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Cash management HLL Life Care

A STUDY ON CASH MANAGEMENT AT HLL


LIFE CARE LTD, AKKULAM, TRIVANDRUM
PROJECT REPORT

Submitted to Kerala University


In partial fulfillment of the requirements for the award of degree of
BACHELOR OF COMMERCE WITH COMPUTER APPLICATION

Submitted by

AJI. R LAL
(Candidate Code: 159 -10 814 002)

Under the guidance of


Asst. Prof. Mr. SHIBI CHANDRADAS. M. S

Department of Commerce and Management Studies

P M S A Pookoya Thangal Memorial Arts & Science College

KADAKKAL, KOTTAPPURAM

2012 2013

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Cash management HLL Life Care

DECLARATION

I declare that this report entitled A PROJECT REPORT ON THE STUDY OF

EFFECTIVENESS OF CASH MANAGEMENT submitted by me for the award of degree of

B com of the University of Kerala is my own work. The report has not been submitted for the

award of any other degree of this university or any other university

Place: Kadakkal AJI. R LAL

Date: 159-10 814 002

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Cash management HLL Life Care

ACKNOLOWLEDGEMENT

I wish to express my indebtedness and gratitude to Mr. ARUN of HLL Akkulam


Ltd for giving me support to do this project.

With the deep revence, I express indebtedness to Mr. HASEEN. A. SALAM


(Chairman-PMSA PTM) and Prof. M. SAFARUDEEN (Principal- PMSA PTM) for giving me
an opportunity to pursue Bachelor of Commerce Degree Course in this prestigious institution and
to undertake this project work.

I place on record my deep sense of gratitude to Asst. Prof. GIRISH KUMAR B


Head of the Department of Commerce and Management Studies for generous and timely help
accorded during the programme.

I wish to express gratitude to Asst. Prof. SHIBI CHANDRADAS MS


Department of Commerce and Management studies for moral support and co-operation for this
satisfactory fulfillment of the programme.

I wish to express gratitude to my all friends for moral support and co-operation for
this satisfactory fulfillment of the programme.

Last but not least; my gratitude is to the almighty for showering me with abundant
grace through the entire duration of this training. I believe that the light that God has passed on
me shall be kept alight in all days to come

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Cash management HLL Life Care

TABLE OF CONTENTS

CHAPTERS PARTICULARS PAGE NO

CHAPTER 1 INTRODUCTION OF THE STUDY 1-9

CHAPTER 2 COMPANY PROFILE 10-16

CHAPTER 3 REVIEW OF LITERATURE 17-21

CHAPTER 4 DATA ANALYSIS AND INTERPRETATION 22-64

CHAPTER 5 FINDINGS AND SUGGESTIONS 65-67

CHAPTER 6 CONCLUSION 68-69

BIBILOGRAPHY 70-71

ANNEXTURE 72-76

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LIST OF TABLES

TABLE NO. NAME OF TABLE PAGE NO.

1 CURRENT RATIO 24

2 ABSOLUTE LIQUID RATIO 27

3 CASH TO WORKING CAPITAL 30

4 GROSS PROFIT RATIO 33

5 NET PROFIT RATIO 36

6 CASH TO OTHER INCOME 39

7 CASH TO SALES 41

8 CASH IN HAND 44

9 TRENT ON OTHER INCOME 46

10 TRENT ON WORKING CAPITAL 48

11 TRENT ON SALES 50

12 TRENT ON TOTAL INCOME 52

13 TREND ON VARIOBLE COST 54

14 CORRELATION BETWEEN CASH AND NET 56

PROFIT

15 CORRELATION BETWEEN CASH POSITION AND 57

TOTAL INCOME

16 CORRELATION BETWEEN CASH AND TOTAL 58

SALES

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LIST OF CHARTS

TABLE NO. NAME OF CHARTS PAGE NO.

1.1 CURRENT ASSETS TO CURRENT LIABILITIES 25


1.2 CURRENT RATIO 26
2.1 CURRENT LIABILITIES AND ABSOLUTE LIQUID 28
2.2 RATIO 28
3.1 ABSOLUTE LIQUID RATIO 29
3.2 CASH AND WORKING CAPITAL 31
4.1 CASH TO WORKING CAPITAL RATIO 31
4.2 GROSS PROFIT AND SALES 34
5.1 GROSS PROFIT RATIO 34
5.2 NET PROFIT AND SALES 37
6 NET PROFIT RATIO 37
7 CASH TO OTHER INCOME 39
8 CASH TO SALES 40
9 CASH IN HAND 41
10 TRENT ON OTHER INCOME 42
11 TRENT ON WORKING CAPITAL
12 TRENT ON SALES 44
13 TRENT ON TOTAL INCOME 46
14 TREND ON VARIABLE COST 48
15 CORRELATION BETWEEN CASH AND NET 50
PROFIT
16 CORRELATION BETWEEN CASH POSITION AND
52
TOTAL INCOME
17 CORRELATION BETWEEN CASH AND TOTAL 54
SALES

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CHAPTER I

INTRODUCTION

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Finance is the study of how investors allocate their assets over time under conditions of

certainty and uncertainty. A key point of finance, which affects decision, is the time value of

money, which states that a unit of currency today, is worth more than the same unit of currency

tomorrow. Finance aims to price the assets based on this risk level, and expected rate of return.

Finance can be broken into three different sub categories;

1. Public Finance

2. Corporate finance and

3. Personal Finance

In a business organization finance department is deals with financial activities

Financial management consist Planning, Organizing, Directing, and Controlling of

financial activities such as procurement and utilization of funds of enterprise. It means applying

general management principle of financial resources of the enterprise financial decision include

dividend decision, investment decision and retained earnings etc. the financial management is

generally concerned with procurement, allocation and control of financial resources of a concern.

It ensures regular and adequate supply of fund of the concern. It ensures optimum utilization of

funds. They should utilize maximum possible way at least cost.

Finance management has to make estimation with regards to capital requirement of the

company. This will depend up on expected cost and profit and future programmers and policies

of a concern it can made in an adequate manner which increases earning of enterprise.

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Finance is the life blood of every business concern. It is an important function of any

business, as finance is required to meet the various activities of it. Cash is the important current

asset for the operations of the business. It is the basic input needed to kept the business running

on a continuous basis. It is also the ultimate output expected to be realized by selling the services

or product manufactured by the firm. The firm should kept sufficient cash, neither more nor less

cash shortage will disrupt firms manufacturing operations while exertive cash will simply

remain idle without contributing anything towards the firms profitability. Thus a major function

of the financial manager is to maintain a sound cash position.

Financial management occupies a significant place because it has an impact on all

activities of the firm. Its primary responsibility is to discharge the finance function successfully.

Thus financial management is an appendage of the finance function. No one can think of any

business activity in isolation from its financial implications. The management may accept or

reject a business proposition on the basis of its financial viabilities. In other words, the live

executives who are directly involved in a decision making process should give supreme

impotence for financial consideration.

The finance function centers round the management of funds raising and using them

effectively. But the dimensions of financial management are much border than more

procurement of funds. Planning is one of the primary activities of the financial managers. It helps

him to obtain funds under the best consideration. However, financial management should not be

taken to be a profit extracting device. It implies a more comprehensive concept than the simple

objective of profit making. It broader mission should be to protect the interest of the different

sections of the community through maximizing the value of the firm.

