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CASH FLOW STATEMENT

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INTRODUCTION CASH FLOW STATEMENT


From a financial point of view a firm basically generates cash and spends cash. It generates cash when it issues securities, raises bank loans, sells products, disposes an asset, and so on forth. It spends cash when it redeems securities, pays interest and dividends. Purchases materials,

Acquires an asset etc. the activities that generates cash are called sources of cash and the activities that absorb cash are called uses of cash. Background on a Cash Flow Statement Before getting into the nuts and bolts of a statement of cash flow, lets take a brief look at how this document has evolved over the years. Originally, businesses were required to file a statement of changes in financial position, or funds statement. The funds statement went through several years of development before it was widely used. In 1961, Accounting Research Study No. 2, sponsored by the American Institute of Certified Public Accountants (AICPA), recommended that a funds statement be included with the income statement and balance sheet in annual reports to shareholders. Two years later, Accounting Principles Board (APB) Opinion No. 3 was issued and provided funds statement preparation guidelines. Although Opinion No. 3 did not go so far as to make the funds statement mandatory, most businesses, aware of the statements value, included it in their annual reports anyway. Finally in 1971, APB Opinion No. 19 officially made the funds statement one of the three primary financial documents required in annual reports to shareholders. The APB also said a funds statement must be covered by the auditors report. Because Opinion No. 19 didnt specify a particular format for the funds statement, businesses still enjoyed considerable flexibility in how they chose to report their funds flow information. Page | 3

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That flexibility came to an end in late 1987, with the Financial Accounting Standards Boards (FASB) issuance of Statement No. 95, which called for a statement of cash flows to replace the more general funds statement. Additionally, the FASB, in an effort to help investors and creditors better predict future cash flow, specified a universal statement format that highlighted cash flow from operating, investing, and financing activities. This format is still used today.

CONCEPT
The accounting concept of cash flow provides insight into businesses operations and cash positioning at the time the cash flow is recorded. Cash flow in its simplest form is the sum of cash. The concept of a cash windfall or too much money is rarely addressed. Because no one really plans for having more money than they need, there are often situations where a person will make frivolous purchases.

SIGNIFICANTS:
As stated earlier. Cash flow statement analyses cash inflows of a firm. The importance of cash to a business cannot can be overemphasized. it is the most important current asset for the operations of the business. it is the basic input to keep the business going continuously and also the ultimate output expected to be realized by the firm. A firm needs cash to make payments to trade creditors, to incur day-to-day operating expenses,to pay interest to the debentureholders and dividends to shareholders.the firm should always keep sufficient cash in order to meet maturing obligations. A statement which summarizes the inflows and outflows of cash definitely becomes a useful tool/said to the management. A historical analysis of different sources and uses of cash will enable the management to make reliable cash flow projections for the immediate future(i.e., for the short term financial planning). Such a projected statement helps the management to assess its ability to meet different obligations and when they fall due. These projected cash flow statements prepared month wise or so can be useful in revealing the months cash surplus or deficit. By making available such information in advance, the projected cash flow statement enables the

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management to revise its plans. in the months when cash surplus is expected, bank overdraft can be repaid, short term securities can be purchased, cash discount can be availed of and so on. Similarly, in the months when cash deficit is expected, the firm would be required to arrange for bank overdraft or other short term loans or sell its marketable securities. Thus cash flow statements (historical and/ or projected) offer many advantage to the management of a firm. The following are some of them: 1. It helps in efficient cash management: Cash flow analysis helps in evaluating the cash position and short term financial policies. The management can know how much of cash is needed, from which sources it will be obtained, how much of it can be generated internally and how much could be obtained from outside.

2. It helps in internal financial management: Cash flow analysis reveals funds available from different sources including the operations of the firm. This will help the management in determining policies regarding repayment of long term debt, dividend policies, capital expenditure,etc.

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INDUSRY PROFILE
Introduction:
Plastic have become synonymous with modern living. It is undoubtedly a product, which has penetrated extensively into the common mans life. No wonder the industry has achieved in terms of supply of raw material expansion and diversification of processing capabilities and manufacturing of processing machinery and equipment.

