CAPITAL BUDGETING OF THE RASMI METALICKS

Submitted in partial fulfillment of the requirements

for the award of the degree of

Master of Business Administration

Submitted by:
KARAN SHARMA
Roll No:-
(Batch:20 -20 )
Under the supervision of
Dr.
DEPARTMENT OF MBA

VIDYASAGAR UNIVERSITY
PACHIM MIDNAPORE, WEST BENGAL

1
 PREFACE

The learning process of classroom is incomplete without any practical field experience. It is

because of the reason that our Institute like any other, has provision for practical training so

accordingly we have been given this Project Report for practical exposure.

This work gave us an insight to understand that how some of the important concepts that we

have been studying as a student of management are applicable in the field. The report is a sincere

attempt to focus on the subject in a lucid manner. I sincerely attempted to carry out in depth

study of the subject.

ABHISHEK CHAUCHAN

2
 ACKNOWLEDGEMENT

The present work is an effort to throw some light on COMPARATIVE ANALYSIS OF

CASH MANAGEMENT OF VEHICLE COMPANIES IN INDIA

. The work would not have been possible to come to the present shape without the able

guidance, supervision and help to me by number of people.

With deep sense of gratitude I acknowledged the encouragement and guidance received by my

organizational guide Mr. Deepak Singh.

I convey my heartful affection to all those people who helped and supported me during the

course, for completion of my Research Report.

ABHISHEK CHAUCHAN

DECLARATION

3
I, ABHISHEK CHAUCHAN, student of MBA 4th semester, studying at NOIDA INSTITUTE

OF ENGINEERING AND TECHNOLOGY, Greater Noida, hereby declare that the Research

report on

COMPARATIVE ANALYSIS OF CASH MANAGEMENT OF VEHICLE COMPANIES

IN INDIA

Submitted to the institute in partial fulfillment of the requirement for the award of Post Graduate

in Management is the original work conducted by me.

This Research Report is not being submitted to any other University/Institute for award of any

other Degree, Diploma and Fellowship.

The information and data given in the report is authentic to the best of my knowledge.

(ABHISHEK CHAUCHAN)

4
 EXECUTIVE SUMMARY

The research consisted of detailed analysis of cash management of vehicle companies in India.

The project undertaken also focused on the various hypothesis. Secondary data was used for the

study. Further the study included the objectives of the study, Scope of the study, Research

Methodology, Data sources and with the Hypothesis Formulation.

Objectives:To compare and analyze the cash management position of vehicle companies.

Scope: This study contains a wide scope in comparative analysis of three commercial vehicle

companies namely Maruti Suzuki India Limited, Tata Motors Limited and Mahindra &

Mahindra Limited. By this study, I shall be able to measure the cash performance of these

vehicle companies by using ANOVA. The time period of the study is from 2008-2009 to 2015-

2016.

Methodology: On the purpose of research, the secondary data will be collected from the

official websites of all the three companies. Data is collected for Maruti Suzuki India Limited,

Tata Motors Limited and Mahindra & Mahindra Limited from 2012 to 2016. ANOVA test and

Ratio analysis is used to analyse the cash management of vehicle companies in India which is

useful for interpreting data and reaching to conclusion.

5
Cash management is meant to be used for the management of the organizations bank accounts.

All of the companys bank details are contained in the Bank Account Card feature. Heres what

the users can do on the Bank Account Card: In order to make sure that transactions are always

reconciled, it is necessary for bank reconciliations to be run. Also, you can acquire system

suggestions over the payments, which are to be based on set-up. For instance, available cash

amount today, important vendors and due to date invoices etc. Through this feature, you will be

able to formulate predictions with regards to the cash flow of a company. Get your hands on a

number of cash flow plans, and formulate as many cash flow forecasts as you are interested in.

Users are also given the ability to utilize account schedules along with cash flow forecast

statistics to perform an analysis over cash flow forecasts.

Vehicle Sales Management

Elva DMS features an auto trade functionality that has the potential to manage entire sales

processes. Trade activities can be supervised for both new and used vehicles, whereas necessary

sales documents can be created.

Vehicle Sales Process Management

This function allows you to create sales quotes or proposals for customers. Through it, you are

given the ability to either pick the required car from the inventory, or conduct calculations over

vehicle price from manufacturer or importer warehouse. You may set the vehicle price

6
automatically (via the vehicle assembly options function), or enter it manually. You can also

transfer sales proposals to sales orders, and enter all of the information vital to the transaction of

a sale.

Service Management for Automotive Industry

This functionality provided by Elva DMS enables users to efficiently manage all service

activities for different kinds of transporters and/or vehicles. You may use it as a fleet service

management solution. Considering that Elva DMS is built directly within Microsoft Dynamics

NAV, its user interface is as intuitive and easy to use as any other Microsoft business software.

Scheduling & Planning

The Elva DMS Scheduler is a highly interactive online tool that has been designed for mechanic

time registration, customer visit planning, service order management, booking over locations, as

well as to analyze the amount of time actually spent in comparison to invoiced or standard time.

Customer Relationship Management in Automotive Industry

The vehicle sales and service CRM offered by Elva DMS comes with a number of operations

that can be used to track interactions with contacts, customers and their vehicles at large. There

are countless CRM solutions in the market these days, but Elva DMS allows for you to segment

all contact database on the basic of vehicle age, brand, and engine type etc. Apart from that, you,

as a user, may target all of your marketing activities on the basis of prospect customer interest or

the vehicles that are currently under use by them. There are countless other function for service

7
CRM needs that are offered by Elva DMS along with the basic dealership showroom CRM. All

of these functions are meant to help you enhance your sales and win long-term customer loyalty.

Loyalty Management

The system enables its users to formulate individual discount policies for certain clients and

client groups. You can setup discounts for specific items, or item groups within a particular

period. However, for all of your contracted customers, the system allows you to build specific

pricelist that will eventually come to an end when the contract ends.

Contact Management

All of the external entities that you hold business relations with including customers, vendors

and prospective customers can easily be recorded in the system as contact. Information on an

organization, or a particular contact at that company can also be recorded. If you make a double-

entry of a particular contact that already exists in the system, the duplicate check function will

give you a warning for the same.

Spare Part Replenishment

The replenishment functionality is meant to help you acquire a basic overview of inventory

levels, along with expected supplies over time. This plays a major role in providing an accurate

delivery date for multiple items. You may make calculations of the item price for specified

clients.

Apart from that, basic measurements can be set up. This includes:

8
Financial Management for Automotive Industry

Fixed Asset Management

This particular functionality is meant to help users acquire an overview of all fixed assets and

provide correct periodic depreciation. The system is also meant to help users manage insurance

policies, and maintenance costs related to fixed assets, post fixed asset transaction, and generate

varying statistics and reports.

Through the system, you may acquire the ability to perform calculations on a number of

depreciation books simultaneously, and then use them for various business processes. This

includes tax reporting under country laws, or internal financial reporting to the headquarters of

the organization.

Cash management refers to a broad area of finance involving the collection, handling, and

usage of cash. It involves assessing market liquidity, cash flow, and investments.[2][3]

In banking, cash management, or treasury management, is a marketing term for certain

services related to cash flow offered primarily to larger business customers. It may be used to

describe all bank accounts (such as checking accounts) provided to businesses of a certain size,

but it is more often used to describe specific services such as cash concentration, zero balance

accounting, and automated clearing house facilities. Sometimes, private banking customers are

given cash management services.

9
Financial instruments involved in cash management include money market funds, treasury bills,

and certificates of deposit.[4]

Common services[edit]

The following is a list of services generally offered by banks and utilized by larger businesses

and corporations:[5]

Account reconciliation

Balancing a chequebook can be a difficult process for a very large business, since it

issues so many cheques it can take a lot of human monitoring to understand which

cheques have not cleared and therefore what the company's true balance is. To address

this, banks have developed a system which allows companies to upload a list of all the

cheques that they issue on a daily basis, so that at the end of the month the bank

statement will show not only which cheques have cleared, but also which have not. More

recently, banks have used this system to prevent cheques from being fraudulently cashed

if they are not on the list, a process known as positive pay.

Advanced web services

Most banks have an Internet-based system which is more advanced than the one available

to consumers. This enables managers to create and authorize special internal logon

credentials, allowing employees to send wires and access other cash management features

normally not found on the consumer web site.

Armored car services/cash collection

10
 Large retailers who collect a great deal of cash may have the bank pick this cash up via

an armored car company, instead of asking its employees to deposit the cash.

Automated clearing house

Usually offered by the cash management division of a bank. The automated clearing

house is an electronic system used to transfer funds between banks. Companies use this

to pay others, especially employees (this is how direct deposit works). Certain companies

also use it to collect funds from customers (this is generally how automatic payment

plans work). This system is criticized by some consumer advocacy groups, because under

this system banks assume that the company initiating the debit is correct until proven

otherwise.

Balance reporting

Corporate clients who actively manage their cash balances usually subscribe to secure

web-based reporting of their account and transaction information at their lead bank.

These sophisticated compilations of banking activity may include balances in foreign

currencies, as well as those at other banks. They include information on cash positions as

well as 'float' (e.g., checks in the process of collection). Finally, they offer transaction-

specific details on all forms of payment activity, including deposits, checks, wire

transfers in and out, ACH (automated clearinghouse debits and credits), investments, etc.

Cash concentration services

Large or national chain retailers often are in areas where their primary bank does not

have branches. Therefore, they open bank accounts at various local banks in the area. To

11
 prevent funds in these accounts from being idle and not earning sufficient interest, many

of these companies have an agreement set with their primary bank, whereby their primary

bank uses the automated clearing house to electronically "pull" the money from these

banks into a single interest-bearing bank account. See also: Cash concentration.

Controlled disbursement

This is another product offered by banks under Cash Management Services. The bank

provides a daily report, typically early in the day, that provides the amount of

disbursements that will be charged to the customer's account. This early knowledge of

daily funds requirement allows the customer to invest any surplus in intraday investment

opportunities, typically money market investments. This is different from delayed

disbursements, where payments are issued through a remote branch of a bank and

customer is able to delay the payment due to increased float time.

Lockboxwholesale services

Often companies (such as utilities) which receive a large number of payments via checks

in the mail have the bank set up a post office box for them, open their mail, and deposit

any checks found. This is referred to as a "lockbox" service.

