SUMMER TRAINING REPORT

On
ANALYSIS OF CASH FLOW STATEMENT
AT
WHIRLPOOL INDIA LIMITED

Submitted in partial fulfillment of the degree of

Bachelor of Business Administration
(Computer Aided Management)
Session (2016-2017)

SUBMITTED TO: SUBMITTED BY:

Ms. BHARTI AGGARWAL MOHIT NASA

(LECTURER, BBA DEPARTMENT) BBA (CAM)-5th SEM.

ROLL NO:- 26063

REG NO.:-

UNIV. ROLL NO:-

D.A.V CENTENARY COLLEGE, FARIDABAD

1
 ACKNOWLEDGEMENT

There are a few things that come in the life of a person, may be for a short span of time, but
leaves on ever shining impression in to the mind. My summer training is one of the events which
will be ever green in my life

I sincerely wish to acknowledge deep thanks for valuable guidance; suggestions and generous
help extended to me by Ms. Bharti Aggarwal . I thank her for being the source both of helpful
criticism and of encouragement.I would also like to thank the Faculty Member of DAVCC,
(Faridabad) for their help and cooperation throughout the project.

I sincerely acknowledge them for extending their valuable guidance, support for literature,
critical review of the project and report and above all the morale support they have provided me
with all the stages of the project.

I take this opportunity to thank all the members of Whirlpool India Ltd. who directly and
indirectly helped me in completing my report.

AKASHDEEP CHAUDHARY

2
 PREFACE

This project is designed as the final report of summer training. Main aim has been to give
update information aboutsuppliers bill passing and payment system to different companies.
Main focus to study this project is to know about the procedure and need of a bill passing and
payment system for aorganization. And give information about the bill passing system software
SAP. What a cost of per bill passing & payment in an organization.

3
 INDEX

CHAPTER TOPIC PAGE

NO.
CHAPTER 1 INTRODUCTION OF THE TOPIC

CHAPTER 2 INDUSTRY AND COMPANY PROFILE

CHAPTER 3 REVIEW OF LITERATURE

CHAPTER 4 RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

SCOPE OF THE STUDY

RESEARCH DESIGN
a) DATA COLLECTION METHODS
b) DATA ANALYSIS

LIMITATIONS OF THE STUDY

CHAPTER 5 DATA ANALYSIS AND INTERPRETATION

CHAPTER 6 CONCLUSIONS AND SUGGESTIONS

CHAPTER 7 BIBLIOGRAPHY

CHAPTER 8 ANNEXURE

4
 CHAPTER-1
INTRODUCTION TO
THE TOPIC

5
CHAPTER-2
COMPANY
PROFILE

6
 WHIRLPOOL INDIA LIMITED

The worlds no.1 appliance company came to India in 1987, through a joint venture with
sundram Clayton limited.
Since then, the whirlpool brand has been warmly received by Indian homemakers and its
innovate products have a permanent place in homes across the country.

Over the years our unrelenting focus on understanding consumers innovation quality and
safety combined with strong operational capabilities has resulted in creating a strong brand a
portfolio of well differentiated products and a healthy balance sheet. The result beyond
greater market share is an emotional connection with people that will hold us in good stead as
we embark on a journey of accelerated, portfolio growth.

Whirlpool Corporation is a principal supporter of Habitat for Humanity, a nonprofit

organization dedicated to building low-cost, affordable housing. The company's commitment
to Habitat for Humanity has exceeded $34 million and it has donated more than 73,000

7
 appliances for Habitat homes. The company plans to support every Habitat home built
globally by 2011, either through product donations, cash, or home sponsorship.

100 years of Innovation

Happiness begins at home. This belief has shaped a century of innovation, growth and
achievement at Whirlpool Corporation, propelling our expansion from modest beginnings to our
present-day status as the worlds no.1 home appliance company.
As we enter 2011, our 100th year in business, we celebrate a century of innovations that have
helped create the modern household. For a hundred years, providing products that meet specific
consumer needs and doing business with both integrity and character has been our hallmark.
Business upon our strong heritage and values is what will foster profitable growth and the
creation of long-term value for our shareholders.

Whirlpool of India is well-positioned to take advantage of the ample opportunities that exist as
we enter our next century in business. Our vision of every home, everywhere reinforces that
every home is 0our domain, every customer an opportunity. This vision defines our purpose in

8
India, inspiring us to provide innovative solutions that uniquely meet the needs of our
consumers. We bring this vision to life through the power of our unique global enterprise and our
outstanding people, working together everywhere. Past, present or future, our focus as always, is
on improving the lives of people and creating happier homes.
Chronology

Year

Louis and Emory Upton founded the Upton Machine Company on November 11, 1911.
With the financial aid of Lowell Bass ford, they began to produce electric, motor-driven
wringer washers. Soon after its founding, Lou Upton's younger brother Fred joined the
1911 company and was an integral part of the business.

Federal Electric ordered 100 machines, but a gear failed in the transmission of
them. Louis Upton immediately replaced them at no cost to Federal Electric, who was so
impressed with Upton's ethics, they immediately doubled their order.

Sears, Roebuck & Co. began selling Upton manufactured machines under the "Allen"
1916
brand, one for $54.75 and a deluxe model for $95.
Upton merged with Nineteen Hundred Washer Company of Binghamton, New York,
1929
taking the name Nineteen Hundred Corporation.
1942 Nineteen Hundred Corporation began converting all of its factories for war production.
Nineteen Hundred Corporation begins manufacturing appliances for John Inglis and
1946
Company of Canada.
1949 First top-loading automatic washer sold manufactured for sale under Sears' brand.
The Nineteen Hundred Corporation was renamed as the Whirlpool Corporation, and sold
1950
its first top-loading automatic washer sold under the Whirlpool brand.
Establishment of the Whirlpool Foundation, a philanthropic arm of Whirlpool
1951
Corporation.
1955 Acquires Seeger Refrigerator Company and RCA's air conditioner and cooking range
lines including ownership of RCA's Estate brand name. Company changes its name to
Whirlpool-Seeger Corporation and began using the RCA-Whirlpool brand name until
the mid-1960s. Whirlpool acquires appliance division from International Harvester

9
 Company.
1956 Opened a 100-acre (0.40 km2) administrative centre in Benton Harbor, Michigan.
The RCA Whirlpool Miracle Kitchen was introduced with an estimated 15 million
1957 television viewers. The company changed its corporate name back to Whirlpool
Corporation.
Won NASA's contract for the development of the feeding and waste systems for Project
1962
Gemini.
1966 Whirlpool drops the RCA name so the brand name becomes Whirlpool.
1967 Introduced a 24-hour helpline.
1968 Surpassed $1 billion in annual revenues.
1978 Surpassed $2 billion in annual revenues.
1986 Acquired Kitchen Aid, a division of the Hobart Corporation.
Began selling compact washers in India and acquired majority interest in Inglis of
1987
Canada.
Begins a joint venture with Philips called Whirlpool International with Whirlpool
1988 owning 53% of the company. The joint venture was formerly Philips' major appliance
subsidiary.
Acquired the Roper brand and Bauknecht of Germany.
1989
Surpassed $6 billion in annual revenue.

