in accounting year and include cash+ short J term

in estment+ de0tor s 0ills recei a0les+ and stoc . The term net "or ing capital refers to the

difference 0et"een current assets and current lia0ilities. ,urrent lia0ilities are those claimed of

outsiders+ "hich are e:pected to nature for payment "ith in an accounting year and include

creditors+ 0ills paya0le+ 0an o erdrafts and outstanding e:penses. The net concept of "or ing

capital is also called !ualitati e concept. The financial analyst also gi es importance to this

concept of "or ing capital and he also sees it as the e:cess total assets our total lia0ilities the

net "or ing capital and he also see it as the e:cess total assets our total lia0ilities the net

"or ing capital+ on the same analogy+ must mean the success of the current o er the current

lia0ilities+ if current assets are less than current lia0ilities+ there "ill 0e no "or ing capital at all.

In fact it "ould mean that fi:ed assets ha e 0een financed partially 0y long 1 term funds and

partly 0y the short J term funds. 6udging from the lia0ilities side of 0alance J sheet+ "or ing

capital means that part of long J term capital that is used to finance current assets.

The t"o concept of "or ing capital 4ross K net "or ing capitals1gross and net1are note:clusi e+ they ha e rather e!ual significance from the Management ie"point. 4ross "or ing

capital concept focus attention on t"o aspects of current assets Management+ (a) optimum

in estment in current assets and (0) inancing of current assets. The consideration of the le el

of in estment and inade!uate in estment in current assets. $nother aspect of gross "or ing

capital points to the need of arranging funds to finance current assets. 5hene er a need for

"or ing capital funds arises due to increasing le el of 0usiness acti ity of for any other reason+

arrangement should 0e made !uic ly. imilarly+ if suddenly some surplus funds arise+ they

should 0e in ested in short1term securities. Thus+ a financial manager should ha e no"ledge of

sources of "or ing capita funds as "ell as in ested. The net "or ing capital assets indicates (a)

the li!uidity position of a firm+ and (0) uggests the e:tent to "hich "or ing capital needs may

0e financed 0y permanent source of finds. ,urrant assets should 0e sufficiently in e:cess of

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current Lia0ilities to constitute a margin of 0uffer for mat"ing o0ligations+ "hich the ordinary

operating cycles of a 0usiness. In order to project their interests+ short1term creditors al"ays li e

a company to maintain current assets at a higher le el than current lia0ilities.

The net "or ing capital concept also the judicious mi:ture of long1term and short1term funds

for financing current assets. or e ery 0usiness there is minimum amount of net "or ing

capital+ "hich is permathe permanent sources of finds such as o"ner s capital+ de0entures and

long1term de0t+ management must+ therefore+ decide the e:tent to "hich current asserts should

0e financed "ith e!uity capital and / or 0orro"ed capital. The time honored and majority

accepted ie" of "or ing capital is that is must measure the relationship of current assets "ith

current lia0ilities .it must+ therefore+ include not the "hole of current assets 0ut that part "hich

is not committed for payment of one year lia0ilities. This ie" of "or ing capital has 0eenused in the present studynent. Therefore+ a portion of "or ing capital should 0e financed "ith

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Sour)e$ o3 'ork n! Cap ta-

Long Jterm ources hort Jterm ources

;"ned ources #orro"ed ources Internal ources*:ternal sources

=. Issue of hares =. &e0entures =. &epreciation unds =. Trade,redit2. -etained *arnings 2. Long1term de0t 2. Pro ision for Ta:ation 2. Lettersof ,reditE. ales of i:ed $ssets E. ;utstanding Payments E. #an,reditC. -etiring ,urrent Lia0ilities C. Pu0lic&eposits

0elo" 0oo J alue ?. $d ancerom ,ustomers

?. -eser es G. inance,ompanies

F. ati eMoneylenders etc.

D. Loansfrom e:ecuti e and

&irectors>.

