PROJECT REPORT

ON

“Cash Flow Statement at

ThinkNEXT Technologies PVT. Ltd”

An industrial training report submitted in partial fulfillment of the requirement for the degree of

BACHLORE OF COMMERCE

(2016-2017)

Submitted by:

SATNAM SINGH

MBA 3rd SEM

Uni. Roll no: 32136

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 PUNJAB TECHNICAL UNIVERSITY , JALANDHAR

I hereby declare that the Training Report was submitted by me under the supervision and
guidance of Mr. , project guide, College of DOABA GROUP OF COLLEGE in partial
fulfillment of B.Com 5th semester. I further declare that I am solely responsible for omission
and commission of errors if any.

(SATNAM SINGH)

Signature of the student

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 ACKNOWLEDGEMENT

Amongst the wide panorama of people who provided me the inspiration, guidance and
encouragement, I take this opportunity to thank those who gave me indebted assistance and
constant encouragement for completing this project.

I would like to thank Ms Neetu finance Executive of ThinkNEXT Technologies Pvt.

Ltd., and Mohali for his continuous help in completion of this project. He motivated me and was
available whenever her assistance was sought. He was actively involved throughout the project
and was also kind enough to tell me the strengths and weaknesses and how I could improve
myself to face the corporate world. Without her support the completion of this project would be
impossible.

I would like to extend my thanks to all the employees/staff of the ThinkNEXT

Technologies Pvt. Ltd., Mohali for their support.

Thanking you All

Place: Mohali

(SATNAM SINGH)

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 TABLE OF CONTENT

S.No. Chapter Name Page No.

Chapter-1 Introduction

1.1 Company Profile 6-16

1.2 Introduction to Cash Flow 17-25

Chapter-2 Review of Literature 26-27

Chapter-3 Scope and Objectives of the Study 28-29

Chapter-4 Research Methodology 32-33

Chapter-5 Limitations of the Study 34-35

Chapter-6 Data Analysis and Interpretation 36-38

Findings & Suggestions 39-41

Chapter-7

Conclusion 42-43

Bibliography 44

Annexures 45-48

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 CHAPTER-1

INTRODUCTION

1.1 INTRODUCTON OF THE COMPANY

ThinkNEXT Technologies Private Limited (Formerly Brilliant Software Solutions) is an ISO

9001:2008 certified software development company founded in August 2009 and it is approved
from Ministry of Corporate Affairs which deals in University/College/School ERP Solutions,
Android /iPhone Applications development, Web designing, Web development, Discount Deals
(www.thinknextcard.com, www.tricitydeal.com), Bulk SMS, Voice SMS, Bulk Email, Biometric
Time Attendance, Access Control, SEO/SMO, Database Solutions, Payment Gateway
Integration, E-Mail Integration, Industrial Training, Corporate Training and Placements etc.
ThinkNEXT Technologies provides software solutions using latest technologies e.g. Smart Card,
NFC, Biometrics, GPS, Barcode, RFID, SMS, Auto SMS (Short code), Android, iPhone, Web,
Windows and Mobile based technologies

ThinkNEXT has wide expertise in .NET, Crystal Reports, Java, PHP, Android, iPhone,
Databases (Oracle and SQL Server), Web Designing, Networking, Web Server configurations,
various RAID Levels etc.

ThinkNEXT Technologies has also setup its offices in USA, Delhi, Shimla and Bathinda for its
software support. ThinkNEXT has its own multiple Smart Card printing, encoding and barcode

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label printing machines to provide better and effective customer support solutions. ThinkNEXT
has also setup its own placement consultancy and is having numerous placement partner
companies to provide best possible placements in IT industry.

ThinkNEXT Technologies has developed for the first time in northern region cloud computing
based Cloud Campus 4.0 to facilitate knowledge and placement centric services. It is a unique
concept for effective and collaborative learning.

1. ThinkNEXT deals exclusively in campus automation through Smart Campus ERP

Solutions. Therefore we have better experience in handling large group of institutions
through proper time-tested policies and procedures.
2. First Company of India who has Launched NFC Technology (The Future) for Smart
Campuses through NFC Smart Cards.
3. First Company of India who has launched Android Version of Smart Campus ERP
Solutions for Mobiles and Tablet PCs.
4. First company of India who has developed SMS Opt-In Technology so that
Institutes/Colleges can send Transactional SMS with SMS Sender ID and without SMS
Template approval.
5. First company of Punjab, Haryana, Himachal, J&K (Northern region) who launched
Smart Cards (Contact Type), Smart Cards (Contactless) in Punjab for campus
automation.
6. First company of India which has launched its ThinkNEXT Smart Card as Discount Card
in more than 120 enterprises.
7. Established own multiple Smart Card Designing, Smart Card Printing, Smart Card
Lamination and Oyster Barcode Printing Units.
8. Multiple SMS Gateway Support.

SERVICES:

We provide Software Solutions using latest technologies or features:

 NFC
 Biometrics (Fingerprint with Automated Online)

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  Smart Card
 Barcode
 RFID
 SMS
 Short code 56767 (Auto SMS)
 Android
 ions (phone)
 GPS
 WAP (For WAP Enabled Mobile Phones)
 Multiple SMS Gateway Support
 Web based Technologies (365x24x7 services)
 Windows based Technologies
 Mobile based Technologies
 Webcam support for various operations
 Parallel Internet, Intranet and Wi-Fi Support

Vision:

ThinkNEXT Technologies Pvt. Ltd. are already very flexible and scalable. Still, we always
take care of specific requirements of our clients. Our highly committed R&D team makes our
software feature rich, dynamic and future tuned everyday so that our clients always maintain
the lead over their competitors. The development of the software is being done and the purpose
full customization of the package is carried out in the ThinkNEXT lab.

Mission:
ThinkNEXT is pioneer in Smart Campus ERP Solutions for Universities/Colleges/Schools
using latest technologies and features. We provide software solutions using .NET, PHP,
Android, iPhone, Java technologies with three tier-architecture support. We provide back-end
solutions using MS SQL Server, Oracle, and MySQL.