Lockboxretail services

are for companies with small numbers of payments, sometimes with detailed

requirements for processing. This might be a company like a dentist's office or small

manufacturing company.

12
Positive pay

Positive pay is a service whereby the company electronically shares its check register of

all written checks with the bank. The bank therefore will only pay checks listed in that

register, with exactly the same specifications as listed in the register (amount, payee,

serial number, etc.). This system dramatically reduces check fraud.

Reverse positive pay

Reverse positive pay is similar to positive pay, but the process is reversed, with the

company, not the bank, maintaining the list of checks issued. When checks are presented

for payment and clear through the Federal Reserve System, the Federal Reserve prepares

a file of the checks' account numbers, serial numbers, and dollar amounts and sends the

file to the bank. In reverse positive pay, the bank sends that file to the company, where

the company compares the information to its internal records. The company lets the bank

know which checks match its internal information, and the bank pays those items. The

bank then researches the checks that do not match, corrects any misreads or encoding

errors, and determines if any items are fraudulent. The bank pays only "true" exceptions,

that is, those that can be reconciled with the company's files.

Sweep accounts

Sweep accounts are typically offered by the cash management division of a bank. Under

this system, excess funds from a company's bank accounts are automatically moved into

a money market mutual fund overnight, and then moved back the next morning. This

13
 allows them to earn interest overnight. This is the primary use of money market mutual

funds.

Zero balance account

A Zero balance account can be thought of as somewhat of a hack. Companies with large

numbers of stores or locations can very often be confused if all those stores are

depositing into a single bank account. Traditionally, it would be impossible to know

which deposits were from which stores without seeking to view images of those deposits.

To help correct this problem, banks developed a system where each store is given their

own bank account, but all the money deposited into the individual store accounts are

automatically moved or swept into the company's main bank account. This allows the

company to look at individual statements for each store. U.S. banks are almost all

converting their systems so that companies can tell which store made a particular deposit,

even if these deposits are all deposited into a single account. Therefore, zero balance

accounting is being used less frequently.

Wire transfer

A wire transfer is an electronic transfer of funds. Wire transfers can be done by a simple

bank account transfer, or by a transfer of cash at a cash office. Bank wire transfers are

often the most expedient method for transferring funds between bank accounts. A bank

wire transfer is a message to the receiving bank requesting them to effect payment in

accordance with the instructions given. The message also includes settlement

instructions. The actual wire transfer itself is virtually instantaneous, requiring no longer

for transmission than a telephone call.

14
 Automated Cash Handling

An Automated cash handling is the process of dispensing, counting and tracking cash in a

bank, retail, check cashing, payday loan / advance, casino or other business environment

through specially designed hardware and software for the purposes of loss prevention,

theft deterrence and reducing management time for oversight of cash drawer (till)

operations. [6]

Tools:SPSS is used to analyze and present the data collected from various secondary sources.

Findings: Selected companies are found to be having a fluctuating trend almost in all the three

performance drivers of cash management. Hence it can be derived that the industry might be

facing a mixed trend during the research period. The study enhances the knowledge base of

working capital management and will help companies to manage working capital efficiently in

growing situation associated with capital expenditure.

Limitations

The present study is based on the secondary data collected from secondary data sources, internet

and websites of various vehicles industries concerned. Therefore, the quality of the study

15
depends upon the accuracy, reliability, and quality of secondary data source. Every possible

attempt was made to minimize the occurrence of error, while conducting the analysis but still

some limitations were observed. The study has focused only on vehicle industries and did not

consider other sector of the economy due to inadequacy of time and resources.

Scope for further Research

The research study is based on the annual reports of the company for a period of five years from

2011-12 to 2015-16. The reason for restricting the study to this small period was due to time

constraint. To describe briefly the economic characteristics of the industry that affect price

research. To formulate a research program, indicate specific projects that seem important and

feasible, and suggest elements of a wider program that will stimulate the industry, individuals,

universities, research bureaus, and appropriate governmental agencies to undertake studies

designed to provide a better understanding of pricing problems in this industry.

16
 CONTENTS

S NO. Topic Page No.

1. Certificate (i)

2 Acknowledgement (ii)

3. Executive Summary (iii)

4. List of Tables (v)

5. List of Figures (v)

6. Chapter-1: Introduction 1-12

7. Chapter-2: Literature Review 13-26

8. Chapter-3: Data Presentation & Analysis 27-39

9. Chapter-4: Summary and Conclusions 40-43

10. Chapter-5: Recommendations 44-45

11. References/Bibliography

12. Appendices/Annexure

17
 LIST OF TABLES

Table No. Title Page No.

3.1 Cash Profit Ratio 29

3.2 Cash Return on Assets 31

3.3 Cash Flow Margin Ratio 32

3.4 ANOVA of cash profit ratio 33

3.5 Descriptive of CPR 34

18
 3.6 ANOVA of CRA 35

3.7 Descriptive of CRA 35

3.8 ANOVA of CFMR 36

3.9 Descriptive of CFMR 36

3.10 Cash management performance ratios 37

3.11 Statistical result of ANOVA 39

4.4 Keywords and their meanings 72

LIST OF FIGURES

Figure No. Title Page no.

3.1 Cash Profit Ratio 29

3.2 Cash Return on Assets 31

3.3 Cash Flow Margin Ratio 33

19
 Chapter-1

Introduction

1.1 Profile of the Company:

The vehicle companies in India are one of the largest in the world with an annual production of

23.96 million vehicles in FY 2015-16, following a growth of 2.57 per cent over the last year. The

vehicle companies accounts for 7.1 per cent of the country's gross domestic product (GDP). The

Two Wheelers segment, with 81 per cent market share, is the leader of the Indian vehicle market,

owing to a growing middle class and a young population. Moreover, the growing interest of

companies in exploring the rural markets further aided the growth of the sector. The overall

Passenger Vehicle (PV) segment has 13 per cent market share.

India is also a prominent vehicle exporter and has strong export growth expectations for the near

future. In FY 2014-15, vehicle exports grew by 15 per cent over the last year. In addition, several

initiatives by the Government of India and the major vehicle players in the Indian market are

expected to make India a leader in the Two Wheeler (2W) and Four Wheeler (4W) market in the

world by 2020.

20
1.11: Maruti Suzuki:

Maruti Suzuki India Limited (MSIL, formerly Maruti Udyog Limited) is a subsidiary of Suzuki

Motor Corporation of Japan. Maruti Suzuki is a leading manufacturer of passenger vehicles in

India. Lovingly referred to as the peoples car maker; over the past three decades Maruti Suzuki

has changed the way people in India commute and travel.

Maruti Suzuki India Limited (MSIL) has four assembly plants in India. Three of the assembly

plants operate in Gurgaon area and one assembly plant is located in Gurgaon. Each of the

assembly plants have certain set of processes which are carried out during the course of the

production cycle.

The operators, supervisors and Inspectors working on the assembly line have to follow certain

set of standards called as Maruti Operating Standards. To aid the work of the employees

certain systems have been implemented in each of these plants.

S NO. PARTICULARS EXPLANATIONS

1. Vision
To be a leader in the Indian Automobile Industry,

creating customer delight and shareholders wealth,

A pride of India.

2. Mission To create exceptional automotive value for our

21
 customers by harmoniously blending safety, quality

and efficiency. With our diverse team, we all

provide responsible stewardship to our community

and environment while achieving stability and

security now and for future generation.

3. Strengths (a) Huge and well spread distribution network and

after sale service network.

(b) Maruti Suzuki has well established brand image

of Maruti.

(c) Huge product line

(d)Technological advancement from Japan through

Suzuki.

4. Weaknesses (a)Demotivated human resources and negative

attitude of employee towards Maruti.

(b)High import duty and tariffs to be paid on exports

from the Japan.

(c)Long waiting time for customer to get delivery of

new cars, especially newly launched car model.

22
5. Capabilities of MSIL (a)Manufacturing and Production technology

(b)Understanding customers needs

(c)Developing new designs and models of cars

which are fuel-efficient

(d)Quality focus

(e)Prompt service and customer satisfaction

6. Environmental practices Maruti is not only working towards implementing

environmental best practices in its facilities, but also

takes acttive part working in collaboration with its

suppliers to implement best practices in their

facilities through its Environment Management

System (EMS) bringing benefit to the entire value

chain.

An analysis of the Maruti Suzuki India ltd. shows three core competencies:

(a) Strong customer base and brand image

The Maruti Suzuki has a market share of about 55% in the Indian passenger car segment and is

the largest manufacturer of small cars in India.The company has been voted as first by Indian

customers for level of customer service and customer satisfaction. Such a strong brand image

and huge customer base can sustain the position of the company as the market leader in the

Indian small car segment.

23
(b) Well developed sales and service network throughout India.

The Maruti Suzuki India has a strong dealership network comprising more than 450 cities across

India and a huge service network of more 2750 franchises of service outlet spreading about 1300

cities throughout India. Such a widely distributed sales and service network can help the

company to relate with its customers across India.

(c)Very strong knowledge of India market

Maruti Suzuki is the Indias one of the oldest car manufacturers and Maruti has been dealing in

huge customer base can sustain the position of the company as the market leader in the Indian

small car segment and hence Maruti has strong knowledge.

1.12 Mahindra & Mahindra ltd.

Mahindra and Mahindra Limited (M&M) is an Indian multinationalautomobilemanufacturing

corporation headquartered in Mumbai, Maharashtra, India. It is one of the largest vehicle

manufacturers by production in India and the largest manufacturer of tractors in the world. It is a

part of Mahindra Group, an Indian conglomerate. The Mahindra & Mahindra ltd has market

share around 7.5%.

Mahindra and Mahindra Limited is engaged in the manufacture of passenger cars, commercial

vehicles and tractors. The Company's segments include Automotive, which is engaged in the sale

of automobiles, spare parts and related services; Farm Equipment, which is engaged in the sale

tractors, spare parts and related services; IT Services, which includes business consulting and

related support activities; Financial Services, which includes services relating to financing,

24
leasing and hire purchase of automobiles and tractors; Steel Trading and Processing, which is

engaged in trading and processing of steel; Infrastructure, including operation of commercial

complexes, project management and development; Hospitality, including sale of Timeshare;

Systech, which consists of automotive components and other related products and services; Two

wheelers, which consists of sale of two wheelers, spare parts and related services, and Others,

which includes logistics, after-market and investments.

