Professional Documents
Culture Documents
Fund Flow Statement Project
Fund Flow Statement Project
Society LTD.
CHAPTER: 1
INTRODUCTION
A financial analysis looks at many aspects to a business from its profitability and stability to
its solvency and liquidity. Financial analysis is the process of evaluating business projects
budgets and other finance -related entities to determine their performance and suitability.
Financial analysis is performed by professional who prepare report using ratio that make use
of information taken from financial statement and other report. Financial analysis conducts
analysis by focusing on the income statement, balance sheet and cash flow statement.
Some techniques are used in financial analysis those are: Ratio analysis, cash flow
statement .and so on. We have discussed briefly under FUND FLOW STATEMENT.
The term “FUND” has defined and interpreted differently by different experts. Broadly the
term “FUND” refers to all the financial resources of the company. On the other extreme, fund
has been understood as “CASH “only.
The term “FLOW OF FUNDS “refers to changes or movement of funds or changes in working
capital in the normal course of business transaction. The changes in working capital may be in
the form of inflow of working capital or outflow of working capital.
In other words, any Increase or decrease in working capital when the transaction takes place
is called as “FLOW OF FUNDS”. If the components of working capital results in increase of
the fund, it is known as inflow of fund or sources of fund .If decrease the financial position it is
treated as outflow of funds.
It is a statement showing the movement of funds into and out of business .In other words it
is a statement showing sources and application of fund. A fund flow statement deals with the
financial resources required for running the business activities. it explains how were the
obtained and how were they used.
Fund flow statement is a statement prepared to analyse the reason for changes in the
financial position of a company between two balance sheet. Fund flow statement is prepared to
explain the changes in working capital position of a company .there are two types of inflow
funds:
Fund flow analysis is the analysis of flow or fund from current assets to fixed assets or current
asset to long term liabilities or vice-versa. Fund flow statement is an assertion of sources and
uses of funds.
Fund flow statement helps to know the liability position capital expenditures incurred dividend
paid and extent of external financing. A project fund flow statement guides the firm to plan the
matching of inflow and outflow of the organisation.
The term fund is interpreted in different ways viz. as cash or as total current assts .As net
current assets or net working capital .But for the purpose of fund flow statement the term fund
means net assets or net working capital.
The study is conducted at primary agriculture credit co-operative society ltd. This
study titled “fund flow statement of primary agriculture credit co-operative society
ltd”.The scope of the study is confined to detail analysis of financial position of a firm are
useful in proper management of working capital of the firm. Fund flow are only based on
operational efficiency of firm. Fund flow are based on information that has been other in
–financial changes of outflow and inflow, of working capital changes.
STATEMENT OF A PROBLEM
“Funds are important for personal finance and give saves a part of global
growth. At the same time saving contribute to the financing of companies or firms
investment and socio economic growth.
The parties estimate that performance if this fund will not cost the government. A funds
flow statement cannot present a continuous change of financial activities including the
changes of working capital.
Since the research carried out for this project is descriptive in nature the various documents
and official files would require for understanding the methodology used by the firm. The
information on the project under consideration can be obtained by the firm employees and
officials files also .I went through various files and official correspondence the topic under the
study.
The method or framework which is research is to be done by called research methodology. The
research design adopted for this study is exploratory and descriptive research design. The
technique used in the analysis of study is excel sheets, graphs and tables of financial statement
for example balance sheet...
THE FIELD OF STUDY: The study was conducted at the firm as well as office of
primary agriculture credit co-operative society of the bank at hagaribommanahalli.
RESEARCH STUDY: This is descriptive in nature, the project was made to know
and evaluate the financial performance of the bank.
SOUCRES OF DATA: Primary data and secondary data.
DATA COLLECTION:
The search for answers to research questions is called collection of data. Data
collection is the process of gathering measuring information on establish systematic
manner which enables one to answers relevant questions and evaluate outcomes .
Data are facts and other relevant material past and present serving as a basis for
study and analysis
PRIMARY DATA: Primary data are those which are collected a fresh and for the first
time and thus happen to be original in character and know as primary data..
Discussion with executive and collect the information. Primary data will be
through regular interaction with the officers of primary agriculture credit co-operative
society. Relationship will be established basing on the theoretical literature available from
the “finance text books and firm balance sheet and profit and loss account..
SECONDARY DATA: It those which have been collected someone else, and which
have already been passed through the statistical process are known as secondary data.
Secondary data collected through the company records annexure and data given by
company. Internet search google.com, annual report of primary agriculture credit co-
operative society.
Required information is collected from lectures and friends.....
Information related to this report is not available because they are confidential in nature.
The time consuming is one of the major limitation of the study.