This versatile material with its superior qualities such as light weight, easy process ability corrosion resistance, energy conservation, no toxicity etc. many substitute to a large extent many conventional and costly industrial materials like wood, metal, glass, jute, lather etc., in the future. The manifold applications of plastics in the field of automobiles, electronics, electrical, packaging and agriculture give enough evidence of the immense utility of plastics.

At 80 percent of total requirement for raw material and almost all types of plastic machines required for the industry are indigenously available. The present investment in all the three segments of the industry namely production of raw materials, expansion and diversification of processing capacities, manufacturing of processing machinery and ancillary equipment is Rs.1250 crores and it provides employment to more than 80000 people.

On account of their inherent advantage in properties and versatility in adoption and use, plastics have come to play a vital role in a variety of applications, the world over. In our country, plastics are used in making essential consumer goods of daily use for common man such as baskets, shopping bags, water bags, water bottles, school bags, tiffen boxes, hair combs, tooth brushes, spectacle frames and fountain pens, they also find applications in field like packaging, automobiles, and transportation, engineering, electronics, telecommunications, defense, medicine, and building and construction. Plastics are growing in importance in agriculture and water management.

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The Govt. of India recognizing the importance of plastics in agriculture appointed on march 7th, 1981 a National Committee on the use of plastics in agriculture under the chairmanship of Dr.G.V.K.Rao. This committee has forecast a tremendous growth of drip irrigation through a net work of plastic pipes and tubes. In its opinion large scale adoption of irrigation would lead to sports in demand for PVC pipes, L.D.P.E tubes and polypropylene emitters. The committee made a number of recommendations for promoting the use of plastics. The implementation of recommendations would go along away in increasing the consumption of plastics, which at present is very low. The rigid pipes, flexible pipes and sheeting, which are being used for agricultural operations to carry out water place to place and also lining of ponds and reservoirs to reduce seepage and most important in drip irrigation system.

Export of plastics goods:


Plastics have excellent potentialities. Our country is equipped with all kind of processing machinery and skilled labor and undoable, and extra to boost export, finished plastics products will yield rich divided.

Today India exports plastic products to as many as 80 countries all over the world. The exports, which were stagnant at around rest 60-70 cores per annum double to 129 craters. The Plastic industry has taken up the challenge of achieving an export target of Rs.17 crores.

Major export markets for plastic products and linoleum are Australia, Bangladesh, Canada, Egypt, Hong Kong, Italy, Kuwait, Federal Republic of Germany, Sri Lanka, Sweden, Taiwan, U.K., U.S.A., and Russia. With view to boosting the export, the plastics and linoleums export promotion council has urged the government to reduce import duty of plastic raw material, supply indigenous raw materials at international prices, fix duty, draw backs on weighted average basis and charge freight rate on plastic products on weights basis instead of volume basis.

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Prospects:
The Production of various plastics a raw materials in the country is expected to double by the end of seventh plan, the consumption of commodity plastics including LDPE, HDPE, PP, PS AND PVC is immense scope for the use of plastics in agriculture, electronics, automobile, telecommunications and irrigation and thus, the plastic industry is on the threshold of an explosive growth.

Role of plastics in the national economy:

Plastics are got perceived as just simple colourful household products in the mind so common person. A dominant part of the plastics of the percent and future find their utilization in the areas.

Agriculture, forestry and water-management. Automobile and transportation Electronics and telecommunications, buildings, construction and. Food processing and packaging Power and gas distributor.

Importance Of Pipes Industry:


We shall look at the basic data about plastics and particularly those properties, which are so, fuse in practical working with plastics. Plastics are man-made materials. The oldest raw material for producing plastics is carbonaceous material obtained from coal tar (benzene, phenol).

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Today the majority of raw materials are obtained from petrol chemical source and they can be economically produced in large quantities.