Strategic Implication:

The Mahindra group has a new tagline, which reflects a new strategy. Its a call to action a core

purpose that will galvanize employees, customer and stakeholders in coming together to form a

more cohensive, formidable unit. The Mahindra Brand logo will read as Mahindra rise from here

onwards. This tagline is the acceptance of no limit in creativity, alternative thinking and drive

positive change. This is not some corporate branding but a new strategic move that will cost the

Mahindra Group Rs.120 crore over the next three years. This is a strategic move.

S NO. PARTICULARS EXPLANATIONS

1. Vision To be Indias leading and most preferred integrated

logistics service provider.

2. Mission To serve our customers, in global markets, by

25
 providing creative, cost effective, technology enabled

solutions that continuously meet and exceed our

customers expectations thus enhancing stakeholder

value. To provide continuous opportunities for growth

and knowledge enhancement to our employees and

business associates. Also to serve the communities

within which we work, with integrity and

responsibility.

3. Strengths (a)Mahindra has been one of the strongest brands in

the Indian automobile market.

(b)Mahindra group give employment to over 110,000

employees.

(c)Excellent branding and advertising, and low after

sales service cost.

(d)Sturdy SUVs good for Indian roads and off-road

terrain

4. Weaknesses Mahindras partnership with Renault did not live up to

international quality standards through their brand

Logan.

26
5. Operations Mahindra & Mahindra, branded on its products

usually as 'Mahindra', produces SUVs, saloon cars,

pickups, commercial vehicles, and two wheeled

motorcycles and tractors. It owns assembly plants

in India, and has three assembly plants in the United

States. Mahindra maintains business relations with

foreign companies like Renault SA, France.

6. Environmental analysis Mahindra & Mahindra branded on its products usually

as Mahindra, produces SUVs, saloon cars, pickups,

commercial vehicles, and two wheeled motorcycles

and tractors. It owns assembly plants in Mainland

China (PRC) and the United Kingdom and has three

assembly plants in the united states.

1.13 Tata Motors India

Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company)

is an Indian multinationalautomotive manufacturing company headquartered in Mumbai, India,

and a member of the Tata Group. Its products include passenger cars, trucks, vans, coaches,

buses, sports cars, construction equipment and military vehicles.

27
Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow,

Sanand, Dharwad, and Pune in India, as well as in Argentina, South Africa, Great Britain and

Thailand. It has research and development centres in Pune, Jamshedpur, Lucknow, and Dharwad,

Tata Motors has auto manufacturing and assembly plants

in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad, and Pune in India, as well as in

Argentina, South Africa, Great Britain and Thailand. It has research and development centres in

Pune, Jamshedpur, Lucknow, and Dharwad, India and in South Korea, Great Britain and Spain.

Tata Motors' principal subsidiaries purchased the English premium car maker Jaguar Land

Rover (the maker of Jaguar and Land Rover cars) and the South Korean commercial vehicle

manufacturer Tata Daewoo. Tata Motors has a bus-manufacturing joint venture with Marcopolo

S.A. (Tata Marcopolo), a construction-equipment manufacturing joint venture with Hitachi (Tata

Hitachi Construction Machinery), and a joint venture with Fiat Chrysler which manufactures

automotive components and Fiat Chrysler and Tata branded vehicles.

TATA Tiago

Founded in 1945 as a manufacturer of locomotives, the company manufactured its first

commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969.

Tata Motors entered the passenger vehicle market in 1991 with the launch of the Tata Sierra,

becoming the first Indian manufacturer to achieve the capability of developing a competitive

indigenous automobile.[4] In 1998, Tata launched the first fully indigenous Indian passenger car,

the Indica, and in 2008 launched the Tata Nano, the world's cheapest car. Tata Motors acquired

28
the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and

purchased Jaguar Land Rover from Ford in 2008.

Tata Motors is listed on the (BSE) Bombay Stock Exchange, where it is a constituent of the BSE

SENSEX index, the National Stock Exchange of India, and the New York Stock Exchange. The

company is ranked 226th on the Fortune Global 500 list of the world's biggest corporations as of

2016.[5]

On 17 January 2017, Natarajan Chandrasekaran was appointed chairman of the company.

India and in South Korea, Great Britain and Spain. Tata Motors' principal subsidiaries purchased

the English premium car maker Jaguar Land Rover (the maker of Jaguar and Land Rover cars)

and the South Korean commercial vehicle manufacturer Tata Daewoo. Tata Motors has a bus-

manufacturing joint venture with Marcopolo S.A. (Tata Marcopolo), a construction-equipment

manufacturing joint venture with Hitachi (Tata Hitachi Construction Machinery), and a joint

venture with Fiat Chrysler which manufactures automotive components and Fiat Chrysler and

Tata branded vehicles. Founded in 1945 as a manufacturer of locomotives, the company

manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG,

which ended in 1969. Tata Motors entered the passenger vehicle market in 1991 with the launch

of the Tata Sierra, becoming the first Indian manufacturer to achieve the capability of developing

a competitive indigenous automobile. In 1998, Tata launched the first fully indigenous Indian

passenger car, the Indica, and in 2008 launched the Tata Nano, the world's cheapest car. Tata

Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company

in 2004 and purchased Jaguar Land Rover from Ford in 2008.

29
S NO. PARTICULARS EXPLANATIONS

1. Vision Most admired by our customers, employees, business

partners and shareholders for the experience and value they

enjoy from being with us. Achieving sustainable financial

performance.

2. Mission To be passionate in anticipating and providing the best

vehicle and experiences that excite our customers globally.

3.. Culture (a)Accountability

(b)Customer and Product focus

(c)Excellence

(d)Speed

4. Values (a)Inclusion

(b)Integrity

(c)Accountability

(d)Innovation

(e)Concern for the environment

(f)Passion for excellence

(g)Agility

5. Strengths (a)Strong Domestic Player ( Indian Market)

(b)It is a demand driven, customer-oriented, taking care of

30
 customers preferences and taste.

(c)Long list of portfolios

(d)Global presence

(e)Company has a very strong research and development

activities.

(f)The companys dealership, sales, services and spare

parts network comprises over 3500 touch points.

6. Weaknesses (a)Return on Investment on TATA motors shares is low.

(b)Tata Motors products are not considered as luxurious.

Hence, the company lacks a strong footprint in the sector of

luxury products.

(c)Safety standards are not maintained/often ignored.

(d)Limited consumer base

(e)Relatively smaller proportion of market share in

passenger vehicles in India.

1.2 Objectives of Study:

(a) To compare and analyze the cash management position of vehicle companies.

(b) To study the growth of cash of vehicle companies.

31
1.3 Scope of Study:

This study contains a wide scope in comparative analysis of three commercial vehicle companies

namely Maruti Suzuki India Limited, Tata Motors India Limited and Mahindra & Mahindra

Limited. By this study, I shall be able to measure the cash performance of these vehicle

companies by using ANOVA. The time period of the study is from 2008-09 to 2015-16.

1.3.1 Maruti Suzuki:Suzuki Motor Corporation, was the first ever car company in India to

churn out and sell more than a million cars in India thereby triggering the automobile revolution

here. The reported net sales of Maruti Suzuki India Ltd stood at around INR 114,864 million

reflecting net profits of INR 6,398 million in Quarter 4 of 2011-2012. Maruti Suzuki is the

Indias one of the top and the oldest car manufacturers and Maruti has been dealing in huge

customer base can sustain the position of the company as the market leader in the Indian small

car segment and hence Maruti has strong knowledge base. Maruti vehicles typically rank among

the best in fuel mileage (owed to the low weight of the body). Total cost of ownership including

both the capital cost and the parts cost are quite cheap compared to others. The Maruti Suzuki

has a market share of about 55% in the Indian passenger car segment and is the largest

manufacturer of small cars in India.Chronology[edit]

Under the Maruti name

In 1970, a private limited company named Surya Ram Maruti technical services private

limited (MTSPL) was launched on November 16, 1970.[relevant? discuss] The stated purpose of this

company was to provide technical know-how for the design, manufacture and assembly of "a

wholly indigenous motor car". In June 1971, a company called Maruti limited was incorporated

32
under the Companies Act. Maruti Limited went into liquidation in 1977. Maruti Udyog Ltd was

incorporated through the efforts of Dr V. Krishnamurthy.[14]

Affiliation with Suzuki

In 1982, a license & Joint Venture Agreement (JVA) was signed between Maruti Udyog Ltd.

and Suzuki of Japan. At first, Maruti Suzuki was mainly an importer of cars. In India's closed

market, Maruti received the right to import 40,000 fully built-up Suzukis in the first two years,

and even after that the early goal was to use only 33% indigenous parts. This upset the local

manufacturers considerably. There were also some concerns that the Indian market was too small

to absorb the comparatively large production planned by Maruti Suzuki, with the government

even considering adjusting the petrol tax and lowering the excise duty in order to boost

sales.[15] Finally, in 1983, the Maruti 800 was released. This 796 cc hatchback was based on

the SS80 Suzuki Alto and was Indias first affordable car. Initial product plan was 40% saloons,

and 60% Maruti Van.[15] Local production commenced in December 1983.[11] In 1984, the Maruti

Van with the same three-cylinder engine as the 800 was released and the installed capacity of the

plant in Gurgaon reached 40,000 units.

In 1985, the Suzuki SJ410-based Gypsy, a 970 cc 4WD off-road vehicle, was launched. In 1986,

the original 800 was replaced by an all-new model of the 796 cc hatchback Suzuki Alto and the

100,000th vehicle was produced by the company.[14][dead link]

In 1987, the company started

exporting to the West, when a lot of 500 cars were sent to Hungary. By 1988, the capacity of the

Gurgaon plant was increased to 100,000 units per annum.

Market liberalisation

33
In 1989, the Maruti 1000 was introduced and the 970 cc, three-box was Indias first

contemporary sedan. By 1991, 65 percent of the components, for all vehicles produced, were

indigenized. After liberalization of the Indian economy in 1991, Suzuki increased its stake in

Maruti to 50 percent, making the company a 50-50 JV with the Government of India the other

stake holder.

