CHAPTER-IV

DATA ANALYSIS &INTERPRETATION

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.
 CASH FLOW STATEMENT (2010-2011)
TABLE NO: 5.1

31-03- 31-03-
PARTICULARS 2010 2011
OPENING BALANCES
Cash in Hand 61738
SOURCE OF CASH
Central Excise 2151 779 1372
Secured Loan 3363880 3406134 42254
CASHFROMOPERATION
Net Profit 247341 206964 40377
ADD: Increase in Sundry 38392
Creditors 3363458 3747384 6
Increase in Other Liabilities 300217 300466 249
15538
Less Increase in Inventories 7310787 7466168 1
31861 -
Increase in Sundry Debtors 2154425 2473039 4 49443
TOTALCASHAVAILABL
E 16742259 17600934 55921
APPLICATION OF CASH
Purchases of Fixed Assets 744630 749327 4697
Loans & Advance 162581 194320 31739
Income Tax 77494 84556 7062
CLOSING BALANCE
Cash in Hand 12423
TOTALAPPLICATION
AVAILABLE 984705 1028203 55921
 CASH FLOW STATEMENT (2011-12)

TABLE NO-5.2

31-03-
PARTICULARS 2011 31-03-2012
OPENING BALANCES
Cash in Hand 12423
SOURCE OF CASH
Income Tax 194320 206000 2650
Sale of Fixed Assets 726292 749327 23035
CASH FROM
OPERATION
Net Profit 247341 261547 14206
ADD Increase in Other
Liabilities 300466 379275 78809
Decrease in Inventories 7466168 5698609 1767559
LESS Decrease in Sundry
Creditors 3747384 2470569 1276815
Increase in Sundry Debtors 2473039 2651776 178737 405022
TOTAL CASH
AVAILABLE 15155010 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 6266
TOTAL APPLICATION
AVAILABLE 4856233 4451797 443130
 CASH FLOW STATEMENT (2012-2013)

TABLE NO: 5.3

31-03-
PARTICULARS 2012 31-03-2013
OPENING BALANCES
Cash in Hand 6266
SOURCE OF CASH
Central Excise 5313 2596 2717
CASH FROM
OPERATION
Net Profit 261547 267548 5999
ADD Increase in Sundry
Creditors 2470569 3553092 1082523
Increase in Other
Liabilities 379275 530420 151145
Decrease in Inventories 5698609 4378883 1319726
LESS Increase in Sundry
Debtors 2651776 4542399 1890623 668770
TOTAL CASH
AVAILABLE 11467089 13274938 677753
APPLICATION OF
CASH
Purchases of Fixed Assets 726292 991175 264883
Loans & Advance 206000 332424 126424
Secured Loan 3135484 3088824 46660
Unsecured Loan 1105000 900000 205000
Income Tax 81906 107401 25495
CLOSING BALANCE
Cash in Hand 9291
TOTAL APPLICATION
AVAILABLE 5254682 5419824 677753
 CASH FLOW STATEMENT (2013-14)

TABLE NO-5.4

31-03-
PARTICULARS 2013 31-03-2014
OPENING BALANCES
Cash in Hand 9291
SOURCE OF CASH
Sale of Fixed Assets 991175 792972 198203
Unsecured Loan 900000 1200000 300000
CASH FROM
OPERATION
Net Profit 267546 309347 41801
ADD Increase in Other
Liabilities 530420 531981 1561
Decrease in Sundry
Debtors 4542399 3652395 890004
Decrease in Inventories 4378883 3950640 428243
LESS Decrease in Sundry
Creditors 3553092 3258702 294390 1067219
TOTAL CASH
AVAILABLE 15163515 13696037 1574713
APPLICATION OF
CASH
Loan & Advance 332424 377608 45184
Unsecured Loan 3088824 15892601 1499564
Central Excise 2596 24695 22099
Income Tax 107401 108612 1211
CLOSING BALANCE
Cash in Hand 6655
TOTAL APPLICATION
AVAILABLE 3531245 16403516 1574713
 CASH FLOW STATEMENT (2014-15)

TABLE NO-5.5

PARTICULARS 31-03-2014 31-03-2015

OPENING BALANCES
Cash in Hand 6655
SOURCE OF CASH
Central Excise 24695 9867 14828
Secured Loan 1589260 1163089 350000
CASH FROM
OPERATION
Net Profit 309347 413155 103808
ADD Increase in Other
Liabilities 531981 735107 203126
Decrease in Sundry Debtors 3652395 3596559 55836
LESS Decrease in Sundry
Creditors 3258702 3250590 8112
Increase in Inventories 3950640 4018625 67985 286673
TOTAL CASH
AVAILABLE 13317020 13186992 658156
APPLICATION OF
CASH
Purchases of Fixed Assets 792972 944278 151306
Loans & Advance 377608 432320 54712
Secured Loan 1163089 1589260 426171
Income Tax 108612 114142 5530
CLOSING BALANCE
Cash in Hand 20437
TOTAL APPLICATION
AVAILABLE 2442281 3080000 658156
 CASH FLOW STATEMENT