The statement lacks originality because it is only rearrangement of data appearing in
account book.
It is not an ideal tool for financial analysis.
It indicates fund flow a summary from and it does not show various changes which take
place continuously.
Not co-operate with us and proper giddiness.
It is not a substitute of income statement or a balance sheet, it is only a supplement to
them.
CHAPTER SCHEME:
Chapter 1: This chapter includes the introduction of the study need and scope of the
study, objectives of study, statement of problem, , methodology of the study data collection
.limitation of the study
Chapter 2: This chapter a complete profile of Industry is been given It also provide
company profile of the firm include history nature of business carried product and service
number of branches.
Chapter 3: This chapter includes the brief overview of the meaning definition funds
from sources and application current assets and liabilities.
Chapter : 4 This chapter includes the data collected through feedback by the various
records available with the bank were compiled tabulated increase or decrease percentage.
Chapter 5: This chapter includes summaries of findings suggestions under each objective
and provide conclusion and recommendation based on findings.
CHAPTER 2
INDUSTRY PROFILE AND COMPANY PROFILE
INDUSTRIAL PROFILE:
History
The name bank derives from the Italian word banco “desk\ bench”, using during the
Renaissance by Jewish Florentine bankers, who used to make their transactions above a desk
covered by a green tablecloth. However, there are traces of banking activity even in ancient
time.
The origin of Banking in India can be traced back to almost Vedic period. It is believed
that the transition form money lending to banking must have occurrence even before Manu, the
greater Hindi jurist, who has devoted a section of his work to deposits and advances and laid
down rules relating to the interest. During the mogul period, the indigenous bankers played a
very important role in leading money and financing foreign trade and commerce. During the
days of East India Company, it was to turn of the agency houses top curry on the banking
business. The general bank of India was the first joint stock bank to be established in the year
1786. The other which followed were the Bank of Hindustan and the Bengal Bank. The bank of
Hindustan is reported to have continued till 1906, while the other failed in the meantime. In the
first half of the 19th Century established three banks; The Bank of Bengal in 1809, The Bank of
Bombay in 1840 and The Bank of Madras in 1843. These three banks also known as presidency
banks and were independent units and functioned well. These three banks and were independent
units and functioned well. These three banks were amalgamated in 1920 and The Imperial Bank
of India was established on the 27th Jan 1921, with the passing of the SBI Act in 1955, the
undertaking of The Imperial Bank of India was taken over by the newly constituted SBI. The
Bank of Bengal, which later become the State Bank of India. The Reserve Bank which is the
Central Bank was created in 1935 by passing of RBI Act 1934, in the wake of swadeshi
movement, a number of banks with Indian Management were established in the country namely
Punjab National Baroda Ltd, The Central Bank Ltd. On July 19 th 1969, 14 Major Banks of the
country were nationalized and in 15th April 1980 six more commercial private sector banks were
also taken over by the government.
The term banking as defined in the section 5(b) of the banking regulation Act, 1949 is
the business of “accepting deposits of money from the public for the purpose of lending of
investment”. These deposits are repayable on demand or otherwise, and withdrawals by cheque,
draft and order or otherwise. Banks are the only financial institutions which can accept demand
deposits which can be withdrawn by cheque.
The Indian Banking industry, which is governed by the Banking Regulation Act of India
1949, can be broody classified into two major categories, non-scheduled banks and scheduled
Banks comprise commercial banks and the co-operative banks.
The first phase of financial reforms resulted in the nationalization of 14 major banks in 1969
and resulted in a shift from class banking to mass banking. This in turn resulted in the
significant growth in the geographical coverage of banks. Every bank had to earmark a
minimum percentage of their loan portfolio to sectors identified as “priority sector”, today state
owned and private banks must make 40% of loans to the priority sector whereas foreign banks
must make 35%, the manufacturing sector also grew during the 1970’s in protected
environments and the banking sectors was a critical source. The next wave of reforms saw the
nationalization of 6 more commercial banks in 1980 since then the number of scheduled
commercial banks increased fourfold and the number of bank branches increased to eight fold.
After the 2nd phase of financial sector reforms and liberalization of the sector in the early
90’s. The PSB’s found it extremely difficult to complete with the new private sector banks and
the foreign banks. The new private sector first made their appearance after the guidelines
permitting them were issued in January 1993.
Banking in our country is already witnessing the sea changes as the banking sector seeks
new technology and its applications. The best part is that the benefits are beginning to reach the
masses. Earlier this domain was the preserve of very few organizations. Foreign banks with
heavy investments in technology stated giving some “Out of the world” customer services.
