A Study On Cash Management On

A STUDY ON CASH MANAGEMENT ON
THE FLAVORS INDIA (P) LTD,PUDUCHERRY

SUMMER PROJECT REPORT
Submitted by
J.SAKTHIPRIYA
REGISTER NO: 27348335
Under the Guidance of
MRS.R.HEMALATHA M.B.A.
Faculty, Department Of Management Studies
In partial fulfilment for the award of the degree
Of
MASTER OF BUSINESS ADMINISTRATION
DEPARTMENT OF MANAGEMENT STUDIES

SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE
PONDICHERRY UNIVERSITY
PUDUCHERRY, INDIA
SEPTEMBER 2007
SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE

PONDICHERRY UNIVERSITY
DEPARTMENT OF MANAGEMENT STUDIES
BONAFIDE CERTIFICATE
This to certify that the project work entitle A STUDY ON CASH
MANAGEMENT ON THE FLAVORS INDIA (P) LTD is a bonafide work

done by J.SAKTHIPRIYA [REGISTER NO: 27348335] in partial fulfilment
of the requirement for the award of Master Of Business Administration by Pondicherry
University during the academic year 2007-2008.
GUIDE
HEAD OF THE DEPARTMENT
Submitted for the viva voice Examination held on

EXTERNAL EXAMINER
1
2
TABLE OF CONTENTS
CHAPTER
TITLE
PAGE NO
ACKNOWLEDGEMENT
ABSTRACT
LIST OF TABLE
LIST OF CHART
INTRODUCTION
1.1 Introduction of the Study
1.2 Profile of the Company
II
REVIEW OF LITERATURE
III
OBJECTIVE OF THE STUDY
29
IV
RESEARCH METHODOLOGY
30
DATA ANALYSIS AND INTERPRETATION
31
VI
FINDINGS OF THE STUDY

SUGGESTION & RECOMMENDATION
54
VII
CONCLUSION
56
VIII
LIMITATION & SCOPE OF THE STUDY

ANNEXURE
BIBLOGRAPHIC
57
ACKNOWLEDGEMENT
I whole heatedly thank my respected chairman Mr. N. KESAVAN, vice
chairman Mr. SUGUMARAN, and beloved M.D Mr. DHANASEKARAN
who helped us in all our endeavors and for his blessings on us to make this project a
successful one.
I would like to express my profound gratitude to all those who have been
instrumental on the preparation of the project report I wish to place on deep sense of
gratitude to our principal Mr. V.S.K. VENKATACHALAPATHY the keen
interest and affection towards as through out the course.
I convey my sincere thanks to prof. Mr. S. JAYAKUMAR HOD,
Department Of Management Studies for his interest towards us throughout the course.
I am sincere thanks to my internal guide MRS. R. HEMALATHA M.B.A.
Department Of Management Studies for her valuable guidance and inspiration extended
all along the project.
I am grateful to my company guide Mr. MURUGAVEL, Accounting
Incharge for his valuable guidance and inspiration extended all along the project.
I also wish my sincere thank to all the teacher and non-teaching staff of
department of MBA, Sri Manakula Vinayagar Engineering College, without whose
cooperation this project would not be a success.
Lastly, I wish to thank my parents and friends who supported and helped me in
completion of this project.
ABSTRACT
The project is titled as A STUDY ON CASH MANAGEMENT ON THE

FLAVORS INDIA (P) LTD, the aim is to analyses cash position of the company by
using the financial tool and techniques.
These project is mainly concentrated on cash management is an important factor
and it is one of the component of working capital cash can be regarded as a life blood of
corporate. Cash either a hand or at bank is the most liquidity of all current assets. The
cash and bank balance indicates high liquidity position of a company.
LIST OF TABLE
TABLE NO
LIST OF TABLE
PAGE NO
2.1
CASH FLOW STATEMENT
16
5.1
CASH FLOW STATEMENT(2001-02)
32
5.2
CASH FLOW STATEMENT(2002-03)
33
5.3
CASH FLOW STATEMENT (2003-04)
34
5.4
35
5.5
36
5.6
CASH FLOW STATEMENT
37
5.7
CASH BUDGET
39
5.8
NET WORKING RATIO
42
5.9
CURRENT RATIO
44
5.1
QUICK TEST RATIO
46
5.11
INVENTORY TURNOVER RATIO
48
5.12
DEBTORS TURNOVER RATIO
50
5.13
CREDITORS TURNOVER RATIO
52
LIST OF CHART
TABLE NO
LIST OF TABLE
PAGE NO
5.1
CASH BUDGET
40
5.2
NET WORKING RATIO
43
5.3
CURRENT RATIO
45
5.4
QUICK TEST RATIO
47
5.5
49
5.7
DEBTORS TURNOVER RATIO
51
5.8
53
BIBLIOGRAPHY
Khan M.Y and P.K. Jani

Financial Management, New Delhi, Tata Mc Graw Hill, 1992.
Dr.S.N. Maheshwari, Principles of Management Accounting.
Prasanna Chandra, Financial Management Theory and Practice
Websites:
www.flavorindia.com.
CHAPTER - I
INTRODUCTION
1.1 INTRODUCTION FOR THE STUDY:
This study aims in knowing the functions of the financial department of
The Flavors India (p) ltd.
To know about the general functioning of the company.
To study the practical work and collect information from the concern.
To compare the theoretical knowledge gained with practice in real life commercial
situation.
To analysis the balance sheet and profit & loss account of the year.
To know the financial position of the company.
1.2 PROFILE OF THE COMPANY
The Flavors India (p) Ltd is a well established and systematically

organized company engaged in the manufacture of food flavours, food colours
and caramel. The genesis of flavors India dates back to 1975 after an in-depth and
intensive market survey to cater to the needs of high demand areas
The promoter late shri R.Bramanandam and his team had the business
acumen, professional background obtained after serving a long stint in flavors
industry, sound business ethics, skills and had brought this to bear in the
discipline and systems required to maintain and sustain quality in such a mass
production.
The Flavors India (p) Ltd operates from puducherry (India) previously a
French colony and now the union territory capital, about 120kms from Chennai
airport, south India. Garnering and utilizing the skilled low-cost manpower
strength that puducherry offer, flavors India has staff strength of 100 personnel
headed by the board of directors, who control the different divisions of the
organization.
1.2.1Quality:
For the Flavors India with 30 years of standing, quality is the day to
success. Our plant has fully equipped quality control laboratories where the raw
materials, in process and finished products are rigorously tested for their quality
standards.
Our qualified manufacturing and technical personnel deal with material
handling, shop floor and production activities. We maintain stringent quality
control measure and hygienic condition as per the specification of Bureau of India
Standards. The research and development wing devotes its fulltime towards better
product development, cost .effective methods and new products.
The Flavors India (p) Ltd is an ISO 9001_2000 certified company
ensuring the quality systems practiced .with a commitment towards safe
environment we have development an efficient Effluent Treatment Plant fulfilling

the pollution control Board needs.
1.2.2 CUSTOMER BASE:
Our motto being customer is our Boss a good amount of time and skill is
put in and translated into action by formulating new products as demands by the
customers.
Our products command its reputation in the market for the past 3decades
and more in leading food processing companies throughout the country and
overseas.
Our customer service is always prompt and sure as the sun rises and sun set
1.2.3 AWARDS:
The Flavors India (p) Ltd believes in the concepts of the company as a
family and working together towards the future with various welfare
programmes for the employees.
It was a moment of pride when government of puducherry bestowed on us
thrice the Good Industries Relations Award for the consecutive years 2001,
2002and 2003.
We promise to march towards the future with the same zeal and motive.
1.2.4 OUR PRODUCTS
TOP SOFT DRINK CONCENTRATES,