Plastics have changed our world and day-by-day they are becoming important. They own their success to whole series of advantage, which they have over conventional materials such as: Lightweight Excellent mould ability Attractive colours Low energy requirements for convention Low labour and cost of manufacture Low maintenance & High strength weight ratio

Benefits of pvc pipes :

1.Corrosion Resistance: Amuse to galvanic of electrolyte corrosion.

2.Chemical Resistance: PVC pipes are not attacked by low or high concentration of acids, Oxidizing agents, alkalis, oils fats and halogens.

3.Maintenance Free: No Painting coating required

4.Fire Resistance:

Self Extinguishing

5.Flexibility:

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6.Variety of Joining Methods

Cement, Heat fusing, threading, flanged compression fitting.

7.Biological Resistance:

Fit for high purity water applications, and resistant to rodent attack

Economic role:
Agriculture is the chief occupation in India. For the developing countries like India modernization of the agriculture practices assumes pivotal places in improving the economic status and the process of modernization. Includes usage of higher productive plastics supplement to greater extent manufacturing of tools required for new agricultural practices.

The usage of poly vinyl chloride pipes in agricultural fields, lesser water seepage, which was predominant in earlier practices, with services of P.V.C pipes, water can be transported efficiently with lesser from the place of higher potential to the place of lower water potential.

Presently the revolutionary tried in water management speaks much about drip irrigation, which is developed in Israel and is practiced by all agricultural based nations in the world. Drip irrigation greatly P.V.C pipes as core tools of implementation with the services of this sort, P.V.C pipes one way or the other strengthening the hands of countrys economy.

A part with the referred P.V.C pipes supplemented with fitting is used in houses for electrical connection and other domestic purposes. Apart from these two applications it has got wide applications even in industrial sectors. P.V.C pipes with much unique heart, chemical and physical characteristics serve many industrial purposes.

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Even characteristics of weight and low price attract many more applications. Rigid PVC pipes have been manufactured in India from the 60s on imported extrusion lines and there after indigenous plan were few pipes manufactures upto 1979-83. When many extrusion lines were imported from batten field, Cincinnati, kraaus-maffi etc. the Govt. allowed the imports of sophisticated and high output plants, which were not available indigenously.

Pvc pipes in India:


Pipes products have found wide acceptance in India and abroad. PVC is one of the more versatile plastics. It can be extruded, moulded, calendared and thermoformed into a multitude of furnished products. The PVC resin can be formulated to give a wide range of properties ranging from hand, tough materials for load bearing application lime pipes, windows and doors to flexible materials for products a due as wire and cable insulation and shooting and flooring.

PVC products cater to both interiors and exteriors. In interiors it can be used for flooring, profile and cable tray, wall covering modular office systems, houses and furniture. For exteriors it is used for doors and windows, fencing partitions and paneling, roofing and rain systems.

The other external applications are in the field of irrigation, portable water supplies. In the field of irrigation there are several methods to irrigate the fields. There are minor irrigation projects and major irrigation projects apart from individual sources like wells, tube wells, bore wells. Major irrigation sector small projects will have canals and lift irrigation schemes etc., will have canals and lift irrigation schemes etc., will have pipelines. Cement and GI pipes were the pipes used in conventional methods of irrigation. Now-a-days PVC pipes replaced the conventional pipes and they constituted almost 90% in this respect.

Drip irrigation popular in the agricultural sector especially in the field of horticulture commercial cropping and green ply houses. The drip irrigation concept is becoming more popular with its advantages like highly yield, water conversion, less labour cost, less fertilizer, less past management costs, less power costs and many more advantages. The demand for this concept is increasing at a place of 30%-40% per annum. Page | 12

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Agriculture a sunrise industry in the Indian economy is mainly dependent on the PVC pipes for the seawater sector and pumping to their aqua ponds. They are using pipelines of four to five kilometers of 10-16 diameters pipes.

The state Govt. of A.P is using rigid PVC pipes for the irrigation water supplies for the past few years. The state Govt. is producing PVC pipes through APSIDC (Andhra Pradesh State Irrigation Development Corporation) for its lift irrigation schemes. The panchayatraj department is producing pipes for public water supply schemes. These pipes can be used for the main distributors, sub-distributors and individual connections.