In 1993, the Zen, a 993 cc, hatchback was launched and in 1994 the 1298 cc Esteem was

introduced. Maruti produced its 1 millionth vehicle since the commencement of production in

1994. Maruti's second plant was opened with annual capacity reaching 200,000 units. Maruti

launched a 24-hour emergency on-road vehicle service. In 1998, the new Maruti 800 was

released, the first change in design since 1986. Zen D, a 1527 cc diesel hatchback and Maruti's

first diesel vehicle and a redesigned Omni were introduced. In 1999, the 1.6 litre Maruti

Baleno three-box saloon and Wagon R were also launched.

In 2000, Maruti became the first car company in India to launch a Call Center for internal and

customer services. The new Alto model was released. In 2001, Maruti True Value, selling and

buying used cars was launched. In October of the same year the Maruti Versa was launched. In

2002, Esteem Diesel was introduced. Two new subsidiaries were also started: Maruti Insurance

Distributor Services and Maruti Insurance Brokers Limited. Suzuki Motor Corporation increased

its stake in Maruti to 54.2 percent.

In 2003, the new Suzuki Grand Vitara XL-7 was introduced while the Zen and the Wagon R

were upgraded and redesigned. The four millionth Maruti vehicle was built and they entered into

a partnership with the State Bank of India. Maruti Udyog Ltd was Listed on BSE and NSE after

34
a public issue, which was oversubscribed tenfold. In 2004, the Alto became India's best selling

car overtaking the Maruti 800 after nearly two decades. The five-seater Versa 5-seater, a new

variant, was created while the Esteem was re-launched. Maruti Udyog closed the financial year

2003-04 with an annual sale of 472,122 units, the highest ever since the company began

operations and the fiftieth lakh (5 millionth) car rolled out in April 2005. The 1.3 L Suzuki Swift

five-door hatchback was introduced in 2005.[16]

In 2006 Suzuki and Maruti set up another joint venture, "Maruti Suzuki Automobiles India", to

build two new manufacturing plants, one for vehicles and one for engines.[16]Cleaner cars were

also introduced, with several new models meeting the new "Bharat Stage III" standards.[16] In

February 2012, Maruti Suzuki sold its ten millionth vehicle in India.[11] For the Month of July

2014, it had a Market share of >45 %.[17]

Joint venture related issues[edit]

Relationship between the Government of India, under the United Front (India) coalition

and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian

media until Suzuki Motor Corporation gained the controlling stake. This highly profitable joint

venture that had a near monopolistic trade in the Indian automobile market and the nature of the

partnership built up till then was the underlying reason for most issues. The success of the joint

venture led Suzuki to increase its equity from 26% to 40% in 1987, and to 50% in 1992, and

further to 56.21% as of 2013.[18] In 1982, both the venture partners entered into an agreement to

nominate their candidate for the post of Managing Director and every Managing Director would

have a tenure of five years[19][20]

35
Manufacturing facilities[edit]

Maruti Suzuki has two manufacturing facilities in India.[21] Both manufacturing facilities have a

combined production capacity of 1,450,000 vehicles annually. The Gurgaon manufacturing

facility has three fully integrated manufacturing plants and is spread over 300 acres

(1.2 km2).[22] The Gurgaon facilities also manufacture 240,000 K-Series engines annually. The

Gurgaon Facilities manufactures the Alto 800, WagonR, Omni, Gypsy King, Ertiga, S-

Cross, Vitara Brezza, Ignis and Eeco.

The Manesar manufacturing plant was inaugurated in February 2007 and is spread over 600

acres (2.4 km2).[22] Initially it had a production capacity of 100,000 vehicles annually but this

was increased to 300,000 vehicles annually in October 2008. The production capacity was

further increased by 250,000 vehicles taking total production capacity to 800,000 vehicles

annually.[23] The Manesar Plant produces the Alto 800, Alto K10, Swift, Swift

DZire, Ciaz, Baleno, Baleno RS and Celerio. On 25 June 2012, Haryana State Industries and

Infrastructure Development Corporation demanded Maruti Suzuki to pay an additional Rs 235

crore for enhanced land acquisition for its Haryana plant expansion. The agency reminded

Maruti that failure to pay the amount would lead to further proceedings and vacating the

enhanced land acquisition.[24] It plans to set up a plant in Gujarat and has acquired 600 acres of

land.[25]

In 2012, the company decided to merge Suzuki Powertrain India Limited (SPIL) with

itself.[26] SPIL was started as a JV by Suzuki Motor Corp. along with Maruti Suzuki. It has the

36
facilities available for manufacturing diesel engines and transmissions. The demand for

transmissions for all Maruti Suzuki cars is met by the production from SPIL.

Industrial relations[edit]

Since its founding in 1983, Maruti Udyog Limited has experienced problems with its labor force.

The Indian labour it hired readily accepted Japanese work culture and the modern manufacturing

process. In 1997, there was a change in ownership, and Maruti became predominantly

government controlled. Shortly thereafter, conflict between the United Front Government and

Suzuki started. In 2000, a major industrial relations issue began and employees of Maruti went

on an indefinite strike, demanding among other things, major revisions to their wages, incentives

and pensions.[27][28]

Employees used slowdown in October 2000, to press a revision to their incentive-linked pay. In

parallel, after elections and a new central government led by NDA alliance, India pursued a

disinvestment policy. Along with many other government owned companies, the new

administration proposed to sell part of its stake in Maruti Suzuki in a public offering. The

worker's union opposed this sell-off plan on the grounds that the company will lose a major

business advantage of being subsidised by the Government, and the union has better protection

while the company remains in control of the government.[27][29]

The standoff between the union and the management continued through 2001. The management

refused union demands citing increased competition and lower margins. The central government

privatized Maruti in 2002 and Suzuki became the majority owner of Maruti Udyog

Limited.[30][31]

37
1.3.2TATA motors:Tata Motors Limited (formerly TELCO, short for Tata Engineering and

Locomotive Company) is an Indian multinationalautomotive manufacturing company

headquartered in Mumbai, India, and a member of the Tata Group. Its

products include passenger cars, trucks, vans, coaches, buses, sports cars, construction

equipment and military vehicles.

1.3.3 Mahindra and Mahindra Co: Basing its operation mainly on steel trading, started

in the year 1945, Mahindra penetrated the automotive manufacturing industry of India in 1947.

Till today, Mahindra and Mahindra has successfully maintained its status as a leading company

manufacturing utility vehicles in India. The main reason behind this company's success in India

lies in the fact that it makes cars that are ideally designed for the rugged terrains of India.

Popular names featuring in portfolio are Bolero and Scorpio, both of which have proved to be

environment friendly, fuel efficient and reliable.

Mahindra and Mahindra Limited (M&M) is an he first Indian company to sponsor a car in

NASCAR. In 2008, Mahindra was a sponsor of the McDonald Motorsports team which ran the

#81 car in the NASCAR Nationwide Series.[6]

Indian multinational automobile manufacturing corporation headquartered in Mumbai,

Maharashtra, India.[3] It is one of the largest vehicle manufacturers by production in India and the

38
largest manufacturer of tractors in the world.[4] It is a part of Mahindra Group, an

Indian conglomerate.

It was ranked 21st on a list of top companies in India by Fortune India 500 in 2011.[5]

Its major competitors in the Indian market include Maruti Suzuki, Tata Motors, Ashok

Leyland and others.[6] Mahindra Tractors is an international farm equipment manufacturer

of Mahindra & Mahindra.[1] In 2010, Mahindra became the largest selling tractor brand name in

the world. Mahindra's largest consumer base is in India, China, North America and a growing

base in Australia. The company is the largest manufacturer in India[2] and has the capacity to

build 150,000 tractors a year.[3] In 1963, M&M formed a joint venture with International

Harvester to manufacture tractors carrying the Mahindra nameplate for the Indian

market.[4] M&M developed its first tractor, the B-275. Mahindra Tractors sold about 85,000 units

annually making it one of the largest tractor producers in the world.[5] To expand into the

growing tractor market in China, Mahindra acquired majority stake in Jiangling. To raise

awareness about Mahindra in the US, Mahindra USA announced its new sponsorship in

the NASCAR Nationwide Series with R3 Motorsports, which is participating with a Mahindra

Tractors Chevrolet. The car was driven by Robert Richardson Jr. Mahindra USA, Inc. announced

a 17-race primary and 18-race associate sponsorship for the 2009 NASCAR Nationwide

Series. With this sponsorship, Mahindra was t

39
1.4 Methodology:

The study is concerned with comparative analysis of cash management of commercial vehicle

companies in India. The study is based on secondary data. The data has been collected from

published annual reports of commercial vehicle companies. Other information related to

companies has been collected from official websites and internet sources, references books,

Journals, media reports, press release etc.

For the analysis of cash management many techniques have been used like mean, standard

deviation (S.D), ANOVA, various ratios like cash return on assets (CPR) ratio, cash flow margin

ratio (CFMR) ratio. Software tools SPSS has been used in the project report.

1.41 Cash Profit Ratio (CPR): Cash Profits Sales

The ratio indicates financial efficiency of the firm in terms of generating cash profit.

1.42 Cash Return On Assets (CRA): Cash Flow From Operating Activities Total

Assets

The cash return on assets (including interest) indicates internal generation of cash available to

creditors or investors.

1.43 Cash Flow Margin Ratio (CFMR): Cash Flow from Operating Activities Net

sales

The ratio shows the relationship between cash generated from operations and sales.

40
1.5 Hypothesis:

According to above objective, the following hypotheses have been framed, as under...

H0: - There is no significant difference in Cash Profit Ratio between the sample companies.

H0: - There is no significant difference in Cash Return on Assets between the sample companies.

H0: - There is no significant difference in Cash Flow Margin Ratio between the sample

companies.

41
 Chapter 2

Literature Review

2.1 Vaghela and Jhala (2015): analyzed performance evaluation of selected cars and

utility vehicles companies Maruti Suzuki India Ltd., Hindustan Motors Ltd, Force Motor Ltd,

Mahindra & Mahindra Ltd in their research paper. After applying the tools and techniques, the

researchers have found that Mahindra & Mahindra Ltd is at the top of the list when it comes to

average performance based on cash management, followed by Maruti Suzuki India Ltd., though

researchers have observed a mix trend in the performance of the Maruti Suzuki India Ltd.

Researchers have seen a fluctuating trend in performance of Force Motor Ltd. It is not showing

stability in its overall cash management performance. When it comes to Hindustan Motors Ltd.,

it is having the worst scenario showing much poor performance in its average cash management.