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The concept of financial management is applicable to an organization irrespective of its

size, nature of ownership and control. They can be applied to any activity or an organization,

which has financial implication. in the words of Raymond Chambers; the term financial

management may be applied tom any kind of undertaking or organization regardless of its aims

or constitution.

The term corporate financial management of companies or corporations consists of the

decision relating to (a) investment-concerned with capital budgeting and current asset

management (b) financial-concerned with determining the best financing mix (c) dividend-

concerned with the solution to the decision of dividend policy.

Cash management is the management of the cash balance of a concern is such a manner

as to maximize the availability of cash not invested in fixed assets or inventories and to avoid the

risk of insolvency. According to Kayner these are three motives for holding cash: the

transactions motives, the precautionary motive, and the speculative motive. The most useful

technique of cash management is the cash budget.

In simple terms, cash management may be defined as management tool to ensure that

sufficient cash is available to meet current and future liabilities, with any surplus being safety

invested to generate the maximum income.

In a business, anything done financially affect cash eventually. Cash is to a business is

what blood is to a living body. A business cant operate without its lifeblood cash, and without

cash management, these may carmine no cash to operate. Cash movement in a business is two

way traffic, inflow and outflow. Important aspect which is unique to cash management is time

dimension associated with the movement of cash due to non-synchronicity of cash inflow and

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outflow, the inflow may be more than the outflow or the outflow may be more than the inflow at

a particular point of time. This needs regulations left to itself cash flow is apt to follow

monsoonal pattern and shows of cash may be heavy, scanty or just normal, hence there is a dire

need to control its movement through skillful cash management. The primary aim of cash

management is to ensure that there should be enough cash availability when the needs arise not

too much but never too little.

Cash management is the management of the cash balances of a concern in such a

manager. On to minimize the availability of cash not invested in fixed assets or inventories and

to avoid the risk of insolvency. According to Keygen these are three motives of bolding cash.

The transaction motive, the precautionary motive, and the speculative motive are the most useful

technique of cash management.

Population explosion is the most important cause to from life care companies in India,

which means population explosion is a pyramiding of number of a biological population. As

the number of people in a pyramid increases, so do the problems related to the increased

population that will cause the population changes are the birth rate, death rate and migration.

Population explosion has many reasons like birth rate, poverty, regions etc. These reasons Are

bill fledged in India So a big chance to born a life care organization in India which is also

covered the unemployment in India.

HLL life care limited commenced its journey to serve the nation

in the area of health care, on March 1, 1966 with its incorporation as a corporate entity under the

ministry of health and family welfare of the Government of the India. HLL was setup in the

natural rubber rich state of Kerala, for the production of male contraceptive sheets.

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HLL Life Care is the only company world manufacturing and marketing the widest range

of contraceptives. Today it is the leading marketing organization in the country in area of

contraceptives with a market share of over 65 percentage in the rural and semi urban markets

including the highly populated states to up, Bihar, Madyapradesh etc.

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Cash management HLL Life Care

Cash management HLL Life Care, Akkulam

1. Introduction to the study:


HLL is a Mini Ratna and upgrade as a scheduled B Central Public Sector Enterprise. HLL Life

Care Limited is the only company in the world manufacturing and marketing the widest range of

contraceptives. It is unique providing range condoms steroidal, and Tubal Rings etc. HLL

produces today 1.316 billion condoms annually marketing it one of the worlds leading

manufacturer of condoms accounting for nearly 10 percentage of the global production capacity.

Cash management is concerned with how a firm managers its cash levels and operations (cash
collection and payments) cash investments and dis- investments and cash borrowing and lending.
It is very essential for a business for long run and short run process.

In HLL Life Care their cash management was efficiently done. The cash management of past
years was good.

2. Statement of the problem

Finance is the life blood of every business concern. It is an important function of any business, as

finance is required to meet the various activities of it. Cash is the important current asset for the

operations of the business. It is the basic input needed to kept the business running on a

continues basic. It is also the ultimate output expected to be realized by selling the services or

product manufactured by the firm. The firm should kept sufficient cash, neither more nor less

cash shortage will disrupt firms manufacturing operations while exertive cash will simply

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Cash management HLL Life Care

remain idle without contributing anything towards the firms profitability. Thus a major function

of the financial manager is to maintain a sound cash position.

HLL Life Care is the leading business in India. It is a very big company .HLL has five places so

it must have an efficient finance management. In HLL an intelligent system of accounting is

followed. The finance department is meant for the effective utilization of funds. The account and

the financial statement are prepared will in time. Usually, transaction is recorded as they occur

book keeping in the recording business transaction in a systematic way.

3. Objective of the study


General objective
To evaluate the efficiency of the cash management of HLL.

Specific objective

To identify the cash efficiency on the basis of available data.


To analyze liquidity position of the firm.
To evaluate cash flow position of the firm.
To study on cash management techniques of the firm.
4. Methodology of the study
The study involves use of secondary data; the balance sheet and cash flow statement are the data
for the study. The study is analytical nature study.
5. Reference period
This study was conducted during 15 years commerce from November 25 to December 10 of
2012
6. Organization of the study
Proposed study consists of six chapters;
First chapter will be the Introduction of the study.
Second chapter will be the Profile of the company.

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Third chapter will be the Review of literature.


Forth chapter contains Data analysis and interpretation.
Fifth chapter is Findings and Suggestions.
Sixth chapter is Conclusion and Bibliography.
7. Proposed period of completion of the study
Review of literature - 1 day
Collection of data - 2 day
Analysis of data - 3 day
Interpretation of data - 2 day
Preparation of drafting thesis - 5 day
Completion of the work - 2 days
15 days

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CHAPTER II

COMPANY PROFILE

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HLL is a Mini Ratna and upgrade as a scheduled B Central Public Sector Enterprise.

HLL Life Care Limited is the only company in the world manufacturing and marketing the

widest range of contraceptives. It is unique providing a range condoms steroidal, and Tubal

Rings etc. HLL produces today 1.316 billion condoms annually marketing it one of the worlds

leading manufacturer of condoms accounting for nearly 10 percentage of the global production

capacity.

HLL s Health Care product include: Blood collection bags, Surgical structure, Auto

Disable Syringes, Vaccines, In-Vitro Diagnostic Test Kits, Pharmacy products for women,

Natural products, Hydrocephalus shunt, Tissue expanders, Surgical and Examination Gloves,

Blood banking equipment, Neonatal equipment, Blood Transfusion and intravenous sets,

Vending machines, iron and Folic Acid Tablets, Sanitary Napkins oral rehydration Sults and

Medical plants.

Over the years each of the initiatives taken up by HLL are targeted at reaching quality

health care at the courtship of every family Associate Institute of HLL namely HLFPPT and Life

Spring Hospitals have nursed this to nations under served and vulnerable populace, at an

affordable cast. With vast array of innovative for Healthy Generation.

Over the past sixteen years, HLL has steadily setup a strong and sound infrastructure for

marketing. HLL has put in place a vast distribution network covering. It is the leading marketing

organization in the country in the area of contraceptives-with a market share of over 65% in the

rural and semi urban markets including the highly polluted states of UP, Madya pradesh Bihar

etc.