1991 Whirlpool becomes full owner of Whirlpool International by buying Philips' 47% stake.
Acquired majority stake on Embraco, a Brazilian world-leading maker of compressors
1997
for refrigeration.
Acquired Brazilian appliance maker Multibrs, owner of the
2000
brands Brastemp and Consul, including its stake on Embraco.
Inglis Ltd. changes its name to Whirlpool Canada. Whirlpool continues to market Inglis
2001
appliances to this day. Surpassed $10 billion in annual revenues.
2002 Surpassed $11 billion in annual revenues.
2003 Surpassed $12 billion in annual revenues.
2004 Surpassed $13 billion in annual revenues.

10
 Maytag Corporation shareholders voted to accept Whirlpool Corporation's stock

2005 purchase. U.S. Justice Department began a review of the merger.

Surpassed $14 billion in annual revenues.

Acquired the Maytag, including the Maytag, Jenn-Air, Amana, Jade, Magic
Chef, Admiral, Hoover, and Dixie-Narco brands, after Justice Department approved the
2006 merger. Sold Dixie-Narco to Crane Co., and Amana Commercial to AGA.

Surpassed $18 billion in annual revenues.

Sold Hoover to Techtronic Industries, TTI Floor care and Jade Appliances to Middle by.
Also closed plants in Newton, Iowa; Searcy, Arkansas; and Herrin, Illinois. This resulted
2007 in the sudden loss of 4500 jobs in the affected communities.

Surpassed $19 billion in annual revenues.

2008 Location closings in La Vergne, Tenn; Reynosa, Mexico; and Oxford, Miss.

Whirlpool acquired WC Woods from Bankruptcy and to keep Ottawa, OH plant open;
2009 Whirlpool to close Evansville plant; Whirlpool has received $19.3 million in U.S.
Department of Energy funding as part of its Smart Grid Investment Grant program

Whirlpool announced plans for its 100th Anniversary in 2011 and unveiled its 100th
2010 Anniversary logo as well as an updated corporate logo. Also, took over former
KarstadtQuelle brand Privilege from Otto Group.

11
 VISSION & MISSION

Every Home, everywhere, with pride, passion & Performance

To Rests on the pillars of innovations, operational excellence, customer-centric approach

and diversifiedtalent. These are embedded with our business goals, strategy, process and
work culture Be it our products that are the result of innovation and operational
excellence to meet every need of consumers or the people behind these products that
come from a wide spectrum of backgrounds, everything we do features a distinct
whirlpool way.

CORE COMPETENCIES

OPERATIONAL
INNOVATION EXCELLECE

CUSTOMER
EXCELLENC
E

INNOVATION:
Unique and compelling solutions valued by our customers and aligned to our brands
create competitive advantage and differentiated shareholder value.

OPERATIONAL EXCELLENCE (OPEX):

12
 A methodology for solving problems & continuous improvement of product & process
through pursuit, acquisition, and utilization of knowledge using critical thought and
planned experimentation helps us achieve operational excellence.

CUSTOMER EXCELLENCE:

Excelling the customer expectations from the company, its brand, products and services
are a three-step process. The three steps are: Know a customer, be a customer, serve a
customer.

Whirlpools achievements
Whirlpool honored with two if product design awards 2009 for glamour oven and green
kitchen design concept

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2009: Whirlpool was voted Product of the Year and received the award for the
'Best Innovative Product' in the popular refrigerators category. This was based
on 40,000 consumers across 36 towns in India voting Whirlpool Frost Free
Refrigerators with 6th sense as the Best Innovation in the Popular Refrigerator
Category.

2009: Hewitt Best Employers in India 2009 Study

20
 2009: Named one of the 100 Best Corporate Citizens by Chief Responsibility
Officer (formerly Business Ethics) magazine in 2009 and from 2000-2007

2008: Included in the Dow Jones Sustainability, FTSE4Good and KLD Global
Sustainability Indexes, three of the worlds most comprehensive reviews of
sustainable business practices

2008: Named one of the 2008 Worlds Most Ethical Companies by Ethisphere
magazine

2008: Whirlpool OF India was awarded the NDTV Profit Business &
Leadership Award 2008 for The Best Consumer Durables Company.

2008: The year 2008-09 saw Whirlpool India achieve great milestones in our attempt to be an
Employer Of Choice.

2008: The Business Today - Mercer -TNS Study 2008. Top 20 Best
Companies to work for in India

WHIRLPOOL A GLOBAL BRAND FOR EVERY HOME

Today whirlpool have different-different product for different room according to

conditions of consumers expectations and his demands. Now we discuss some popular
and famous product of whirlpool have:-

THE ACTIVE BALANCER

Whirlpool the flagship brand of the company, strives to help families manage their ever
busy lives with innovative products that help them get more done. The legacy of insight
driven innovation has made whirlpool the NO.1 home appliance brand in the world.

MAYTAG

21
THE DEMAND LOYALIS
Appliances under the Maytag brand have been synonymous with dependability and
durability. Their strength and durability are conveyed through powerful good looks and
solid internal engineering.
KITCHENAI
FOR THE WAY ITS MADE THE HOME ENTHUSIATS
The kitchen aid brand is for those people who are passionate about cooking. In response
to consumers inspired by the quality of their kitchen aid counter top and major
appliances-the brand now offers virtually anything a cook may need in the kitchen. From
cooks ware and measuring cups to pantry ware and cookbooks, this brand has it.

JENN-AIR
THE LOVE OF COOKING
The jinn-air brand offers refined kitchen appliances that deliver beautiful results. It takes
the lead on style and performance, appealing to the consumer who loves to entertain this
uncompromising taste and pays Attention to detail.

AMANA
THE PRACTICAL STYLE -SEEKER
The Amana brand is for down-to-earth consumers who want to create a pleasant
atmosphere in their homes and seek quality and style at an affordable prize

BRASTEMP
THE TRENDY COSMOPOLITAN
The Brastemp brand, the No.1 home appliance brand in Brazil, helps consumers express
their sense of style and individuality while freeing them to do the things they like to do.

CONSUL
THE CLOSE-KNIT COSMOPOLITAN

22
The consul brand is close and intimate with its consumers and is considered a part of their
homes and family heritage.

WHIRLPOOL MANUFACTURING FACILITIES IN INDIA

Whirlpool has manufacturing facilities at 3 places:-

PRODUCTS PLACE YEAR

Washing machines Pondicherry , Madras Started April94

Refrigerators Faridabad, Haryana Started Feb95

23
CFC
Free Refrigerators Ranjangoan ,Pune Started march98

Broadly, WOILS product mix width consists of :

Washing Machine Washer

-T1

Refrigerators -Ref
-T2

AC -
-T3

24
Ovens and microwaves oven and micro -
-T4

Water purifiers
-T5

Built in Appliances
-T6

T1 and T2 are the categories which are WOILs core competing areas.