To examine whether or not there are significant differences in cash management performance

between the sample companies, One-Way ANOVA has been applied by the researcher. Cash

flow based ratios like cash return on asset ratio and cash profit ratio are employed to evaluate the

average cash management performance of the selected companies.

2.2 Kavitha and Palanivelu (2014)investigated factors affecting vehicle industry based on

profitability and cash management model. Analysis was done for a period of ten years starting

from 2002-2003 to 2011-2012. Twenty one firms were taken for the study out of 227 firms

working in India out of which 168 were listed in stock exchanges in India. ANOVA was used to

find whether there was any significant difference between liquidity, leverages and efficiency

42
positions of the firms under study during the selected period of time. It was found that quick

ratio, debt equity ratio, proprietary ratio, fixed asset to net-worth ratio and inventory turnover

ratio had impacted profitability positions and cash asset ratio, cash flow margin ratio had

impacted the cash management of the vehicle companies. It was suggested that Companies could

reduced the interest burden by giving quality products and should build brand image to increase

the profit. It was also suggested that the firms should utilize maximum production capacity and

should try to increase production and sales for maximization of profit and to strengthen financial

position.

2.3 S.U. & Khan, Al-Mwalla (2012):analyzed that few companies had been able to use

the optimization of working capital as a real competitive advantage to leverage profit motivated

the study with the objective of identifying the variables that most affect profitability through

investigating the impact of working Capital Management on firms performance for non-

financial institutions listed in Nairobi Securities Exchange (NSE) for the seven year from 2005 to

2011. The profitability was measured in two different ways: return on sales (ROS) and on asset

(ROA). The independent variables used were cash conversion cycle, days of accounts payable,

days receivable and days inventory. The results were obtained using Correlation Analysis for

identifying the relationship between working capital management and firms performance.

Multiple linear regressions had identified that in termsof ROS and ROTA were concerned, to

manage working capital properly was relevant. From ANOVA it was evident that days inventory

had negative relationship with ROS and ROTA. Days of accounts payable as the variable that

influences ROS (positive relationship). These results showed that managing working capital

43
properly is important. Moreover, managing inventory as well as cash conversion cycle to an

optimum level will yield more profit. He researched the relationship between working capital

management and value creation of American firms with 59,985 firm years observations.

Profitability measured by return on assets (ROA) and return on sales (ROS) and cash conversion

cycle and net-trade cycle (NTC) as standard measured for working capital management using

correlation and regression analysis, by industry, and working capital intensity found strong

evidence of Significant negative relationship between the length of the firm's net-trade cycle and

its profitability concluding that that shorter the days of working capital higher the profitability.

2.4 Ghodrati and Ghanbar (2012):analyzed the relationship between working capital

management and profitability of accepted corporations in Tehran stock exchange over the period

of 2008-2012. Researcher selected 66 firms as a statistical sample based on Cochran formula and

simple random selection. In his study, variables including the average period of collecting

accordance, periods of circulation of inventories, the average period of debt payment, and cycle

of cash conversion on the factories operating profits were studied. Researcher showed that the

efficiency of working capital management of BritishAmerican Tobacco Bangladesh

Company Ltd. was highly satisfactory because of the positive cashinflows and planned

approach in managing the major elements of working capital. He examined the relationship

between profitability and liquidity by using correlation and regression analyses and found

that the cash conversion cycle was of more importance as a measure of liquidity than the

current ratio that affects profitability. He studied the effect of various variables of working

capital management. He found that there was a strong negative relationship between

variables of Working Capital Management and Profitability. He also determined that as the

44
cash conversion cycle increases, it leads to decrease in profitability of the firm and

managers could create a positive value for the shareholders by reducing the cash

conversion cycle to a possible minimum level. The study selected 68 firms over the period

20082013 for investigation as a random sample. SPSS software and required statistic

approaches have been utilized to analyze data by the researcher. Descriptive methods such

as the average parameters, SD, regression and elongation factors were used to describe

research variables.

2.5 Amalendu (2011) has deeply analyzed short term liquidity management of two market

leader steel companies of India. The study revealed that lack of working capital management

with specific reference to receivables and inventory management, both giant companys

profitability was highly affected with the help of regression model, relationship of profitability

with current ratio, absolute liquid ratio, age of inventory and age of debtors had been established

indicates that there is nearly cent percent relationship between profitability in terms of return on

capital employed and short term liquidity factors in case of Tata Steel Limited. It further revealed

that increase in liquid ratio, debt equity ratio and age of creditors having negative relationship

with the profitability of the firm in case of Tata Steels Limited. In case of JSW Steels Limited

only one co-efficient was associated with profitability of the firm positively which is current

ratio. Inverse relationship has been found between profitability and increase in liquid ratio,

absolute liquid ratio, debt equity ratio, age of inventory, age of debtors and age of creditors. One-

way ANOVA was applied to the set of ten year average ratio means. Inventory management as

well as receivable management affected overall short term liquidity of the firm which creates

acute shortage of cash which ultimately results into overall reduction in the profit. The study

45
concluded that proper composition of net current assets should be sustained by the means of

indexes of Indian Steel Companies as well as any short term finance obtained should be paid-out

within short period of time otherwise it dents out operating profit. However, best management

team could not create any impact on the profitability through better working capital management.

The examination of the said research has ignored seasonal impact on profitability as well as

working capital management. The researcher has not taken into account benchmark ratio of Steel

Industries in deriving any conclusion as well as any changes in the organization which are highly

affecting short term liquidity are ignored.

2.6 Al-Debie (2010):Long-term investing and financing decisions received most of the

researchers' attention compared with the attention given to short-term investing and financing

decisions which reflect the working capital management of the business organization. However,

several previous studies, conducted in different countries, examined the relationship between

WCM measures and profitability. Researchers believe and have proved the importance of

efficient WCM on the profitability of the business organization. Researchers argued that the

static liquidity measures; such as the current ratio and the acid-ratio, are measures of liquidation

rather than the going concern of the business organization. They further argued that the operating

cash flow coverage approach, rather than the asset liquidation value, is crucial element in the

liquidity analysis. They managed to construct a measure of the cash cycle concept by reflecting

the net time interval between actual cash expenditures on purchases and the ultimate recovery of

cash receipts from products sale and they called it the Cash Conversion Cycle (CCC) which is an

additive measure of the Receivables Conversion Period (RCP) plus the Inventories Conversion

46
Period (ICP) less the Payables Deferral Period (PDP). Correlation and regression analysis were

employed. One-way ANOVA was applied to the set of ten year average ratio means. The

differences in the means were significant indicating a distinctive difference in the asset

management policies between industries. They further examined the stability of those relative

differences between policies over time using Rank Order Correlations. They concluded that

differences in working capital policies not only exist but they persist over extended periods of

time. Regarding the relationship between asset and financing policies, they found that industries

with relatively aggressive asset policies follow relatively conservative financing policies.

2.7 Mutungi, Mary W (2010):This was study on the relationship between working capital

management policies and financial performance of oil marketing firms in Kenya. The study was

inspired by the fact that working capital in any firm is extremely critical and requires conscious

balance between the components on the working capital namely cash, receivables, payables and

inventory. The objectives of the study were to establish the working capital management policies

among oil marketing firms in Kenya and to examine the relationship between working capital

management and profitability in oil marketing firms in Kenya. The study highlighted what other

studies found out on the three common working capital management policies namely aggressive,

conservative and moderate policies. The research design was causal research trying to establish

the relationship between policies applied with the profitability of the oil marketing firms. The

design came up with a regression model with the dependent variable being the net operating

income with independent variables including Average collection period, inventory turnover

period, average payment period, current ratio, debt ratio and natural logarithm of sales. The

47
population for the study focused on the oil marketing firms who are members of Petroleum

Institute of East Africa, analyzing financial statements for the 4 years from the year 2006 to

2009. The analysis includes statistics like mean, correlation, regression analysis, ANOVA and

coefficients statistics. Analysis of the questionnaire was done and the findings represented in

tables, graphs and pie charts. The study found out that the identified independent variables affect

the performance by 56.7%, and that the oil marketers reviewed apply aggressive working capital

policy.

2.8 Anichebe, Juliana (2010):This study critically examined the assessment of Cash

Management Strategy in Small and Medium scale Enterprises (SME) in Bida Metropolis. In

essence, the variables that enhance and promote effective and efficient management of cash has

been thoroughly investigated and the primary objective of the work was to ascertain if regular

cash management in SME has any relationship with profit maximization in the firms. Data was

obtained through primary and secondary sources and analyzed through the use of simple

percentage and ANOVA (Analysis of Variance) method of data analysis. The findings shows

that management of cash in SME in Bida is not effective and efficient as most of the SME

surveyed have not heard about any cash management models due to lack of qualified and

professional accountants. The study recommended among others that small and medium scale

enterprises should regularly ascertain the cash management strategy or model that will maximize

the SMEs profit.

2.9 Pandey (2008) has provided in his book that cash management is concerned with managing

of cash flows into and out the firm as well as cash flows within the firm, and also cash balances

held by the firm at a point of time by financing deficit or investing surplus cash. The analysis
48
includes statistics like mean, correlation, regression analysis, ANOVA and coefficients statistics.

He added that in order to resolve the uncertainty about cash flow prediction and lack of

synchronization between cash receipts and payments, the firm should develop appropriate

strategies for cash management. The firm should evolve strategies regarding the following four

facets of cash management which includes:

Cash planning: Cash inflows and outflows should be planned to project cash surplus or deficit

for each period of the planning period. Cash budget should be prepared for this purpose.

Managing the cash flow: The flow of cash should be properly managed. The cash inflows should

be accelerated while, as far as possible, the cash outflows should be decelerated. This is

concerned with management of collections and disbursements.

Optimum cash level: The firm should decide about the appropriate level of cash balances. The

cost of excess cash and danger of cash deficiency should be matched to determine the optimum

level of cash balances. It appreciates the need to retain cash in business to meet various cash

requirements that may arise at any time. Especially short term requirement of cash.

Investing surplus cash: The surplus cash balances should be properly invested to earn profits.

The firm should decide about the division of such cash balance between alternative short-term

investment opportunities such as bank deposits, marketable securities, or inter-corporate lending.

The ideal cash management system will depend on the firm's products, organisation structure,

competition, culture and options available. The task is complex, and decisions taken can affect

important areas of the firm. For example, to improve collections if the credit period is reduced, it

49
may affect sales, Pandey added. However, in certain cases, even without fundamental changes, it

is possible to significantly reduce cost of cash management system by choosing a right bank and

controlling the collections properly.