4o ernmental $ssistance =@.

ecurities of *mployees

5or ing ,apital can 0e o0tained from the follo"ing sources1

=.Long1Term ources+ and

2. hort1Term sources.

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RINCI LES OF WORKING CA ITAL

There are four important principles of "or ing capital management??+ 8amaha Motor ,ompany has "or ed to

0uild its products "hich stands among the ery 0est in the "orld through its constant pursuit of !ualityA and at

the same time+ through these products it has sought to contri0ute to the !uality of life of people all o er the

"orld. ollo"ing are the success of our motorcycle+ 8amaha 0eing manufacturing Po"er0oats and out0oards

Motors in =>G@+ since then+ *ngine and -P Technology "ere used as a 0ase to acti ely di ersify and 4lo0ali3e

the area of 0usiness. Today+ our field of influence e:tends from the land to the sea and e en into s ies as our

0usiness di isions ha e gro"n motorcycle operations to include $utomoti e ;perations+ Po"er Product

;perations+ and Intelligent machinery ;perations and P$ ;perations.

Per$u n! T*e U-t #ate In Personal Vehicle

* er since the founding 8amaha Motor ,ompany has 0een a company that continues to de elop its e:pertise in

the field of small *ngines and i0er 4lass -einforced Plastic ( -P) Manufacturing as "ell as *lectronic

,ontrol Technologies 8amaha Pursues the ideals of 0uilding products of 7igh uality and 7igh

Performance.

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En: ron#ent 3r end-/ and Peop-e 3r end-/

In product 0uilding and promotional efforts 8amaha ta es as one of the fundamental ideals the concept that

products+ "hich are people friendly+ should 0e *n ironment riendly and products that are en ironment friendly

should also 0e people friendly. This concept is 0orn of our a"areness that It is the *arth and Possi0le.

8amaha Motor ,ompany upplies the Po"er that mo es people and helps them to li e to their fullest as

human 0eings. 8amaha ehicles ha e the practical ad antage of using the minimum of energy for human

transport that means less negati e impact on the *n ironment.

Te)*no-o! )a- Ad:anta!e$

$t the hearts of the efforts of en ironmental preser ation are the en ironmental management system designedand implemented under the I ; =C@@= international standard. 'nder the slogan $0solute uality ,ontrol.

8amaha "as the early adopter of comprehensi e uality ,ontrol ystem and !uic to put in a place or Total

Producti e Management

Produ) n! #ean$ to an a)t :e L 3e

$t 8amaha 0usiness and leisure are treated as insupera0le parts of life that is a reason of stri ing to help 0ring

people around the "orld a more acti e life.

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2ounded

Cap ta-

Pre$ dent

6uly =+=>??

CD+E@2 million yen (as of March E=+2@=E)

Ta ashi 9aji a"a

E#p-o/ee$

;Con$o- dated+@=> (as of &ecem0er E=+ 2@=2)

Sa-e$

;Con$o- dated>+2@> million yen

(from 6anuary =+ 2@=2 to &ecem0er E=+ 2@=2)

Sa-e$ Pro3 -e ales (B) 0y product category (consolidated)

ales (B) 0y region (consolidated)

Head4uarter$ 2?@@ hingai+ I"ata1shi+ hi3uo a1 en+ 6apan

Ma=or Produ)t$ 8

Ser: )e$

Manufacture and sales of motorcycles+ scooters+ electro1hy0rid

0icycles+ 0oats+ sail 0oats+ 5ater %ehicles+ pools+ utility 0oats+ fishing

0oats+ out0oard motors+ diesel engines+ C1"heel $T%s+ side10y1side

ehicles+ racing arts+ golf cars+ multi1purpose engines+ generators+ "ater

pumps+ sno"mo0iles+ small1si3ed sno" thro"ers+ automoti e engines+intelligent machinery+ industrial1use remote control helicopters+ electrical

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CORPORATE PHILOSPHY

2or $o) et/" 3or t*e +or-d >

Ya#a*a +ork$ to rea- 9e

our )orporate # $$ on o3 )reat n! &ando

8amaha Motor is a company that has "or ed e er since its founding to 0uild products defined 0y the concepts

of high1!uality and high1performance and light "eight and compactness as "e ha e continued to de elop

ne" technologies in the areas of small engine technology and -P processing technology as "ell as control and

component technologies.

