Kota

Kota Fibre, Ltd. was nominateed in 1962 as a small society that utilizes lovesome material and advancing technology to supply synthetic character reference yarn to domestic textile mills; this yarn was use to weave vibrant colored saris. With the ever- increment female population of five hundred million women, the deal for saris accounted for over 12 billion special K of fabric, which translates to higher demand and stable sales growth for company. Kota Fibres enjoyed growing sales, entirely one of the constraint that limit its capacity to embroider and increase its operation cost was seasonal demand for nylon textiles. The seasonal demand for nylon yarn would peak in mid-summer to early fall. The companys current financial position is dampen to good. In the form 2000,sales had grown at an annual rate of 18% and their projected sales also were projected to reach to INR 90.9 million. though they seem to be a profitable organization but at later phase of business they were pulled into the situation which was characterized by declining profit, increasing interest expenses, high dependence on give to meet seasonal demand, and declining cash flow. The yarn plant operates at peak capacity for two months of the year and a moderate levels there after which they would hire and layoffs when the season slowed down.



Additionally callable to short cash crunch they were unable to pay short-term debt, maintain timely delivery system and maintain seasonal line of credit with All-India depose and Trust company. The bank had deference of maintaining 30-day clean up of the loan, however, Kota was unable to repay the required amount. This causes the bank to deny any kind of seasonal credit and demand reasonable financial plan for the company.

Forecast 2001: Based on the forecast, it does not show a positive performance for the company, we found the Kota is suffering from cash shortage. The forecast has shown that profit of INR 1335848 in the year 2001which accounts to be only 1% of the forecasted gross sales is far-off below...If you want to get a full essay, order it on our website: Orderessay



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