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 Quality Policy:
We have wide experience working with eminent Educationists, Managements, Directors,
Principals, Head of Departments, other Staff Members, Parents and students. Therefore we do
not sell only software Modules but an innovative system which has more importance than just
ERP software modules. Today Smart Campus solutions are a need of hour for every
University/Group of Colleges or an Institution to make edge over others and maintain a lead
over their competitors. Our Research and Development team is committed to make your
institute(s) to maintain lead over their competitors.

More Services:

• ThinkNEXT offers various industry-ready programs so that student needs not to

struggle for jobs. ThinkNEXT offers 6 weeks/2 Months/6 Months training programs to
make students industry.

• ThinkNEXT is pioneer in providing best placements in Industry. We offer

minimum five job interviews for each student and provide 100% Placement Assistance.

• ThinkNEXT Offers Life-Time Validity Learning and Placement Card. Students

undergoing six months training will have advantage to learn free of cost anything against
that training program for life-time.

• ThinkNEXT offers Part-Time/Full Time Job Offer for each student during
training so that students can earn while they learn. Student can bear their food,
accommodation and other expenses on.

MANAGEMENT OF ThinkNEXT PVT.LTD.

BOARD OF DIRECTOR

 Sunil Jindal

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  Munish Mittal
 GhanshamDas

MANAGING DIRECTOR

 Sunil Jindal

MARKETING HEAD

 Suresh Chandra

IT HEAD

 Mukesh Kumar

SOME OF OUR CLIENTS:

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10
PLACEMENTS

Company list

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INDUSTRIAL TRAINING

6 Months/Weeks Industrial Training Programs

 Microsoft .NET
 Android
 iPhone
 Java
 PHP/MySQL
 Web Designing
 Embedded Systems
 AutoCAD
 Online Bidding (Freelancing)
 Oracle/SQL Server Administration
 Software Testing and Quality Assurance
 Hardware & Networking
 CCNA
 MCITP
 SEO
 CATIA
 Pro-E
 Solid Works
 Human Resource
 Marketing
 Finance

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  (FREE Spoken English/Personality Development/IELTS Classes on daily basis with
Industrial Training + Job Offer)

 One-to-one Project and Project will be made Live and to make it Live, ThinkNEXT
will provide sub-domain and hosting worth Rs. 3000 absolutely free to each student
for web based Project. To host mobile apps, ThinkNEXT will provide free Google
Play account (For Android Mobile Apps) and Apple iTunes Connect Account
(Apple App Store) for iPhone Apps.

ThinkNEXT Edge:-

 Industrial Training and Certificates from Software/Electronics Company not just from an
institute
 Free Interview Preparation, Spoken English and Personality Development Programmers.
 Opportunity to get placed in ThinkNEXT and numerous other companies.
 Life-Time Validity Learning and Placement Card.
 Part-Time/Full-Time Job Offer for each student during Training.
 Think NEXT Cloud Campus advantage not only during training, even after completion of
training for life time.
 One-to-one PC and Corporate Environment.
 Learn from Developers/Industry experts rather than Trainers/Teachers.
 Direct interaction with Developers/Industry Experts.
 Industrial training programmers are designed to make students industry-ready.
 Large Display LEDs in each Class-Room/Lab, Wi-Fi Labs.
 Guest Lectures/Seminars by Industry Experts.
 Every Student is provided with “Live Projects” mentored by Software/ Electronics/Industry
Experts.
 100% Placement assistance.

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ThinkNEXT Cloud Campus Advantages:-

 Each Student will have Unique User ID and Password to Login to ThinkNEXT Cloud
Campus 4.0 anytime…anywhere…
 View Numerous Technical, Personality Development Videos anytime…any here…
 Students will be able to download e-Books, e-Journals, Class Notes, Important Links and
other study material.
 ThinkNEXT Smart Campus is a step towards not only 100% placements but also better job
offers even after placements.
 Student Profile, Instant Technical Updates, Class Notes, Project Report Submitted,
Attendance, Performance, Notice-Board, Class Timings etc. Everything online.
 Communication with industry experts, Technologists through cloud Campus
anytime…anywhere… .
 Regular SMSes and E-mail for Related Job Offers.
 Access through PCs, Laptops, Tablet PCs, Mobiles via internet.

1.2 INTRODUCTION TO FINANCE

Financing is an important function of any business undertaking. It deals with the Finance is a life
blood of a business. Finance is very necessary for the smooth running of the business. No
business, whether big, medium, small can be started without an adequate amount of finance.
Right from the very beginning getting an idea to business. Finance is needed to establish the

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business, acquire fixed asset, make investigation such as market survey, develop product, keep
men and machine at work etc.

In other words, finance may be defined as the provision of money at the time when it is required.
So, it refers to the management of flow of money through an organization. So finance involves
the application of skills in the manipulated, use & control of money.

MEANING OF FINANCE

Before we begin, first let’s understand the origin of word “Finance”.

Finance may be defined as the art & science of managing money. It includes
financial service & financial instrument. The concept of finance includes capital, funds, money
& amount. But each word is having unique meaning.

Finance is a field that deals with allocation of assets and liabilities over time under conditions of
certainty & uncertainty. Finance is also applies & uses the theories of economics at some level.
Finance can also be defined as the science of money management. A key point in finance is the
time value of money, which states the purchasing power of one unit of currency can vary over
time. Finance aims to price assets based on their risk level & their expected rate of return.
Finance can be broken into three different sub categories: - public finance, corporate finance &
personal finance.

DEFINITIONSOF FINANCE

 Finance is defined as the provision of money at the time when it is required.

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  In the general sense:-
“Finance is the management of money & other valuables which
can be easily converted into cash”.

 According To Experts:-
“Finance is a simple task of providing the necessary funds
(money) required by the business of entities like companies, firms, individuals & others
on the terms that are most favourable to achieve their economic objectives.”

 AccordingTo Entrepreneurs:-
“Finance is concerned with cash. It is so,
since, every business transaction involves cash directly or indirectly.

SOURCES OF FINANCE

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 According to period:-
 Long term:-
a) Retained earnings: Retained earning denotes the profit not distributed among
shareholder. The practice of retained earnings as a method of ‘self financing’ or ‘internal
financing’ commonly used by the established companies. It is also known as ploughing back of
profits’.
b) Financial institution: Institutional finance means long term credit provided by the
specialized financial institutions to industry and business. The national level institutions
providing terms loans to business and industry are as follows:
i.Industrial Finance Corporation of India (IFCI)
ii.National Industrial Development Corporation (NIDC)
iii.Life Insurance Corporation of India (LIC)
iv.UTI Mutual Fund
v.Industrial Credit and Investment Corporation of India (ICICI).