T3 is gaining popularity.

WOIL Water purifier range PuraFresh is being given special attention by WOIL as the
technology used for the Reverse osmosis (RO) requires repeat purchase of a membrane
and filter.
Hence, one RO sold will generate multiple repeat purchases generating assured cash flow
for WOIL.This is the reason why heavily funded push and pull strategies, like hiring
more Temp REs and launching the Purafresh Ad on TV respectively, are being
executed.WOIL, premium Built-in-Appliances were launched in 2007 and have
witnessed significant sales. However, the premium market still not completely ready for
such heavy spend hence is still a niche one.

WHIRLPOOLS PRODUCTS

25
Refrigerator

The 3-door protton world series refrigerator in 300 &

350 ltr. Capacity achieved rapid success , acquiring
over 30% of market share.

Air conditioner

The introduction of colors and graphics in air

conditioners saw the category grow by 85%.

Washing machine
.

Washing takes efforts and time. The consumer

insight inspired whirlpool to launch the ace wash
station in the washing machine category. Its path
breaking design provided the user with a platform
for the sorting of clothes, thus raising
convenience to a new level by saving time effort.

Microwave

26
 Two new models were launched in microwaves which
helped the category grow by 80%.In the pipeline are more
innovative products to help make food preparation easier
and better for consumers.

Water purifier

Keeping with the profit of water you can trust whirlpool

introduced the mineral reverse osmosis water purifier
range. With a unique mineral enrichment system that adds
essential minerals to purified water and a ceramic that
prevents the re-contamination of purifier water, this range
already accounts for more than 30% of RO water purifier
sales.

OBJECTIVES OF THE STUDY

The basic purpose of the study is to get an insight of the Finance Department of Living Media
India Limited (part of India Today Group of Companies). The main objectives are:

To understand the work culture, duties and tasks performed by each individual of the
Finance Department.

To analyze Cash Management System and Quarterly Information System.

27
 To analyze the basics of Management Information System and Bank Reconciliation
System.

To analyze the procedure and Documentation involved for obtaining Loans and the
terminology used in such documents.

To understand the linkages between the various departments of the organization.

To learn various things which come across while dealing in Finance.

Understanding of Stock and Debtors Statement and Monthly Select Operational Data
prepared by the company on monthly basis.

Understanding and computations of Interest on Term Loans and on Working Capital Loan
of various banks.

Report is prepared with the objective that it is helpful for various parties like

The researchers can use the study for the further analysis and recommendations.

The company executives can utilize the training report for the purpose of Financial
Management.

The training students can use the report to undergo the various accounting concepts.

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 Chapter-3

REVIEW
OF
LITERATURE

REVIEW OF LITERATURE

INTRODUCTION
MEANING OF FINANCIAL STATEMENT

Financial statements refer to such statements, which contain financial information about an
enterprise. These statements are a collection of data presented based on logical and consistent
accounting principals. The term financial statements include at least statements, which the

29
account prepares at the end of an accounting period: - (1) The balance sheet or a statement of
financial position; (2) the income statement or the profit & loss account. These statements are
used to Conway to management and other interested outsiders the profitability and financial
position of a firm.
Financial statements are the outcome of summarizing process of accounting. In the words John
N. Myer, the financial statements provides the summery of the accounts of a business
enterprise, the balance sheet reflecting the assets, liabilities and capital as on a certain data and
the income statement showing the results of operation during the certain period. Financial
statements are prepared as results of financial accounting and are the major source of financial
information of an enterprise. Recent activities and analysis of what has been done with
earnings.

In the words Anthony, Financial statements, essentially, are interim reports, presented annually
and reflect a division of life of an enterprise into more or less arbitrary accounting period more
frequently the yea

NATURE OF FINANCIAL STATEMENTS

Data exhibited in the financial statement is not absolute fact because they are affected by
personal judgments, recorded facts, accounting conventions. The recorded facts are those, which
can be expressed in monetary terms. The statements are prepared for a particular period,
generally one year. The accounting records and financial statements prepared from these records
are based on historical records.
The following points explain the nature of financial statements:-

30
Personal judgments: Even though certain accounting conventions are followed while preparing
the financial statements, still personal judgment of the accountant plays a decisive role in
accounting. For example, He is to apply his personal judgment in deciding the role of
deprecation. Accountants have to exercise his personal judgment in respect of rate of provision
for doubtful debts, period for writing off intangible assets and classification of expenditure into
capital and revenue.

Recorded facts: The team `recorded facts` to the data taken out from the accounting records.
The records are maintained on the basis of actual cost data. The original cost or the historical is
the base of recording various accounts such as cash in hand, cash at bank etc. taken as per the
figure recorded in the accounting books.

Accounting Conventions: Certain accounting conventions are following while preparing

financial statements. The convention of valuing inventory at cost or market price, whichever is
lower, is followed. The convention materiality is followed in dealing.

ANALYSIS OF DATA FINANCIAL STATEMENT

In the words of John N. Myers, Financial statement analysis is a largely a study of relationship
among the various financial factors in a business, as disclosed by a single sat of statement, and a
study of the trends of these factors, as shown in a series of statements.

31
Analysis of financial statements refers to the process of the critical examination of the financial
information contained in the financial statements in order to understand and make decisions
regarding the operation of the firm.

The AFS is a study of the relationship among various financial figures as given in a set of
financial statements.

OBJECTIVES OF ANALYSIS OF FINANCIAL STATEMENT

The basic purpose of Analysis financial statement (AFS) is to understand the information
contained in financial statements with a view to know the weaknesses and strength of the firm
and to make forecast about the future and help the analyst to take various decisions regarding the
operation of the firm.

The objectives or purposes are as following:-

I. To know the solvency.

II. To provided information to the management.

III. To estimate & determine the possibility of future growth of business.

IV. To evaluate the administrative efficiency of the business enterprise.

V. To find out the relative importance of different components of the financial position of
the firm.

VI. To identify the reasons for change in the profitability / financial position of the firm,

32
 VII. To assets the present profitability and operating efficiency of the firm as a whole as well
as its different departments

PRINCIPAL TECHNIQUE OF AFS

AFS can be undertaken by different persons and for different purposes, therefore the
methodology adopted for the AFS may be varying from one situation to another. However, the
following are some of the common techniques of the AFS;

I. Comparative financial statements

II. Common-size financial statements

III. Trend percentage analysis

IV. Ratio analysis

V. Fund flow statements

VI. Cash flow statements.

COMPARITIVE FINANCIAL STATEMENTS

When financial statements figures for two or more years are placed side by side to facilitate
comparison, these are called comparative financial statements. Such statements not only show

33
the absolute figures of various years but also provided for columns to indicate the increase or
decries in these figures from one year to another in percentage from.