PVC Pipe Manufactures in Andhra Pradesh: The Major PVC pipes Manufactures in Andhra Pradesh

Nandi Pipes Finolex Pipes Supreme Pipes Sri Lakshmi Venkateswara PVC Pipes And Other Local Manufactures

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COMPANY PROFILE

Introduction:
A dynamic entrepreneur Sri S.P.Y.Reddy was established a black pipes manufacturing company in 1977 and the name of the company is Nandi Pipes Pvt Ltd at Nandyal, Kurnool district. Anantha PVC Pipes Pvt Ltd was incorporated in the year 2002. The factory is situated at NH-7, Hampapuram village, Raptadu mandal, and Anantapur district and it was taken over by Nandi Group Company. The company is managed by team of professionals under the guidance of young, experienced, and well qualified dynamic managing director Mr.S.Sreedhar Reddy.

Origin:
Rayalaseema is economically backward area in Andhra Pradesh, was rare field region for industries. A dynamic entrepreneur sir S.P.Y.Reddy who is basically mechanical engineer started a unit at Nandyal, which manufactures black pipes in 1977. The determination and hard work of Sri S.P.Y.Reddy helped him to overcome the problems faced by the company in the initial years, and with financial assistance from local commercial banks. The company could overcome the problems of the merger and now it is running smoothly.

Later the company started manufacturing of PVC pipes which terminated the manufacturing of black pipes. This resulted in the formation of a Pvt. Ltd. company called SUJALA PIPES PVT.LTD. with Sri S.P.Y.Reddy as the Managing Director.

The only major competitors to the company are Sudhakar pipes, Maharaja Pipes. The only backdrop to it is the competition from local brands. As the majority of the customers belong to farmers, they consider the quality. The company has to make aware of the companys quality standards to them.

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Board of directors:
S.P.Y.Reddy:

Sri S.P.Y.Reddy locally well known industrialist with the base at nandyal, Kurnool district who has been successful entrepreneur, he is technically qualified person with B.E (MEC) from R.E.C (Warangal) and with work experience at BAARC (Bombay). He has daringly ventured and established industries in and around nand yal from 70s. As years went of he has established most successfully the following nandi group of companies:

Nandi Milk Maha Nandi Mineral Water Nandi Infosys Nandi Online Services Anantha PVC Pipes Pvt Ltd. Integrated Thermos Plastic Ltd. Nandi PVC Projects.

Promoter:
Sri.S.Sreedhar Reddy, a computer engineer and a student of IIM, Ahemadabad has been entrusted the management of Anantha PVC Pipes Pvt Ltd., Hampapuram and great assistance and a great upcoming engineer and industrialist.

Branches:
Pondichery Bellary Sangli Vellore Goa Kerala Page | 16

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Coverage:
At present Andhra Pradesh, parts of southern states of Karnataka, Tamilnadu and Kerala are ambit of Sujala Pipes Pvt Ltd.

The company extended their sales in the below regions are shown below: 1979 1984-85 1985-86 1986-87 1988-91 1991-94 Nandyal Region(polypone pipes) Rayalaseema Region (PVC pipes) Telangana Region Karnataka and Andhra Pradesh Tamilnadu and Karnataka Kerala

Sizes:
Various sizes ranging from to 10 are offered to customers. Even pipes with different gauges and sizes are manufactured to suit specified conditions.

Packing:

Packing plays less important role into the products like PVC pipes because the hallow space inside can be utilized. For the purpose of cubic space utilization in trucks while transport, organization is adopting the technique like pipes in pipes.

Payment period:
For monarch brand the company adopts zero credit policy and goods are not delivered unless cash remittances are made. For monarch and sagar brands credit is entitled up to a week. The difference between these brands is due to brand image.

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Technical details about pvc pipes:


Ingredients: PVC resin D.B.L.S T.B.L.S L.S C.S Stearic Acid Hydro Carbon Calcium Carbonate

Manufacturing process:
The main raw materials are HDPE granules and PP granules. The manufacturing process for pipes consists of mixing various resins along with the colouring materials in a mixture and the prepared material is fed to the extruder. In the extruder, the material is heated to the required politicizing temperature (190deg. centigrade to 230deg. centigrade) the extruder through the die hard to form the pipe. The hot pipe coming out of the extruder is cooled in a water bath to retain the final shape.