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 Medium term:-
a) Debenture:
A debenture may be defined as an acknowledgement of debt by a company. Debentures are
creditorship securities which provide funds to the company on loan basis rather than on capital
basis.
The debentures have following features:
i.Debentures carry a fixed rate of interest every year.
ii.Debenture can be redeemed as per the terms of their issue.
iii.Debentures are generally secured by charge on the company’s asset which could be
sold in case of default by the company.
iv.Debenture-holder don’t carry any voting right and so they can’t in the election of
directions.
b) Commercial banks:Commercial banks advance money to the business firms generally
for meeting their short term and medium term requirements. So, Commercial banks can also
refers to a bank or a division of a bank that mostly deals with deposits and loans. The mode of
advances have shown in the followings:
i. Overdraft
ii. Cash Credit
iii. Discounting of bills
iv. Loans

 Short term:-
a) Bank Credit/ Trade Credit: - It refers to the arrangement whereby the suppliers sells
raw materials, finished goods to the buyer on credit and allow him to make payment with in an
agreed period, generally ranging from 30 days to 90 days. It is a flexible source of finance. It is
convenient & easy source of finance.
b) Advances:-Some business houses get advances from their customers & agents again
orders & this source is a short term source of finance. It is a cheap source of finance & in order
to minimize these investments in working capital.

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c) Factoring:-A factor is a financial institution which offers services related to the
management & financing of debt arising out of credit sales. Factoring can be of two types,
namely;

i. With-resource factoring, and

ii. Without resource factoring.

 According to Ownership
a) Equity shares: Equity shareholders provide capital on permanent basis to the company.
Equity shareholders are the real owners of the company and they bear the risk of business. The
main features of equity shares are discussed below:
i. The equity shareholders are the primary risk bearer as they provide risk capital.
ii. The equity share capital is not redeemable during the life time of the company.
iii. There is uncertainty of returns as the rate of equity dividend is not fixed.
iv. It is a source of confidence to the loan providers.
v. The equity shareholders enjoy voting rights.

b) Public Deposit: - Acceptance of fixed deposits from the public by all type of
manufacturing and non-bank financial companies in the private sector has been unique feature of
Indian financial system. Public deposits are unsecured, more risky, less liquid and without any
tax advantage. There has been a tremendous growth both in the amount of public deposits as well
in the number of companies accepting such deposits.

ROLE & IMPORTANCE OF FINANCE

Finance is important to an organisation as the firm has to know how viable it is and balance
profit with costs.

The role of finance department can be summarised as follows:-

 Prepare & create financial accounts:-

Such as trading, profit & loss account & the balance sheet.

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  Keep & maintain financial records:-
Sales figures & records of expenditure would be held by the finance department and used
by other department also.

 Prepare & plan internal financial information:-

This would mainly be performed in the case of a budget, which is a financial plan & can help
managers take corrective actions.

 Analyse current financial performance:-

How the firm has done in trading or expenses would be analysed primarily using ratio
analysis tools.

 Pay creditors:-

Finance department would ensure that bills are paid to people the firm owes money to.

 Pay employees wages & salaries:

Running the payroll system is another important task for finance to undertake. Employees
have to be paid.

1.3 INTRODUCTION TO CASH FLOW

What is 'Cash Flow' ?

Cash flow is the net amount of cash and cash-equivalents moving into and out of a business.
Positive cash flow indicates that a company's liquid assets are increasing, enabling it to settle
debts, reinvest in its business, return money to shareholders, pay expenses and provide a buffer
against future financial challenges. Negative cash flow indicates that a company's liquid assets
are decreasing. Net cash flow is distinguished from net income, which includes accounts
receivable and other items for which payment has not actually been received. Cash flow is used

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to assess the quality of a company's income, that is, how liquid it is, which can indicate whether
the company is positioned to remain solvent.

Features of Cash Flow Statement:

The significant features are:

(i) Cash Flow Statement is very dynamic in character since it records the investment of cash
from the beginning of the period to the end of the period.

(ii) It is a periodical statement as it covers a particular period.

(iii) This statement does not recognize matching principles.

(iv) A comparison of the historical and projected cash flow statements can be made so as to find
the variations and deficiency or otherwise in the performance as to enable the firm to take
immediate and effective action.

(v) It exhibits the changes of financial positions relating to operational activities, investing
activities and financial activities, respectively, by which an analyst can draw his conclusion.

Importance of Cash Flow Statement

(a) Helps to make Cash Forecast:

Cash Flow Statement, no doubt, helps the management to make a cash forecast for the near
future. A projected Cash Flow Statement helps the management about the cash position which is
the basis for all operations and, thus, the management sees light relating to cash position, viz.
how much cash is needed for a specific purpose, sources of internal and external issues, etc.

(b) Helps the Internal Management:

It helps the internal management to determine the financial policy to be adopted in future since it
supplies information relating to funds, e.g. taking decision about the replacement of fixed assets
or repayment of long-term liabilities, etc.

(c) Reveals the Cash Position:

It is a significant pointer about the movement of cash, i.e. whether there is any increase in cash
or decrease in cash and the reasons thereof which helps the management. Moreover, it explains
the reasons for small cash balance even though there is sufficient profit, or vice versa. Besides,
the management can compare the original forecast with the actual one in order to understand the
trend of movement of cash and the variation therefore.

(d) Reveals the result of Cash Planning:

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How far and to what extent the cash planning becomes successful is revealed by the analysis of
Cash Flow Statement. The same is possible by making a comparison between the projected Cash
Flow Statement/Cash Budget and the actual one—and the measures to be taken accordingly.

Advantages of Cash Flow Statement

The advantages of Cash Flow Statement are:

(a) Ascertaining Liquidity and Profitability Positions:

Cash Flow Statement helps the management to ascertain the liquidity and profitability position of
a firm. Liquidity means one’s ability to pay the obligation as soon as it becomes due. Since Cash
Flow Statement presents the cash position of a firm at the time of making payment it directly
helps to ascertain the liquidity position, the same is also applicable in case of profitability.