But, such services were available only to select few the very large account holders. Then
came the liberalization and with it a multitude of private banks, a large segment of the urban
population now requires minimal time and space for its banking needs.
Automated Teller Machine or popularly known as ATM are the three alphabets that have
changed the concept of banking like nothing before. Instead of tellers handling your own cash,
today there are efficient machines that don’t talk but just dispense cash. Under the Reserve
Bank of India Act 1934, banks are classified as scheduled banks and non-scheduled banks. The
scheduled banks are those, which are entered in the second schedule of RBI Act, 1934. Such
banks are those, which have paid-up capital and reserves of aggregate values of not less than 5
lakhs and which satisfy RBI that their affairs are carried out in the interest of their deposits. All
commercial banks Indian and Foreign, regional rural banks and state co-operative banks are
Scheduled banks. Non Scheduled banks are those, which have been included in the second
schedule of the RBI Act, 1934. The organized banking system in India can be broadly classified
into three categories: (i) Commercial Banks (ii) Regional Rural Banks and (iii) Co-operative
Banks.
LAW OF BANKING:
Banking laws is based on a contractual analysis of the relationship between the bank (defined
above) and the customer-defined as any entity for which the bank agrees to conduct an account.
The law implies rights and obligations into this relationship as follows:
1. The bank account balance is the financial position between the and the customer: when
the account balance is the financial position between the owes the balance to the
customer; when the account is overdrawn the customer owes the valance to the bank.
2. The bank agrees to pay the customer’s cheques up to the amount standing to the credit of
the customer’s account, plus any agreed overdraft limit.
3. The bank may not pay form the customer’s account without a mandate from the
customer, e.g. a cheque draw by the customer.
4. The bank agrees to promptly collect the cheques deposited to the customer’s account as
the customer’s agent, and to credit the proceeds to the customer’s account.
5. The bank has a right to combine the customer’s accounts, since each account is just as
aspect of the same credit relationship.
6. The bank has a lien on cheques deposited to the customer’s account, to the extent that
the customer is indebted to the bank.
7. The bank must not disclose details of transactions through the customer’s account--
unless the customer consents, there is a public duty to disclose, the bank's interests
require it, or the law demands it.
8. The bank must not close a customer’s account without reasonable notice, since cheques
are outstanding in the ordinary course of business for several days.
These implied contractual terms may be modified by express agreement between the
customer and the bank. The statues and regulations in force within a particular jurisdiction
may also modify the above terms and \or create new rights, obligations or limitations
relevant to the bank-customer-relationship.
CURRENT SCENARIO
Currently (2011), the overall banking in India is considered as fairly mature in terms of
supply, product range and reach-even through reach in rural India still remains a challenge
for the private sector and foreign banks. Even in terms of quality of assets and
Capital adequacy, Indian banks are considered to have clean, strong and transparent balance
sheets – as compared to other banks in comparable economies in its region. The Reserve
Bank of India is an autonomous body, with minimal pressure from the Government with the
growth in the India economy expect to be strong for quite some time especially in its
services sector, the demand for banking services are expected to be strong. Mergers and
Acquisitions ., takeovers, are much more in action in India.
One of the classical economic functions of the banking industry that has remained
virtually unchanged over the centuries is leading. On the hand, competition has had
considerable adverse impact on the margins, which lenders have enjoyed, but on the other
hand technology has to some extent reduced the cost of delivery of various products and
services.
Bank is a financial institution that borrows money from the public and lends money to
the public for productive purposes. The Indian Banking Regulation Act of 1949 defines the
term Banking Company as “Any company which transacts banking business in India” and
the term banking as Accepting for the purpose of lending all investment of deposits, of
money from the public, repayable on demand or otherwise and withdrawal by cheques, draft
or otherwise.
● Banks mobilize the small savings of the people and make them available for productive
purpose.
● Promote the habit of saving among the people thereby offering attractive rates of
interests on their deposits.
● Provides safety and security to the surplus money of the depositors and as well provides
a convenient and economical method of payment.
● Banks provide convenient means of transfer of fund from one place to another.
● Helps the movement of capital from regions where it is not very useful to regions where
it can be more useful bank acts as an intermediary between the depositors and the
investors. Bank also acts as mediator between exporter and importer who does foreign
trades. Thus India banking has come from a long way from being a sleep business
institution to a highly pro-active and dynamic entity. This transformation has been
largely brought about by the large dose of liberalization and economic reforms that
allowed banks to explore new business opportunities rather than generating revenue
from conventional streams (i.e. borrowing and lending). The banking in India is highly
fragmented with 30 banking units contributing to almost 50% of deposits and 60% of
advances.