COMMON-SIZE STATEMENT (CSS)

The CSS are those in which individual figures are converted into percentage to some other base.
In balance sheet the total of assets or liabilities are assumed equal to hundred and all the figures
are expressed as percentage of this total. Similarly in P&L A/C sales figure is taken at 100 and all
other figures are expressed as percentage of sales. Thus, the CSS is useful not only in infra-firm
comparisons over a series of different year but also in making inter-firm comparisons for the
same year or for several years.

TREND PERCENTAGE ANALYSIS (TPA)

Trend percentages are very useful in making comparative study of the financial statements for a
number of years. In TPA, the trend percentage are calculated for each item by taking the figure of
that item for some base year as 100. These indicate the direction of movement over a long time
and help an analyst of financial statement to form an opinion as to whether favorable or
unfavorable tendencies helps in future forecasts of various items.

RATIO ANALYSIS (RA)

The RA is based on the premise that a single accounting figure by itself may not communicate
any meaningful information but when expressed as a relative to some significant information.

34
The relationship between two or more accounting figure/groups is called a Financial Ratio.
Ratio can be classified into:

1. The Liquidity Ratio

2. The Activity Ratio

3. The Average Ratio

4. The Profitability

STATEMENTS OF CHANGES IN FINANCIAL POSITION (SCFP)

Since the balance, sheet and Income Statement of a firm are two basic financial statements
depicting the financial position of a firm at the end of the year. These two financial
statements are called the traditional financial statements.

Both these statements fail to throw light on changes in assets, liabilities and shareholder
wealth during this year.

BS deals with the financial position gives only the static view of the year-end financial
position and fails to indicate the movement and causes change in assets and liabilities during
the year.

Similarly, is show the profits or loss resulting out of the firm during the years? This profit or
loss in facts reflects change in shareholder wealth.

Moreover, it is fail to ascertain the sufficiency of resources to declare the dividend etc. thus,
there is need to prepare another statement (together with BS and IS.)

35
The SCFP is essentially an explanation of the change in financial position of the firm. The
SCFP draw basic information from the BS and IS and helps in understanding the changing in
assets, liabilities and shareholder worth.

The SCFP are intended to summarize-

1. The way in which the firm used its financial resources during the periods. (For example
to acquire fixed assets, to pay debts, to pay dividends to shareholder and so on.)

2. Changes in assets, liabilities resulting from financial, and investment transitions during
the period as well as those changes, which resulted due to change in owners equity.

The SCFP deals with flow of funds during the year i.e. the funds coming in end going out of
the firm.
The SCFP can be prepared as follows:

1. SCFP (cash basis) also known as a FUND FLOW STATEMENT.

2. SCFP (Net Working Capital) also known as CASH FLOW STATEMENT.

Thus, the SCFP should incorporate all significant financing, investing and other activities
of the facts whether such activity affect the cash /working capital or not. Therefore, a
SCFP prepared on cash basis (i.e., fund flow statement) should include all significant
transitions even if they do not go through cash or current accounts.

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

36
 The balance sheet of a firm does not disclose the causes of changes in these items
between the end of previous year and the end of current year. Therefore, an additional
statement called Fund Flow Statement is prepared to show the changes in the assets,
liabilities and capital between the dates of two balance sheets. Fund Flow Statement is
known by various others names also, such as Statement of sources and application of
fund and Where got and where gone statement.

The term working capital (WC) is generally defined as the excess of total current assets
over the total current liabilities. The current assets (CA) of a firm may include cash in
hand and at a bank, stock, debtors, bill payable, outstanding expenses, provision for tax,
short-term liabilities etc. the term WC is to increase or decrease the working capital by
affecting any of the elements of Current assets or Current Liabilities. Therefore, the
FFS in its standard form, incorporates only those transactions which affect the working
capital i.e., those transactions where in only one of the affected accounts is a current
account
Now, a flow of working capital arises when one of the affected accounts is a current account.
From the point of view of current accounts, the affect on Working Capital can examined in the
light of the definition of the term Working capital i.e., the excess of current assets over current
liabilities i.e.,

WC=CA-CL
WC (WORKING CAPITAL)
CA (CURRENT ASSETS)
CL (CURRENT LIABILITIES)
Increase in any of the CA or decrease in any of the CL will result in
increase in the WC, decrease in any of the CA or increase in any of the CL will result in decrease
in the WC.

A firm undertakes numerous transactions during a year and most of these transactions may affect
one or the current account i.e.; most of these transactions may result in the flow of the WC.
Neither is it necessary not practical to identity the effect of each transaction on the WC. These

37
transaction, instead, are considered and analysis in collective forms and then their effect on the
WC is identified.

SOURCE OF WORKING CAPITAL

1. OTHER INCOMES;
2. LONG TERM BORROWINGS;
3. SALE OF NON CURRENT ASSETS;
4. FUND FROM BUSINESS OPERATION;
5. ISSUE OF ADDITIONAL EQUITY CAPITAL, OR PREFERENCE SHARE CAPITAL
OR DEBENTIURES.

USES OF WORKING CAPITAL

1. Dividend to shareholder;
2. Purchase of non current assets;
3. Losses from business operations;
4. Repayment of long term borrowings;
5. Redemption of debentures and/ or preference share.

SCFP (CASH BASIS)

CASH FLOW STATEMENT

A CFS is statement-showing inflows and out flows of cash during a particular period. In other, it
is a summary of sources and application of cash during a particular spend of time. It analysis the

38
resources or changes in balance of cash between the two balance sheet dates. The term cash
stands for cash and cash equipments.

This cash balances sheet can be matched with the firm needs for cash during the period; and
accordingly, arrangements can be made the deficit or invest the surplus cash temporarily. A
historical analysis of cash flows provides in sight reliable cash flow projection for the immediate
future.

CFS explains the causes of changes in the cash balances of the firm by showing the sources of
cash receipts and purposes for which the payments were made.

OBJECTIVE OF CASH FLOW STATEMENT

The main objective behind preparing a cash flow statement can be laid down as under:

1. Useful for short term financial planning

2. Useful in preparing the cash budget
3. Comparison with cash budget
4. Study of the trend of cash receipts and payment
5. It explains the deviations of cash from earning
6. Helpful in Ascertaining Cash from various Activities Separately
7. Helpful in making dividend decision

SOURCES OF CASH

The following are the sources of cash:

1. Increase in liabilities
2. Decrease in assets (expect cash)
3. The profitable operation of the firm and

39
 4. Sale proceeds from ordinary or preference share issue.

APPLICATION OF CASH

The following are the application of cash:

1. Decrease in liabilities
2. The loss from operations
3. Increase in assets (except cash)
4. Redemption on redeemable preference s

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial decisions,
which are taken in the cast availability or cash position of the firm.

For example, declaration of dividend by the company required cash disbursement and therefore,
the board of direction must consider the cash position before proposing a dividend. The CFS also
provides information for the short term financial planning and in particular, the short-term cash
needs of the firm.
In view of increasing importance and relevance of the CFS, the clause 32 of the listing
agreement (between a company and the stock exchange where the share proposed to be listed)
has been amended by the SEBI. As per this agreement, the listed companies in India are now
required to supply copy of the CFS to each shareholder as a part of Annual Report. As a result,
the listed companies have started practices of sending a CFS for the period fit which the BS has
been prepared as a part of the Annual Report of the company.