One can understand from Cash Flow Statement how efficiently the firm is paying its obligation
in various forms of expense and liability. At the same time, as the cash earning capacity of a firm
can be ascertained from this statement, profitability position depends also on cash earning
capacity.

(b) Ascertaining Optimum Cash Balance:

Cash Flow Statement also helps to ascertain the optimum cash balance of a firm. If optimum
cash balance can be determined, it is possible for a firm to ascertain the idle and/or excess and/or
shortage of cash position. After ascertaining the cash position, the management can invest the
surplus cash, if any, or borrow funds from outside sources accordingly to meet the cash deficit.

(c) Cash Management:

Proper management of cash is possible if Cash Flow Statement is properly prepared. The
management can prepare an estimate about the various inflows of cash and outflows of cash so
that it becomes very helpful for them to make plans for the future.

(d) Capital Budgeting Decisions:

Since capital budgeting relates to the decision of capital expenditure in various forms on a long-
term basis, cash flow timing is very important for this purpose.

(e) Superiority over Accrual Basis of Accounting:

No doubt Cash Flow Statement or cash basis of accounting is more reliable or dependable than
accrual basis of accounting—as a number of technical adjustments are made in the latter case.
Cash flow accounting is free from such snags.

(f) Planning and Coordination:

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Cash Flow Statement is prepared on an estimated basis meant for the successive/next year which
helps the management to know how much funds are required for what purposes, how much cash
is generated from internal sources, how much cash can be procured from outside the business. It
also helps to prepare cash budgets. Thus, the management can prepare plans, coordinate various
activities with the help of this statement.

(g) Movement of Cash:

A Cash Flow Statement presents the management the flows in and flows out of cash for various
purposes on the basis of which future estimates can be prepared.

(h) Performance Appraisal:

By comparing the actual Cash Flow Statement with the projected Cash Flow Statements, the
management can evaluate or appraise the performances regarding cash. If any unfavourable
variance is found, the reason for such variation is located and rectified accordingly.

Articles to learn about objectives of cash flow statement.

(a) Measurement of Cash:

Inflows of cash and outflows of cash can be measured annually which arise from operating
activities, investing activities and financial activities.

(b) Generating Inflow of Cash:

Timing and certainty of generating the inflow of cash can be known which directly helps the
management to take financing decisions in future.

(c) Classification of Activities:

All the activities are classified into: operating activities, investing activities and financial
activities which help a firm to analyze and interpret its various inflows and outflows of cash.

(d) Prediction of Future:

A Cash Flow Statement, no doubt, forecasts the future cash flows which helps the management
to take various financing decisions since synchronization of cash is possible.

(e) Assessing Liquidity and Solvency Position:

Both the inflows and outflows of cash and cash equivalent can be known, and, as such, liquidity
and solvency position of a firm can also be maintained as timing and certainty of cash generation
is known, i.e. it helps to assess the ability of a firm to generate cash.

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(f) Evaluation of Future Cash Flows:

Whether the cash flow from operating activities are quite sufficient in future to meet the various
payments e.g. payment of expenses/debts/dividends/taxes.

(g) Supply Necessary Information to the Users:

A Cash Flow Statement supplies various information relating to inflows and outflows of
cash to the users of accounting information in the following ways:

(i) To assess the ability of a firm to pay its obligations as soon as it becomes due;

(ii) To analyze and interpret the various transactions for future courses of action;

(iii) To see the cash generation ability of a firm;

(iv) To ascertain the cash and cash equivalent at the end of the period.

(h) Helps the Management to Ascertain Cash Planning:

No doubt a cash flow statement helps the management to prepare its cash planning for the future
and thereby avoid any unnecessary trouble.

What is the purpose of drawing up a cash flow statement?

The purpose of drawing up a cash flow statement is to see a company's sources of cash and uses
of cash, over a specified time period. The cash flow statement is traditionally considered to be
less important than the income statement and the balance sheet, but it can be used to understand
the trends of a company's performance that can't be understood through the other two financial
statements.

While the cash flow statement is considered the third most important of the three financial
statements, investors find the cash flow statement to be the most transparent, so they rely on it
more than the other financial statements when making investment decisions.

Cash vs. Cash Flow

Cash is ready money in the bank or in the business. It is not inventory, it is not accounts
receivable (what you are owed), and it is not property. These can potentially be converted to
cash, but can't be used to pay suppliers, rent, or employees.

Profit growth does not necessarily mean more cash on hand. Profit is the amount of money you
expect to make over a given period of time, while cash is what you must have on hand to keep
your business running. Over time, a company's profits are of little value if they are not
accompanied by positive net cash flow. You can't spend profit; you can only spend cash.

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Cash flow refers to the movement of cash into and out of a business. Watching the cash inflows
and outflows is one of the most pressing management tasks for any business. The outflow of
cash includes those checks you write each month to pay salaries, suppliers, and creditors. The
inflow includes the cash you receive from customers, lenders, and investors.

Positive Cash Flow

If its cash inflow exceeds the outflow, a company has a positive cash flow. A positive cash flow
is a good sign of financial health, but is by no means the only one.

Negative Cash Flow

If its cash outflow exceeds the inflow, a company has a negative cash flow. Reasons for negative
cash flow include too much or obsolete inventory and poor collections on accounts receivable
(what your customers owe you). If the company can't borrow additional cash at this point, it may
be in serious trouble.

What Are the Components of Cash Flow?

A "Cash Flow Statement" shows the sources and uses of cash and is typically divided into three
components:

1. Operating Cash Flow:

Operating cash flow, often referred to as working capital, is the cash flow generated from
internal operations. It comes from sales of the product or service of your business, and
because it is generated internally, it is under your control.

2. Investing Cash Flow:

Investing cash flow is generated internally from non-operating activities. This includes
investments in plant and equipment or other fixed assets, nonrecurring gains or losses, or
other sources and uses of cash outside of normal operations.

3. Financing Cash Flow:

Financing cash flow is the cash to and from external sources, such as lenders, investors
and shareholders. A new loan, the repayment of a loan, the issuance of stock, and the
payment of dividend are some of the activities that would be included in this section of
the cash flow statement.