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HLL has today, five stages of art manufacturing facilities two at Thiruvananthapuram

one at Kanangala near Belguam another at Kochi and the fifth one at Manerar in Haryana.

In HLL Life Care there have a strong governing body;

Board of Directors

Shri M Ayyappan Chairman & Managing Director.

Shri Raghubir Singh Addl. Secretary & FA, Min. Of Health &Family

Welfare

Shri Braj Kishore Prasad Joint Secretary Min. Of Health &Family Welfare

Shri R.P Kahandewal Director (Finance)

Shri K K Suresh Kumar Director(Marketing)

Dr. K Mohan Das Director (Sree Chitha Thirunal Institute For Medical

Science & Technology Medical College Thiruvananthapuram)

Shri V Meenekshi Sundaram Senior Chartered Accountant

Shri V. Sanjeevi Managing Director & Chief Executive Officer

Corporate Objective

Maximize utilization of existing plants capacity.

Raise the profitability of the company.

Taking up profitability of the company.

To explore possibilities for strategic alliance for diversification.

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To make continues effort for up gradation of technology and quality to be

internationally competitive.

To improve substantially direct marketing for all products.

To maximize cost reduction.

Organizational policies

Provide product and services, conforming to international standards in the health

care area to the complete satisfaction of all the customers and to building healthy

generations.

Achieve a high standard of personal, corporate and business excellence through

continual improvement, human resources development and team work.

Market the product and services of the company globally on the strength of

innovation quality, cost and development.

Melt all statutory and regulatory requirements and be an organization with good

corporate Governance and social responsibility.

HLL committed to quality by mandating that all manufacturing facilities are

certified to a quality system standard.

Corporate Social Responsibility

Hindustan Latex setup Hindustan Latex Family Planning Promotion Trust (HLFPPT) an

organizational mainly for reaching health care and contraceptive aids to the poor and

marginalized in the country. The trust has been undertaking well co-ordinates efforts in

population stabilization and HIV AIDS control.

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The company renovated and provided an attractive landscaping at the Kowdiar Park

located near the heart of Thiruvananthapuram city. The company also added recreational

facilities.

Department of Hindustan Latex Limited, Akkulam Plant

Human resource

Finance

IT

Production

Stores

Sales

Purchases

Engineering

Quality Control

R&D

Finance Department

In HLL an intelligent system of accounting is followed. The finance department is meant

for the effective utilization of funds. The account has the financial statement are prepared with

precision accuracy well on time usually, transaction are recorded on the occur book keeping in

recording business transaction in a systematic way.

The finance department at HLL is divided into five section, they are

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1. Ledger

2. Party Bills

3. Payroll, Cash and Computer

4. Costing

5. Finalization of accounts

1. Ledger section

The ledger section has to perform the function of passing and setting of all fright

advantages in HLL of bill related to electricity, water charges etc.

2. Party Bill Section

The party bill section deals with the service bill for rendering services such as

phone, typewriter etc. It certifies the bill and prepare for cash or cheque payment

accordingly.

3. Payroll, Cash and Computer Section

In patrol selection, the salary computation is done. The cash section deals with the

payment of salaries of employees. HLL has got a well integrated M/s. All departments

are computerized.

4. Costing Section

The costing section deals with preparation of quarterly financial reports,

preparation of monthly profitability statement, budget preparation etc.

5. Finalization of Account Section

This section has perform the function of assisting the statutory of government

auditor in connection with audit and accounts of HLL and the preparation, assisting the

coordination of all works with the finalization of accounts of HLL.

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The main functions of HLL Akkulam finance department.

i. The facilitate all finance aspects of the unit activities.

ii. To record and report on all financial aspects on the unit activities.

iii. To capture and record the cost of production of various products of the unit.

iv. To analyze and report on various expenditure of the unit a view to control the same.

v. The report on revenue and capital expenditure viz Budget.

vi. To control and manage all personnel related activities.

vii. To ensure statutory complaints of the financial related activities.

viii. To manage the working capital requirement with in the funds provided by the head

office.

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CHAPTER III

REVIEW OF LITERATURE

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1. Nithin balwani describes the cash flow statement help users of financial statement to evaluate
a companies ability to have sufficient cash both on a short- run and a long run basic for
this reason, the cash flow statement is useful ritually every one interested in the companys
financial health; short and long term creditors, inventories, management and both current and
prospective competitors.

Cash management is concerned with how a firm managers its cash levels and operations
(cash collection and payments) cash investments and dis investments and cash borrowing and
lending.

2. Eije and Westerman cash normally would not be needed if it were not for the market
imperfections and resulting transactions costs of urgently needing cash and short notice if the
need arises and these is no enough cash von.
3. David G. Coderre Ratio analysis identifies potential frauds by computing the variance in a set
of transactions and then calculating the ratios are; the ratio of the highest value to the lowest
value the ratio of the highest value to the next highest and the ratio of one numerical field to
another, such as the current year to the previous year or one operational area to another.
4. Lakshmanan Sivakunmar. Financial reports are the primary means by which managers
communicate company result to investors, creditors and analysis. There parties user the
reports to judge company performance, to assets creditworthiness, to predict future. Financial
performance, and to analyze possible acquisitions and take over users of financial
statements must be able to meaning fully interpret financial reports, construct measures of
financial performance and analyze the reporting choice made by companies. Also, since
company managers choose accounting techniques when marketing their reports, users must
learn to undo the effects of this accounting choice. The purpose of this course is to give
foundation for such analysis.
5. Jawahar Lal describes that Financial Statement Analysis an analysis which highlights
important relationship in the financial statement. It focuses on evaluation of past operations
as revealed by the analysis for basic statements. Financial Statement analysis embraces the
methods used in assessing and interpreting the results of past performance and current
financial position as they related to the particular factor of interest ijn investment decision, it

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is an important means of assessing past performance and in forecasting and planning future
performance.
6. S N Maheshwari states that accounting ratios are relationship expressed in mathematical
terms between figures which are connected with each other in some manner. Obviously, no
purpose will be served by comparing two sets of figures which are not at all connected with
cash other. Moreover, absolute figures are also until for comparison.
7. Jule.Et,al,says that the cash flow provide considerable information about what is really
happening business beyond that contained in either be income statement or the balance sheet.
Analyzing this statement should not task, instead it will quickly become obviously that the
benefits of understanding the sources and uses of a companys cash for outweigh the costs of
undertaking some very straight forward analysis.
8. Maynard E.Rafure argues that attempts to improve working capital by delaying paymant to
creditors are counter-productive to individuals and to the economy as a whole. Claims that
attiring debtors and creditors levels for individual tiers with in a value system will rarely
produce any net benefit proposes that stock reduction generates system wide financial
improvements and other important benefits urgent those organizations seeking concentrated
working capital reduction strategies of focus on stock management strategies based on lean
supply chain techniques.
9. Smith and Ashburne, financial statements as the end product of financial accounting is a set
of financial statements that purport to reveal the financial position of the enterprise, the result
of its resent activities and analysis of what has been done with earning. The financial
statements are the outcome of preparing final accounts and there statements reveal financial
position and profitability of the concern and the utilization of retained earnings
10. N P.Srinivasan and M Sakthivel Murugan describe that cash flow Analysis is an analysis
based on the movement of cash and bank balance. Under cash flow analysis, all movements
of cash, rather than the movement of working capital would be considered such movements
of cash deposited in a statement of changes in financial position prepared on cash basis.
11. Christian Leuz, he says that the incentives of German firms to voluntary disclose cash flow
statement overtime while cash flow statement are mandated under many GAAP regimes, its
disclosure has been mandatory in Germany until recently never the les, an increasing number
of firms provides cash flow statement voluntarily there firms are likely to be influenced by