It can also 0e said that our corporate history has ta en a path "here people are the fundamental element and

our product creation and other corporate acti ities ha e al"ays 0een aimed at touching people s hearts. ;ur goal

has al"ays 0een to pro ide products that empo"er each and e ery customer and ma e their li es more fulfilling

0y offering greater speed+ greater mo0ility and greater potential.

aid in another "ay+ our aim is to 0ring people greater joy+ happiness and create 9andoQ in their li es.

$s a company that ma es the "orld its field and offers products for the land+ the "ater+ the sno"fields and the

s y+ 8amaha Motor stri es to 0e a company that offers ne" e:citement and a more fulfilling life for people all

o er the "orld and to use our ingenuity and passion to reali3e peoples dreams and al"ays 0e the ones they

loo to for the ne:t 9ando.

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1I&ES PRODUCED 1Y YAMAHA

YZF-R15 YZF-R1

GLADIATOR ALBA

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(?

2UTURE O2 YAMAHA

India Yamaha Motor is all set to launch its next season of YAMAHA RACING as YAMAHA ISR15 ON MAR! " RAC # as a $art of the SI%&IN 'MSCI IN%IAN NA"IONA(CHAM)IONSHI)* +,1- at Madras Motor Race "rac. from /th 0une* at Chennai

After .ic. startin2 the trend t3o 4ears ac.* Yamaha is ac. to fuel the2ro3in2 a$$etite for su$er i.es in India 3ith the launch of Su$er S$orts +,1- in the

Indian mar.et 6ith the launch of this machine* Yamaha is all set to enhance the 7o4 ofIndian riders and ex$erience true 8Art of n2ineerin29* 3hich lies at the heart of Yamaha9screations

"his time 3e shifted our focus to the 15, cc ran2e* throu2h 3hich 3e sou2ht toreesta lish our rand 6e ha:e s$ent around IRs ; illion in the last t3o 4ears oninfrastructure* ne3 moulds* $arts and assem l4 units 6e no3 manufacture ;,,*,,,units a 4ear 3or.in2 in t3o shifts If demand rises e:en more* 3e can add another shiftNext 4ear* 3e ho$e to increase our total ex$orts to 15,*,,, units In Ne$al* Yamahaex$ect a 2ro3th this 4ear to e


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CHAPTER -3

LITRET RE RE!IE"

Rat o ana-/$ $

Rat o ana-/$ $ is a po"erful tool of financial analysis. $ ratio is defined as the indicated !uotient of t"o

mathematical e:pressions and as the relations 0et"een t"o or more things.

In financial analysis+ a ratio is used as a 0enchmar for e aluating the financial position and performance. The

a0solute accounting figures reported in the financial statement do not pro ide a meaningful understanding of the

performance and financial position of a firm. 2or e@a#p-e" a -s. ? crores net profit may loo impressi e+ 0utfirm s performance can 0e said to 0e good or 0ad only "hen the net profit figure is related to firm s in estment.

-atio helps to summari3e large !uantities of financial data and to ma e !ualitati e judgment a0out the firm s

performance.

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Standard$ o3 )o#par $on

The ratio analysis in ol es comparison for a useful interpretation of the financial statements. $ single ratio initself does not indicate fa ora0le or unfa ora0le condition. It should 0e compared "ith some standards.

tandards of comparison may consist ofG

or the year2@@F 1 @D (in crore) S S CD.=?

or the year 2@@D 1 @> (in crore) S S 2.D.F=

or the year 2@@> 1=@ (in crore) S S 2.?=.F?

or the year 2@=@ J == (in crore) S S E.CG.GE

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D>.F?

or the year 2@== J =2 (in crore) S S E.=F2.=D

or the year 2@=2 J =E (in crore) S S C.??