Classification of Cash flow

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Cash flow statement should report cash flows during the period classified by operating, investing
and financing activities. Thus cash flows are classified into three main categories:

1. Cash flows from operating activities.

2. Cash flow from investing activities.
3. Cash flows from financing activities.

1. Cash Flows from Operating Activities: Operating activities are the principle revenue
producing activities of the enterprise and other activities that are not investing or
financing activities.
The amount of cash flows arising from operating activities is a key indicator of
the extent to which the operations of the enterprise have generated sufficient cash flows
to maintain the operating capability of the enterprise, pay dividends, repay loans, and
make new investments without recourse to external source of financing. Information
about the specific components of historical operating cash flows is useful, in conjunction
with other information, in forecasting future operating cash flows.
Cash flow from operating activities are primarily derived from the principle
revenue producing activities of the enterprise. Therefore, the generally result from the
transaction and other events that enter into the determination of net profit or loss.

Examples of cash flows from operating activities are :

a) Cash receipts from the sale of goods and the rendering of services.
b) Cash receipts from royalties, fees, commissions, and other revenues.
c) Cash payment to suppliers of goods and services.
d) Cash payment to and on behalf of employees.
e) Cash receipts and cash payments of an insurance enterprises for premiums and claims,
annuities and other policy benefits.

Some transactions, such as the sale of an item of plant, may give rise to a gain or loss
which is included in the determination of net profit or loss. However, the cash flows
relating to such transactions are cash flows from investing activities.

2. Cash Flows From Investing Activities: Investing activities are the acquisition and
disposal of long-term assets and other investments not included in cash equivalents. The
separate disclosure of cash flows arising from investing activities is important because
the cash flows represent the extent to which expenditures have been made for resources
intended to generate future income and cash flows.

Examples of cash flows from investing activities are :

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 a) Cash payments to acquire fixed assets (including intangibles).
b) Cash receipts from disposal of fixed assets (including intangibles).
c) Cash payments to acquire shares, warrants, or debt instruments of other enterprises and
interests in joint ventures.
d) Cash receipts from repayment of advances and loans made to third parties.
e) Cash advances and loans made to third parties.

3. Cash Flows From Financing Activities: Financing activities are activities that results in
changes in the size and composition of the owners capital (including preference share
capital in the case of company) and borrowings of the enterprise.
The separate disclosure of cash flows arising from financing activities is
important because it is useful in predicting claims on future cash by providers of
funds (both capital and borrowings) to the enterprise.

Examples of cash flows from Financing activities are :

a) Cash proceeds from issuing shares or other similar instrumrnts.

b) Cash proceeds from issuing debentures, loans, notes, bonds, and other short or long term
borrowings.
c) Cash repayments of amounts borrowed such as redemption of debentures, bonds,
preference shares.

Classification of Cash Flows

The Statement of Cash Flows shows cash inflows and cash outflows, organized into three
different business activities. These three business activities are summarized below.

Name of activity Name of activity What the activity presents

Operating activities Operating assets and The net cash flows generated, or used, by the
liabilities. These business in their core operations. We will
include most current use the indirect method of presenting
asset and liability operating activities. This method reconciles
accounts. net income to net cash flow from operating
activities.

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 Investing activities Long-term assets The cash inflows and outflows from sales
and purchases of long-term assets, such as
equipment, patents, and long-term
investments.

Financing activities Long-term liabilities The cash inflows and outflows from issuance
and stockholders’ of debt; repayment of debt; issuance of
equity. stocks; dividends paid; and stock
repurchases.

7 great ways to keep your cash flow in check and avoid cash flow problems:
Keep a cash flow forecast

Set targets for the next six to 12 months to keep track of finances and to avoid any shortfalls.
The most basic way to set up a cash flow forecast is to keep a simple spreadsheet listing income
and costs on a monthly basis. Take note of any seasonal variations – for example, heating bills
will probably go up during winter. Factor in fixed and variable costs to your cash flow forecast
and be realistic – include every item.

Keep on top of payments

Send out invoices promptly and be quick to chase overdue bills. It’s also worth setting out clear
payment terms with suppliers from the start of doing business with them – 30 days is standard.
Get to know your customer payment dates and don’t ignore irregularities or delays — a poor
paying customer might be about to go bust. Knowing when you’re due to be paid for a product
or service will help you keep on top of your cash flow.

Stay on top of stock management

Efficient stock management is just as important as managing cash flow. Reconcile your stock
records at the same time as you reconcile your bank account – be it weekly or monthly. This
way you will remain on top of items that you have left in stock and those that require
reordering. An efficiently managed stock control system will have a positive impact on your
cash flow because you will never be holding too much stock, or have all your money tied up in
it.

Stay friendly with lenders

Many businesses need a cash boost from a bank or lender every now and again, particularly
when they’re starting out, and might need credit or an overdraft to get up and running. Stay on
good terms with them and keep them informed of any unforeseen outgoings or changes in

28
forecasts. By developing a good relationship, based on trust, with banks and lenders, they’ll be
more likely to treat you favorably should your business need future financial assistance.

Access credit

If your business is growing rapidly – say, for example, you’ve just won a new contract from a
client and you’re worried about having enough money to meet your overheads – seek access to
a line of credit from a bank or financier, such as an overdraft or short-term loan. In many cases,
this is a viable option because banks are more willing to lend to a business if they can see a
draft service contract or letter of intent. Once the client pays, you can pay your debt. You will
only have to pay interest to the bank or financier for the amount of time you actually need
the cash.

Tighten up on your outgoings

Assess the frequency with which you pay suppliers, tax bills, utilities and so on — is it possible
to pay in installments or make terms more flexible? Use your powers of negotiation to strike
deals that are favorable to you and your business. Also, check on all those little things you
spend money on that can add up – as the old saying goes, watch the pennies and the pounds will
take care of themselves.

Anticipate problems before they happen

Identify potential cash flow problems in advance by regularly updating your cash flow forecast,
monitoring market conditions, keeping an eye on customers and suppliers who may be in
trouble, and taking action as soon as you see a problem. Don’t bury your head in the sand and
hope an issue will go away. By keeping on top of your cash flow you’ll be able to deal with
problems quickly and efficiently. Also, if worried, talk to an accountant, investor or business
mentor.