MEANING OF CASH FLOW

40
As a new or small nonprofit, your biggest challenge is likely to be meaningful your cash flow
probably the most important financial statement for a new business is the cash flow statement.
The overall purpose of meaningful your cash flow is to be making sure that you have enough
cash to pay current bills. Business can manage cash flow by examining a cash flow statement
and flow projection. The cash flow statement includes total cash received minus total cash spent.
Cash management looks primarily at actual cash transitions.

(Note that nonprofit must file a financial statement called Cash Flow Statements, or statements
of cash flow- this statement is not the same as a flow budget.)

The balance sheet, income statement, and cash flow statement are the three generally accepted
financial statements used by most business for financial reporting. All three statements are
prepared from the same accounting data, but each statement service its own purpose. The
purpose of the cash flow statement is to report the sources and uses of cash during the reporting
period.

ADVANTAGE OF CASH FLOW STATEMENT

The chief advantages of cash flow statement are:

41
 1. A projected cash flow statement can be prepared in order to know the future cash position
of a concern so to enable a firm to plan and coordinate its financial operations properly.

2. By preparing this statement, a firm can come to know as to much cash will be needed to
make various payment and hence the can plan to arrange for the future requirement of
cash.

3. Cash flow analysis is more useful and appropriate than flow analysis for short-term
analysis, as is very short period it is cash, which is more reverence then the working
capital for forecasting the ability of the firm to, meets its immediate obligation.

4. Cash flow statement prepared according to As-3 is more suitable for making comparison
then the fund flow statements is no standard format used for the same.

5. Science cash flow statement is basis of accounting; it is very useful in the evolution of
cash position of the firm.

6. Cash flow statement helps in planning the repayment of loan, replacement of fixed assets
and other similar long term planning of cash.

7. It had better explain the causes for poor cash position in spite of substantial profit in a
firm by throwing light on various applications of cash made by firm.

8. A series of intra-firm and inter-firm cash flow statement reveals whatever the firm
liquidity is improving or deteriorating and in comparison to other firms over a given
period.

LIMITATIONS OF CASH FLOW STATEMENT

Even cash flow has a lot of advantage, cash flow statement suffer from the following limitation:

42
1. Cash flow statement is not suitable for judging the profitable of a firm as non-cash
charges are ignored while calculating cash flow from the operating activities.

2. It does not present the true liquidity of a firm because the liquidity does not depend upon
cash alone. Liquidity also depends upon those assets, which can be converted into cash
easily.

3. As cash flow statement is based on cash basis of accounting, it ignores the basic
accounting concept of accrual basis.

43
 CHAPTER-4
RESEARCH
METHODOLOGY

44
 OBJECTIVE AND METHODOLOGY

TITAL OF PROJECT

Title of project is ANALYSIS OF CASH FLOW STATEMENT at THOMSON PRESS,

FARIDABAD.

SCOPE OF PROJECT

The scope of project is limited to LIVING MEDIA INDIA LTD. This company is a leading
manufacturing of all types of magazines and books. This has a distinction of being of very
largely business partners of other companies.

OBJECTIVE OF THIS PROJECT

TO prepare cash flow statement.

To find the movement of cash inflow and cash out flow.

To make the comparisons between cash flow and cash out flow.

To analysis the Balance sheet of the company in terms of Cash Flow Statement.

To focus on various activities of the originations in terms of operating, financing, investment.

RESERCH METHODOLOGY

45
Research methodology is a way to systematically solve the research problems it may be
understand as a science of studying how to research is done scientifically. In it, study the various
steps that are generally adopted by researcher to know not the research methods / techniques but
also the methodology.

METHODS OF DATA COLLECTION

The data so collected is primary and secondary in Nature:

Primary

Secondary

PRIMARY SOURCES OF DATA COLLECTION

The primary data is collected by the personal interview with senior officers, colleagues in the
organization.

SECONDARY METHOD OF DATA COLLECTION

The secondary data is collected by the detailed study and critical analysis of the existing Annual
report. The data can be collected through the magazines, internet etc.

RELEVANCE OF THE STUDY

The relevance of the study can be studied from the following points:

The benefit of the report from the researcher is that it has to get the knowledge of the
cash inflow &cash outflow.

46
 This study also unable the company that their cash is not utilizing in unnecessary things.

The scope of the report was confined to the outside parties like creditors, shareholder.
Govt., etc. who want to invest their money in the company.

The benefit of the report for company is that through this report, they can come to know
about the cash flow position of the company.

PARAMETERS

The report is analyzed under the presumption that cash flow position of LIVING MEDIA
INDIA LTD. can be improved and made effective in terms of cash.

In testing the above hypothesis, the following aspect will be considered:

Balance sheet comparison.

Presentation of cash flow statement in terms of revised AS-3.

47
 FINANCIAL TOOLS

The Financial tools used in the report are balance sheet. Profit & loss account and cash flow
statement i.e., giving information about the cash flow in the organization.

LIMITATIONS

The study, through conducted to the best of the ability, suffers from some certain limitations.
There are:

Senior officials were rarely approachable.

Websites were not giving comprehensive data.

Not having face to interaction to get more information that is relevant.

The data is secondary one and such its reliability may be questioned upon.

Element of Biases may be there due to more dependable on secondary Data.

The time availabilities for the study are less, and such it hinder the progress of the s

48
49
 CHAPTER # 4

DATA ANALYSIS

PREPARATION OF CFS

The CFS is intended to provide information about the flows of cash of a firm and is useful to
asses the ability of the firm to generate cash and cash equivalent and the needs of the firm to
utilize these cash flow. The primary objective of the CFS therefore, is to provide information
regarding cash inflows and outflows during the year. As per the format given in AS-3 (received),
the CFS summarizes the cash receipt, cash payments and net change in cash position resulting,
investing, and financing activities of a firm during the period. In order to prepare the CFS, the
following points worth nothing.

DEFINATIONS:

Cash comprises cash on hand and demand with banks.

Cash Equipments are short term, liquid investments that are readily convertible into known
amounts of cash and which are subject to an in significant risk of change in value. Example of
cash equipments are treasury bills, commercial paper etc.

Cash Flows are inflows and outflows of cash equipments. It means the movement of cash into
organization and movement of cash out of the organization. The difference between the cash
inflows and outflows is known a net cash flow, which can be either net cash inflow or net cash
outflow.

50
 CLASSIFICATION OF CASH FLOW

The cash flow during a period is classified into three main categories of cash inflow and outflow:

Cash Flow from operating Activities

Cash Flow from Investing Activities

Cash Flow from Financing Activities

CASH FLOW FROM OPERATING ACTIVITIES

Operating activities are the principal revenue-producing activities of the enterprise and the other
activities that are not investing and financing activities that are not investing and financing
activities. Operating activities that enter into the determination of net profit or loss.