2.10 Odeyinka and Lowe (2008) identified and assessed the extent of occurrence and impact of

risk factors responsible for the variation between the forecast and actual construction cash flow.

The study was conducted by the researcher through a structured questionnaire administered to

UK contracting organizations. Adopting a projectbyproject approach, respondents were asked

to provide opinions on the extent of occurrence of some identified risk factors and their impacts

on cash flow forecast. Respondents were split into three groups of small, medium and large

contracting firms based on their annual turnover so as to be able to investigate statistical

differences of opinions between the groups. Statistical analyses were carried out using mean

response analysis and univariate analysis of variance (ANOVA) in order to determine significant

risk factors and also to investigate differences of opinions between respondents' groupings.The

research identified 11 significant risk factors out of 26 research risk variables. These significant

risk variables can be grouped under three generic factors of changes in the design or

specification, project complexity and natural inhibition. The significant risk variables are

those ranking high in extent of occurrence and with critical impacts on cash flow forecast. The

research further showed that there is no statistically significant difference in the opinions of

different categories of contractors regarding the extent of risk occurrence and impacts on cash

flow forecast.

50
2.11 Rahman, Afza and Qayyum(2006) :The relationship of cash conversion cycle with

firm size and profitability for firms listed at Istanbul Stock Exchange was studied by researcher

using ANOVA and correlation analysis. The results showed retail/wholesale industry has shorter

Cash Conversion Cycle (CCC) than manufacturing industries. Furthermore, study found

significant negative correlation between CCC and profitability as well as between CCC and firm

size. Lazaridis and Tryfonidis (2006) investigated the relationship of corporate profitability and

working capital management for firms listed at Athens Stock Exchange.

They reported that there is statistically significant relationship between profitability measured by

gross operating profit and the Cash Conversion Cycle. Furthermore, Managers can create profit

by correctly handling the individual components of working capital to an optimal level.

Researcher explained that a well designed and implemented working capital management is

expected to contribute positively to the creation of firms value. The results indicated that high

investment in inventories and receivables is associated with low profitability and also showed an

increasing trend in the short term component of working capital financing. Researcher reported

about working capital and profitability that reducing working capital investment would

positively affect the profitability of firm by reducing proportion of current assets in total assets.

There are few studies with reference to working capital management in Pakistan like Afza

(2008), who studied the factors determining the working capital requirements for a large sample

of 204 firms in sixteen manufacturing sub sectors during 1998-2006. Another study by Afza and

Nazir (2007) investigated the relationship between aggressive and conservative working capital

policies for a large sample of 205 firms in 17 sectors listed on Karachi Stock Exchange during

1998-2005. They found a negative relationship between the profitability measures of firms and
51
degree of aggressiveness of working capital investment and financing policies. Raheman and

Nasr (2007) studied the relationship between working capital management and corporate

profitability for 94 firms listed on Karachi Stock Exchange using static measure of liquidity and

ongoing operating measure of working capital management during 1999-2004.

2.12 MOHAMED (2005):This study tried to investigate how private schools can properly

manage their cash in an optimal way. it was reported that among the problems that affect

private schools in Mogadishu leading to their failure were negative cash management and poor

record keeping at International Education. This leaves the gap that is poor cash collection fees

from the students and payment to pay teachers, operating expenses and miscalculate the actual

time to collect students overdue accounts receivables, in which the researcher caused to in

investigate about the impact of cash management on profitability of Private schools with a case

study of secondary schools. The general objective of the study is to investigate the effects of cash

management on profitability of private schools in Mogadishu, Somalia. Researcher was used

descriptive and statistical analysis with the help of the SPSS computer package to analyze the

data. The researcher recommends that the Private schools should adopt cash management

strategy to increase their control to collections fees as it was founded that cash collection

positively affects the financial performance of Private Schools to improve their competitiveness

and financial performance. The findings indicated that cash management has high effect on

financial performance of Private secondary schools in Mogadishu, Somalia. The results revealed

that all variables were significant in explaining Financial Performance of Private secondary

schools in Mogadishu, Somalia.

52
Multiple regression analysis was performed to assess the effects between the dependent variable

(Financial Performance) and the independent variables (Cash management) and to test the

research hypotheses on the cash budget management determinants on financial performance

multiple regression analysis was conducted in order to establish the best combination of

independent (predictor) variables would be to predict the dependent (predicted) variable and to

establish the best model of the study. The ANOVA technique extends what an independent-

samples t test can do to multiple means. The null hypothesis examined by the independent

samples t test is that two population means are equal. If more than two means are compared,

repeated use of the independent-samples t test was lead to a higher Type I error rate (the

experiment-wise level) than the level set for each t test.

2.13 Sarawat and Agrawal24 (2004)carried out a comparative study of WCM in two

Nepal Cement Industry firms for a period of eight years (1993-94 to 2000-2001). The size of

working capital was higher in HCIL coupled with more variations as compared to UCIL. Also,

the rate of increase of working capital per year as well as the average compound progressive

growth rate was higher in HCIL as compared to UCIL. A statistically significant difference

between sizes of working capital of both the samples was found. There was no significant

correlation between working capital and sales in both the sample. Exponential Trend was found

to be best fit in case of HCIL and Quadratic Trend was found to be best fit in case of UCIL for

working capital trend. A positive relationship between profit and sales was found for both the

companies; however the increase in profit was double in HCIL as compared to UCIL. A negative

relationship was found between current assets and profit indicating lower profitability with

higher liquidity. CA and Sales accounted for 88% of variation in profit. The study pointed out
53
that important reason for the losses or low level of profits of public enterprises in Nepal was

ineffective and inefficient.

2.14 Odeyinka, Kaka and Morledge (2003): Financial planning is central to the

survival of any construction company. This is essential as lack of funds had been identified as

the most common cause of business failure, and can lead to the failure of profitable and growing

firms as well as those declining. On the other hand, a permanent surplus of funds, while less

damaging is in itself an uneconomic state of affairs. As such, there is a need for adequate timing

of fund availability in construction and deployment of excess fund to more productive use. The

researcher examined the construction cash flow management approaches in the UK contracting

organisations through a questionnaire survey. Essentially, the survey examined the strategies

adopted by construction firms in resolving deficit cash flow. It also investigated the extent of

usage of some identified cash flow forecasting methods. Data analysis was carried out by

ranking the mean response. This enabled the major strategies employed for resolving deficit cash

flow to be determined. It also aided the determination of major cash flow forecasting methods

utilised by the industry. Further analysis was carried out using one-way analysis of variance

(ANOVA). This enabled preferences of cash flow management approaches between different

sizes of firms to be determined. Results showed the major approaches employed in resolving

deficit cash flow and approaches preferred by different sizes of construction firms. Results

further showed extent of usage of various cash flow forecasting methods. The findings were

significant, as firm size seemed to have direct implications on the approaches contracting firms

adopt in cash flow management. Data analyses were carried out using the Statistical Package for

54
Social Sciences (SPSS). The analysis was dealing mainly with the ranking of the variables based

on their mean values. This was followed by the Analysis of Variance (ANOVA) to test the null

hypothesis that the mean values of the dependent variables are equal for all the sizes of

construction companies considered. An analysis was carried out to evaluate the extent of usage

of various strategies for resolving deficit cash flow.

2.15Kytonen (2002): Cash management is necessary service mismatches between the timing

of payments and the availability of cash may interfere with operations of a firm. Studies have

noted that many hospitals have maintained large cash reserves and liquidity positions within their

investment portfolios in an effort to partially accommodate unforeseen expenditure. However,

inadequate cash management practices among the hospitals has led to slow rate of service

delivery, accompanied with regular strikes of employees, insufficient medicines and other basic

equipment for use in hospitals and employee strikes which are all linked to management of

funds. The objectives of the study were to identify the effects of preparing cash budgets on

operational performance of public hospitals, to determine the effects of operating bank accounts

on operational performance of public hospitals and to establish the effects of Book Keeping on

operational performance of public hospitals. The descriptive survey research design was adopted

in the study. The study was undertaken in Kisii County. The target population was 99

respondents consisting of 34accountants, 30 Medical Superintendents and 35 assistant

administrators of all public hospitals in Kisii County. The sample frame for the study was 31

public hospitals within Kisii County. The sample size was 99 respondents which were selected

using census sampling technique. Primary data were collected using a questionnaire. The data

were tabulated, and then analyzed using descriptive and inferential statistics with the help of
55
Social Sciences (SPSS) version 22 software. Descriptive statistics involved the use of weighted

averages and percentages while inferential statistics involved the use of ANOVA and regression

analysis. The findings revealed that cash budgets assist in making cash flow projections and

ensures budgetary control and controls a hospitals spending habits although and that it does not

create competition of resources and politics; operating bank accounts ensured security of hospital

funds besides helping keep track of hospital transactions; the hospitals keep records of all cash

payment and receipts on daily basis, facilitating accountability that improves operational

performance of public funds. The ANOVA results revealed that, at 5% level of significance, cash

budget, operating bank account(s) and book keeping all have a significant influence in

determining the operational performance of public hospitals. The findings from regression

analysis realized that cash budgeting account for 38.9% effect size in influencing operational

performance, operating bank accounts account for 14.1% effect size in influencing operational

performance while book keeping account for 49.3% effect size in influencing operational

performance in public hospitals. The study findings are helpful to the County governments in

understanding the importance of preparing cash budgets, operating bank accounts and Book

Keeping to improve operational performance of public hospitals. The study will also be helpful

to relevant stakeholders in the health sector and the management of these hospitals on having

proper management practices in their institutions.

56
Chapter 3

DATA PRESENTATION & ANALYSIS

3.1 Data Presentation

This chapter covers the statistical analysis on data collection. Analysis of the data was carried

out using both MS Excel and SPSS (Statistical Package for Social Sciences) to understand the

comparative analysis of cash management of vehicle companies. The data is being collected

from secondary sources.

We will interpret the data and analyze it by showing the data into charts, graphs, bar diagrams so

as to analyze the data and interpret some results out of it. Under the data presentation included

various ratios. For the purpose of comparative analysis of cash management of vehicle

companies, the secondary data has been used. As definition point of view the term secondary

data refers to the tactical material which is not originated by investigator himself but which he

obtains from some ones records. Secondary data, which were not gathered specially to meet the

need of the problem at hand for specific study, for the present study, data have been collected for

the period of five years from 2011-12 to 2015-16.