The Preparation of a cash flow statement involves the following

steps:
Step 1.Compute the net increase or decrease in cash and cash equivalents by making a
comparison of these accounts given in the comparative Balance sheet.

Step 2.Calculate the net cash flow provided (used in) operating activities by analysing the profit
and loss account, Balance sheet and additional information.

Step 3.Calculate the net cash flow from investing activities.

Step 4.Calculate the net cash flow from financing activities.

29
Step 5.Prepare a formal cash flow statement highlighting the net cash flow from (used in)
operating, investing, and financing activities separately.

Step 6.Make a aggregate of net cash flows from the three activities and ensure that the total net
cash flow is equal to the net increase or decrease in cash and cash equivalent as calculated in step
1.

Step 7.Report significant non-cash transaction that did not involve cash or cash equivalents in a
separate schedule to the cash flow statement e.g. purchase of machinery against issue of share
capital or redemption of debentures in exchange for share capital.

Specimen of Cash Flows Statement

Statement of Cash Flows
for the year ended _ _ _ _
Cash flows from operating activities
Net income __
Adjustments for:
Depreciation and amortization __
Provision for losses on accounts receivable __
Gain on sale of facility __
__
Increase in trade receivables __
Decrease in inventories __
Decrease in trade payables __
__
Cash generated from operations __

Cash flows from investing activities

Purchase of property, plant, and equipment __
Proceeds from sale of equipment __
Net cash used in investing activities __

30
Cash flows from financing activities
Proceeds from issue of common stock __
Proceeds from issuance of long-term debt __
Dividends paid __
Net cash used in financing activities __

Net increase in cash and cash equivalents __

Cash and cash equivalents at beginning of period __
Cash and cash equivalents at end of period __

Difference Between Fund Flow Statement and Cash Flow Statement

Basis of Fund Flow Statement Cash Flow Statement
Difference

Basis of Concept It is based on a wider concept of It is based on a narrow concept of

funds , i.e. working capital. funds, i.e. cash.
Basis of It is based on accrual basis of It is based on cash basis of
Accounting accounting. accounting.
Schedule of Schedule of changes in working No such schedule of changes in
changes in capital is prepared to show the working capital is prepared.
working capital changes in current assets and
liabilities.
Method of Fund Flow statement reveals the It is prepared by classifying all
preparing sources and applications of funds. cash inflows and outflows in terms
The net difference between of operating , investing and
sources and applications of funds financing activities. The net
represents net increase or decrease difference represents the net
in working capital. increase or decrease in cash and
cash equivalent.
Basis of usefulness It is useful in planning It is more useful for short term
intermediate and long term analysis and cash planning of the
financing. business.

31
 Basis of Improvement in funds (working Improvement in cash position
improvement capital) position of the firm does results in improvement of funds
not necessarily lead to (working capital) position of the
improvement in cash position. firm.

Cash and Cash The opening and closing balances The balances of cash and cash
equivalents of cash are included in the equivalents at the beginning and
schedule of changes in the at the end of the period are shown
working capital. in the cash flow statement.

32
 CHAPTER-2

REVIEW OF LITERATURE

REVIEW OF LITERATURE

The Literature review of this study will emphasis on the related studies on comparing and
analysingCash Flow to make an investment.

The basis of Cash Flow analysis is the financial information (Statements). Cash Flow Statements
are needed to predict, compare and evaluate a firm’s earning ability. It is also required to aid in
economic decision making investment and financing decision making. The financial information
of an enterprise is contained in the financial statements.

33
 CHAPTER-3

SCOPE AND OBJECTIVES OF

THE STUDY
SCOPE AND OBJECTIVES OF THE STUDY

 To get the knowledge of level of Cash flow in ThinkNEXTtechnologies private limited.

 To find out the financial stability and soundness of the business enterprise.
 To assess and evaluate the earning capacity of the business.
 To estimate and evaluate the fixed assets, stock etc., of the concern.
 To estimate and determine the possibilities of future growth of business.
 To assess and evaluate the firm’s capacity and ability to repay short and long term loans.
 To help in decision making and control.
 This is the part of our MBA degree (project of training).
 The economic decisions are taken by users require evaluation of ability of generating
cash and Cash assets.
 All entities shall present the cash flow statement as an integral part of the financial
statements.

34
 CHAPTER-4
SCOPE OF THE STUDY
SCOPE OF THE STUDY
The scope of Cash flow statement is to satisfy the needs of the users of the cash flowstatements
and which provides relevant information's about the business to the interested parties like
Government, management, creditors, share holdersetc

Scope of the study is limited to ThinkNEXT technologies pvt.Limited company and its
employees.

35
 CHAPTER- 4 RESEARCH
METHODOLOGY
RESEARCH METHODOLOGY.

Research

Research is a systematically process of collecting and analyzing information to increase our

understanding of the phenomenon under study. It is the function of the researcher to contribute to
understanding of the phenomenon and to communicate that understanding to others.

Methodology

According to Polit and Hungler (2004:233), methodology refers to ways of obtaining, organising
and analyzing data. Methodology decisions depend on the nature of the research question.
Methodology in research can be considered to be the theory of correct scientific decisions
(Karfman as cited in Mouton & Marais 1996:16). In this study methodology refers to how the
research was done and its logical sequence. The main focus of this study was the exploration and
description of the experiences of registered nurses involved in the termination of pregnancy,
therefore the research approach was qualitative.

Research methodology
Research methodology is a systematic approach in management research to achieve pre-defined
objectives. It helps a researcher to guide during the course of research work. Rules and
techniques stated in research methodology save time and labor of the researcher as researcher
know how to proceed to conduct the study as per the objective.

Basically project study is usually based on a research, which gives a concrete answer to a
problem. This research may be Problem Solving or Problem Oriented. Both types of research are

36
 usually known as Applied Research. The primary purpose for applied research is discovering,
interpreting, and the development of methods for solving the problems.

Qualitative methodology is dialectic and interpretive. During the interaction between the
researcher and the research participants, the participants’ world is discovered and interpreted by
means of qualitative method

 Research design
“A Research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure” The
research design followed to study the working capital management in Aarti Steels Limited is
Descriptive and Analytical Research Design.