Scheduled Banks
New Private
Sector Banks
NATIONALIZED BANKS
This group consists of private sector banks that were nationalized. The Government of India
nationalized 14 private banks in 1969 and another 6 in the year 1980. In early 1993, there were
28 nationalized banks i.e., SBI and its 7 subsidiaries plus 20 nationalized banks. In 1993, the
loss making new now only 27 nationalized banks exits in India.
These were established by the RBI in the year 1975 of banking commission. It was
established to operate exclusively in rural areas to provide credit and other facilities to small
and marginal farmers, agricultural laborers, artisans and small entrepreneurs.
This group consist of the banks that were establishes by the private sector, committee
organization or by group of professionals for the cause of concentrated in a few regional areas.
However, their branches slowly spread throughout the nation as they grow.
These banks were started as profit orient companies after the RBI opened the banking sector
to the private sector. These banks are mostly technology driven and better managed the other
banks.
FOREIGN BANKS
These are the banks that were registered outside India and had oriented in a foreign country.
The major participant of a Indian financial system are the commercial banks, the financial
institutions (FI’s), encompassing term-lending institutions, investment Institutions, specialized
financial institutions and the state-level development bank, Non-Bank Financial Companies
(NBFCs) and other market intermediaries such as the stock brokers and money-lenders. The
commercial banks and certain variants of NBFCs are amoung the oldest of the market
participants. The FIs, on the other hand, are relatively new entities in the financial market place.
In the recent times when the service industry is attaining greater importance compared to
manufacturing industry, banking has evolved as a prime sector providing financial services to
growing needs of the economy. Banking industry has undergone a paradigm shift from
providing ordinary banking services in the past to providing such complicated and crucial
services like, merchant banking, housing finance, bill discounting etc. This sector has become
more active with the entry of new players like private and foreign banks. It has evolved as a
prime builder of the economy by understanding the needs of the same and encouraging the
development by way of giving loans, providing infrastructure facilities and financing activities
for the promotion of entrepreneurs and other business establishments.
For a fast developing economy like ours, presence of a sound financial system to mobilize
and allocate saving of the public towards productive activities is necessary. Commercial banks
play crucial role in this regard. The banking sector in recent years has incorporated new
products in their businesses, which are helpful for growth. The banks have started to provide
fee-based services like, treasury operations, managing derivatives, options and futures, acting as
bankers to the industry during the public offering, providing consultancy services, acting as an
intermediary between two-business entities etc. at the same time, the banks are reaching out to
other end of customer requirements like, insurance premium payment, tax payment etc. it has
changed itself from transaction type of banking into relationship banking, where you find
friendly and quick service suited to your needs. This is possible with understanding the
customer needs their value to the bank, etc. this is possible with the help of well organized staff,
computer based network for seedy transactions, products like credit card debit card, health card,
ATM etc. These are the present trend of services. The customers at present ask for convenience
of banking transactions, like 24 banking, where they want to utilize the services whenever there
is a need. The relationship banking plays a major and important role in growth, because the
customers now have enough number of opportunities, and they choose according to their
satisfaction of responses and recognition they get. So the banks have to play cautiously, else
they may lose out the place in the market due to competition, where slightest of opportunities
are captured fast.
The Indian banking system has passed through three distinct phases from the time of
inception. The first was being the era of character banking, where you were recognized as a
credible depositor or borrower of the system. This era comes to an end in the sixties. The
second phase was banking the social banking. Nowhere in the democratic developed world, was
banking or the service industry nationalized. But this was practiced in India. Those were the
days when bankers has no clue whatsoever as to how to determine the scale of finance to
industry. The third era of banking which is in existence today is called the era Prudential
Banking. The main focus of this phase is on prudential norms accepted internationally
BANKING IN INDIA:
The co-operative society is very essential for agricultural sector to meet their financial
requirements. The main object of co-operative society is to provide cheap credit to their
members. They are based on the principles of self reliance and natural co-operation.
The co-operative society plays an important role in Indian financial system, especially at
the rural level. In rural finance as a means of reaching the last man in the last village,
co-operative credit has no rival except the traditional money lender; it offers only
possible method of proved merit for reaching the people as a whole it is the only
practical alternative to use. A credit co-operative is a voluntary associate Co-operative
banks are a group of Financial Institutional organized under the provisions of the co operative
society’s act of the states. These banks are essentially co-operative credit societies organized by
members to meet their short term and medium term financial requirements. The main object of
co-operative banks is to provide credit to their members at lower rate. They are based on the
principles of self reliance and natural cooperation. The co operative bank plays an important
role in Indian financial system, especially at the rural level. In rural finance as a means of
reaching the last man in the last village, co-operative credit has no rival except the traditional
money lender; it offers only possible method of proved merit for reaching the people as a whole
it is the only practical alternative to use. A credit is a voluntary association of members for self
help, altering to the needs on mutual basis. on of members for self help for the financial
needs.