TOP MIST,
TOP LIQUID PRESERVATIVE,
TOP CONCENTRATED OILS,
TOP FOOD COLOURS WITH ISI MARK,
TOP FLAVORS,
TOP DRY MIX POWDER FLAVORS,
TOP LIQUOR FLAVORS,
TOP CARAMEL WITH ISI MARK,
TOP CULINARY FLAVORS,
TOP FLAVORS,
TOP DRY MIX POWDER FLAVORS,
TOP ENCAPSULATED FLAVORS,
TOP FLAVORS,
TOP DUST-ON POWDER FLAVORS,
TOP FLAVORS.
1.2.5 ORGANISATIONAL CHART
MANAGING DIRECTOR
FACTORY INCHARGE
PRODUCTION
DEPARTMENT
QUALITY
CONTROL
FINANCE
DEPARTMENT
INCOME
TAX
MARKETING
DEPARTMENT
ACCOUNTS
SENIOR
ASSISTANT
JUNIOR
ASSISTANT
1.2.6 FINANCE DEPARTMENT:
The accounts department of The Flavors India (p) ltd functions so as to keep as a
system record of the daily events of the business. It maintain records of all financial
transaction to find out the profit and loss according during the year and to financial status
of the company, which helps them to take quick and correct policy decision.
1.2.7 OBJECTIVE OF FINANCE DEPARTMENT:
To determine the financial status of the company balance sheet, profit and loss
accounts.
To help the management to analyses the financial standard of the company so
that they can take quick correct decision.
To provide useful information to management.
Analysis the cash flow of the company it will useful for new ventures.
1.2.8 SYSTEM OF ACCOUNTING:
All the transaction in the company is enter into to the system. There is more
lapse of time in the company to do the other work. The daily transaction of the company
is registered under the computer. The invoice, Quotation etc are sending through the
system.
1.2.9 FUNCTING FINANCE DEPARTMENT OF THE FIRM
The work performed by the account department has follows.
1. Preparation of cash and bank vouchers ( both debtors and creditors)
2. Maintaining cash and bank book.
3. Bank reconciliation statement.
4. Preparing purchasing journal, salaries, wages etc.
5. Preparing debtors and creditors notes.
6. Posting journal to journal books.
7. Maintaining general ledger accounts.
8. Maintaining subsidiary books.
9. Preparing trial balance, profit and loss account and balance sheet.
10. Filling of return of income tax both company and employers to income tax
departments
CHAPTER-II
REVIEW OF LITERATURE
2.1 CASH MANAGEMENT:

Cash management is one of the key areas of working capital management. A part from
the fact that it is the most liquid current assets, cash is the common denomination to which all
current assets can be reduced because the other major liquid assets that are receivables and
inventory get eventually converted into cash.
2.2 MOTICES FOR HOLDING CASH:
The term cash with reference to cash management is used in the two senses.
2.2.1 NARROW SENSES:
To cover currency and generally accepted equivalents of cash, such as cheque, drafts and
demand deposits in bank.
2.2.2 BROAD SENSES:
It includes near cash, assets such as marketable securities and time deposits in bank.
There are four primary motives for maintaining cash balances.
Transaction motives.
Precautionary motives.
Speculative motives.
Compensating motives.
A, TRANSACTION MOTIVES:
An important reason for maintain cash balance is the transaction motive. This refers to
the holding of cash to meet routine cash requirements to finance the transactions which a firm
carries on the ordinary course of business.
B, PRECAUTIONARY MOTIVES:
It will clearly determine the cash inflows and outflows in the ordinary course of business,
a firm may have to pay cash for purposes which cannot be predicted or anticipated.
C, SEPCULATIVE MOTIVE:
It refers to the desire of a firm to take advantage of opportunities which present
themselves at unexpected moments and which are typically outside the normal course of
business.
D, COMPENSATIVE MOTIVE:
Bank provides a variety of service of business firms, such as clearance of cheque, of
credit information, transfer of funds.
2.3 OBJECTIVE OF CASH MANAGEMENT:
The basic objective of cash management is two-fold.
To meet the cash disbursement needs (payment schedule) and.
To minimize funds committed to cash balance.
Meet payments schedule:

Firms have to make payments of cash on a continuous and regular basis to suppliers of
goods, employees. At the same time, there is a constant inflow of cash through collections from
debtors.
Minimizing funds committed to cash balance:
In minimizing the cash balance
2.4 FACTORS DETERMING CASH MEEDS:
The factors that determine the required cash balance are.
A SYNCHRONIZATION OF CASH FLOWS.
The need for maintaining cash balance arises from the non- synchronization of the
inflows and outflows of cash. If the receipts and payments pf cash perfectly coincide or balance
each other, there would be no need for cash balances. The first consideration in determining the
cash need is, therefore, the extent of non synchronization of cash receipts and disbursements.
For the purpose, the inflows and outflows have to be forecast over a period of time, depending
upon the planning horizon which is typically a one-year period with each of the 12months
B, SHORT COST.
Another general factor to be considered in determining cash needs is the cost associated
with a shortfall in the cash needs. The cash forecast presented in the cash budget would reveal
periods of cash shortages. In addition, there, may be some unexpected shortfall. Every shortage
of cash whether expected or unexpected- involves a cast depending upon the severity, duration
and frequency of the shortfall and how the shortage is covered.
TRANSACTION COSTS:
Transaction costs are associated with raising cash to tide over the shortage. This is
usually the brokerage incurred in relation to the sale of some short-tern near-cash assets such as
marketable securities.
BORROWING COSTS:
Borrowing costs associated with borrowing to cover the shortage. These include items
such as interest on loan, commitment charge and other expense relating to the loan.
C LOST OF CASH DISCOUNT:
Lost of cash-discount a substantial loss because of a temporary shortage of cash.
D, COST ASSOCIATED WITH DETERIORATION OF THE CREDIT RATING:
Cost associated with deterioration of the credit rating which is reflected in shortage of
cash charges on loans, stoppage of supplies, demands for cash payment, refusal to sell, loss of
image and the attendant decline in sales and profits.
E, PENALTY RATES:
Penalty rates by banks to meet a shortfall in compensating balances.
F, EXCESS CASH BALANCE COSTS:
The cost of having excessively large cash balances is known as the excess cash balances
cost. If large funds are idle, the implication is that the firm has missed opportunities to invest
those funds and has thereby lost interest which it would otherwise have earned. This loss of
interest is primarily the excess cost.
G, PROCUREMENT AND MANAGEMENT:
These are the costs associated with establishing and operating cash management staff and
activities. They are generally fixed and are mainly accounted for but salary, shortage, handling of
securities and so on.
H, UNCERTAINTY AND CASH MANAGEMENT:
Finally, the impact of uncertainty on cash management strategy us also relevant as cash flows
cannot be predicted with complete accuracy. The first requirement is a precautionary cushion to
cope with irregularities in cash flows, unexpected delays in collections and disbursements,
defaults and unexpected cash needs.
The impact of uncertainty on cash management can, however, is mitigated through.
Improved forecasting of tax payments, capital expenditure, dividends and so on.
Increased ability to borrow through overdraft facility.
2.5 DETERMINE CASH NEED:

There are two approaches to derive on optimal cash balances, namely
Minimizing cost cash model,
Cash budget.
2.5.1 CASH MANAGEMENT:

The following are the analytical model for cash management
Baumol model
Miller-orr model
Orglers model.
A, BAUMOL MODEL:
The purpose of this model is to determine the minimizing cost amount of cash that a
financial manager can obtain by converting securities to cash.
They are two elements
Conversion cost
Opportunity cost
CONVERSION COST:
Conversion costs are incurred each time marketable securities are converted into cash.
Total conversion cost per period = Tb\c

Where,
b = cost per conversion.
T = total transaction cash need for the period.
C = value of marketable security sold to each conversion.
OPPORTUNITY COST:
Opportunity cost is derived from the cost\forfeited interest rate (i) that could have been
earned on the investment of cash balance.
I (c\2)
Where,
c\2= the average cash balance
(i)=interest rate that could have been earned.
i(c\2)+(Tb\c)
B, MILLER- ORR MODEL:
To determine the optimum cash balance level which minimizes the cost of cash
management.
C=bE (n)\t+iE (M)

Where,
b = the fixed cost per conversion.

E (M) = the expected average daily cash balance.
E (N) = the expected number of conversion.
t = the number of days in the period.
(i) = the lost opportunity cost.
C = total cash management costs
C, ORGLERS MODEL:
According this model, an optimal cash management strategy can be determined through
the use of a multiple linear programme model. The construction of the model comprises three
sections
Selection of the appropriate planning horizon.
Selection of the appropriate decision variables and
Formulation of the cash management strategy itself.

The advantage of linear programming model is that it enables coordinates of the optimal
cash management strategy with the other operations of the firm such as production and with less
restriction on working capital balances.
The model basically uses one year planning horizon with twelve monthly periods because
of its simplicity. It has four basic sets of decisions variables which influence cash management of
a firm and which must be incorporated into the linear programming model of the firm. These are
Payment schedules.
Short-term financing.
Purchase and sale of marketable securities and
Cash balance.
The formulation of the model requires the financial managers first specify an objective
function and then specify a set of constraints.

Orglers objectives function is to minimize the horizon value to the net revenues from the
cash budget over the entire planning period; using the assumption that all revenues generated are
immediately re-invested and that any cost is immediately financed, the objective function
represented the value of the net income from the cash budget at the horizon by adding the net
returns over the planning period. Thus, the objective function recognizes each operation of the
firm that generated cash inflow or cash outflows as adding pr subtracting profit opportunities for
the firm from its cash management operations. In the objective function, decision variables
which cause inflows, such as payments on receivables, have positive coefficient.
2.6 TECHNIQUES OR TOOLS OF CASH MANAGEMENT ANALYSIS:

The most important techniques of analysis and interpretation of cash management are us follows.
CASH FLOW STATEMENT.
CASH BUDGETING
RATIO ANALYSIS.
1 CASH FLOW STATEMENT:
A cash flow statement is used in conjunction with the other financial statements, provides
information that enables users to evaluate the change in net assets of an enterprise, its financial
structure (including its liquidity and solvency), and its ability to affect the amounts and timing
of cash flow in order to adapt to changing circumstance and
opportunities. Cash flow
information is useful in assessing the ability of the enterprises to generate cash and cashequivalents and enables users to develop models to assess and compare the present value of the
future cash flows of different enterprises. It also enhances the comparability of the reporting of
operating performance by different because it eliminates the effects of using different accounting
treatments for the same transactions and events
1.1 MEANING OF CASH STATEMENT:
A cash flow statement is a statement depicting change in cash position from one period to
another. A proper planning of the cash resource will enables the management to have cash
available whenever needed and put it to some profitable or productive use in case there is surplus
cash available.
1.2 UTILITY OF CASH FLOW ANALYSIS:
A cash flow statement is useful for short-term planning. A business enterprise needs
sufficient cash to meet its various obligations in the near future such as payment for purchase of
fixed assets, payment of debts maturing in the near future, expenses of the business etc. a cash
flow analysis is an important financial tool for the management. Its chief advantage is as follows.
Helps in efficient cash management.
Helps in internal financial management.
Discloses the movement of cash.
Discloses success or failure of cash.
1.3 LIMITATION OF CASH FLOW STATEMENT:
Cash flow analysis is a useful tool of financial analysis. However, it has its own
limitation.
Cash flow statement cannot be equated with the income statement.
The cash balance as disclosed by the cash flow statement may not represent the real
liquid position of the business.
Cash flow statement cannot replace the income statement or the fund flow statement.
CASH FLOW STATEMENT
TABLE NO 2.1
PARTICULARS
OPENING BALANCES
Cash in Hand
xxxxxx
SOURCE OF CASH
Income Tax
Sale of Fixed Assets
CASH FROM OPERATION
Net Profit
ADD Increase in Other Liabilities
Decrease in Inventories
Xxxx
Xxxx
Xxxxx
LESS Decrease in Sundry Creditors