The research designs constitute the blueprint for the collection, measurement and analysis of
data. It is the strategy for a study and plan which the strategy is to be carried out. The research
design of the project is descriptive in nature as it describes data and characteristic associated
with study.

37
 CHAPTER - 5

LIMITATIONS OF THE STUDY

LIMITATIONS OF THE STUDY

This study was made subject to the following limitations:

 Some difficulties were met in collecting data owing to fear of giving certain data
and some are almost unpublished.
 Certain data have not been recorded properly.
 The analysis and interpretation are based on secondary data contained in the
published annual reports of for the study period.

38
 CHAPTER-6
DATA ANALYSIS AND
INTERPRETATION
SUGGESTIONS
1) The company should reduce its cost of production through adopting new technology. It
will help to increase the sales.
2) Company should try to reduce its credit sales through cash discount at the time of sales. It
will helps to meet the current obligation.
3) Company is suggested to maintain sufficient amount of cash & bank balance to pay its
quick liabilities, which will increase its credit worthiness & goodwill.
4) The company should conduct weekly meetings for central planning, material
management department, and production department towards operations of the company.
5) The company should conduct monthly meetings to knowing its performance. If the
performance is not reached then it will helps to take necessary decisions.
6) It presents an insight into the changes in net assets of a company, financial structure
(including its liquidity and solvency).

7) It shows the ability of a company to generate cash and cash equivalents.

8) It can be useful in developing models to assess and compare the present value of the future
cash flows of different companies.

9) It also enhances the comparability of the reporting of operating performance by different

enterprises because it eliminates the effect of using different accounting policies in accrual
accounting for the same transaction and events

10) It is usually used as a sign of the amount, timing and certainly of future cash .

39
 11) The company is using cash generated from oerations from sales from long term assets and
from cash reserve.

12) The company is using cash from operations and borrowing to expand . This pattern is
typically of many growing companies .

CHAPTER-7
CONCLUSION
CONCLUSION

Financial statements plays very important role in providing facts and figures for the decision
makers. In the same way ratios will act as analysis kit in the hands of financial analyst. These
ratio will help us and in answering the basic question like why, how, what of these statements.

Now a days financial statement are very much in consideration for decision making. In
deciding what to do and what not to do they are required to analyze the data as per their
requirement. Thus in our project we try to give brief outline of ratio analysis (i.e., how to analyze
the facts and figures given in the financial statements) form the angle of all stake holders.

Throughout my project I have analyzed company’s financial position and pros and cons of
the situation and we have also interpreted the data. In spite of some limitation we try to analyze
and interpreted the facts and figures with accuracy.

40
 Based on the analysis and interpretation I tried to give my findings and suggestions for the
company as per my best knowledge.

Finally project really helps us in knowing the practical things of the corporate world. Really
I enjoyed this project work in its real spirit.

Annexures
THINKNEXT TECHNOLOGIES PRIVATE LIMITED

SCF 112, SECOND FLOOR, PHASE 11, MOHALI

PROFIT AND LOSS STETEMENT

FOR THE YEAR ENDED 31ST MARCH 2014

Note Figures for the

Particulars Previous year
No
31.03.2014

I.
Revenue from operations 10 11,900,000.00
II.
Other Income 64,685.97
III.
Total Revenue (I +II) 11,964,685.97
IV. Expenses:

Cost of materials consumed 11 5,750,000.00

Purchase of Stock-in-Trade
Changes in inventories of finished
goods, work-in-progress and Stock-in-
Trade

Employee benefit expense 12 1,262,000.00

Financial costs 13 571,791.50

Depreciation and amortization
expense 805,188.00

41
 Other expenses 14 48,000.00

Total Expenses 8,436,979.50

V. Profit before exceptional and

extraordinary items and tax (III - IV) 3,527,706.47

VI. Exceptional Items

VII. Profit before extraordinary items and tax

(V - VI) 3,527,706.47

VIII.
Extraordinary Items -

IX.
Profit before tax (VII - VIII) 3,527,706.47

X. Tax expense:
(1) Current tax
(2) Deferred tax

XI. Profit/(Loss) from the period from

continuing operations (VII - VIII) 3,527,706.47

XII. Profit/(Loss) from discontinuing

operations -

XIII.
Tax expense of discounting operations -

XIV. Profit/(Loss) from Discontinuing

operations (XII - XIII) -

XV.
Profit/(Loss) for the period (XI + XIV) 3,527,706.47

42
 THINKNEXT TECHNOLOGIES PRIVATE Limited
SCF 112, SECOND FLOOR, PHASE 11, MOHALI
BALANCESHEET
FOR THE YEAR ENDED 31ST MARCH 2014

Figures for
Note the current
Particulars
No year
31.03.2014

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds

(a) Share Capital 1 13,297,794.79
(b) Reserves and Surplus 2 3,074,007.95
(c) Money received against share warrants
(2) Share application money pending
allotment -

(3) Non-Current Liabilities

(a) Long-term borrowings 3 3,194,007.9

(b) Deferred tax liabilities (Net)
(c) Other Long term liabilities
(d) Long-term provisions

(4) Current Liabilities

(a) Short-term borrowings
(b) Trade payables 4 3,170,087.95

43
 (c) Other current liabilities 5 55,000.00
(d) Short-term provisions
Total 22,790,898.55
II.Assets
(1) Non-current assets
(a) Fixed assets
(i) Tangible assets 6 11,177,144.87
(ii) Intangible assets
(iii) Capital work-in-progress
(iv) Intangible assets under development
(b) Non-current investments
(c) Deferred tax assets (net)
(d) Long term loans and advances
(e) Other non-current assets -

(2) Current assets

(a) Current investments -
(b) Inventories (as certified by directors) 6,693,555.00
(c) Trade receivables 7 3,842,000.00
(d) Cash and cash equivalents 8 445,000.00
(e) Short-term loans and advances 9 633,198.68
(f) Other current assets
Total 22,790,898.55

44
 THINKNEXT TECHNOLOGIES PRIVATE LIMITED
SCF 112, SECOND FLOOR, PHASE 11, MOHALI
PROFIT AND LOSS STETEMENT
FOR THE YEAR ENDED 31ST MARCH2015

Note
Particulars No Figures for the Previous year 31.03.2015

I.