“Co-operative society with limited liability” means a co-operative society in which the
liability of its members, for the debts of the society in the event of its being would up
is limited by its bye-laws.
(1) To the amount, if any unpaid on the shares respectively held by them; or
(2) To such amount as they may respectively, undertake to contribute to the assets
of the society;
“ Co-operative society with unlimited liability” means a co-operative society, the
members of which are, in the event of its being wound up, jointly and severally
liable for and in respect of all its obligations and to contribute to any deficit in
the assets of the society;
The co-operatives were first started in Europe to serve the credit-starved people
in Europe as a self-managed people’s movement with no role for the
government.
British India replicated the raiffeisen-type co-operative movement in India to
mitigate the miseries of the poor farmers, particularly harassment by money
lenders.
The first credit co-operative society was formed in banking in the year 1903 with
the support of government of Bengal. It was registered under the friendly society
act of the British government.
Co-operative credit societies act of India was enacted on 25th march 1904.
Reserve bank of India started refinancing co-operatives for seasonal agricultural
operations from 1939.
From 1948, reserve bank started refinancing state co-operative banks and through
them the primary agricultural co-operative societies.
In 1954, the all India rural credit survey committee recommended strengthening
of District credit co-operative Banks and Primary agricultural credit co-operative
society with state partnership and patronage to solve the farmer’s woes.
Registrar of co-operative societies became the custodian of co-operative from
1962 with the enactment of respective state acts.
The finding of all India rural credit review committee that coverage of co-
operatives is limited to hardly 30% of farmers led to nationalization of banks.
However, co-operatives have played a key role in meeting the credit needs of
weaker sections of farmers.
Though the co-operatives were lagging behind in rural credit till 1991, they
regained their prime place with 62% share in rural crops loans between 1991
and 2001
Any co-operative society are may, enter into collaboration with any government
undertaking or any other undertaking approved by state government to carry out
any one or more specified business provided in the by laws of such society or
societies including industrial invest financial aid or marketing and management
expertise.
5. Distributed profit:
b) The members of the committee who have failed to make arrangements for
election within the time limit specified in sec 39a, shall be deemed to have vacated their
office on the last day of the time limit so specified and such members shall not be
eligible for election as members of the committee for a period of 5 years from the date
of expiry of their term.
a) The state government may nominate not more than three persons as its
representative on the committee of any assisted society of whom one shall be a person
belonging to the scheduled castes or scheduled tribes and one shall be a woman.
b) The persons so nominated shall not have the right to become office bearers
of primary co-operative societies and any other class or of co-operative societies as may
be specified by the state government from time to time.
a) The term of office of the elected members of the committee shall commence
on the date on the majority of the elected members of the committee assume office or
the term of the outgoing committee expires, whichever is later.
9. Resignation Of A Member:
Primary credit societies lie at the total or base level. In rural areas there are Primary
Agricultural Credit Societies
Primary agricultural credit co –operative society(PACS), which cater to the short and
medium term credit needs of the farmers. The primary co-operative credit society is an
association of borrowers and non-borrowers residing in a particular locality. The funds
of the society are derived from the share capital of members as well as the society is
fixed. The loans are given to members for the purchase of cattle, fodder, fertilizer,
pesticides, implements etc. This society will create ten or more members and liability
were unlimited.
2.5 FEATURES:
Government control
Lawfully distributed profit
Mainly agricultural finance
2.6 MERITS:
2.7 DE-MERITS:
Lack of funds
Inefficiency and corruption
Political interference
Lack of training
Too many defaulters
Lack of awareness
Opposition from money lenders
Neglect of other functions
2.8 PRINCIPLES:
Principle of credit
COMPANY PROFILE:
The society will establish 9 th September 1976. provide loans to their members at lower rates
of interest for the purchase of cattle, fodder, fertilizer, pesticides, implements etc. the work
sector of this society only this places;
3.9 OBJECTIVES:
3.10 FUNCTION:
Encouragement of investment.
The H.B Halli branch will provides information of its various deposit schemes.
The primary agricultural credit co-operative society will provide much type of loans to its
members.
2. Short-term loan:-
Loan on deposit.
Agricultural loan.