Increase in Sundry Debtors
Xxxx
Xxxx
TOTAL CASH AVAILABLE

APPLICATION OF CASH
Loans & Advance
Secured Loan
Unsecured Loan
Central Excise
Xxxxx
xxxx
Xxxxx
Xxxxx
Xxxxx
Xxxxx
Xxxxx
Xxxxx
CLOSING BALANCE
Cash in Hand
Xxxxx
TOTAL APPLICATION
AVAILABLE
Xxxx
2 RATIO ANALYSES:
An analysis of financial statements based on ratios is known as ratio analysis. Ratio
analysis involves the process of computing determining and resenting the relationship of items or
group of items of financial statements. Ratio analysis is a widely used tool of financial
analysis. It can be used to compare the risk and return relationship of firms of different sizes. It is
defined as the systematic use of ratio to interpret the financial statements so that the strengths
and weaknesses of a firm as well as its historical performance and current financial condition can
be determined. The term ratio refers to the numerical or quantitative relationship between two
items.
2.1 ADVANTAGE OF RATIO ANALYSIS:
The advantages of ratio analysis are as follows.
1.
Forecasting.
2.
Managerial control.
3.
Facilitates communications.
4.
Measuring efficiency.
5.
Facilitating investment decisions
6.
Useful in measuring financial solvency.
7.
Inter firm comparisons
2.2 STEPS IN RATIO ANALYSIS:
Selection of relevant information.
Comparison of calculated ratios.
Interpretation and reporting.
2.3 LIMITATION OF RATIO ANALYSIS:
The analyst should have a through knowledge and experience about the firm and
industry.
Ratios are not an end in themselves but they are means to achieve a particular purpose or
end.
Ratios are interred- related and therefore a single ratio cannot convey meaning. It has to
be interpreted with reference to other related to draw meaningful conclusions.
Ratio will be meaningful if they can be compared with standards or norms.
Ratio analysis will be fruitful only if the conclusions are conveyed quickly to the
management.
Ratio analysis becomes redundant during periods of heavy price
Fluctuations.
2.4 NET WORKING CAPITAL:

MEANING: This ratio establishes the relationship between cost of sales and working capital.
SIGNIFICANCE:
Working capital measures the effective utilization of working capital. It also
measures the smooth running of business. Net working capital represents the excess of
current assets over current liabilities. The term current assets refers to assets which in the
normal course of business get converted into cash without dimunition in value over a
short period ,usually not exceeding one year or length of operation cycle whichever is
more. The greater is the amount of net working capital, the greater is the liquidity of the
firm, accordingly net working capital is a measure of liquidity, and inadequate working
capital is the first sign of financial problem for a firm.
COMPONENTS:
The components of working capital ratio are current assets and current liabilities.
FORMULA:
This ratio is calculated with the help of the following formula.
Net Work capital = current assets - Current liabilities
2.5 CURRENT RATIO:

MEANINGS:
This ratio expresses the relationship between current assets and current liabilities.
SIGNIFICANCE:
The liquidity position of any company is easily measured with the help of current ratio.
The current ratio is the ratio of total current assets to total current liabilities. Its
calculated by divided current assets by current liabilities.
The current assets of a firm, as already stated, represent that asset which can be, in
the ordinary course of business, converted into cash within a short period of time
normally not exceeding one year.
COMPONENTS:
The components of currents assets of the firm are cash at bank, deposits, sundry debtors
and closing stock. The components of current liabilities are sundry creditors and provision for
Income Tax.
FORMULA:
Current ratio
Current assets
Current Liabilities
2.6 DEBTORS TURNOVER RATIO:
MEANINGS:
This ratio determines the debtors constitute of current assets and therefore the quality of
debtors to great extent determines a firms liquidity.
SIGNIFICANCE:
This ratio helps in cash budgeting since the flow of cash from customers can be worked
out on the basis of sales. It is determine by dividing the net credit sales by average debtors
outstanding during the year. Thus, net credit sales consist of gross credit sales minus returns, if
any, from customers average debtors is the simple average of debtors (including bills
receivables) at the beginning and at the end of the year
COMPONENTS:
The components of Debtors Turnover Ratio are the Credit Sales and the Average Accounts
Receivable.
FORMULA:
Debtors turnover ratio =
Credit sales
Average Accounts Receivables
2.7 STOCK TURNOVER RATIO:

MEANINGS:
This ratio indicates whether investment in inventory is efficiently used or not. It therefore,
explains whether investments in inventories is within proper limits
B SIGNIFICANCE:
The ratio is measure to discover the possible trouble in the form of overstocking
or overvaluation. The stock position is known as the graveyard of the balance sheet It is
computed by divided the cost of good sold by the average inventory thus, the cost of
good sold means sales minus gross profit. The average inventory refers to the simple
average of the opening and closing inventory. The ratio indicated how fast inventory is
sold.
COMPONENTS:
The component of Stock Turnover Ratio is determined by the Cost of Goods Sold during the
Year and the Average Inventory.
FORMULA:
Stock Turnover Ratio = Cost of Goods Sold During the Year

Average Inventory
2.8 LIQUID RATIO:
MEANING:
The ratio expresses the relationship between liquid assets and current liabilities of the
firm. It is otherwise known as absolute liquid ratio or quick ratio.
SIGNIFICANCE:
It is a measure of judging the immediate ability of the firm to pay off its current
obligations. The quick test ratio is the ratio between quick current ratio and current
liabilities and is calculated by dividing the quick assets by the current liabilities.
The term quick assets refers to current assets which can be converted into cash
immediately or at a short notice without diminution of value
COMPONENTS:
All the components of current assets are included except stock and prepaid expenses and
the various components of currents liabilities are same as the items included in current ratio.
FORMULA:
Liquid ratio can be calculated as follows.
Liquid Ratio =
Liquid assets
Current Liabilities
Liquid assets - (Stock + Prepaid Expenses)

2.9 CREDITORS TURNOVER RATIO:
It indicates the speed with which the payment for credit purchase are made to the
creditors
A low turnover ratio reflects liberal credit terms granted by suppliers, while a high ratio
shows that accounts are to be settled rapidly. The creditors turnover ratio is an important tool of
analysis as a firm can reduce its requirement of current assets by relying on suppliers credit. The
extent to which trade creditors are willing to wait for payment can be approximated by the
creditors turnover ratio.
It is a ratio between net credit purchase and the average amount of creditors
outstanding during the year. A low turnover ratio reflects liberal credit terms granted by
suppliers, while a high ratio shows that account are to be settled rapidly. The creditors
turnover ratio is an important tool of analysis as a firm can reduce its requirement of
current assets by relying on suppliers credit.
Creditors turnover ratio =
credit purchase
Average account payable.
3 CASH BUDGETING:
A firm is well advised to hold adequate cash balance but should avoid excessive
balances. The firm has, therefore, to assess its need for cash properly. The cash budget is
probably the most important tool in cash management. It is device to help a firm to plan and
control the use of cash. It is a statement showing the estimated cash inflows and cash outflows
over the planning horizon. In the other words, the net cash position of a firm as it moves from
one budgeting sub period to another is highlighted by the cash budget.
The various purposes of cash budgets are
To coordinates the timings of cash needs. It identifies the periods when there might either
be as shortage of cash or an abnormally large cash requirement.
It pinpoints the periods when there is likely to be excess cash.
It enables a firm which has sufficient cash to take advantage of cash discounts on its
accounts payable, to pay help obligation when due, to formulate dividend policy, to plan
financing of capital expansion and to help unify the production schedule during the year so that
the firm can smooth out costly seasonal fluctuations.
It helps to arrange needs funds on the most favorable terms and percents the
accumulation for excess funds. With adequate time to study his needs, the finance manage can
select the best alternative avenues of financing, the management would be forced to accept the
best terms offered in a difficult situation. These terms will not be as favorable, since the lack of
planning indicates to the lender, that there is an organizational deficiency. The firm, therefore,
represents a high risk.
Cash budgeting or short-term cash forecasting is the principal tool of cash management.
Estimating cash requirement
Planning short-term financing
Scheduling payments in connection with capital expenditure projects
Planning purchase of materials
Developing credit policies and
Checking the accuracy of long term forecasting
Firms use multiple short-term forecasts of varying length and detail, suited to meet different
needs. The commonly used design for short term cash forecasts are
One year divided into quarters or monthly.
One quarter divided into months and
One month divided into weeks.
3. A RECEIPTS AND PAYMENTS METHODS:

The cash budget prepared under this method shows the timing and magnitude of expected
cash receipts and payments over the forecast period. It includes all expected receipts and
payments irrespective of how they are classified in accounting.
3. B LONG TERM CASH FORECASTING:
Long-term cash forecasting are generally prepared for a period ranging from two to five
years and serve to provide a broad brush picture of a firms financing needs and availability of
invertible surplus in future. Such forecasts are helpful in planning capital investment methods
outlays and long-term financing
3. C REPORTS FOR CONTROL:
Cash reports, providing a comparison of actual developments with forecast figures, are
helpful in controlling and revising cash forecasts on a continual basis. Several types of cash
reports may be prepared the important ones are.
DAILY CASH REPORT:
The daily cash report shows the opening balance, receipts, payments and the closing
balance on a daily basis.
DAILY TREASURY REPORT:
An amplification of the daily cash report, the daily treasury report provides a
comprehensive picture of changes in cash, marketable securities, debtors and creditors.
MONTHLY CASH REPORT:

This report shows the actual cash receipts and payments on a monthly basis. The actual
are compared with the budgeted figures and variances calculated.
3. D CASH COLLECTION AND DISBURSEMENT:
The cash balance shown by a firm on its books is called the book, or ledger, balance
whereas the balance shown in its bank account is called the available, or collected, balance. The
difference between the available balance and the ledger balance is referred to as the float.
There are two kinds of float disbursement float and collection float, cheque issued by a firm
create disbursement float.
The net float is the sum of disbursement float and collection float. It is simply the difference
between the firms available balance and its book balance. If the net float is positive (negative) it
means that the available balance is greater (lesser) than the book balance.
2.7 BANK ORGANISATION

Prior to the project, the billing process was distributed across different product processors
like (those handling cross border transfer, non resident yen related, mass payments, through post
office etc). Wipros solution aims to implement a centralized billing system that maximizes
automation.
The transaction details would be pushed from the product processors to the billing system
as an end of day offline process, which will then calculate the charges based on the transaction
type and generate accounting entries. At the end of the billing cycle, customer invoices would be
generated by the system and the customer account debits will take place in the bank host.
Customer information and charge information (fixed, transaction and event based) are
maintained in the billing system. For transactions that require immediate charge calculation, the
billing system's pricing engine would provide the charges in real time.
2.8 CASH MANAGEMENT SYSTEM FOR A NATIONALIZED BANK

MC De COM proposed a solution to facilitate information flow between various entities
of the Cash Management system. This system enabled a complete Electronic Messaging Solution
for their Branch Offices across the country. This project facilitated the Bank to exchange
information between its CCC (Cheque Collection Centre), FCC (Fund Collection Centre) and
FMC (Fund Management Centre) seamlessly without any delay.
The Bank has its Corporate Office in Bangalore and International transaction center at
Mumbai. The realization of cheque or any cash transactions required a couple of days. This delay
leads to a situation where the Bank was not in a position to get at its head office the transaction
happened at each of its branches or extension counters at.
The head office and the International transaction office faced numerous problems in
terms of managing the cash at various locations. The customers also could not really track the
transaction especially if they are more than one transaction at different places. The Bank thought
of an ambitious program of offering Cash Management Services to its customers across the
country The Customer deposit their cheque at various Cheque Collection Centers (CCC) across
the country and this information is processed and consolidated at the Fund Management Centre
(FMC) located at Mumbai. The FMC will further communicate the processed information to
various Fund Collection Centre (FCC). The Customers can contact directly the Fund Collection
Centre (FCC) to obtain updated information about their funds position as required
CHAPTER-III
OBJECTIVE OF THE STUDY
To determine the overall performance of cash in the concern.
To know the credit worthiness of the concern.
To assess the liquidity and short term solvency position of the firm.
firm.
To understand the relationship maintained with the trade creditors and the debtors of the
To identify the basic forces influencing the cash management of the firm.
CHAPTER-IV
RESEARCH METHODOLOGY
4.1 RESEARCH DESIGN:

The research approach used for the study is descriptive. The form of the study is on the
financial statement analysis in general and specific to the cash position.
4.2 DATA COLLECTION
PRIMARY DATA:
The primary data is collected from the personnel interview.
SECONDARY DATA:
The study has been made using secondary data, which are obtained from annual reports
and statements of accounts. The study is period for the annual reports and statements of accounts
extended form the year 2001-02 to 2005-06.
4.3 ANALYTICAL TOOLS FOR THE STUDY:
The researcher for the purpose of analysis and interpretation of the following tools have been
need
CASH FLOW STATEMENT
RATIO ANALYSIS
CASH BUDGETING
4.4 PERIOD OF STUDY:

The study includes 5 years (2001-02 to 2005-06) financial rates of the firms. The study was
conducted for 1 months period.
CHAPTER-V
DATA ANALYSIS &INTERPRETATION
5.1 CASH FLOW STATEMENT:

A cash flow statement is used in conjunction with the other financial statements,
provides information that enables users to evaluate the change in net assets of an
enterprise, its financial structure (including its liquidity and solvency), and its ability to
affect the amounts and timing of cash flow in order to adapt to changing circumstance
and
opportunities. Cash flow information is useful in assessing the ability of the
enterprises to generate cash and cash-equivalents and enables users to develop models to
assess and compare the present value of the future cash flows of different enterprises. It
also enhances the comparability of the reporting of operating performance by different
because it eliminates the effects of using different accounting treatments for the same
transactions and events.