The pipe coming out of the extruder is guided through the water bath suitable transaction system. The temperature of the water is maintained by circulating through the cooling towards and with the help of a chilling plant.

The required length of the pipe is cut with a planetary saw. The cut lengths are titled by titling units and get corrected in the pipe rack attached to the titling frames. Later they are stocked separately. The company has entered into a technical with its own processing technology.

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Production details of Pvc Pipes

Sewing

High Temperature

Under process

Raw material
PVC, cacl2, Pbo, resins.

Mixture of raw material

Hot molten mixed


raw material

Processing

Storage in warehouse

Printing brand logo

Moulded pipe cooling

Cooling

Channels of distribution:
Anantha PVC Pipes Pvt Ltd. has got zero level and single level channel of distribution.

MANUFACTURER

CONSUMER

MANUFACTURER

DEALER

CONSUMER

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Anantha PVC Pipes Pvt Ltd. has an extensive network of 350 dealers in Andhra Pradesh and who are directly serviced by company sales force and 620 dealers in South India.

Transportation:
Transportation vehicles of Anantha PVC Pipes Pvt Ltd. outnumber the fleet of the competitors vehicle. This unique strength of the organization enables the delivery system to be efficient. This event helps the dealers to reduce inventory levels to the minimum. The dealers are also supplemented with the benefit of the lower paid up capital in the form of inventory.

Anantha pvc pipes pvt ltd:


Anantha PVC Pipes Pvt Ltd. was incorporated in the year Feb 2002. The factory is situated at NH-7, Hampapuram village, Raptadu mandal, and Anantapur district. It was taken over by Nandi group company, and it is one of the sister company among the Nandi groups.

Its annual production capacity is 18,000 mts. And it is one of the leading manufacturers of PVC pipes in south India. This company is equipped with technical collaboration from Batten field of West Germany. It has made possible few other small ventures. Pipes are sold under the brand names of MONARCH, KOHINOOR and KRISHNA. Anantha PVC Pipes with their good quality, trouble free services, durability and commercial use are a better choice than mild steel, galvanized steel, cast iron and plastic pipes.

The company is managed by a term of professionals under the guidance of a young, experienced and well qualified dynamic managing director Mr. Sreedhar Reddy

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Mission Statement:
The mission statement of Anantha PVC Pipes Pvt Ltd. is as follows:

To be preferred supply chain partner to out customer. To be recognised as the best in the world at we do. To create new values in the quality for our customers and employees.

Vision Statement:
The vision statement of Anantha PVC Pipes Pvt. Ltd. is as follows: Creating new values in quality by working together for you

Functional departments of the company:

Financial department:

Through initially the company approached the external source for financial aid, now the financial status of the company is very sound and is being run only with self finance excepting for loans taken for hypothecation of machinery and stock from SBI Nandyal. The company follows cash and carry policy for monarch brand. The product is not delivered until the cash is paid and financial department with the help of marketing department looks after these transactions.

Marketing department:

Marketing Department is headed by the Executive Director. Marketing Manager is in charge of all operations who reports to the Executive Director. Marketing Manager and 35 Sales

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Representatives are under the control of Executive Director. There are also 20 salesmen who have to report to the sales representatives above them.

Personal Department:

The Personal department consists the details of the executives and workers of the organization. The organization is formed with Sri.S.P.Y.Reddy as the managing Director. Two Marketing managers, financial managers, public relations officer and quality control officer who all reports to executive director. Other than executives there are thousands workers in the organization.

Panel consisting of managing director, executive director and managers of concerned departments makes the recruitment and selections of persons. Apart from the attractive salaries company provides health card facilities.

Purchasing department:

The perplexing situation i.e. conformed by the manufactures of the PVC pipes is scarcity of resin. Though the government of India has taken various steps to improve the supply conditions of PVC resin, the Indian manufactures could meet only 50 percent of demand and remaining 50 percent is met from imports. The major petrochemical company is Reliance Petrochemical Ltd.