Various publications of vehicle companies from Indian vehicle Industry has been collected from

their Corporate Offices and their Official websites and other publications have also been used

57
such as stock exchange official directory, Economics Times, Financial Express, R.B.I. Bulletin,

Other periodicals Journals. Some of the data also collected from various websites like

indiabull.com, capital-line, NSE and BSE India, Crisil research India Ltd., and other online

resource.

All the collected data have been presented and formulating in the form of condensed balance

sheet and income statement. All the ratios and mentioned statement have been analyzed and

interpreted.

3.11 Data Presentation through different Ratios: -

a) Cash Profit Ratio (CPR): Cash profit is the profit recorded by a business that uses the cash

basis of accounting. Under this method, revenues are based on cash receipts and expenses are

based on cash payments. Consequently, cash profit is the net change in cash from these receipts

and payments during a reporting period.

The cash profit concept closely relates to the net change in cash flows that an organization

experiences during a reporting period. The difference between the change in total cash flows and

the cash profit is that the cash profit only relates (as just noted) to the sale of goods or services.

The ratio indicates financial efficiency of the firm in terms of generating cash profit.

Formula to calculate cash profit ratio:

(CPR) = Cash profit

Sales

Cash profit = Net Profit + Depreciation

58
 Table 3.1 CASH PROFIT RATIO

COMPANY NAME / 2011-12 2012-13 2013-14 2014-15 2015-16

YEAR

MAHINDRA & 0.1085 0.1005 0.1141 0.11031 0.1046

MAHINDRA

MARUTI SUZUKI INDIA 0.0779 0.0976 0.1114 0.1237 0.128

TATA MOTORS 0.0525 0.0473 0.0701 -0.0588 0.0634

59
 Cash profit ratio
0.15

0.1
Ratios

0.05
MAHINDRA & MAHINDRA
MARUTI SUZUKI INDIA
0
TATA MOTORS
2011- 2012- 2013- 2014- 2015-
2012 2013 2014 2015 2016
-0.05

-0.1
Company Name/Year

Fig 3.1 Cash Profit Ratio

b) Cash Return on Assets (CRA): The cash return on assets ratio is used to compare a business'

performance among other industry members. It is an efficiency ratio that rates actual cash flows

to company assets without being affected by income recognition or income measurements. The

ratio can be used internally by the company's analysts or by potential and current investors.

60
Cash return on assets measures the proportional net amount of cash spun off as the result of

owning a group of assets. The measure is usually derived in aggregate for an entire business, in

which case the calculation is:

(CRA)= Cash flow from operating activities

Total Assets

In the calculation, the cash flow from assets figure comes from the statement of cash flows. The

denominator includes all assets stated on the balance sheet, not just fixed assets. The cash return

on assets is especially valuable when there is a notable difference between cash flows and

reported net income, as can sometimes be the case when the accrual basis of accounting is used.

In this situation, calculating the return on total assets can be misleading, so cash flow is used

instead of the net income figure.

A high percentage of cash return on assets is especially necessary in an asset-heavy environment

(such as any manufacturing industry), where the cash is needed to maintain, update, and invest in

additional assets. The measure is commonly used to compare the performance of businesses

within the same industry, since it is very difficult for someone to obfuscate the cash flow figure.

Thus, the ratio is quite a reliable and comparable measure of asset performance across an

industry.

61
COMPANY NAME / YEAR 2011-12 2012-13 2013-14 2014-15 2015-16

MAHINDRA & MAHINDRA 0.1808 0.2319 0.1816 0.1472 0.2327

MARUTI SUZUKI INDIA 0.1371 0.2154 0.2164 0.2684 3.1136

TATA MOTORS 0.1193 0.0677 0.0732 -0.0734 0.0645

62
 Cash return on assets
3.5

2.5

2
Ratios

MAHINDRA & MAHINDRA

1.5
MARUTI SUZUKI INDIA
1
TATA MOTORS
0.5

0
2011- 2012- 2013- 2014- 2015-
-0.5 2012 2013 2014 2015 2016
Company Name/Year

Fig 3.2 Cash return on assets

c) Cash Flow Margin Ratio (CFMR): The ratio shows the relationship between cash generated

from operations and sales. Cash flow margin is a measure of the money a company generates

from its core operations per dollar of sales. The operating cash flow can be found on the

company's cash flow statement, and the revenue can be found on the income statement. A high

operating cash flow margin can indicate that a company is efficient at converting sales to cash,

and may also be an indication of high earnings quality.

Also called Operating Cash Flow Margin and Margin Ratio, the Cash Flow Margin measures

how well a companys daily operations can transform sales of their products and services into

cash. A key profitability ratio, relating Cash Flow from Operations to Net Sales provides

63
powerful view into the inner workings of a company using two crucial measures of company

performance. The calculation of cash flow margin ratio is:

(CFMR): Cash flow from operating activities

Net Sales

64
COMPANY NAME / YEAR 2011-12 2012-13 2013-14 2014-15 2015-16

MAHINDRA & MAHINDRA 0.0859 0.1025 0.092 0.827 0.1339

MARUTI SUZUKI INDIA 0.0626 0.0987 0.1122 0.1283 0.146

TATA MOTORS 0.0673 0.0505 0.0718 -0.0706 0.0554

65
 Cash flow margin ratio
0.9
0.8
0.7
0.6
0.5
Ratios

0.4 MAHINDRA & MAHINDRA

0.3 MARUTI SUZUKI INDIA
0.2 TATA MOTORS
0.1
0
2011- 2012- 2013- 2014- 2015-
-0.1
2012 2013 2014 2015 2016
-0.2
Company Name/Year

Fig 3.3 Cash flow margin ratio

66
3.2 Data Analysis

3.21 CASH PROFIT RATIO (CPR):

ANOVA

Ratios

Sum of Squares Df Mean Square F Sig.

Between Groups .003 4 .001 .302 .870

Within Groups .027 10 .003

Total .031 14

Table 3.4 ANOVA of Cash profit ratio

On the basis of results of one- way ANOVA with resulting value of F-test 0.302 that is

significant at 5% level as shown in the above table, the null hypothesis is accepted and it is

concluded that no significant difference exist among companies of Indian Vehicle Industry in

terms of their Cash Profit Ratio.

67
 Descriptive

Ratios

N Mean Std. Deviation Std. Error 95% Confidence Interval for Minimum Maximum

Mean

Lower Bound Upper Bound

1 3 .0796 .02804 .01619 .0100 .1493 .05 .11

2 3 .0818 .02991 .01727 .0075 .1561 .05 .10

3 3 .0985 .02466 .01424 .0373 .1598 .07 .11

4 3 .0584 .10172 .05873 -.1943 .3111 -.06 .12

5 3 .0987 .03271 .01888 .0174 .1799 .06 .13

Total 15 .0834 .04685 .01210 .0575 .1093 -.06 .13

Table 3.5 Descriptive of Cash flow ratio

68
3.22 CASH RETURN ON ASSETS (CRA):

ANOVA

RATIO

Sum of Squares df Mean Square F Sig.

Between Groups 2.357 4 .589 .988 .457

Within Groups 5.965 10 .596

Total 8.321 14

Table 3.6 ANOVA of Cash return on asset

On the basis of results of one- way ANOVA with resulting value of F-test 0.988 that is significant at 5%

level as shown in the above table, the null hypothesis is rejected and it is concluded that significant

difference exist among companies of Indian Vehicle Industry in terms of their Cash Return on Assets.

Descriptive

RATIO

N Mean Std. Deviation Std. Error 95% Confidence Interval for Mean Minimum Maximum

Lower Bound Upper Bound

1 3 .1458 .03160 .01825 .0673 .2243 .12 .18

2 3 .1717 .09041 .05220 -.0529 .3963 .07 .23

3 3 .1571 .07469 .04312 -.0285 .3426 .07 .22

4 3 .1141 .17329 .10005 -.3164 .5445 -.07 .27

5 3 1.1369 1.71391 .98953 -3.1207 5.3945 .06 3.11

Total 15 .3451 .77095 .19906 -.0818 .7721 -.07 3.11

Table 3.7 Descriptive of Cash return on asset

69
3.23 CASH FLOW MARGIN RATIO (CFMR):

ANOVA

RATIO

Sum of Squares df Mean Square F Sig.

Between Groups .103 4 .026 .572 .689

Within Groups .452 10 .045

Total .555 14

Fig 3.8 ANOVA of Cash flow margin ratio

On the basis of results of one- way ANOVA with resulting value of F-test 0.572 that is

significant at 5% level as shown in the above table, the null hypothesis is accepted and it is

concluded that no significant difference exist among companies of Indian Vehicle Industry in

terms of their Cash Flow Margin Ratio.

70
 Descriptive

RATIO

N Mean Std. Deviation Std. Error 95% Confidence Interval for Minimum Maximum

Mean

Lower Bound Upper Bound

1.00 3 .0719 .01232 .00711 .0413 .1025 .06 .09

2.00 3 .0839 .02899 .01674 .0119 .1559 .05 .10

3.00 3 .0920 .02020 .01166 .0418 .1422 .07 .11

4.00 3 .2949 .47142 .27218 -.8762 1.4660 -.07 .83

5.00 3 .1118 .04919 .02840 -.0104 .2340 .06 .15

Total 15 .1309 .19919 .05143 .0206 .2412 -.07 .83

Table 3.9 descriptive of Cash flow margin ratio

Interpretation:

71
 The cash management performance of the sample companies are examined with the help of the

above ratios. To examine whether or not there are significant differences in cash management

performance between the sample companies, One-Way ANOVA has been applied in the study.

In Table,I have selected some ratios on the basis of ratios to compare the comparative analysis of

cash management of Mahindra & Mahindra, Maruti Suzuki India and Tata Motors. The one-way

ANOVA compares the means between the groups you are interested in and determines whether

any of those means are statistically significantly different from each other. This is important

because one of the assumptions of one way ANOVA is that the two or more groups have

different from each other. The F- value in the above table is greater than 0.05, than we can

assume that variances are equal and the values with equal variances are taken into consideration

in the present study.