TABLE NO: 5.1
PARTICULARS
31-03-2001
31-03-2002
OPENING BALANCES
Cash in Hand
61738
SOURCE OF CASH
Central Excise
2151
779
1372
Secured Loan
3363880
3406134
42254
247341
206964
40377
3363458
3747384
383926
Increase in Other Liabilities
300217
300466
249
Less Increase in Inventories
7310787
7466168
155381
2154425
2473039
318614
TOTALCASHAVAILABLE
16742259
17600934
55921
Purchases of Fixed Assets
744630
749327
4697
Loans & Advance
162581
194320
31739
Income Tax
77494
84556
7062
CASHFROMOPERATION
Net Profit
ADD: Increase in Sundry
Creditors
-49443
APPLICATION OF CASH
CLOSING BALANCE
Cash in Hand
TOTALAPPLICATION
AVAILABLE
12423
984705
1028203

TABLE NO-5.2
55921
PARTICULARS
31-03-2002
31-03-2003
OPENING BALANCES
Cash in Hand
12423
SOURCE OF CASH
Income Tax
194320
206000
2650
726292
749327
23035
247341
261547
14206
300466
379275
CASH FROM OPERATION

Net Profit
ADD Increase
Liabilities
in
Other
7466168
LESS Decrease in Sundry
Creditors
3747384
5698609
2470569
78809
176755
9
127681
5
2651776
178737
2473039
TOTAL CASH AVAILABLE 15155010
405022
12417103
443130
APPLICATION OF CASH
Loans & Advance
194320
206000
11680
Secured Loan
3406134
3135484
270650
Unsecured Loan
1255000
1105000
150000
Central Excise
779
5313
4534
CLOSING BALANCE
Cash in Hand
TOTAL
APPLICATION
AVAILABLE
4856233
6266
4451797

TABLE NO: 5.3
443130
PARTICULARS
31-03-2003
31-03-2004
OPENING BALANCES
Cash in Hand
6266
SOURCE OF CASH
Central Excise
5313
2596
2717
261547
267548
5999
2470569
3553092
1082523
379275
530420
151145
5698609
LESS Increase in Sundry
Debtors
2651776
4378883
1319726
4542399
1890623
11467089
13274938
677753
726292
991175
264883
Loans & Advance
206000
332424
126424
Secured Loan
3135484
3088824
46660
Unsecured Loan
1105000
900000
205000
Income Tax
81906
107401
25495
CASH FROM OPERATION

Net Profit
ADD Increase
Creditors
in
Sundry
668770
APPLICATION OF CASH
CLOSING BALANCE
Cash in Hand
TOTAL
APPLICATION
AVAILABLE
5254682
9291
5419824

TABLE NO-5.4
677753
PARTICULARS
31-03-2004
31-03-2005
OPENING BALANCES
Cash in Hand
9291
SOURCE OF CASH
991175
792972
198203
Unsecured Loan
900000
1200000
300000
Net Profit
ADD Increase in Other
Liabilities
267546
309347
41801
530420
531981
1561
Decrease in Sundry Debtors
4542399
3652395
890004
Creditors
4378883
3950640
428243
3553092
3258702
294390
15163515
13696037
1574713
Loan & Advance
332424
377608
45184
Unsecured Loan
3088824
15892601
1499564
Central Excise
2596
24695
22099
Income Tax
107401
108612
1211
CASH FROM OPERATION
1067219
APPLICATION OF CASH
CLOSING BALANCE
Cash in Hand
TOTAL
APPLICATION
AVAILABLE
3531245
6655
16403516

TABLE NO-5.5
PARTICULARS
31-03-2005
31-03-2006
1574713
OPENING BALANCES
Cash in Hand
6655
SOURCE OF CASH
Central Excise
24695
9867
14828
Secured Loan
1589260
1163089
350000
Net Profit
ADD Increase in Other
Liabilities
309347
413155
531981
735107
10380
8
20312
6

Creditors
3652395
3596559
55836
3258702
3250590
8112
Increase in Inventories
3950640
4018625
67985
13317020
13186992
658156
792972
944278
151306
Loans & Advance
377608
432320
54712
Secured Loan
1163089
1589260
426171
Income Tax
108612
114142
5530
CASH FROM OPERATION
286673
APPLICATION OF CASH
CLOSING BALANCE
Cash in Hand
TOTAL APPLICATION
AVAILABLE
20437
2442281
3080000
658156
CASH FLOW STATEMENT

TABLE NO-5.6
PARTICULARS
OPENING BALANCES
2001-02
2002-03
2003-04
2004-05
2005-06
Cash in Hand
SOURCE OF CASH
Central Excise
Secured Loan
Income Tax
Unsecured Loan
CASH FROM
OPERATION
NET PROFIT
ADD Increase in Sundry
Creditors
LESS Increase in Inventories
Decrease in Sundry Creditors
TOTAL CASH
AVAILABLE
APPLICATION OF CASH
Loans & Advance
Secured Loan
Unsecured Loan
Central Excise
Income Tax
CLOSING BALANCE
Cash in Hand
TOTAL APPLICATION
AVAILABLE
0.61
0.124
0.013
0.422
0.06
0.02
0.02
0.23
0.4
0.14
0.05
3.84
0.002
0.78
17.67
10.82
1.51
14
3.18
1.78
0.046
0.31
4.42
0.11
2.7
1.5
0.04
0.07
0.06
0.14
1.98
3
3.5
0.42
1.04
0.015
4.28
8.9
2.03
2.94
0.08
15.7
6.57
0.45
1.51
0.54
4.26
0.56
0.68
18.9
12.76
0.55
0.09
6.76
2.65
1.26
0.46
2.05
0.25
15
0.22
0.012
0.055
0.12
0.06
0.09
0.22
0.2
0.55
4.42
6.76
15.7
6.57
INTERPRETATION:
The above table explains that the beginning of the (2001-02) opening balance is
in0.61 but in the other year it reduced gradually. So the concern should take
necessary step to overcome the default.
The concern is purchase the fixed assets in the year 2001-02,2003-04,2005-06 at

0.046,2.65 and 1.51. The concern purchase high asset in the year 2003-04 at 2.65
it clearly determine the outflow of cash in the concern.
The borrowing of concerns high in the year 2003-04 at 1.26 it indicates that the
concern uses more loan. The concern should reduce to borrow the money from the
various resources. It leads to take more advantage to the borrowers.
The closing balance is not high than the opening balance .it indicates that the cash
is not properly managed in the concern.
5.2 CASH BUDGETING:

A firm is well advised to hold adequate cash balance but should avoid excessive
balances. The firm has, therefore, to assess its need for cash properly. The cash budget is
probably the most important tool in cash management. It is device to help a firm to plan
and control the use of cash. It is a statement showing the estimated cash inflows and cash
outflows over the planning horizon. In the other words, the net cash position of a firm as
it moves from one budgeting sub period to another is highlighted by the cash budget
CASH BUDGET
TABLE NO 5.7
PARTICULARS
a
OPENING
BALANCE
2001-02
2002-03
2003-04
2004-05
2005-06
61738
6266
1992924
4
1966463
1
9291
2052023
2
2025314
9
6655
CASH
b Receipts
16315437
c Payments
16093407
12423
1806471
0
1789247
8
d NET CASH FLOW (b-c)
222030
172232
264613
267083
329980
e Cumulative Net Cash Flow
222030
394262
658875
925958
1255938
f (a+e)
283768
g Minimum Cash Balance
Requirement
100000
SURPLUS RELATION TO
THE MINIMUM
CASHBALANCE
REQUIREMENT(F-G)
183768
406685
665141
935249
1262593
100000
100000
100000
100000
306685
565141
835249
1162593
CHART NO 5.1
23938082
23608102
12
10
8
6
4
cash required
2
0
20 20 20 20 20
01- 02- 03- 04- 0502 03 04 05 06
INTERPRETATION:
In the above table it clearly determines the availability of the cash balance in the
subsequent year. It will clearly determine the minimum cash balance requirement of the
concern. In the 2005-06 leads to higher need of cash balance 11.62 lakhs. The cash
balance is highly required for the day- to day transaction.
5.3 RATIO ANALYSIS:

An analysis of financial statements based on ratios is known as ratio analysis. Ratio
analysis involves the process of computing determining and resenting the relationship of items or
group of items of financial statements. Ratio analysis is a widely used tool of financial
analysis. It can be used to compare the risk and return relationship of firms of different sizes. It is
defined as the systematic use of ratio to interpret the financial statements so that the strengths
and weaknesses of a firm as well as its historical performance and current financial condition can
be determined. The term ratio refers to the numerical or quantitative relationship between two
items.
5.3.1 NET WORKING CAPITAL:

Net working capital represents the excess of current assets over current liabilities.
The term current assets refers to assets which in the normal course of business get
converted into cash without dimunition in value over a short period ,usually not
exceeding one year or length of operation cycle whichever is more. The greater is the
amount of net working capital, the greater is the liquidity of the firm, accordingly net
working capital is a measure of liquidity, and inadequate working capital is the first sign
of financial problem for a firm.
FORMULA:
NET WORKING CAPITAL = CURRENT ASSETS-CURRENT LIABILITIES.
NET WORKING CAPITAL
TABLE NO-5.8
PARTICULARS
2001-02
2002-03
2003-04
2004-05
2005-06
CURENT ASSETS
99.51
83.56
89.30
76.09
76.35
CURRENT LIABILITIES
40.47
28.49
40.83
37.90
39.85
NET WORKING CAPITAL
59.03
55.06
48.47
38.19
36.49
Chart no.5.2
100
90
80
70
60
50
40
30
20
10
0
Current assets
Current liabilities
Net Working capital
200102
20022003
200304
200405
200506
Interpretation:
This ratio indicates there is lower amount required in the working capital. The
higher amount is in the year 2001-02 at 59.03. It will clearly determine the firm is in
liquidly position but this is reducing gradually. The financial manager should
concentrated more on the working capital as it is not satisfactory.
5.3.2 CURRENT RATIO:

The current ratio is the ratio of total current assets to total current liabilities. Its
calculated by divided current assets by current liabilities.
The current assets of a firm, as already stated, represent that asset which can be, in the
ordinary course of business, converted into cash within a short period of time normally
not exceeding one year.
FORMULA:
CURRENT RATIO = CURRENT ASSETS
CURRENT LIABILITIES
CURRENT RATIO
TABLE NO-5.9
PARTICULARS
2001-02
2002-03
2003-04
2004-05
2005-06
CURRENT ASSETS
99.51
83.56
89.30
76.09
76.35
CURRENT LIABILITIES
40.47
28.49
40.83
37.90
39.85
CURRENT RATIO
2.45
2.93
2.18
2.00
1.9
Chart no.5.3
100
90
80
70
60
50
40
30
20
10
0
Current assets
Current liabilities
Current ratio
200102
20022003
200304
200405
200506
Interpretation:
The company is highly efficient is short term solvency position. The company
should maintain this current ratio. The concern should concentrate on 2005-06 year
current ratio position.
5.3.3 QUICK TEST RATIO:

The quick test ratio is the ratio between quick current ratio and current liabilities
and is calculated by dividing the quick assets by the current liabilities.
The term quick assets refers to current assets which can be converted into cash
immediately or at a short notice without diminution of value.
FORMULA:
QUICK TEST RATIO = QUICK ASSETS
QUICK LIABILITIES
QUICK TEST RATIO

TABLE NO-5.10
PARTICULARS
2001-02
2002-03
2003-04
2004-05
2005-06
QUICK ASSETS
24.85
26.58
45.51
36.59
36.16
QUICK LIABILTIES
40.47
29.00
40.83
37.90
39.85
ACID TEST RATIO
0.61
0.93
1.11
0.96
0.90
Chart no.5.4
50
45
40
35
30
25
20
15
10
5
0
Quick assets
Quick liabilities
Acid test ratio
2001- 2002- 2003- 2004- 200502 2003 04

05
06
Interpretation:
The liquidity position is not near to the standard ratio. The concern should clearly
determine the various liquidity position of the concern.
5.3.4 INVENTORY TURNOVER RATIO:

It is computed by divided the cost of good sold by the average inventory thus, the
cost of good sold means sales minus gross profit. The average inventory refers to the
simple average of the opening and closing inventory. The ratio indicated how fast
inventory is sold.
FORMULA:
INVENTORY TURNOVER RATIO= COST OF GOOD SOLD
AVERAGE INVENTORY

TABLE NO-5.11
PARTICULARS
INVENTORY TURNOVER
RATIO
2001-02
2002-03
2003-04
2004-05
2005-06
1.16
1.59
2.36
2.81
3.37
COST OF GOOD SOLD
86.04
105.07
118.9
117.05
134.1
AVERAGE INVENTORY
74.00
65.82
50.38
41.65
39.84
Chart no.5.5
140
120
100
Inventory TurnOver
ratio
Cost of good sold
80
60
40
Average Inventory
20
0
2001- 2002- 2003- 2004- 200502
2003
04
05
06
Interpretation:
The inventory turnover is increasing gradually to the period of the year. It will
clearly determine the capacity of the concern
5.3.5 DEBTORS TURNOVER RATIO:
It is determine by dividing the net credit sales by average debtors outstanding

during the year. Thus, net credit sales consist of gross credit sales minus returns, if any,
from customers average debtors is the simple average of debtors (including bills
receivables) at the beginning and at the end of the year.
FORMULA:
DEBTORS TURNOVER RATIO= NET CREDIT SALES
AVERAGE DEBTORS
DEBTORS TURNOVER RATION:

TABLE NO-5.12
PARTICULARS
2001-02
2002-03
2003-04
2004-05
2005-06
CREDIT SALES
159.8
157.8
155.8
172.62
206.45
AVERAGE DEBTORS
DEBTORS
TURNOVER
RATIO
23.13
25.62
35.97
40.97
36.24
6.90
6.16
4.33
4.21
5.69
Chart no.5.6
250
200
Credit sales
150
Average debtors
100
Debtors turn over

ratio
50
0
2001- 200202
2003
2003- 200404
05
200506
Interpretation:
The debtors turnover ratio is not in the concert way in the concern. The higher
ratio is in the year 2001-02 is 6.90. The past performance is clearly determining the
various formation of the concern.
5.3.6 CREDITORS TURNOVER RATIO:
It is a ratio between net credit purchase and the average amount of creditors
outstanding during the year. A low turnover ratio reflects liberal credit terms granted by
suppliers, while a high ratio shows that account are to be settled rapidly. The creditors
turnover ratio is an important tool of analysis as a firm can reduce its requirement of
current assets by relying on suppliers credit.
FORMULA:
CREDITORS TURNOVER RATIO= NET CREDIT PURCHASES
AVERAGE CREDITORS

TABLE NO-5.13
PARTICULARS
2001-02
2002-03
2003-04
2004-05
2005-06
CREDIT PURCHASE
86.0
105.07
118.91
117.05
134.16
AVERAGES CREDITORS
CREDITORS
TURNOVER
RATIO
35.55
31.08
30.11
34.05
32.54
2.42
3.38
3.94
3.43
4.12
Chart no.5.7
140
120
100
Credit purchase
80
Average creditors
60
40
Creditors Turnover
ratio
20
0
2001- 2002- 2003- 2004- 200502 2003 04

05
06
Interpretation:
The creditors availability of the concern keeps on decrease in the year. It will
clearly determine in the year 2001-02 2.42.
CHAPTER-VI
FINDINGS AND SUGGESTION OF THE STUDY
6.1 FINDINGS OF THE STUDY

1. The net working capital of the organization is not satisfactory.
2. The current ratio for the four year it is as per the standard norms (2:1) concept for
the year 2005-06 which is 1.9:1. On an average current ratio is formed to be
satisfactory.
3. Quick ratio of the company is not satisfactory as it is not up to the standard norms
(1:1).
4. Inventory turnover ratio is found to be not satisfactory as it is maintain low
inventory.
5. Debtor turnover ratio is decline indicates it is not satisfactory.
6. Creditors turnover ratio showing increasing ratio indicates that the company is
enjoying. Its credit facilities to the possible amount.
7. In the year 2005-06 is leads to higher requirement of cash balance 11.62 lakhs.
8. Cash reflects the liquidity position of the concern is reduced in the year 2005-06
0.06 lakhs decreasing cash position indicated that the company is not managing
its cash position satisfactorily.
6.2 SUGGESTION & RECOMMENDATION:

The various suggestions are followed after analyzing the main finding of this study.
The cash management of the company is failed to strengthen the cash position so
the company so required to table steps to improve the cash position by
concentrating on receivables, inventories avoiding to much on borrowings.
The company failed to manage the receivable in the normal level because of poor
performance of the collection procedure and inefficient performance related with
managing the receivables.
The inventories play a major role in production. So, the concern should take
measure to maintain the inventories that are required to in order reduce the e cost,
and keep the production flow continuously.
In 2005-06 the net profit is increased compare to the other four year. So the
concern should maintain the same position to improve the net profit.
The cash and bank balance indicate high liquidity position of a company, The
Flavors India (p) Ltd maintain cash including bank balance is at a optimum level
and it is enough to meet day to day requirement.
CHAPTER-VII
CONCLUSION
Analysis and Interpretation of the financial data of The Flavors India (p) ltd,
ascertain the cash position of the firm. The results explores that the firm is unable toe
meet its short term obligations.
The concern should reduced the long term loan and obtain the profit.
The concern should take various measures to increase the net profit.
CHAPTER-VIII
LIMITATION & SCOPE OF THE STUDY
8.1 LIMITATION OF THE STUDY:
These studies only concentrated the quantitative method.
The study is restricted only to The Flavors India (P) Ltd. being a case study the
findings cannot be generalized.
8.2 SCOPE OF THE FURTHER STUDY:
It helps to take short term financial decision.
It indicates the cash requirement needed for plant and equipment expansion
programme.
It reveals the liquidity position of the firm by highlighting the various sources of
cash and its uses.
To find strategies for efficient management of cash.

A Study On Cash Management On

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A Study On Cash Management On

Uploaded by

Copyright:

Available Formats

A STUDY ON CASH MANAGEMENT ON

THE FLAVORS INDIA (P) LTD,PUDUCHERRY

MASTER OF BUSINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT STUDIES

SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE

MANAGEMENT ON THE FLAVORS INDIA (P) LTD is a bonafide work

HEAD OF THE DEPARTMENT

Submitted for the viva voice Examination held on

OBJECTIVE OF THE STUDY

DATA ANALYSIS AND INTERPRETATION

FINDINGS OF THE STUDY

LIMITATION & SCOPE OF THE STUDY

The project is titled as A STUDY ON CASH MANAGEMENT ON THE

CASH FLOW STATEMENT

CASH FLOW STATEMENT(2001-02)

CASH FLOW STATEMENT(2002-03)

CASH FLOW STATEMENT (2003-04)

CASH FLOW STATEMENT (2004-05)

CASH FLOW STATEMENT (2005-06)

CASH FLOW STATEMENT

NET WORKING RATIO

QUICK TEST RATIO

INVENTORY TURNOVER RATIO

DEBTORS TURNOVER RATIO

CREDITORS TURNOVER RATIO

NET WORKING RATIO

QUICK TEST RATIO

INVENTORY TURNOVER RATIO

DEBTORS TURNOVER RATIO

CREDITORS TURNOVER RATIO

Khan M.Y and P.K. Jani

To know about the general functioning of the company.

To know the financial position of the company.

1.2 PROFILE OF THE COMPANY

The Flavors India (p) Ltd is a well established and systematically

environment we have development an efficient Effluent Treatment Plant fulfilling

1.2.4 OUR PRODUCTS

TOP SOFT DRINK CONCENTRATES,

1.2.5 ORGANISATIONAL CHART

1.2.6 FINANCE DEPARTMENT:

2.1 CASH MANAGEMENT:

To meet the cash disbursement needs (payment schedule) and.

To minimize funds committed to cash balance.

Meet payments schedule:

Improved forecasting of tax payments, capital expenditure, dividends and so on.

Increased ability to borrow through overdraft facility.

2.5 DETERMINE CASH NEED:

Minimizing cost cash model,

2.5.1 CASH MANAGEMENT:

Total conversion cost per period = Tb\c

C=bE (n)\t+iE (M)

b = the fixed cost per conversion.

Selection of the appropriate planning horizon.

Selection of the appropriate decision variables and

Formulation of the cash management strategy itself.

Purchase and sale of marketable securities and

function and then specify a set of constraints.

2.6 TECHNIQUES OR TOOLS OF CASH MANAGEMENT ANALYSIS:

CASH FLOW STATEMENT.

1 CASH FLOW STATEMENT:

opportunities. Cash flow

Helps in efficient cash management.

Helps in internal financial management.