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recommendations of the German accounting profession, IAS7 as well as the respective


standards of the other countries. The idea of the paper is to study this influence by looking at
the adaptation pattern over time at the format of the cash flow statement. it documents the
development of voluntary cash flow statement discloser by German firm with respect to
milestone in the evaluation of German professional recommendations and respective
international standards. The cross sectional determinants of voluntary cash flow statements
are analyzed using profit regressions and factor analyzed. The results are generally consistent
with the idea that capital focuses derive the disclosure of cash flow statements that are in line
with international practice.
12. Bolong Cao, Financial Statements analysis is in of the modern financial analysis. The
financial statements from firm provide the information upon the dynamic and innovative
process of contemporary business practice. By analyzing financial statement, investors,
business pertness managers and Government agencies can infer the efficiency and risks
involved in the business of the firm. Which is extremely important in their decision
according shenanigans from financial statements becomes indispensable in todays business
world. Researches in modern accounting, corporate finance and investment really heavily on
financial statement analysis techniques. Proteciency in financial statement analysis is also
essential in professional certificate like CPA or CFA-exams.
13. KGC Nair and Jayan states ratio analysis is an important and useful technique to check upon

the efficiency with which working capital being used in the enterprise. Some ratios indicate

the trend or progress or downfall of the firm. It help the financial management in evaluating

the financial position and performance of the firm. The trade creditor, bank, lending

instructions and experienced inventor are use ratio analysis as their initial tool in evaluating

the firm as a desirable borrower as a potential investment outlet.

14. Pandey: clearly explain the standards of ratio analysis. The standards of comparison consist

of past ratio; competitor ratios and projecting ratios. For that he describes the methods under

which ratios can be analyzed, cross sectional analysis and Performa analysis.

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15. John.N.Myer financial statements provide a summary of the accounts of a business

enterprise, the balance sheet reflecting the asset and liabilities and income statements

showing the result of operations during a certain period. It emphasis the importance of

balance sheet and profit and loss account; but ignores the importance of other financial

statements like cash flow statement. Fund flow statement and statement of retained earnings

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CHAPTER IV

ANALYSIS AND INTERPRETATION

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RATIO ANALYSIS

Ratio analysis is the one of the most powerful tool of financial analysis. It aims at making

use of quantitative information for decision making. A ratio is an expression of relationship

between two figures or two amounts. It is a yard stick which measures relationship between

two variables. Ratios are simply a mean of highlighting in arithmetical terms the relationship

between figures drowns from various financial statements. Robert Antony defines a ratio as

simply one number expressed in terms of another

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CURRENT RATIO

Current ratio is the most common ratio for measuring liquidity. It represents the ratio of
current assets to current liabilities. It is also called working capital ratio. It is calculating by
dividing current assets by current liabilities

Current ratio = Current asset


Current liabilities
Current assets are those, the amount of which can be realized with in a period of one
year in includes cash in hand, cash at hand etc.

Current liabilities are those amounts which are payable with in a period of one year-
current liabilities are creditors, bills payable etc.

The current ratio of the firm measures its short term solvency, ie, its ability to meet
short term obligations. In a sound business a current ratio of 2:1 is considered an idle one. It
provides a margin of safety to the creditors

Table 1

year Current Assets Current Ratio


Liability

2007 21850.11 12550.12 1.74


2008 24244.91 12011.38 2.01
2009 28303.9 17225.8 1.64
2010 25968.68 16109.8 1.61
2011 39406.45 21440.46 1.83

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The graph represents of current asset and current is as follows.

Chart 1.1

Current Assets Current Liabiality

39406.45

28303.9
24244.91 25968.68
21850.11

21440.46
17225.8
12550.12 16109.8
12011.38

2007
2008
2009
2010
2011

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The following chart shows the ratios of the past five years

Chart 1.2

Ratio

2.01
1.74
1.64 1.83
1.61

2007
2008
2009
2010
2011

INTERPRETATION

From the above table and form the above chart 1.2. it can be seen that the current
ratio during the year 2007 was 1.74 and in 2008 it was an increased to 2.01 while during the year
2009 their was a decreases in to 1.64 during the year 2010the current ratio was decreased to 1.61
but in the case of 2011 the final year it was a slight increase to 1.83 i.e. current assets double the
current liability 9is considered to be satisfactory. But it can be analyzed from the above that
except for the year 2008 the organization did not attained a satisfactory.

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ABSOLUTE LIQUID RATIO

The ratio is obtained by dividing cash (of course cash in hand and cash at bank) and
marketable securities by current liabilities. It is also known as cash position ratio.

Cash + marketable securities


Absolute liquid ratio =
Current liabilities

Table 2

YEAR CURRENT ABSOLUTE Ratio


LIABILITIES LIQUID RATIO

2007 12550.12 3246.12 0.258

2008 12011.38 1644.8 0.136

2009 17225.8 5504.47 0.319

2010 16109.8 3981.92 0.247

2011 21440.46 5092.95 0.237

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

The Current liabilities and Absolute Liquid Ratio can be expressed in this chart

Chart 2.1

CURRENT LIABILITIES ABSOLUTE LIQUID RATIO

21440.46

17225.8
16109.8

12550.12 12011.38

5504.47 5092.95
3981.92
3246.12
1644.8

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

The following chart shows the ratio of the past five years

Chart 2.2

RATIO

0.319

0.258 0.247 0.237

0.136

2007 2008 2009 2010 2011

INTERPRETATION

We have to seen from the above table and from the above chart that the absolute liquid
ratio during the year 2007 was 0.258 and the subsequent year 2008 the ratio has a slight decrease
to 0.136. While during the year 2009 the ratio has its maximum in last five years to 0.319 but in
2012 it has decreases to 0.247 in 2011 also it have a slight decreases to .237

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

CASH TO WORKING CAPITAL

The cash to working capital ratio measures how well a company can meet its short term
liabilities using its liquid assets such as cash and cash equivalents and marketable securities. This
ratio will also help un cover situation where the company may be too heavily spending its cash
on inventory that is not being turned into sales as rapidly as it should be.

Decreasing cash to working capital ratio can indicate the company may be suffering
from low cash reserves, and may not be able to meet its financial obligations. A decreasing ratio
may also mean it has acquired more assets. With more assets, one would hope that it could be
using these additional assets to generate even more cash.

Cash and Cash Equivalents + Marketable Securities


Total Current Assets Total Current Liabilities

Table 3

YEAR CASH WORKING CAPITAL RATIO

2007 3246.12 9299.99 0.349

2008 1644.5 12233.53 0.134

2009 5504.47 11078.1 0.496

2010 3891.92 9859.08 0.403

2011 5092.95 17965.99 0.283

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

The cash and working capital relation can be expressed in this chart

Chart 3.1

CASH WORKING CAPITAL

17965.99

12233.53
11078.1
9299.99 9859.08

5504.47 5092.95
3246.12 3891.92
1644.5

2007 2008 2009 2010 2011

The following chart shows the ratio of cash and working capital

Chart 3.2

RATIO

0.496

0.403
0.349
0.283

0.134

1 2 3 4 5

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

It can be seen from the above table and from the above chart that the cash to working
capital ratio during the year 2007 was 0.349 in 2008. It was decreases to .0134 in 2009 it have
increases to 0.496 it is the biggest value in past five years in 2010 it have a decreases to 0.403
also 2011 it have a decreases to 0.283. A higher the ratio indicates the efficient utalisaction of
work.