Cash flows from operating activities include the following:

Cash payments to and on behalf of employees.

Cash payments to suppliers for goods and services.

Cash receipts from the sale of goods and the rendering of service.

Cash receipts from royalties, fees, commission, and other revenue.

Cash receipts and payments of an insurance enterprise for premiums and claims
annuities and other policy of benefits

51
 CASH FLOW FROM INVESTING ACTIVITIES

Investing activities are the acquisition and disposal of long-term assets other investing not
include in cash equipment. In other words, investing activities include transitions and events that
involve the purchase and sale of long-term productive assets are not held for resale and other
investments.

The following are examples of cash flows arising from investing activities:

Cash payments to required shares, warrants, or debt instruments of other enterprises and
interest in joint ventures (other then payments for those instruments considered cash
equipments and those held for dealing or trading expenses).

Cash receipts from disposal of shares, warrants, or debts instruments of other enterprises
and interest in joint ventures (other then receipts for those instruments considered cash
equivalents and those held for dealing or purposes.)

Cash advances and loans made to third parties other than advances and loans made by a
financial enterprise.

Cash receipts and payments relating to future contracts, and swap contracts except when
the contract are held for dealing or trading purposes or the receipts are classified as
financing activities.

Cash payments to acquire fixed assets (including intangible). These payments include
those relating to capitalized research and development cost and self-constructed fixed
assets.

52
 CASH FLOW FROM FINANCING ACTIVITIES

Financing activities are those activities that result in the change in the size and composition of
the owners capital (including preface share capital, in case of the company) and borrowing of
the enterprises.

Following are the examples of cash flow arising from financing activities:

Payment of interest;
Payment of dividend;
Repayment of borrowings;
Cash proceeds from long term borrowings;
Cash processes from issuing share or other similar instructions.

There are two methods for preparing the cash flow statement:

1. Direct method
2. Indirect method

Both methods yield the same result, but different procedures are used to arrive at the cash flow

DIRECT METHOD

Under the direct method, we are analyzing our cash and bank accounts to identify cash flows
during the period. We could use a detailed general lender report showing all the entries to the

53
cash and bank accounts, or we could use the cash receipts and disbursements journals. We would
then determine the offsetting entry for each cash.

Entry in order to where each cash movement should be reported on the cash flow statement.
Some examples for the operating activities section include:

Cash receipts from customers:

Net sales per the income statement
Equals cash receipts from customers
Minus ending balance in accounts receivable
Plus beginning balance in accounts receivable

CASH RECEIPTS FROM INVENTORY:

Ending inventory
Minus beginning inventory
Equals cash payments for inventory
Plus beginning balance in accounts payable to vendors

CASH PAID TO EMPLOYEES:

Equals cash paid to employees
Salaries and wages per the income statement
Plus beginning balance in salaries and wages payable
Minus ending balance in salaries and wages payable

CASH PAID FOR OPERATING EXPENSES:

Minus deprecation expenses
Equals cash paid for operating expenses
Operating expenses per the income statement
Plus increase or minus decrees in prepaid expense

54
 Plus decrease or minus increase in accrued expenses
TAX PAID:
Tax expense per the income statement
Plus beginning balance in taxes payable
Minus ending balance in taxes payable
Equal taxes paid

INTEREST PAID:
Interest expense per the income statement
Plus beginning balance in interest payable
Minus ending balance in interest payable
Equal interest paid

Under the direct method, for this example, you would then report the following in the cash flows
from operating activities section of the cash flow statement:

Cash receipts from customers

Cash payment for inventory
Cash paid to employees
Cash paid for operating expense
taxes paid
interest paid
equal net cash provided by (used in) operating activities

Similar types of calculation can be made of the balance sheet accounts to estimate the effects of
accrual accounting and determine the cash flows to be recorded in the investing activities and
financing activities sections of the cash flow statement.

INDIRECT METHOD

55
In preparing the cash flows from operating activities section under the indirect method, we start
with net income per the income statement, revenue out entries to income and expense accounts
that do not involve a cash movement, and show the change in net working capital. Entries that
effect net income but do not represent cash flows could include income we have earned but not
received amortization of prepaid expenses, accrued expense, and deprecation or amortization.
Under this method, we are analyzing our income and expense accounts, and working capital. The
following is an example of how the indirect method would be presented on the cash flow
statement:

Net income per the income statement.

Equals cash flows before movements in working capital.
Plus entries to expenses accounts that do not represent cash flows.
Minus entries to income accounts that do not represent cash flows
A decrease in current assets would be shown as a positive figure, because other current
assets were converted into cash.
An increase in current assets (excluding cash and cash equipments) would be shown as a
negative figure because cash was spent or converted into other current assets, thereby
reducing the cash balance.
In increase in current liabilities (excluding short-term debt, which would be represented
in the financing activities section) would be shown as a figure since more liabilities
means that less cash was spent.
A decrease in current liabilities would be shown as a negative figure, because cash was
spent in order to reduce liabilities.

The net effect of the above would then be reported as cash provided by (used in) operating
activities.
The cash flows from investing activities would be presented the same way as under the direct
metho

56
 CASH FLOW STATEMENT (PARAGRAPH 18 A)
DIRECET METHOD

Cash flows from operating activities

Cash receipts from customer ****

Cash paid to suppliers and employees ****

Cash generated from operation ****

Interest paid ****
Cash flow before extraordinary item ****
+ Extraordinary items ****
- Net cash from operating activities ****
Cash flow from investing activities
Purchase of fixed assets ****
Proceeds from sale of equipments ****
Interest received ****
Dividend received ****
Net cash from investing activities ****
Cash flows from financing activities
Proceeds from insurance of share capital ****
Proceeds from long term borrowings ****
Repayment of long term borrowing ****
Interest paid ****
Net cash from financing activities ****
Net increase in cash and cash equivalent ****
Cash and cash equivalent at beginning of period ****
Cash and cash equivalents in end of period ****

57
 CASH FLOW STATEMENT (PAREGRAPH 18)

(INDIRECT METHOD)

Cash flows from operating activities

Net profit before taxation, and extra ordinary item ****

Adjustment for:
Depreciation ****
Foreign exchange loss ****
Interest income ****
Dividend income ****
Interest expense ****
Operating profit before working capital changes ****
Add:-
Decrease in current assets ****
Increase in current liabilities ****
Less:-
Increase in current assets (****)
Decrease in current liabilities (****)(****)
Cash generated from operations ****
Income tax paid ****
Cash flow before extraordinary items ****
+ Extra ordinary items ****
Net cash from operating activities ****
Cash flows from investing activities
Purchase of fixed assets (****)
Sale of fixed assets ****
Purchase of investment (****)
Sale of investment ****
Interest received ****
Dividend received ****
Net cash from investing activities ****
Cash flows from financing activities
Proceeds from issuance of share capital ****
Proceeds from long-term borrowing ****
Repayments of long-term borrowing ****
Interest paid ****
Dividend paid (****)
Net cash from financing activities ****
Net increase in cash in & cash equivalent ****
Cash and equivalent at beginning of period ****
Cash and cash equivalent at end of period ****

58
 STEP BY STEP PROCEDURE TO PREPARE CASH FLOW STATEMENT

(1) Calculate the net increase or decrease in cash and cash equivalents: for this
purpose, the operating balance of total cash and cash equivalents is compared with the
closing balance of cash and cash equivalents.