The lead time for the acquisition of raw materials is 4 days. The following lines highlight the human resources policies and practices: Effective utilization of manpower. To provide good working condition. To promote industrial development.

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Application of pvc pipes:


Agriculture and irrigation schemes. Rural and urban water supplies scheme. Tube well casing. Gas and oil supply lines. Industrial effluent disposal. Sewerage and drainage scheme. Air-condition ducting. Building installations Industrial ducting.

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METHODOLOGY
o For the calculation of cash flows of ANANTA PVC PIPES PVT Ltd. The primary data has not been taken only the secondary data that is, the annual reports of the company from the year 2004-2007 are taken into consideration. o The theoretical contents are gathered from eminent text books and reference Ananta Pvc pvt.ltd. library at

o The financial data and information is gathered from annual reports of the co internal
records.

o Interpretations and conditions are purely based on my opinion.


Source of data collection. All research needs adequate and accurate data or information so the collection of data is the first step in any resources activity. The data needed for research can be classified in to two categories.

Secondary Data Most of the information pertaining to this study has been collected from the secondary source. The study has depended up on both internal as well as external secondary data. Internal secondary data consists of annual reports, brochures, sales records, internal manuals and other records etc. External secondary data consists of journals, newspapers, economic times, financial express, magazines, Internet web sites, paper associations, publications and textbooks, industrial directories etc.

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Objectives of the study Predict future cash flows Evaluate management decisions Determine the ability to pay dividends to stockholders and payments to creditors Show the relationship of net income to the businesss cash flows To study the cash position of SRI VIDHATHRI DIAMOND TOOLS PRIVATE LTD Company. To study the different cash inflows during the study period. To study the different cash outflows during the study period. To identify the cash flow during the study period and how it is used efficiently.

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STATEMENT OF THE PROBLEM


A financial statement contains income statement showing sales, revenues, tax expenses etc. On the other side; the balance sheet shows the liabilities and assets position during the year. Analysis of the liquidity and between current liabilities and assets. Analysis of the liquidity and profitability of the current assets and current liabilities. Analysis of the long term financial of the firm over a period of time. Analysis of various components of working capital

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LIMITATIONS OF CASHFLOW ANALYSIS


The entire is based on financial data that is provided by the limitations of financial statements the limitations of financial statements equally applicable to the study. The study is based on cash flow administration. Hence, all the limitations of cash flow administration are The study is based on the facts and figures provided by the company and obtained from the company annual reports. The available information is not much adequate for studying the organization attitude towards financial management. The data not available for comparison with other similar firms in the industry. It could not possible to make a detailed study of technological problems and up gradation of technology in order to minimize cost, increasing the profitability and productivity due to lack of non-availability of sufficient technical engineering information/data.

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THE NEED FOR A CASH FLOW STATEMENT


Profit represents the increase in net assets in a business during an accounting period. This increase can be in :

---Cash ---Non-current assets ---Receivables ---Inventory

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Scope of the study


The scope of the study is confined to detail analysis of cash flow statement in Sri Vidhathri Diamond Tools Private Limited. An enterprise should prepare a cash flow statement and should present it for each period for which financial statement are presented. Users of an enterprises financial statements are interested in how the enterprise generates and uses cash and cash equivalents. Enterprises need cash for essentially the same reasons, however different their principal revenue producing activities might be. They need cash to conduct their operations, to pay their obligations, and to provide returns to their investors.