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

GROSS PROFIT RATIO

The gross profit ratio plays an important role in two management areas of financial
management, the ratio serves as a valuable indicator of the firms ability to utilize effectively out
side sources of funds.

Gross Profit X 100


Gross Profit Ratio =
Net sales

This ratio help to ascertaining whether the average percentage of mark up on the goods is
maintained or not It also indicate the degree to which selling price per unit may decline with out
resulting in losses from operations to the firm.

Table 4

YEAR GROSS PROFIT SALES RATIO

2007 20353.62 24348.17 83.59

2008 23816.11 31556 75.47

2009 23959.35 36641.2 65.39

2010 32704.97 44006.29 74.32

2011 43276.38 51564.33 83.97

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

The gross profit and sales relation can be expressed in the chart

Chart 4.1

GROSS PROFIT SALES

51564.33
44006.29 43276.38
36641.2
31556 32704.97
24348.17 23816.11 23959.35
20353.62

2007 2008 2009 2010 2011

The following chart shows the ratio of sales and gross profit ratio

Chart 4.2

RATIO

83.59 83.97
75.47 74.32
65.39

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

As from the above table it can be seen that the gross profit ratio in 2007 it was 83.59

then it was a decreasing tendency from 2007 to 2010. In 2008 it was decreased to 75.47 also

2009 and 2010 it was 65.39 and 74.32 but in 2011 it was an increase to 83.97.how ever the gross

profit should be adequate to cover operating expenses and to provide for fixed charges divineds

and building up to reserve.

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

NET PROFIT RATIO

This ratio is also called as the net profit to sale or net profit margin ratio. It is determined

by dividing the net income after tax to the net sales for the period and measures the profit per

rupee of sale

Net Profit X 100


Sales

In this context, the term net profit net profit after interest and tax but before dividend
The ratio is used to measure the overage profitability and hence it is very useful to profitability
of the business. Higher the ratio better is the operational efficiency of the concern

Table 5

YEAR NET PROFIT SALES RATIO

2007 2724.03 24348.17 11.18

2008 2189.11 31556 6.93

2009 1689.32 36641.2 4.61

2010 2230.31 44006.29 5

2011 2726.81 51564.33 5.2

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

The net profit and sales can be expressed in the chart

Chart 5.1

NET PROFIT SALES

51564.33
44006.29
36641.2
31556
24348.17

2724.03 2189.11 1689.32 2230.31 2726.81


2007 2008 2009 2010 2011

The following chart shows the ratio of net profit and sales in chart 5.2

Chart 5.2

RATIO

11.18

6.93

5 5.2
4.61

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

From the above table, it can be seen the highest value in the past five years 11.18. It have

a decreasing tendency to 6.93 in 2009 it was decreased to 4.61 in 2010 it was a slight increase to

5.00 in 2011. It was also an increase to 5.2

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

CASH TO OTHER INCOME


Table 6

YEAR CASH OTHER INCOME RATIO

2007 3246.12 3207.13 1.012

2008 1644.8 3448.89 0.476

2009 5504.47 1879.47 2.928

2010 3891.92 2041.89 1.95

2011 5092.95 2555.52 1.99

The cash and other income can be expressed in the chart 6.1

Chart 6.1

CASH OTHER INCOME

5504.47
5092.95

3891.92
3448.89
3246.12
3207.13
2555.52
1879.47 2041.89
1644.8

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

The ratio of cash and other income can be expressed in the chart 6.2

Chart 6.2

RATIO

2.928

1.95 1.99

1.012

0.476

2007 2008 2009 2010 2011

INTERPRETATION
As from the above table and from the above it can be seen the ratio of cash to other
income during the year 2007 was 0.012 and for the year 2008 the same was 0.476. it can be
further analyzed that during the year 2009 the ratio had been increased to 2.928 and during this
year the ratio is at its maximum while for the year 2011 the value of the ratio was 1.99 the ration
shows that while the amount in the other income increases the cash position of the organization
also increases and vice versa

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

CASH TO SALES
Table 7

YEAR CASH SALES RATIO

2007 3246.12 24348.17 1.33

2008 1644.8 31556 0.052

2009 5504.47 36641.86 0.15

2010 3891.92 44006.29 0.09

2011 5092.95 51564.33 0.098

The cash and sales can be expressed in the chart 7.1

Chart 7.1

CASH SALES

51564.33
44006.29
31556 36641.86
24348.17

3246.12
1644.8 5504.47
3891.92
5092.95
2007
2008
2009
2010
2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

The ratio of cash and sales can be expressed in the chart 7.1

Chart 7.2

RATIO

1.33

0.15
0.052 0.09 0.098

1 2 3 4 5

INTERPRETATION
Having regarded the ratio of cash to sale it can be seen from the above that during the year 2007
the ratio of cash to sales was 1.33 and for the year 2008 the same was 0.052. While during the
year 2009 the ratio of cash of sales was 0.150 for the year 2012 the same 0.190. It can be also
analyzed that during the year 2011 the ratio of cash and sales was 0.098 the above ratio indicates
that indicates that when the sales increases that cash position also increases and thus the
organization can achieve the better liquidity position

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

TREND ANALYSIS
The trend method determines the direction upwards or downwards and involves the computation
of the percentage relationship that cash statement item hears to the same item in have year. Trend
analysis of ratio indicates the direction of change. This kind of analysis of particularly applicable
to the particular item of profit and loss account. The ratio analysis will reveal the financial
condition of the firm more reliable when trends in ratios over time are analyzed. The trend
analysis of ratio considerable significance to financial analysis because is studies ratios several
years and isolates to financial analysis because it studies ratio of several years and isolates the
exceptional instances occurring in one or two periods.

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

CASH IN HAND

Table 8
YEAR CASH IN HAND TREND RATIO
2007 3246.12 100

2008 1644.8 50.669

2009 5504.47 169.57

2010 3981.92 122.66

2011 5092.95
165.89

Chart 8

180
169.57 165.89
160
140
120 122.66

100 100
80 TREND RATIO

60
50.669
40
20
0
2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

As from the above table and from the above chart it can be seen that trend in cash in hand shows

an increasing trend in expect for the year 2008 companied to the base year 2007. During the year

2008 the trend ratio had been decreased by 49.331.it can be also analyzed that during the year

2009 the trend ratio had been increased by 69.57. While for the year 2010 the trend had been

increased by 22.66 it can be also analyzed that for the last year 56.89. It can be also analyzed that

for the last year 56.89. It can be also analyzed that the increase in trend in cash is a favorable

situation and vice versa.