Increase / decrease in cash and cash equivalents

Operating balance closing balance

Cash in hand **** ****

Cash at bank **** ****
Short term **** ****
Total **** ****

The difference between the totals and closing balance will be the increase or decrease in cash
equivalents during the period. It may be noted that if there are only one or two items of cash etc.

(2) Net cash flow from operating activities: The term operating refers to the normal
purchase of goods and services. Based on the information contained in the comparative BS
and IS and the additional information, the net cash flow generated or used by the operating
activities may be ascertained. The IS prepared by the firms gives the net profit figure earned
by the firm gives the net profit figure earned by the firm, on actual basis of earned / accrued
even.

(3) If not resulting in cash movements, the profit or loss as by the may not result in increase /
decrease in cash balance by the same amount.

59
(4) Calculation of cash provided by financing and investing activities: All other
items are analyzed in the light of additional information to find out the resultant cash flow if
any. For this purpose, different items and information is classified into financing activities
and investing activities.

(5) Preparation of CFS: Based on information collection made. Now the CFS can be
prepared as per any of the formats. The net cash flow provided by operating activities plus
investment activities is equal to the net change in cash and equilivalents.

(6) Other items: If there is any other investment or financing truncations that should be
disclosed in the CFS, e.g. there may be a purchase of an asset by issue of capital or
debenture. This transaction will not find place in the usual CFS but must be disclosed to
make the CFS a useful and meaningful docu

CASH FLOW STATEMENT FOR THE FINANCIAL YEAR 2006-07

(Rupees)

A. CASH FLOW FROM OPERATING ACTIVITIES

Net profit before tax 31,901,031

Add: Non operating and ash expediter:
I. Deprecation 56,097,568
II. Preliminary expenses -
III. Loss on sale of fixed assets -
-
(A) 87,998,599

60
 Less: Non operating income:

I. Interest received 1,146,635

II. Rent (commercial flat) 554,544
III. Profit on sale of fixed assets 911,123
IV. Freight subsidy incentive on export -
V. Subsidy on generator -
VI. Foreign currency fluctuations -
-
(B) 2,612,302
CASH FROM OPERATIONS (A-B) (C) 85,292,432

ADJUSTMENT FROM WORKING CAPITAL CHANGES

I. Excess provision of earlier years 74,577,357
II. Increase in payables 8,452,062
III. Increase in provision 3,541,528
IV. Decrease in loans and advance (D) 86,570,947

Less:
I. Decrease in provision -
II. Increase in receivables 52,869,506
III. Earlier year adjustment 16,917,754
IV. Increase in inventory 303,823

V. Change in working capital 70,091,083

(E) 16,479,864
NET CASH GENERATED FROM OPERATIONS

61
AFTER WORKING CAPITAL CHANGES (C-E) (F) 101,772,296

Less:
I. Income Tax paid / provision (G) 11,400,000
II. Payable dividend 2,194,350
Total 13,594,350

NET CASH FROM OPERATING ACTIVITIES (F-G) (H) 88,177,946

CASH FLOW FROM INVESTING ACTIVITIES

I. Sale of fixed assets 7,467,460
II. Interest / dividend Received 1,146,635
III. Rent /commercial plat 554,544
IV. Freight subsidy Incentive on export -
V. Subsidy on generator -
VI. Foreign currency fluctuations -
VII. Capital work in progress / capital advances -
(I) 9,168,639
Less:
I. Capital work in progress / capital advances 26,634,108
II. Purchase of fixed assets 118,472,724
III. Preliminary expenses -
IV. Purchase of Investing 27,499,500
(J) 172,606332
NET CASH FROM INVESTING ACTIVITIES (I-J) (K) (163,437,693)

CASH FLOW FROM FINANCING ACTIVITIES

I. Increase in capital Including premium 50,000,000
II. Increase in Term and Other Secured Loan 299,665
III. Increase in Unsecuried Loan 31,247,879
IV. Increase in Working Capital Limit -

62
 -
Total (L) 81,547,544

Less:
I. Decrease in Working Capital Limit 6,833,837
II. Decrease in Term Loan -
(M) -
6,833,837
NET CASH FROM FINANCING ACTIVITIES (L-M) (N) 74,713,707
NET CHANGE IN CASH & EQUIVALENT
(H+K+N) (O) -546,040
Opening balance of cash and cash equivalent 4,613,984
Closing balance of cash and cash equivalent

CASH FLOW STATEMENT FOR THE FINANCIAL YEAR 2007-08

(Rupees)
A.CASH FLOW FROM OPERATING ACTIVITIES

Net profit before tax 42,123,726

Add: Non operating and ash expediter:
I. Deprecation 49,151,372
II. Preliminary expenses 195,000
III. Loss on sale of fixed assets 261,548
(A) 91,731,646

Less: Non operating income:

63
 I. Interest received 426,735
II. Rent (commercial flat) 590,544
III. Profit on sale of fixed assets -
IV. Freight subsidy incentive on export 1,000,000
V. Subsidy on generator 300,000
VI. Foreign currency fluctuations 54,030
(B) 2,371,309

CASH FROM OPERATIONS (A-B) (C) 89,360,337

ADJUSTMENT FROM WORKING CAPITAL CHANGES

I. Excess provision of earlier years -
II. Increase in payables 82,090,820
III. Increase in provision -
IV. Decrease in loans and advance -
(D) 82,090,820

Less:
I. Decrease in provision 2,028,814
II. Increase in receivables 33,747,237
III. Increase in inventory 46,231,298
IV. Increase in Loan and advance 31,190,516
V. Earlier year adjustment -
113,197,865
Change in working capital (E) -31,190,516

NET CASH GENERATED FROM OPERATIONS

AFTER WORKING CAPITAL CHANGES (C-E) (F) 58,253,292

Less:
I. Income Tax paid / provision (G) 16,363,649

64
 II. Payable dividend -

NET CASH FROM OPERATING ACTIVITIES (F-G) (H) 41,889,643

CASH FLOW FROM INVESTING ACTIVITIES

I. Sale of fixed assets 660,307
II. Interest / dividend Received 426,735
III. Rent /commercial plat 590,544
IV. Freight subsidy Incentive on export 1,000,000
V. Subsidy on generator 300,000
VI. Foreign currency fluctuations 54,030
VII. Capital work in progress / capital advances 41,357,018
(I) 44,388,634
Less:
I. Capital work in progress / capital advances 122,334,104
II. Preliminary expenses 975,000
III. Purchase of Investing 84,380,850
(J) 207,689,954
NET CASH FROM INVESTING ACTIVITIES (I-J) (K) (163,301,320)

CASH FLOW FROM FINANCING ACTIVITIES

I. Increase in capital Including premium 25,200,000
II. Increase in Term and Other Secured Loan -
III. Increase in Unsecuried Loan 32,636,634
IV. Increase in Working Capital Limit 70,157,3870

65
 Total (L) 127,994,021

Less:
I. Decrease in Working Capital Limit -
II. Decrease in Term Loan 430,915
(M) 430,915
NET CASH FROM FINANCING ACTIVITIES (L-M) (N) 127,563,106
NET CHANGE IN CASH & EQUIVALENT (H+K+N) (O) 6,151,429
Opening balance of cash and cash equivalent 4,067,944
Closing balance of cash and cash equivalent 10,219,373
NOTE All the figures are imaginary.