TABLE NO-5.6

PARTICULARS 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

OPENING
BALANCES
Cash in Hand 0.61 0.124 0.06 0.09 0.06
SOURCE OF CASH
Central Excise 0.013 0.02 0.14
Secured Loan 0.422
Income Tax 0.02
Sale of Fixed Assets 0.23 1.98
Unsecured
Loan 3 3.5
CASH FROM
OPERATION
NET PROFIT 0.4 0.14 0.05 0.42 1.04
ADD Increase in
Sundry Creditors 3.84 - 10.82
Increase in Other
Liabilities 0.002 0.78 1.51 0.015 2.03
Decrease in
Inventories 17.67 14 4.28
Decrease in Sundry
Debtors 3.18 8.9 0.56
LESS Increase in
Inventories 0.68
Increase in Sundry
Debtors 1.78 18.9
Decrease in Sundry
Creditors 12.76 2.94 0.08
TOTAL CASH
AVAILABLE 0.55 4.42 6.76 15.7 6.57
APPLICATION OF
CASH
Purchases of Fixed
Assets 0.046 2.65 1.51
Loans & Advance 0.31 0.11 1.26 0.45 0.54
Secured Loan 2.7 0.46 4.26
Unsecured Loan 1.5 2.05 15
 Central Excise 0.04 0.22
Income Tax 0.07 0.25 0.012 0.055
CLOSING
BALANCE
Cash in Hand 0.12 0.06 0.09 0.22 0.2
TOTAL
APPLICATION
AVAILABLE 0.55 4.42 6.76 15.7 6.57

INTERPRETATION:

The above table explains that the beginning of the (2010-2011) 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 2010-2011,2011-

2012,2013-2014,2014-2015 -06 at 0.046,2.65 and 1.51. The concern
purchase high asset in the year 2012-2013 at 2.65 it clearly determine the
outflow of cash in the concern.

The borrowing of concerns high in the year 2012-2013 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

2012- 2013- 2014-

PARTICULARS 2010-2011 2011-2012 2013 2014 2015
a OPENING CASH
BALANCE 61738 12423 6266 9291 6655

b Receipts 16315437 18064710 19929244 20520232 23938082

c Payments 16093407 17892478 19664631 20253149 23608102
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 406685 665141 935249 1262593
g Minimum Cash
Balance Requirement 100000 100000 100000 100000 100000
SURPLUS
RELATION TO
THE MINIMUM
CASHBALANCE
REQUIREMENT(F-
G) 183768 306685 565141 835249 1162593
 CHART NO 5.1

12

10

6
cash
4 required

0
2010- 2011- 2012- 2013- 2014-
11 12 13 14 15

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 2014-15 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 2010-11 2011-12 2012-13 2013-14 2014-15

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
NET WORKING CAPITAL
120

100

80

60

40

20

0
2010-11 2011-12 2012-13 2013-14 2014-15

CURENT ASSETS CURRENT LIABILITIES NET WORKING CAPITAL

Interpretation:

This ratio indicates there is lower amount required in the working capital.
The higher amount is in the year 2010-11 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 2010-11 2011-12 2012-13 2013-14 2014-15

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
CURRENT RATIO
120

100

80

60

40

20

0
2010-11 2011-2012 2012-13 2013-14 2014-15

Current assets Current liabilities Current ratio

Interpretation:

The company is highly efficient is short term solvency position. The

company should maintain this current ratio. The concern should concentrate on
2014-15 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 2010-11 2011-12 2012-13 2013-14 2014-15

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
QUICK TEST RATIO

90
80
70
60
50
40
30
20
10
0
2010-11 2011-2012 2012-13 2013-14 2014-15

Quick assets Quick liabilities Acid test ratio

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

INVENTORY TURNOVER RATIO

TABLE NO-5.11

PARTICULARS 2010-11 2011-12 2012-13 2013-14 2014-15

INVENTORY
TURNOVER RATIO 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
INVENTORY TURNOVER RATIO

140
120
100
80
60
40
20
0
2010-11 2011-2012 2012-13 2013-14 2014-15

Inventory TurnOver ratio Cost of good sold Average Inventory

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 2010-11 2011-12 2012-13 2013-14 2014-15

CREDIT SALES 159.8 157.8 155.8 172.62 206.45

AVERAGE DEBTORS 23.13 25.62 35.97 40.97 36.24

DEBTORS TURNOVER
RATIO 6.90 6.16 4.33 4.21 5.69
 Chart no.5.6
DEBTORS TURNOVER RATION
250

200

150

100

50

0
2010-11 2011-2012 2012-13 2013-14 2014-15

Credit sales Average debtors Debtors turn over ratio

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

CREDITORS TURNOVER RATIO

TABLE NO-5.13

PARTICULARS 2010-11 2011-12 2012-13 2013-14 2014-15

CREDIT PURCHASE 86.0 105.07 118.91 117.05 134.16

AVERAGES
CREDITORS 35.55 31.08 30.11 34.05 32.54
CREDITORS
TURNOVER RATIO 2.42 3.38 3.94 3.43 4.12
 Chart no.5.7
CREDITORS TURNOVER RATIO

140
120
100
80
60
40
20
0
2010-11 2011-12 2012-13 2013-14 2014-15

Credit purchase Average creditors Creditors Turnover ratio

Interpretation:

The creditors availability of the concern keeps on decrease in the year. It

will clearly determine in the year 2010-11 2.42.