Introduction:Kota Fibres, Ltd. is one of India textile fictitious character manufactures that supply nylon fiber to domestic textile mills which make saris, the traditional women?s dress. lining demand of India?s female population of 500 million, the saris effort consumes 12 billion yards of fabric, and the market persist ins a steady 15% annual growth. Kota Fibres has been run as a family business by Ms. Pundir and her family since 1962. In the year of 2000, Kota Fibres eruptperform market average by growing sales revenue of 18% and achieved INR 2.6 million in net profit.
Despite healthy growth of Kota Fibres? revenue, Pundir found come to the fore that the company was facing a serious property return issue. The company was virtually stopped operation due to other overdraw from its bank account. Pundir must get additional loans from desire to keep the company operating. In this paper, we will assist Pundir to general anatomy out the issues Kota Fibres is confronting, and to workout a plan to deal with the issues by cutting inventories, reducing account payable, gaining new sales revenue, and the well-nigh important of all, to work out a reasonable money receipts and disbursements schedule and balance sheet to convince the bank to grand additional loan.
Problem Statement:The biggest issue is that Kota Fibres is out of cash on early January. Ms.
Pundir has questioned her bookkeeper and us how could a advantageous and growing firm face such critical cash flow issue. We need to look into several areas on natures of how nylon fiber business operates in India. The yarn manufactures like Kota Fibres are in very upstream in India?s textile fabrication and is the essential financial source to issue quotations to keep downstream businesses running. Kota Fibres has to keep an average of 45 days credit for its customers in order to...
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