Working capital management; Indian petrochemicals corporation limited, Baroda

Abstract

IPCL was established in L949 by Government of India with the ultimate objective of creating a very sound base for the manufacture of major petrochemicals of international standard in the country. At present it is producing various types of polymers, fibres & fibre intermediates, chemicals , catalyst and adsorbents etc. It has won the “Award of Honour’ from National Safety Council, USA 8 times for excellent track record on safety in Vadodara complex. Prior to 1990, IFCL had @ monopoly in the petrochemical industry. From 1990 onwards it started losing its monopoly, facing tough competition from RELIANCE, CHEMPLAST, SHRIRAM & NOCIL in its various product lines. The study was undertaken to review working capital management of IPCL, to find out the loopholes and give the recommendations. A thorough analysis was done by finding out pattern of various types of ratios and turnovers i.@. current ratio, quick ratio, debtor turn aver ratio, creditor turn over ratio & inventory turn over ratio over a period of last §& years. From 1990 onwards, due to intense competition & inefficiency, the working capital needs has increased very sharply. The most glaring aspect is a large increase in the proportion , of finished goods (F.G.)} inventory in total current assets which shows the inability of IFCL in disposing of its F.G. Besides the inventory planning seems to be much more wayward in various types of its inventory.