>G.=?

or the year 2@=EJ =C (in crore) S S C.FF


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Fu )k Rat o (rap*

S !n 3 )an)e0 4enerally+ the !uic ratio of =


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Ca$* Rat o

ince cash is the most li!uid asset+ a financial analyst may e:amine cash ratio and its e!ui alent to current

lia0ilities. Trade in estments and mar eta0le securities e!ui alent to cashA so they may 0e included in cash ratio.

,ash V Mar eta0le securities

Ca$* Rat o S

,urrent Lia0ilities

2G.>@

or the year 2@@F 1 @D (in crore) S S =.2D

or the year 2@@D 1 @>(in crore) S S =.@D 1 =@ (in crore) S S @.CD


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[email protected]

or the year 2@== 1 =2(in crore) S S @.?2


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Ca$* Rat o (rap*

S !n 3 )an)e 0 cash ratio generally helps in finding out "hether the cash is 0eing proper utili3ed in the 0usiness

or not and to chec that "hether or not cash is lying ideal in the firm+ if yes then to ma e proper utili3ation of

cash.

Co##ent$0

$s "e can see that circulation of cash has decreased o er the past years. It sho"s that de0tors are not ma ing

prompt payments and company is not a0le to ma e 0etter utili3ation of cash.

4"

Y$-r


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A)t : t/ Rat o

Inventory Turnover Ratio

In entory turno er indicates the efficiency of the firm in producing and selling its products. It is calculated 0y

di iding the cost of goods sold 0y the a erage in entory.

,ost of 4oods old

In:entor/ Turno:er Rat o

$ erage in entory

Co$t o3 !ood$ So-d ;pening toc V Purchases V &irect ,harges J ,losing toc .

Co$t o3 (ood$ So-d et ales J 4ross Profit.

=?D.=C

or the year 2@@F 1 @D(in crore) S S F.EC times

2=.?C

=FE.CC

or the year 2@@DJ @> (in crore) S S F.=C times

2C.2D

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=FD.>?

or the year 2@@> 1 =@(in crore) S S G.22 times

2D.FE

2==.>E

or the year 2@=@ 1 == (in crore) S S G.2= times

EC.@D

2FD.FC

or the year 2@== 1 =2 (in crore) S S G.?> times

C2.2?

E?F.=C

or the year 2@=2 1 =E (in crore) S S F.C2 times CD.=2

C@@.2?

or the year 2@=E 1 =C (in crore) S S F.?F times

?2.DC

4$


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In:entor/ Turno:er Rat o (rap*

Year$

S !n 3 )an)e0 This ratio indicates "hether or not the stoc has 0een efficiently utili3ed. It sho"s the speed "ith

"hich the stoc is rotated into sales. The higher the ratio+ the 0etter it is+ since it indicates that the stoc is

selling !uic ly. In 0usiness "here stoc turno er is high goods can 0e sold at lo" margin of profit and e en then

the profita0ility can 0e high.

Co##ent$ 0In entory turno er ratio of the company is !uite good earlier it means that there is proper outflo" of

the stoc and goods do not remain in the go do"n for a long time. $s "e can see that in entory turno er isdecreasing "hich sho"s that there is o erspending in stoc "hich is left unused.

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De tor$ Turno:er Rat o

This ratio indicates the relationship 0et"een the credit sales and a erage de0tors or de0tor of the current year.

et ,redit ales

De tor$ turno:er Rat o

$ erage &e0tors V $ erage #/-

#ills recei a0les are added in de0tors for the purpose of calculation of this ratio. 5hile calculating this ratio+

pro ision for 0ad de0t and dou0tful de0t is not deducted from total de0tors+ so that it may not gi e a false

impression that de0tors are collected !uic ly.

et ,redit ales S Total ales J ,ash ales.