3.14 BOARD OF DIRECTORS:- BOARD OF DIRECTORS FROM 2015-2020
NAME
Akkamahadevakka B Director
Shivarudrappa M Sub-director
Parvatamma K Director
Kotreshappa K Director
Pakkirappa T Director
Ettinemane S S Director
Hanumanthappa A Director
Chandrasheker A Director
CHAPTER 3
THEORICAL FRAMEWORK
INTRODUCTION:
The balance sheet of a company reveals it’s financial at certain of time. Its usefulness is
limited fir analysis and planning purpose. The financial executive must know the funds flow
underlying the balance sheet changes. The statement of sources and uses of funds serves this
end. The operation of business enterprise involves the conversion of cash into non-cash assets
which, when used are recovered bank in cash form. The funds used in this circuit flow can be
raised in a number of ways. The selection of means raises the funds together with the associated
used has a strong bearing on the soundness of financial program of a business firm. For judging
the effectiveness of the financial management, it is imperative to review the record of the past
as to sources and uses of such funds.
One of the significant techniques of financial analysis is “Fund Flow Analysis” designed to
highlight changes in the financial condition of a company between the point of time with
generally conforming the beginning, and ending financial statement dates for whatever period
of examination is relevant
Although financial statement supply useful information to the management in much as the
balance sheet portrays the financial position of the company and the income statement describes
the nature of the changes in ownership as a result of the periods productive and commercial
activates, these statement fail to mirror the changes in funds that have taken place over a given
time span. They do not spell out the movement of funds.
It is more important to describe the sources from which additional funds were derived and the
uses to which additional funds were out because the ultimate success of the company depends
on where got, where gone situation. The funds flow statement is, therefore prepared to non-
cover the informatio0n, the financial statement Fails to describe clearly.
Current assent are those assets, which van be converted into cash in the normal course of
business within as short span say a maximum of one year.
1. Cash in hand
2. Cash at Bank
3. Bill receivables
4. Short term loans and advances
5. Inventory of stock of
Raw-materials
Semi finished goods
Finished goods
Stores and spares parts.
02. Current liabilities:
Current liabilities are those which are payables within a short term period; say one year out
of current assets.
1. Trade creditors
2. Bills payables
3. Bank overdraft
4. Outstanding liabilities for expense
5. Dividends payables
How to determine the effect of a transaction as working capital:
In order to know to effect of business transaction on the working capital (i.e. flow of funds)
we should keep in mind that the change in working capital (i.e. flow and funds) takes place
when the transaction involves.
According to Mr.Foulke-
Funds flow statement is prepared in summary form to indicate the changes occurring in
terms of financial condition between two different balance sheet dates.
The funds flow statement describes the sources from which additional funds were derived
and the uses to which these funds were put.
Thus, funds flow statement is a statement, which states the sources from which the funds were
derived during a certain period and the use to which they have been put into during that period.
FUNDS:
As already states, funds flow statement is a technical device designed to indicate changes in
financial opposition between the tow periods of time. Broadly speaking funds flow statement
consists of parts.
The excess of current assets over current liabilities is called working capital.
Therefore,
As such, the following steps should be taken while preparing, schedule of changes in the
working capital.
a) Identify current assets and current liabilities in the given balance sheets.
b) Compare the current assets and current liabilities of net current year with that of the
previous year and find out differences in each individual current assets and current
liabilities and consider such differences as increase or decrease in the working capital
based on the following points.
An increase in current assets increases working capital.
An increase in current liability decreases working capital.
A decrease in current assets decreases working capital.
A decrease in current liability increases working capital.
C) Consider the total differences between total increase and decrease in the working capital
as the net increase or decrease in working capital
XX XX
Bills Payable
Creditors XX XX
Outstanding Expences XX XX
Bank Overdraft
Short term advances XX XX
Dividend Payable XX XX
Proposed Divided
Provision for taxation XX XX
XX XX
Total- XX XX
XX XX
XXX XXX
Sources of Flow:
A fund from operation is the main of funds. The net profit as disclosed by profit and
loss account or income statement may not always be equal to the amount of actual
sources of funds because balance of net profit shown in the income statement is
ascertained after deduction from revenue (i.e. sales) a number of expensed, some of
which are non-fund or non-operating items which do not result in the outflow or inflow
of funds
A) Non-operating expenses:
I. Depreciation and depletion charges
B) Non-operating incomes:
Similarly, there are certain non-operating incomes, which have been credited to profit
and loss account or income statement while arriving at net loss. As such, should be
deducted form the current years profits while calculating funds from operations. They
are:
I. Dividends received
II. Retransfer of excess previsions
III. Profit on sale of fixed / non- current assets
IV. Appreciation in the value of fixed assets
V. Profit on sale long-term investments etc
INTRDUCTION:
Cash flow is a useful concept to be used as one of the tools of the investment analysis. “Cash
Flow” in financial analysis means net income after adding back expenses items and which
currently do not funds, such as deprecation.