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

TREND ON OTHER INCOME

TABLE 9

YEAR OTHER INCOME TREND RATIO

2007 3207.13 100

2008 3448.89 107.538

2009 1879.47 58.6

2010 2041.89 63.667

2011 255.52
79.68

CHART 9

TREND RATIO

107.538
100

79.68

63.667
58.6

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

As from the above table and from the above chart it can be seen that the trend on other

income shows a decreasing trend expect for the year 2008.it can be also analyzed that during the

year 2008 the trend had been increased by 7.538 while for the year 2009 the trend had been

decreased by 41.4, during the year 2010 the decreases was 36.333 during the last year 2011 the

trend had been 20.32 the decrees in other income is not a favorable situation to the business as it

renders a liquidity position

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

TREND ON WORKING CAPITAL

TABLE 10

YEAR WORKING CAPITAL TREND RATIO

2007 9299.99 100

2008 12233.53 131.54

2009 11078.08 119.11

2010 9859.08 106.01

2011 17965.99 193.18

Chart 10

TREND RATIO

193.18

131.54
119.11
100 106.01

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

It can be seen from above table and from the above chart that the trend on working

capital shows an increasing trend when compared to the base year 2007. During the year 2008

the trend had been increased by 31.54 and for the year 2009 the increase was 19.11 while for the

year 2010 the increase was 6.01 during the last year 2011 the increase was 93.18.

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

TREND ON SALES

Table 11

YEAR SALES TREND RATIO

2007 24348.17 100

2008 31556 129.6032

2009 36641.86 150.491

2010 44006.29 180.7376

2011 51564.33 211.779

Chart 11

TREND RATIO

211.779
180.7376
150.491
129.6032
100

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

It can be seen from the above table and from the above chart that the trend on sales shows

increasing trends when compared to the base year 2007. During the year 2008 the trend had been

increased by 29.60 and for the year 2009 the increase was 50.49 while for the year 2010 the

increase was 80.73 during the last year 2011 the increase was 111.77

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

TREND ON TOTAL INCOME

Table 12

YEAR TOTAL INCOME TREND RATIO


2007 28906.99 100

2008 33968.22 117.5087

2009 98188.29 132.1

2010 46548.03 161.02

2011 54119.85 187.22

CHART 12

TERND RATIO

187.22

161.02

132.1
117.5087
100

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

It can be seen from the above table and from the above chart that the trend on total
income always shows an increasing trend. During the year 2008 the trend had been increased by
17.5087and for the year 2009 the same had been increased by 32.10 while during the year 2010.
The same had been increased by 61.02 and for the year 2011 the same had been increased by
87.22

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

TREND ON VARIABLE COST

Table 13
YEAR VARIABLE COST TREND RATIO
2007 20417.71 100

2008 24284.87 118.94

2009 26957.16 132.02

2010 33117.83 162.201

2011 39488.15 193.4

Chart 13

TREND RATIO

193.4
162.201
132.02
118.94
100

2007 2008 2009 2010 2011

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION

It can be seen from the above table and from the above chart that the trend on variable

cost always shows an increasing trend. During the year 2008 the trend had been increased by

18.94 and for the year 2009 the same had been increased by 32.03. while during the year 2010

the same had been increased by 62.201 and for the year 2011 the same had been increased by

93.40

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

CO-EFFICIENT OF CORRELATION
Co-Efficient of Correlation is an algebraic method of measuring the correlation. Under this
method, we measure correlation by finding a value known as co- efficient of correlation using an
appropriate formula. Correlation co-efficient is a numerical value. It shows the degree on the
extent of correlation between two variables.

This is no association between cash position and net profit.


Ho: There is no association between cash position and net profit.

H1: There is no association between cash position and net profit.

Table 14

CORRELATION BETWEEN CASH AND NET PROFIT

YEAR CASH NET XY X2 Y2


PROFIT(Y)
2006-07 3246.12 2724.03 8842528.264 10537295 7420339

2007-08 1644.8 2189.11 3600648.128 2705367 4792203

2008-09 5504.47 1689.32 9298811.26 30299190 2853802

2009-10 3981.92 2230.31 8880915.995 15855687 4974283

2010-11 5092.95 2726.81 13887506.99 25938140 7435493

TOTAL X=19470.26 Y=11559.58 XY=44510410.64 X2=85335679 Y2=27476120

= -.1881

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION
Here the value of r is -.1881 which shows a negative correlation.

There for we accept the null hypothesis.

There for there is no association between cash position expenses and net profit .

Table 15

CORRELATION BETWEEN CASH POSITION AND TOTAL INCOME

YEAR CASH Total XY X2 Y2


Income(Y)
2006-07 3246.12 28906.99 93835558.38 10537295 835614070.9

2007-08 1644.8 33968.22 55870928.26 2705367 1153839970

2008-09 5504.47 38188.29 210206296.7 30299190 1458345493

2009-10 3981.92 46548.03 185350531.6 15855687 2166719097

2010-11 5092.95 54119.85 275629690.1 25938140 2928958164

TOTAL X=19470.26 Y= XY= X2= Y2=


201731.4 820893005 85335679 8543476795

= 0.56

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION
Here is the value of r is 0.569 which shows a positive correlation. Therefore accept the null
hypothesis.

This is no association between cash position and income.

Ho: There is no association between cash position and total expenses.

H1: There is no association between cash position and net profit.

Table 16

CORRELATION BETWEEN CASH POSITION AND TOTAL SALES

YEAR CASH Total XY X2 Y2


expenses (Y)
2006-07 3246.12 26182.96 84993030.12 10537295 685547394.4

2007-08 1644.8 31779.11 52270280.13 2705367 1009911832

2008-09 5504.47 36498.97 200907485.4 30299190 1332174811

2009-10 3981.92 44317.72 176469615.6 15855687 1964060306

2010-11 5092.95 51393.04 261742183.1 25938140 2641244560

TOTAL X=19470.26 Y= XY= X2= Y2=


190171.8 776382594.3 85335679 7632938904

= 0.581

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

INTERPRETATION
Here the value of r is 0.581 which shows a positive correlation. Therefore accept the null
hypothesis.

There is no relationship between cash position and sales.

STATEMENT OF CHANGES IN CASH FLOW STATEMENT FOR THE YEAR 2008-09

particulars 2008 2009 Change % of Changes

Cash flow from operating


2142.95 1654.43 -488.52 -22.79
activities
Profits for the year Adjustment for: 733.07 899.59 166.52 22.71
Depreciation & amortization
Interest paid 447.10 420.64 473.54 105.91
Profit or Loss on Asset
Interest received 305.75 1.34 307.09 -100.43

Operating profit
(174.01) (100.37) 73.64 -42.31
Before working capital changes
Increase or Decrease in sundry
2843.36 3375.63 532.27 18.71
debtor
Increase or decrease in other
(4597.43) (281.42) 4316.01 -93.87
receivable
Increase or decrease in inventory (68.21) 12227 190.48 -279.250
Increase or decrease in trade and
739.07 (1785.96) -2525.03 -341.65
other payables (364.18) 8928.70 7292.88 -2002.55