YEAR CPR CRA CFMR CPR CRA CFMR CPR CRA CFMR

2011-12 0.1085 0.1808 0.0859 0.0779 0.1371 0.0626 0.0525 0.1193 0.0673

2012-13 0.1005 0.2319 0.1025 0.0976 0.2154 0.0987 0.0473 0.0677 0.0505

2013-14 0.1141 0.1816 0.092 0.1114 0.2164 0.1122 0.0701 0.0732 0.0718

2014-15 0.11031 0.1472 0.827 0.1237 0.2684 0.1283 -0.0588 -0.0734 -0.0706

2015-16 0.1046 0.2327 0.1339 0.128 3.1136 0.146 0.0634 0.0645 0.0554

MEAN 0.1076 0.1948 0.2483 0.1077 0.7902 0.1096 0.0349 0.0503 0.349

S.D 0.00524 0.3691 0.32405 0.02044 1.29968 0.3166 0.05314 0.7261 0.5959

MAHINDRA &MAHINDRA MARUTI SUZUKI INDIA TATA MOTO

Table 3.10 Table Showing Cash Management Performance Ratios of Selected Companies (in %)
72
3.24 Cash Profit Ratio:

As observed from above table, The Cash Profit ratio of Tata Motors is almost forming an

increasing pattern. Amongst all the sample companies it is having the highest standard deviation.

Whereas Maruti Suzuki is showing a mixed pattern in its CPR with lowest standard deviation.

M&M with a standard deviation of 0.00524, Maruti Suzuki is showing a mixed trend in starting

of the research period, further it is trying to consolidate its CPR.

3.25 Cash Return on Assets:

Tata Motors is showing a completely mixed trend during the research period in its Cash Return

on Assets. M&M starting on the positive side, in generating cash return on assets, has been quite

successful in earning positive cash returns though with quite a fluctuating trend. Same is the

scene with Maruti Suzuki. In the end of the research period, Maruti Suzuki has again generated a

positive cash returns.

3.26 Cash flow Margin Ratio:

As it can be observed clearly from Table, all the sample companies are showing fluctuations in

generating cash flow margin during the research period. Tata Motors is standing at top with

highest average CFMR of 0.5959 followed by M&M and Maruti Suzuki with an average CFMR

of 0.324 and 0.3166 respectively.

3.27ANOVA Test

73
To know whether there are significant differences between the samples in their average cash

management performance, ANOVA has been applied. The results obtained from ANOVA are

shown as below:

RATIO F- value Sig. Status of null-hypothesis

CPR 0.302 0.870 Accepted

CRA 0.988 0.457 Rejected

CFMR 0.572 0.689 Accepted

Table3.11 Statistical result of ANOVA

1. On the basis of results of one- way ANOVA with resulting value of F-test 0.302 that is

significant at 5% level as shown in the above table, the null hypothesis is accepted and it is

concluded that no significant difference exist among companies of Indian Vehicle Industry in

terms of their Cash Profit Ratio.

2. On the basis of results of one- way ANOVA with resulting value of F-test 0.988 that is

significant at 5% level as shown in the above table, the null hypothesis is rejected and it is

concluded that significant difference exist among companies of Indian Vehicle Industry in terms

of their Cash Return on Assets.

3. On the basis of results of one- way ANOVA with resulting value of F-test 0.572 that is

significant at 5% level as shown in the above table, the null hypothesis is accepted and it is

74
concluded that no significant difference exist among companies of Indian Vehicle Industry in

terms of their Cash Flow Margin Ratio.

Chapter-4

Summary & Conclusions

4.1 Findings of the study:

4.11 Selected companies are found to be having a fluctuating trend almost in all the three

performance drivers of cash management. Hence it can be derived that the industry might be

facing a mixed trend during the research period.

4.12 It is concluded that no significant difference exist among companies of Indian Vehicle

Industry in terms of their Cash Profit Ratio on the basis of results of one- way ANOVA with

resulting value of F-test 0.302 that is significant at 5% level.

4.13 On the basis of results of one- way ANOVA with resulting value of F-test 0.988 that is

significant at 5% level, the null hypothesis is rejected and it is concluded that significant

75
difference exist among companies of Indian Vehicle Industry in terms of their Cash Return on

Assets.

4.14 On the basis of results of one- way ANOVA with resulting value of F-test 0.572 that is

significant at 5% level, the null hypothesis is accepted and it is concluded that no significant

difference exist among companies of Indian Vehicle Industry in terms of their Cash Flow Margin

Ratio.

4.15 Overall performance of Tata Motors Ltd., when eyed from the cash management viewpoint,

is good enough though showing a mix trend during the study period.

4.16 Mahindra & Mahindra is found to be best at its management of cash considering the

average cash management performance Maruti Suzuki is below the average performance as

compared to Mahindra & Mahindra and Tata Motors Ltd., which again, cannot be said that it is

only due to its poor cash management. But other factors such as market condition and its sales

may also be affecting its performance.

4.17 The study enhances the knowledge base of working capital management and will help

companies to manage working capital efficiently in growing situation associated with capital

expenditure.

4.2 Limitations of the study

4.21 Research is based on secondary data and historical in nature. The study is limited to five

years and three companies only.

4.22 The study has focused only on vehicle industries and did not consider other sector of the

economy due to inadequacy of time and resources.

76
4.23 The present study is based on the secondary data collected from secondary data sources,

internet and websites of various vehicles industries concerned. Therefore, the quality of the study

depends upon the accuracy, reliability, and quality of secondary data source.

4.24 The study has ignored the impact of possible differences in the accounting method adopted.

4.25 The findings have important implications for policy makers and practitioners. The results

reveal an association, not a causal link, between surplus free cash flow condition and the level of

earnings management. Also, inferences in these study ratios are limited by the selected sample

and time period, and the sample size is relatively small. A larger sample size may be necessary in

order to obtain a more statistical power for the data analysis and significant results of hypothesis

testing. Thus, future research may employ a larger sample size in order to also improve the

generalizability of results.

4.26 There are limited resources. The period of study taken was five years from 2011-2016. Only

data related to these financial years was studied to establish the relationship.

4.3 Scope for further study:

4.31 The research study is based on the annual reports of the company for a period of five years

from 20011-12 to 2015-2016. The reason for restricting the study to this small period was due to

time constraint.

4.32 To describe briefly the economic characteristics of the industry that affect price research.

4.33 To formulate a research program, indicate specific projects that seem important and

feasible, and suggest elements of a wider program that will stimulate the industry, individuals,

universities, research bureaus, and appropriate governmental agencies to undertake studies

designed to provide a better understanding of pricing problems in this industry.

77
4.4 Keywords and there meaning:-

S NO. Keywords Meaning

1. Cash Management Cash management is the corporate process of

collecting and managing cash, as well as using it for

(short-term) investing. It is a key component of

ensuring a company's financial stability and solvency.

2. ANOVA Analysis of variance, a statistical method in which the

variation in a set of observations is divided into

distinct components.

3. F- value An F statistic is a value you get when you run an

ANOVA test or a regression analysis to find out if the

means between two populations are significantly

different.

4. Standard deviation A quantity expressing by how much the members of a

78
 group differ from the mean value for the group.

5. Null hypothesis (in a statistical test) the hypothesis that there is no

significant difference between specified populations,

any observed difference being due to sampling or

experimental error.

6. Cash return on assets Return on assets is calculated by dividing net income

by average total assets. A low ratio means a company

makes less net income per $1 of assets, which is a

sign of inefficiency. The issue is net income is not

always aligned with cash flow.

7. Variances The fact or quality of being different, divergent, or

inconsistent.

79
 Chapter-5

Recommendations

5.1 Recommendations

5.11 The vehicle companies are increasing their production and also reducing their fuel

consumption and cost.

5.12 Tata motor company may sustain their market share and goodwill due to cutthroat

competition and arrivals of new entry in the vehicle industries and also the reason to increase in

input cost. They have better financial performances are compared with sample, so give attention

to it.

5.13 Mahindra & Mahindra may give concentration to make optimum utilization of available

resources. Because it has passed high level financial assistance but it fails to make more earnings

compared with Tata Motors. But the TATA has lowest financial position compared with M&M

however it can earn more profit or achieve high profit volume.

80
5.14 Maruti Suzuki may give attention in the area of direct expenses as well as indirect expenses

to reduction it because effective and efficiency performance of company can be measured in

terms of Cash Management. Expenses are the major direct impact on the cash management of

every enterprise.

5.15 In order to increase the growth of cash of the companies, it is suggested to control the cost

of goods sold and operating expenses.

5.16 The quantum of sales generated should be improved impressively in order better to enjoy

better per of the assets and capital employed.

5.17 Few companies, which did not follow a definite policy of financing fixed assets, should

follow such policy.

5.18 Cost accounting and cost audit should be made mandatory for this units and cost sheet along

with annual financing statement should be prepared.

5.19 The management should utilize maximum production capacity.

5.20 Companies can reduce the interest burden by giving quality products and building brand

image which will help to increase profit and utilize maximum production capacity.

5.21 The company should time to time increase their liquidity power which would help them for

further business operations.

81
References/Bibliography

5.21Vaghela and Jhala (2015): performance evaluation of selected cars and utility vehicles

companies, Fundamentals of Financial Management, Thomson South-Western, Ohio.

5.22 Chandra, P. (2005), Finance Sense Finance for Non-Finance Executives, Tata McGraw

Hill, New Delhi.

5.23 Ghosh, S. (2011), Cash Management Performance Evaluation, Indian journal of

accounting volume XLII (1) December 2011.

5.24 Gupta, A. (2009), Financial Accounting for Management An Analytical Perspective,

Pearson, New Delhi

82
5.25 Kothari, C. R., (2002), Research Methodology Methods and techniques, Wishva

Prakashan, New Delhi.

5.26 Published annual report of selected companies from 2008-09 to 2012-13.

5.27 Sanghani, D. D., (2013), Performance Evaluation through Cash Management Educare

International Journal.

5.28 Vaghela S. J. and Raval M. B. (2015) A Comparative Study On Performance Evaluation

Of Selected Cars & Utility Vehicles Companies (With Special Reference To Cash

Management) S. S. International Journal of Multidisciplinary Research, Vol 1 No. 3, pp 33-41.

5.3 Online References

i.www.ibef.org

ii.www.siamindia.com

iii. http://www.moneycontrol.com

iv. www.economictimes.indiatimes.com

v. Wikipedia

vi.www.business.gov.in

vii. Companies Official Websites

83