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REVIEW OF LITERATURE

Uses of Cash Flow Statement:


Cash flow statement is of vital to the financial management. 1. Since a cash flow statement is based on the cash basis of accounting, it is very useful in the evaluation of cash position of a firm. 2. A comparison of the historical and projected cash flow statements can be made so as to find the variations and the deficiency or otherwise in the performance so as to enable the firm to take immediate and effective action. 3. A series of intra-firm and inter-firm cash flow statements reveal whether the firms liquidity is improving over a period of time and in comparison to other firms over a given period of time. 4. Cash flow statement helps in planning the repayment of loans, replacement of fixed assets and other similar long term planning of cash. It is also significant for capital budgeting decisions. 5. Cash flow activities: The cash flow statement is partitioned into three segments, namely: 1) Cash flow resulting from operating activities 2) Cash flow resulting from investing activities and 3) Cash flow resulting from financing activities The money coming into the business is called cash inflow, and money going out from the business is called cash outflow. Operating activities: Operating activities include the production, sales and delivery of the company's product as well as collecting payment from its customers. This could include purchasing raw materials, building inventory, advertising, and shipping the product. Under IAS 7, operating cash flows include: Receipts from the sale of goods or services

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Receipts for the sale of loans, debt or equity instruments in a trading portfolio Interest received on loans Payments to suppliers for goods and services. Payments to employees or on behalf of employees Interest payments (alternatively, this can be reported under financing activities in IAS 7, and US GAAP) buying Merchandise

Items which are added back to [or subtracted from, as appropriate] the net income figure (which is found on the Income Statement) to arrive at cash flows from operations generally include: Depreciation (loss of tangible asset value over time) Deferred tax Amortization (loss of intangible asset value over time) Any gains or losses associated with the sale of a non-current asset, because associated cash flows do not belong in the operating section.(unrealized gains/losses are also added back from the income statement) Dividends received Revenue received from certain investing activities

Investing activities: Examples of investing activities are Purchase or Sale of an asset (assets can be land, building, equipment, marketable securities, etc.) Loans made to suppliers or received from customers Payments related to mergers and acquisitions.

Financing activities: Financing activities include the inflow of cash from investors such as banks and shareholders, as well as the outflow of cash to shareholders as dividends as the company generates Page | 40

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income. Other activities which impact the long-term liabilities and equity of the company are also listed in the financing activities section of the cash flow statement. Under IAS 7: Proceeds from issuing short-term or long-term debt Payments of dividends Payments for repurchase of company shares Repayment of debt principal, including capital leases For non-profit organizations, receipts of donor-restricted cash that is limited to long-term purposes Items under the financing activities section include: Dividends paid Sale or repurchase of the company's stock Net borrowings Payment of dividend tax

Preparation methods: The direct method of preparing a cash flow statement results in a more easily understood report. The indirect method is almost universally used, because FAS 95 requires a supplementary report similar to the indirect method if a company chooses to use the direct method. Direct method: The direct method for creating a cash flow statement reports major classes of gross cash receipts and payments. Under IAS 7, dividends received may be reported under operating activities or under investing activities. If taxes paid are directly linked to operating activities, they are reported under operating activities; if the taxes are directly linked to investing activities or financing activities, they are reported under investing or financing activities. Generally Accepted Accounting Principles (GAAP) vary from International Financial Reporting Standards in that under GAAP rules, dividends received from a company's investing activities is reported as an "operating activity," not an "investing activity."

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CASH FLOW STATEMENT

ANANTHA PVC PIPES PVT LTD.

Indirect method: The indirect method uses net-income as a starting point, makes adjustments for all transactions for non-cash items, then adjusts from all cash-based transactions. An increase in an asset account is subtracted from net income, and an increase in a liability account is added back to net income. This method converts accrual-basis net income (or loss) into cash flow by using a series of additions and deduction.

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CASH FLOW STATEMENT

ANANTHA PVC PIPES PVT LTD.

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CASH FLOW STATEMENT

ANANTHA PVC PIPES PVT LTD.

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CASH FLOW STATEMENT

ANANTHA PVC PIPES PVT LTD.

BIBLIOGRAPHY

TEXT BOOKS

Financial Management - khan & jain Financial Management - I.M.Panday Financial Management - prasanna Chandra Annual Reports of Sujala Company for the year 2004-2007. Internal Reports of Sujala Company.

COMPANY REPORTS: Old Project Works Reports Company Library WEB SITES:

www.wikipedia.com www.google.com www.nandipipes.com

COLLEGE JOURNALS Icfai journal

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