Cash generate from operation (1447.39) 8359.22 9806.61 -677.537


Income tax paid
(823.80) (815.86) 7.594 -0.963
(2271.19) 7543.36 5272.17 232.13

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

Net cash from (2510.12) (2669.87) -159.75 6.634


(134.15) (2702.39) -2568.24 1914.454
Investing activities
376.91 74.37 -302.54 -80.268
Cash flow from financing
174.01 100.37 -73.64 -42.31
activities
Proceeds from long term
-506.7 -164.273
borrowings
5395.77 -7797.57 -324.655
Proceeds from other borrowings -1.97 -0.134
-1019.18 -43.33
Interest paid
(308.45) 1466.72 -473.54 105.91
Dividend paid
(2401.8)
Dividend tax paid
1468.69 1332.51 102.8 -39.87
Reserve and surplus
2351.69 920.64 17.28 -99.511
Net cash used in financing
-206.917
Activities
(447.1) 155.00 -3056.65 18.90
Net Increase or decrease in cash
equivalent (257.8) 26.53 0
Cash and cash equivalent at the
(43.81) 3313.4
beginning of period
3071.67 15.02 613.55 -7290.534
Cash and cash equivalent at the
end of the payment (1601.32) 1712.08 0
Cash and cash equivalent
3246.12 3859.67 5429.99 0
comprise 1644.80 1644.80 -1542.14 -98.20
74.48 5504.47 232.94
Cash in hand
1570.32 28.18 3831.49
Balance with schedule bank 5476.29

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

STATEMENT OF CHANGES IN CASH FLOW STATEMENT FOR THE YEAR 2008-09

2009 2010 Change % of Changes

Cash flow from operating


1654.43 2661.40 606.97 36.68
activities
Profits for the year Adjustment 899.59 1279.07 379.48 42.18
for:
Depreciation & amortization 420.64 756.05 -164.59 -17.87
Interest paid
Profit or Loss on Asset 1.34 1.53 0.49 14.17
Interest received

(100.37) 197.89 -97.52 97.16


Operating profit
Before working capital changes
3375.63 4100.17 824.54 21.46
Increase or Decrease in sundry
debtor
(281.42) 1459.05 1740.47 -618.46
Increase or decrease in other
receivable 12227 1332.33 -1454.6 -1189.66
2609.92 -146.13
Increase or decrease in inventory
(1785.96) 823.96 -8020.42 -115.756
Increase or decrease in trade and 8928.70 1091.72 -4400.08 -52.63
other payables
8359.22 3959.14 -15.86 1.94
Cash generate from operation
(815.86) 831.72 -4415.94 -58.54
Income tax paid 7543.36 3127.42 -3747.95 140.37
(2669.87) 6417.82 -608.73 22.52
Net cash from
(2702.39) 3311.12 98.46 132.39
74.37 172.83 97.52 97.16

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

Investing activities
100.37 197.89 -80.47 40.59
Cash flow from financing
activities
Proceeds from long term
5395.77 278.72 2381.07 -44.12
borrowings
Proceeds from other borrowings
1466.72 3014.70 -1658.54 -113.07
Interest paid
Dividend paid
1332.51 191.82 -1838.14 -137.07
Dividend tax paid
920.64 1505.63 164.59 -17.87
Reserve and surplus
Net cash used in financing
155.00 756.05 -0.35 0.725
Activities
Net Increase or decrease in cash 26.53 155.35 0.13 -0.49
equivalent
Cash and cash equivalent at the -100
15.02 26.40 -15.02
beginning of period
Cash and cash equivalent at the 1712.08 1635.26 -3347.34 195.51
end of the payment
3859.67 1522.54 -5382.21 -139.447
Cash and cash equivalent 1644.80 5504.47 3859.67 234.65
5504.47 3981.92 -1527.55 -27.66
comprise
28.18 27.13 -1.05 -3.72
Cash in hand 5476.29 3954.92 -1494.37 -27.288
3981.92
Balance with schedule bank

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

LEAST SQUARE METHOD

It is widely used statistical employed to study trends in revenue, costs, production and
other data and other data and to investigate the relationship among accounting and financial
variables. Method of least squares is a method of drawing regression line by principle of least
squares. The principal least squares is that principle which states that the line of best fit should
be drawn in such a manner that the sum of the squares of difference between the known value of
the dependent variables and the corresponding values of it obtained from the line of best fit
should be the least.

TREND VALUE OF CURRENT ASSETS FOR FUTURE YEARS


Table 18

CURRENT
YEAR ASSET X XY X2 TREND

Y
2005-06 13486.07 -2 -26972.14 4 16486.898
2006-07 21850.11 -1 -21850.11 1 19628.839
2007-08 24244.91 0 0 0 22770.78
2008-09 28303.88 1 28303.9 1 25912.721
2009-10 25968.88 2 51937.76 4 29054.662
TOTAL 113853.9 0 31419.41 10
y = a + bx

a = y = 112061.4 = 22770.78

b = xy = 34008.79 = 3141.941

x2

Trend value of profit

Trend value in 2012 = 35338.544

Trend value in 2013 = 38480.485

Trend value in 2014 = 41622.426

Trend value in 2015 = 44764.367

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

Trend Value of Current Assets for Future Years


Table 18

PROFIT
YEAR Y X XY X2 TREND

2005-06 3114.87 -2 -6229.94 4 2945.56


2006-07 2750.88 -1 -2750.88 1 2665.23
2007-08 2142.95 0 0 0 2384.9
2008-09 1654.43 1 1654.43 1 2104.57
2009-10 2261.40 2 4522.8 4 1824.24
TOTAL 11924.53 0 -2803.39 10
y = a + bx

a = y = 11924.53 = 2384.906

b = xy = -2803.39 = -280.339

x2

Trend value of profit

2012 = 2384.906+-280.339 X 4 = 1263.55

2013 = 2384.906+-280.339 X 5 = 983.25

2014 = 2384.906+-280.339 X 6 = 702.92

2015 = 2384.906+-280.339 X 7 = 422.54

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

CHAPTER V
FINDINGS AND SUGGESTIONS

DCMS. PMSA PTM COLLEGE


Cash management HLL Life Care

FINDINGS

The major findings of the study are the following.

By studying Ratio analysis it has been found the current ratio of the firm is not attain a

satisfactory expected level expect for one year of the study period. The Absolute Liquid Ratio,

cash to other income and cash to working capital shows a satisfactory level in the year 2009

which means at this year company have shown a good solvency position.

It has found from the ratio analysis of gross profit and net profit the company has shown

a good increasing rate of profit for the last consecutive years.

From trend analysis it has been found that trend on working capital, sales, total income

and variable cost shown an increasing trend throughout the analysis period were as trend on cash

in hand and other income shown a fluctuating trend throughout the study period.

By seeing the co-efficient correlation it has been found that the relation between cash

position and net profit shows a negative correlation were as cash and sales, cash and total

income, cash and total expenses shows a positive correlation. For positive correlation there will

be positive relationship for both the variables and vice versa.

From least square method it has been found that there an increasing trend on current asset

as well as decreasing trend on profit for coming 5 years.

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Cash management HLL Life Care

SUGGESTIONS

1. HLL must maintain apt liquidity position. This indicates that the HLL needs to

improve its short-term financial position.

2. Block funds used properly and profitability.

3. Firm should maintain optimum cash balance throughout the year.

4. Solvency position is to be studied and steps to be taken for improving it.

5. Debt Equity Mix should be maintained optimum level.

6. Fund managers give more importance to utilization of fund.

7. Step to be taken to increase the working capital of the firm to meet short term

obligation.