An enterprise should prepare a cash flow statement and present it for cash period for which
financial statements are presented Users of an enterprises financials statement are interested in
how the enterprise generates and uses cash and cash-equivalents. This is the cash regardless of
the nature of the enterprise activities and irrespective of whether cash can be viewed as the
product of the enterprise, as may be the cash with a financial enterprise. Enterprises need cash
for essentially the same reasons, however different their principal revenue-productions activities
might be. They need cash to conduct their operations, to pay their obligations, and to provide
returns to their investors.
Definition:
The following terms are used in this statement with the manning specified. The term
“Cash” here stands for cash and bank balances.
The principal difference between a fund-flow statement and cash flow statement lies in the
amount shown as resources provided by business operation. The cash flow statement should
report cash flows during the period classified by operating investing and financial activities. The
cash flow statement need to be prepared as per Accounting Standard-3, issued by the Institute of
chartered Accountants of Indian, New Delhi. This standard is mandatory for every Company to
follow.
The amount of cash flow arising from operating activities is a key indicator of the extent
generated sufficient cash flows to maintain the operating capability of the enterprises, pay
dividends, reply loans, and make new investments without resources to external sources 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 receipts from the sale of goods and the rendering of services.
Cash receipts from royalties, fees, commissions, and other revenues.
Cash payments to suppliers for goods and services.
Cash payments to and on behalf of employees etc.,
An enterprise may hold securities and loans for dealing of trading purposes, in which case
they are similar to inventory acquired specifically for resale. Therefore cash flows arising
from the purchase and sale of dealing of trading securities are classified as operating
activities. Similarly cash advances and loans made by financial enterprises are usually
classified as operating activities since they relate to the main revenue producing activities
of that enterprise.
The separate disclosure of cash flows arising from investing activities is important
because these cash flows represent the extent which expenditures have been made for
resources intended to generate income and cash flows.
The separate disclosure of cash flow arising from financing activities is important
because it is useful in predicting claims on future cash flow by providers of funds to the
enterprise.
An enterprise should report cash flows operating activities using direct command. Direct
method, where by major classes of goods cash receipts and gross cash payments are disclosed,:
the direct method provides information which may be useful in estimating future cash flows and
which is not available under the indirect method, information about major class of gross cash
receipts and gross cash payments may be obtained rather.
Concept of fund -Is based on the narrow concept -Is based on wider concept of
of fund i.e., cash only fund i. e.., the working capital.
Basis of Accounting -Is based on the cash basis of -Is based on the accrual basis of
accounting accounting.
Starting and closing -Preparation starts with opening -No such opening and closing
cash balance and ends with appear; rather sources and
closing balance application of funds are
matched and reconciled.
Classification of assets and -Is not necessary -Is very much necessary
liabilities
Chapter: 4
DATA ANALYSIS & INTERPRETATION
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation: Form the above table 4.1 represents that cash maintaining by society was
sufficiently. During the past years bank was increasing its cash from year to years. Cash was increased
5.29% in 2013-14, 5.57% in 2014-15, slightly increased 22.62% and 52.14%in 2015-16, 2016-17 and
dramatically decreased 14.35 % in 2017-18.
The district cooperative central bank (DCCB), popularly know as DCC Bank is a get
elected the president post of the DCCB & a president post would mean nurturing for their future
political ambitions.
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation: Form the above table 4.2 shows that cash Balance with DCCB. It was found that,
society maintaining cash balance with DCCB was increasingly. During the year 2014-15 and 2015-16
was 13.31% and 13.27%, slightly decreased during the year 2016-17 and 2017-18 was 7.40% and 6.48%
.
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation:
Form the above graph table 4.3, represents that investment made by the society in different
assets. The base year 2013-14 investment was made at 22.62% in different assets. Next year it
was increased at 29.27% in 2014-15, slightly increased 44.63% in 2015-16 and unpredictable
decreased to 2.16% and 1.29% in 2016-17 and 2017-18.
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation:
Form the above graph table 4.4, describes that balance with other banks. The graph shows that
first three years was slightly increased year after year from 2013-14 to 2017-18.
Loans: Is on amount given for a specified period and is recoverable with a particular
interest rate.
Advances: It is given for a temporary basis to meet out cause (say) purchases, travel
expenses etc... Interest is not charged on this advance amount.
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation: Form the above table 4.5 shows that loans and advances given by the
society. Loans & advances were increased from one year to another. During the year 2013-14
was 12.58%, then slightly increased 16.96% in 2014-15, 22.08% in 2015-16 and 23.46% in
2016-17 during the last year was increased at 27.89% in 2017-18.