$ erage &e0tors S (;pening &e0tors V ,losing &e0tors) / 2

$ erage #ills -ecei a0les S (;pening #/- V ,losing #/-) / 2

==C.?>

or the year 2@@F 1 @D(in crore) S S E.CF times

E2.>D

FF.DGor the year 2@@D 1 @> (in crore) S S 2.ED times

E2.GF

D>.F>

or the year 2@@> 1 =@(in crore) S S 2.ED times

EF.?F50


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=2E.?=

or the year 2@=@ 1 == (in crore) S S 2.F2 times

C?.2?

=F>.=2

or the year 2@== 1 =2 (in crore) S S E.?? times

[email protected]

=>D.GF

or the year 2@=2 1 =E (in crore) S S E.FD times

?F.D2

2?2.DE

or the year 2@=E 1 =C (in crore) S S C.DE times

CD.@D

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De tor$ Turno:er Rat o (rap*

Year$

S !n 3 )an)e0 This ratio indicates the speed "ith "hich the amount is collected from de0tors. The higher the

ratio+ the 0etter it is+ since it indicates that amount from de0tors is 0eing collected more !uic ly. The less the

ris from 0ad de0t+ and so the lo"er the e:penses of collection and increase in the li!uidity of the firm.

C$44e+t - turno er ratio of the company is 2.F2 "hich is !uite good it means there is efficient credits sales

policy of the management. o there is less ris of 0ad de0ts 0ut there is increase in the ratio from the last year.

#ut still the ratio is lo" as compared to year 2@@F1 @D "hich "as E.CF times+ so company should ta e

appropriate steps to increase the ratio.

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WORKING CAPITAL T RNO!ER RATIO

'ork n! )ap ta- turno:er rat o indicates the elocity of the utili3ation of net "or ing capital.

This ratio represents the num0er of times the "or ing capital is turned o er in the course of year

,ost of sales

5or ing capital turno er -atio S W =@@

et "or ing capital

,u rrent Assets > ?1,*,,, @ ?5*,,, @ ?+5*,,, @ ?+,*,,, > ?;,*,,,Current (ia ilities > ?-,*,,,

Net 6or.in2 Ca$ital > Current assets Current lia ilities> ?;,*,,, B ?-,*,,,

> ?-,*,,,

So the 3or.in2 Ca$ital "urno:er Ratio > 15,*,,, -,*,,,= 5 times

=F.D?

or the year 2@@F 1 @D(in crore) S W =@@ S 22.>CB

FF.DG

2@

or the year 2@@D 1 @> (in crore) S W =@@ S 22.2DB

D>.F>

2F.?D

or the year 2@@> 1 =@ (in crore) S W =@@ S 22.EE B

=2E.?=

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2?.GF

or the year 2@=@ 1 == (in crore) S W =@@ S 2@.@E B

=2D.=F

E2.G2

or the year 2@== 1 =2 (in crore) S W =@@ S 2?.@? B

=ED.C2

E=.?C

or the year 2@=2 1 =E (in crore) S W =@@ S 2D.GG B

=C>.DG

E2.?For the year 2@=E 1 =C (in crore) S W =@@ S [email protected] B

=?G.=>

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WORKING CAPITAL T RNO!ER RATIO

Year$

S !n 3 )an)e0 This ratio measures the margin of profit a aila0le on sales. o ideal standard is fi:ed for this

ratio+ 0ut it should 0e ade!uate enough to meet not only operating e:penses 0ut also to pro ide for depreciation+

interest on loans+ di idends and creation of reser e.

Co##ent$0

$s the figure clearly states that the re enue generated from sales is increasing 0ut the profit is going do"n 0y

fe" digits 0ecause of increase in manufacturing acti ities. #ut still the ratio of the current year is !uite

significant 0ut still the company need to find the reason for this continuous decrease in the ratio "hich might 0e

pro0lematic in near future.

55


57/64

Return on In:e$t#ent ;ROI

Working Capital in Yamaha

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