8. Excess funds invested to diversified projects.

9. Even through the firm is doing well but the bad debts are also increasing so the

management needs to take necessary steps for reducing bad debts.

10. The firm can adopt modern method of cash management.

11. The firm should fix proper working capital and inventory level.

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Cash management HLL Life Care

CHAPTER VI
CONCLUSION

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Cash management HLL Life Care

CONCLUSION

In this study, an analysis on Efficiency of Cash Management of HLL was done. The

Efficiency of the firm during last five years is taken up for study. The Efficiency of fund has

been analyzed on the basis o0f the data collected from the Annual report of HLL. The Efficiency

of Cash Management in HLL was analyzed with the help of Ratio Analysis and Correlation Co-

efficient.

The study conducted in HLL was successful. The study also guides to get knowledge

regarding actual functioning of the Firm. Cash Flow Statement of the firm reveals that overall

performance of cash management of the firm is above average level. So cash managers give

more importance to utilization of cash through using profitable pattern.

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Cash management HLL Life Care

BIBLIOGRAPHY

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Cash management HLL Life Care

BIBLIOGRAPHY

Adesh Sharma, Investment and Financing in Pesticides Industry in India, Indian

Journal of Finance and Research, Vol.V. No.2 July 1999,p.67-83

Agrawal N.K.: Analysis of Financial Management, New Delhi, National Publiting House,

2001.

Vijaykumar and A. Venkathachalam, Working capital and Profitability- An Empirical

Analysis, The Management Accountant, October 1995 p. 748-750

Bari R.R.( Ed.): Selected Reading in Cash Management, Delhi Triveni Publication 200.

Reports and Journals

Annual report of HLL Life Care

Accounting review

Project Report of SENTHIL.E

Websites

1. www.accounting4management.com

2. www.wikipedia.org

3. www.lifecarehll.com

4. www.ec-finance.com

5. www.seribid.com

6. www.businessknowhow.com

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Cash management HLL Life Care

ANNEXURE

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Cash management HLL Life Care

ANNEXURE
BALANCE SHEET AS AT 31STMARCH
Particulars 2005-06 2006-07 2007-08 2008-09 2009-2010
SOURCES OF
FUNDS
Shareholders
Share capital 1553.50 1553.50 1553.50 1553.50 1553.50
Reserves 8174.22 9442.66 10688.95 1124.99 12470.75
&surplus

LOAN FUNDS
Secured loan
Grants/liability
payable as per 1461.52 2849.56 6669.94 94699.17 8771.72
contract 0.00 375.02 100.14 143.36 327.58

11189 14220.74 19012.53 22416.02 23123.55

APPLICATION
OF FUNDS
Fixed assets
Gross block 10907.36
Less: 11608.04 13967.92 16293.74 22422.43
Depreciation 7054.46 7688.67 83336.52 9004.05 10173.79

Net block
Capital work-in- 3852.90 3919.37 5631.40 7289.69 12248.64
progress 36.68 705.00 839.15 3541.53 230.41
3889.58 4624.37 6470.55 10831.22 12479.05
CURRENT
ASSETS,
LOANS &
ADVANCES
Investments
current asset,
loan & advances 0.00 0.00 308.45 506.70 785.42
Inventories
Sundry debtors 3153.48 5083.53 4338.32 6130.51 5312.00
Cash &bank 5726.64 8356.95 12954.38 13235.80 11776.75
balances 2187.35 3246.12 1644.80 5504.47 3981.92
Other current 173.60 580.61 426.57 373.62 1912.59
assets 2245.000 4582.90 4880.84 3059.50 2985.62
Loan &advances

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Cash management HLL Life Care

13486.07 21850.11 24244.91 28303.90 25968.88

Less: current
liability
&provision
Current
4382.77 9991.64 409.15 16554.99 15370.20
liabilities
1620.23 2558.48 2602.23 670.81 739.60
PROVISION

6003.00 12550.12 12011.38 17225.80 16109.80

Net current asset 7483.07 9299.99 12233.53 11078.10 9859.08


Deferred tax
liability(Net) (183.41) 296.38 0.00 0.00 0.00

11189.24 14220.74 19012.53 22416.02 23123.55

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Cash management HLL Life Care

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 ST MARCH

Particulars 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Income
Sales & services 21406.60 24492.34 31709.17 36760.48 44177.90
Less : Excise duty 118.02 144.17 153.17 118.62 171.61

Net sales other


income 21288.58 24348.17 31556.00 36641.86 44006.29
Less/ Add: increase 1427.47 3207.13 3448.89 1879.56 2041.89
or decrease in stock
and work in progress (170.39) 1351.69 (1036.67) - -
Exchange
Fluctuations - - - - 499.85

Total 22545.66 28906.99 33968.22 38521.42 46548.03

Expenditure
Material consumed 5709.22 7217.47 8662.52 10593.02 11142.28
Finished goods & - - - (1581.64) 723.79
stock in progress
Power & Fuel charges 1168.42 1280.68 1431.80 1934.74 1980.73
Water charges 38.46 55.22 57.79 92.67 145.15
Employee salary and 4408.36 4812.76 6314.07 7216.90 8645.44
benefits
Other production 825.29 912.62 1147.66 1471.90 1618.76
expenses
Administrative 1735.56 1995.54 2777.51 3029.80 4009.65
expenses
Marketing expenses 2904.46 3548.97 5017.90 3631.97 4663.05
Insurance charges 54.60 61.33 52.09 53.91 66.30
Finance charges 49.25 272.50 447.10 920.64 756.05
Depreciation 613.78 661.18 733.07 899.59 1279.07
Value of finished
goods purchased 1886.99 5345.88 5137.60 7377.68 8691.36
Pay revision arrears - - - 519.63
Exchange rate - 504.68 -
fluctuation - - -
Voluntary retirement 42.07 18.81 - 326.24 76.46
Contract expenses -
19436.46 26182.96 31779.11 36832.10 44317.72
Profit For The Year 3109.19 2724.03 2189.11 1689.32 2230.31
Profit period 5.68 26.85 (46.16) (34.89) 31.09
adjustment

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Cash management HLL Life Care

Profit For The Year


Before Tax 3114.87 2750.88 2142.95 1654.43 2261.40
Provision for income 1103.56 1103.56 842.15 707.53 789.77
tax-current year
Deferred tax (155.35) (155.35) (274.89) 43.22 184.22
Provision for income 26.06 26.06 8.07
tax-previous year 75.38 (214.98)
Fringe benefit tax- 76.72 76.72 105.20
current year 34.89 89.89 0.00
Fringe benefit tax- - - - - -
previous year (19.41) 0.00
Provisions written
back
Profits Available For
Appropriation 2063.88 1746.78 1427.82 757.83 1493.39

Appropriation
Interim dividend 232.50 155.00 155.00 0.00 -
Tax on interim 34.89 21.73 26353 0.00 -
dividend
Proposed dividend 180.30 257.80 - 155.35 233.03.
Tax on proposed 25.29 43.81 - 26.40 39.60
dividend
Transfer to general 1590.91 1268.44 1246.29 576.07 1220.76
reserve
Balance carried to Nil Nil Nil Nil Nil
Balance sheet

Earnings per - - 919.10 487.82 961.31


share(basic)
Earnings per - - 919.10 487.82 961.31
share(Diluted)

DCMS. PMSA PTM COLLEGE