Revenue from
operations 10 11,700,000.00
II. Other Income 84,685.97
III. Total Revenue (I +II) 11,784,685.97
IV. Expenses:

Cost of materials
consumed 11 5,700,000.00

Purchase of Stock-in-
Trade

45
 Changes in inventories
of finished goods, work-
in-progress and Stock-
in-Trade
Employee benefit
expense 12 1,251,000.00
Financial costs 13 611,589.74
863,150.00
Depreciation and
amortization expense

Other expenses 14 50,000.00

Total Expenses 8,475,739.74

V.
Profit before
exceptional and
extraordinary items and
tax (III - IV) 3,308,946.23

VI. Exceptional Items

VII. Profit before

extraordinary items and
tax (V - VI)
3,308,946.23

VIII.
Extraordinary Items -

IX. Profit before tax (VII -

VIII) 3,308,946.23

X. Tax expense:
(1) Current tax
(2) Deferred tax

46
XI.
Profit/(Loss) from the
perid from continuing
operations (VII - VIII) 3,308,946.23

XII. Profit/(Loss) from

discontinuing
operations -

XIII.
Tax expense of
discounting operations -

XIV.
Profit/(Loss) from
Discontinuing
operations (XII - XIII) -

XV.
Profit/(Loss) for the
period (XI + XIV) 3,308,946.23

PLACE: MOHALI
DATE:

(DIRECTOR)

47
 THINKNEXT TECHNOLOGIES PRIVATE Limited
SCF 112, SECOND FLOOR, PHASE 11, MOHALI
BALANCESHEET
FOR THE YEAR ENDED 31ST MARCH 2015

Note Figures for the

Particulars current year
No
31.03.2015

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds

(a) Share Capital 1 13,329,903.08
(b) Reserves and Surplus 2 6,216,570.94
(c) Money received against share warrants
(2) Share application money pending
allotment -

(3) Non-Current Liabilities

(a) Long-term borrowings 3 3,201,716.77

(b) Deferred tax liabilities (Net)
(c) Other Long term liabilities
(d) Long-term provisions

48
(4) Current Liabilities
(a) Short-term borrowings
(b) Trade payables 4 2,400,000.00
(c) Other current liabilities 5 95,000.00
(d) Short-term provisions
Total 25,243,191.49
II.Assets
(1) Non-current assets
(a) Fixed assets
(i) Tangible assets 6 10,446,135.87
(ii) Intangible assets
(iii) Capital work-in-progress
(iv) Intangible assets under development
(b) Non-current investments
(c) Deferred tax assets (net)
(d) Long term loans and advances
(e) Other non-current assets -

(2) Current assets

(a) Current investments -
(b) Inventories (as certified by directors) 7,757,530.72
(c) Trade receivables 7 5,005,399.82
(d) Cash and cash equivalents 8 972,314.40
(e) Short-term loans and advances 9 1,061,810.68
(f) Other current assets
Total 25,243,191.49

PLACE: MOHALI
DATE:

(DIRECTOR)

49
 THINKNEXT TECHNOLOGIES PRIVATE LIMITED
SCF 112, SECOND FLOOR, PHASE 11, MOHALI

PROFIT AND LOSS STETEMENT

FOR THE YEAR ENDED 31ST MARCH 2016

Note Figures for the

Particulars
No Previous year
31.03.2016

I.
Revenue from operations 10 10,100,000.00
II.
Other Income 46,127.19
III.
Total Revenue (I +II) 10,146,127.19
IV. Expenses:

Cost of materials consumed 11 4,956,000.00

Purchase of Stock-in-Trade
Changes in inventories of finished
goods, work-in-progress and Stock-in-
Trade -

Employee benefit expense 12 1,151,000.00

Financial costs 13 571,791.50

Depreciation and amortization
expense 805,188.00

50
 Other expenses 14 45,000.00

Total Expenses 7,528,979.50

V. Profit before exceptional and

extraordinary items and tax (III - IV) 2,617,147.69

VI. Exceptional Items

VII. Profit before extraordinary items and tax

(V - VI) 2,617,147.69

VIII. Extraordinary Items

IX.
Profit before tax (VII - VIII) 2,617,147.69

X. Tax expense:
(1) Current tax
(2) Deferred tax

XI. Profit/(Loss) from the period from

continuing operations (VII - VIII) 2,617,147.69

XII. Profit/(Loss) from discontinuing

operations

XIII. Tax expense of discounting operations

XIV. Profit/(Loss) from Discontinuing

operations (XII - XIII)

XV.
Profit/(Loss) for the period (XI + XIV) 2,617,147.69

51
 THINKNEXT TECHNOLOGIES PRIVATE Limited
SCF 112, SECOND FLOOR, PHASE 11, MOHALI
BALANCESHEET
FOR THE YEAR ENDED 31ST MARCH 2016

Note Figures for the

Particulars
No previous year
31.03.2016

I. EQUITY AND LIABILITIES

(1) Shareholders' Funds

(a) Share Capital 1 11,435,668.23

(b) Reserves and Surplus 2 4,544,401.81
(c) Money received against share warrants
(2) Share application money pending
allotment -

(3) Non-Current Liabilities

(a) Long-term borrowings 3 2,312,481.2
(b) Deferred tax liabilities (Net)
(c) Other Long term liabilities
(d) Long-term provisions

(4) Current Liabilities

(a) Short-term borrowings

52
 (b) Trade payables 4 4,506,981.23
(c) Other current liabilities 5 65,100.00
(d) Short-term provisions
Total 22,864,632.50
II.Assets
(1) Non-current assets
(a) Fixed assets
(i) Tangible assets 6 11,177,144.87
(ii) Intangible assets
(iii) Capital work-in-progress
(iv) Intangible assets under development
(b) Non-current investments
(c) Deferred tax assets (net)
(d) Long term loans and advances
(e) Other non-current assets -

(2) Current assets

(a) Current investments -
(b) Inventories (as certified by directors) 6,693,555.00
(c) Trade receivables 7 4,142,695.42
(d) Cash and cash equivalents 8 218,038.53
(e) Short-term loans and advances 9 633,198.68
(f) Other current assets
Total 22,864,632.50

53
54