The goods that a business has available for sale at the end of an accounting period
or the value of those goods
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation: Form the above table 4.6 shows that closing stock maintained by society. Low
closing stock tells that high demand in the market, high closing stock describes the less demand
from the market and they was still with society. Closing stock was continuously increasing in
2013-14, 2014-15 and 2015-16. But decreased in 2016-17, 2017-18. By 24.01% to 16.77%.4.7.
FIXED COST:
A period cost that remains more or less unchanged irrespective of the output level or
sales revenue. Such as deprecation, insurance, interest rant, salaries and wages.
Business costs such as rent that are constant whatever the amount of goods purchased.
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation:
Form the above table 4.7 shows that represent that fixed cost incurred in the society during past
years. Fixed cost was incurred in 2013-14 at 23.18% it was increased 27.95% and 28.22% in 2014-15
and 2015-16 Slightly decreased in 26.74% and 24.27% in 2017-18
The sundry can mean various miscellaneous or diverse. Sundry debtors might refer
to a company’s customers who rarely make purchases on credit and the amounts they
purchase are not significant.
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation:-
Form the above table 4.8 shows that sundry debtors of the society. Less sundry debtors shows that
less blocked capital i.e. regularly payment made by the customers and high sundry debtors shows that
irregular or delay payment made by the customers. Sundry debtors was 10.33% in 2013-14, it slightly
increased 10.83% in 2014-15, and 14.32% in 2015-16, then dramatically increased 19.55% in 2016-17.
and in 2017-18 increased 44.39%.
Assets which are purchased for long term use and are not likely to be converted quickly
into cash such as land, buildings and equipment.
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation;
From the above graph table 4.9 describes that fixed assets first two years was increased but next
two years slightly decreased in 2017-18
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
Interpretation:
From the above table 4.10 shows that represent that share capital incurred in the society during
past years. Share capital 2013-14 at 13.61% 2014-15 23.96% and decreased in 2015-16 at
17.52% and increased in 21.15% and 23.73% in 2017-18.
Current assets:
Cash in hand 1153667 317470 836197 -
Cash at bank 5568200 4876642 691558 -
Sundry debtors 11443724 26272243 - 14828819
Investment 2185106 1303786 881320 -
Current liabilities:
Particulars Amounts
Sources of funds:
Increase in share capital 25831291
Sale of assets 4510592
Funds from business 136383
Total:- 30478266
Application of Funds:
Increase investments 1303786
Term deposits 45971877
CHAPTER 5
FINDINGS AND SUGGESTIONS
FINDINDS:
In cash in hand first four year was slightly increased but next one year was decreased
with the society.
In balance with DCCB there is fund that society maintaining cash was first three year
dramatically increased and next two year by year decreased.
Investment there is increase slightly three year by year and next two year is dramatically
decreased.
The balance with other bank that first three year was slightly decreased but next two
year was increased balance with other banks made by society.
The loans and advances that increased year by year so it must be improve and better
Utilisation of resource has to be done.
The closing stock increase in three year and next two year decreased.
The fixed costs represent that decreased the society during past year.
The sundry debtors increased year by year so this shows that there is need to improve so
it is easy to meet its future contingencies.
Fixed assets are first two year by year increasing and after the year.
.The share capital is also increasing the current and previous year so share are capital is
increasing..
SUGGESTIONS:
It suggest that the company should itself in taking proper measure to increase.
It suggests the company should not undertake the new any projects until the completion
of other uncompleted projects.
It suggests the company that the firm need to improve its investment so it is helpful to
the firm.
It is suggested that balance with other bank must be decreased like past year to maintain
the standard time for continues year.
The suggest the company maintaining the or following the same increasing trend the
financial loans and advances there will be financially sound of the firm.
It suggest it is the need to improve so it is easy to meet its future contingencies and very
helpful to the firm.
It is suggested the return on total resource must will be increase year by year there only
higher profitability of total cost.
The firm suggested to follow the same increasing trend for total assets so there only
strong financial position of the firm.
The fixed assets are at present year continuously stable it suggest the firm increasing the
fixed assets and balanced with the firm.
It suggest in future days issued in many share and collected the high capital to the firm
get the profits.
5.3. CONCLUSION:
The primary agricultural credit co-operative society Ltd was established 9/9/1976. India
is basically depending upon agriculture and credit system plays an important role in developing
the agricultural sector. The society will provide a crucial role in the development of the
agricultural sector and providing facility also. The PACS increases in assets position it indicates
the society is financially sound, strong and well established society.
BIBLIOGRAPHY
REFERENCE
Manuals
Brochures
Annual report
BOOK REFERRED
WEBSITES REFERRED
www.google.com
www.moneycontrol.com
www.wikipedia