ANALYSIS OF CASH FLOW

From the cash flow statement of the Living Media India Lt .it can be analyzed from two years
that the net cash balance of two years of the company has increased more than twice in the year
2007-2008.

The net profit in the year 2007-2008 is more than last year and due to certain other changes there
has been increase in the cash balance.
The depreciation has decreased but it does not affect cash to an extent, as it is a non-cash item.
In the head of working capital, there is a drastic change in the balance in the form of loans &
advances and provisions which has affected the cash balance. There is an increase in receivable
as compared to the last year. But the company trade payable than the last year.
So, the net effect is that the cash from operating activities has decreased to half of that of the last
year.
So, the net effect is that the net cash from investing activities is almost same as last year, which
is the negative. There has been an in working capital limit of the company last year. Ultimately,
the net cash from financing activities has increased than that of the last year.

66
The final year net affect of all the above adjustments is that, Net Closing Balance has increased
to two times as compared to the last year.

CHAPTER # 5

IMPLICATIONS
AND
CONCLUIONS

67
 IMPLICATION AND CONCLUSION

FINDINGS OF THE STUDY

According to cash flow statement of the company, the findings of the study are as follows:
The company is not a Sick Industrial Company.
There has been an increase in secured and unsecured loans.
The company has not accepted any deposit from the public during the year.
There has also been an increase in loans and advances granted by company.
The company has paid only a part of term loan during the year.
The company has got subsidy on generator and freight subsidy incentive on export this
year.

IMPLICATIONS

According to cash flow statement of the company, the suggestions of the study are as follows:

The company should try to reduce unnecessary expenditure to the minimum possible
extent.
The principal amount must be paid in time, which can reduce the internet outflow.

The purchase of the fixed assets must be made only when there is extreme requirement.

68
 In order to avoid the taxes the company should go for more investment.
The companys borrowings should be reduced for the minimum time possible.
The company should make more short-term borrowings rather than the long term
borrowing.

CONCLUSION

From the aggregate study of the companys polices & methods, I am able to conclude my
report by summarizing into flowing points:

1. The facilities provided to the workers are appreciable.

2. The market position of the company is also very strong.
3. The company can not be called a sick industrial company.
4. The net cash balance of the company has increased very much.
5. The working environment is up to date and makes the employees fulfill their duties.

69
CHAPTER #6

ANNEXUR

70
 CHAPTER # 6
ANNEXTURE
BALANCE SHEET AS AT 31st MARCH 2007

PARTICULAR SCHEDULE AS AT AS AT
31.3. 2006 31.03.
2007
SOURCE OF FUND
Share capital 1 43,887,000 33,887,000
Reserve & capital 2 242,482,678 184,573,685
Loan funds
Secured loans 3 38,167,010 44,701,182
Unsecured loans 4 61,624,885 30,377,006
Total 386,161,573 293,538,873
APPLICATIONS OF FUNDS
FIXED ASSETS
Gross Block 5 493,945,512 354,674,082

Less deprecation 207,768,496 154,315,884

Net block 256,177,016 200,258,198
Capital advance 47,782,033 4,681,861
Capital work in progress 5,153,039 21,619,103
Investments 6 27,949,500 450,000

71
 CURRENT ASSETS,LOAN & ADVANCE
Inventories 7 75,981,044 59,063
Sundry debtors 8 200,953,500 148,08
Cash & bank balance 9 4,067,944 4,613,
Loan & advances 10 39,857,566 43,399
320,859,822 255,16
Less: current liabilities & provisions
Current liabilities 11 250,051,678 175,47
Provisions 12 21,708,159 13,256
271,759,837 188,73
Net Current Assets 49,099,985 66,429
Miscellaneous Exp.
TOTAL (RS.) 386,161,573 293,53
NODES TO ACCOUNTS 20

BALANCE SHEET AS ON 31st MARCH 2008

PARTICULAR SCHEDULE AS AT AS AT
31.3. 2007 31.03.
2008
SOURCE OF FUND
Share capital 1 189,548,000 43,887,000
Reserve & capital 2 147,781,755 242,482,678
Loan funds
Secured loans 3 107,893,483 3,816,010
Unsecured loans 4 94,261,519 61,624,885
Total 539,484,757 386,161,573
APPLICATIONS OF FUNDS

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FIXED ASSETS
Gross Block 5 584,819,622 463,945,512
Less deprecation 256,381,729 207,68,496
Net block 328,437,893 256,177,016
Capital advance 10,614,659 47,782,033
Capital work in progress 963,395 5,153,039
Investments 6 112,330,350 27,949,500
Current Assets ,Loan & Advance
Inventories 7 122,212,342 75,981,044
Sundry debtors 8 234,700,505 200,953,500

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 Cash & bank balance 9 10,219,373 4,067,944
Loans & advances 10 71,048,082 39,857,566
438,180,302 320,859,822
Less: current liabilities & Provisions

Current liabilities 11 332,142,498

Provision 12 19,679,345 250,051,678
3,518,21,843 21,708,159
Net current assets 86,358,460 271,759,837
Miscellaneous exp. 780,000 49,099,985
TOTAL (RS.) 539,484,757 3,611,621573
NODES TO ACCOUNTS 20

NOTE- ALL THE FIGURES ARE IMAGENI

PROFIT & LOSS A/C FOR THE YEAR ENDED 31.03.2007

PARTICULARS SCHEDULE AS AT 31.03.2007 AS AT 31.03.2006

INCOME
Sale 13 14,22,723,825 1,094,751,729
Other income 14 61,640,525 47,970,152
INCREASE(DECREASE)in stocks 15 12,218,148 11,816,164
1,496,585,498 1,154,538,045
Expenditure
Raw material consumed 16 940,003,491 712,137,132
Manufacturing expenses 17 398,703,847 317,824,490
Administrative and other expenses 18 52,928,908 41,427,768
Financial charges 19 17,041,519 11,318,561
Desperation 5 56,097,568 44,498,510
1,146,775,332 1,127,206,461
Net profit (loss) before tax 31,807,166 27,331,584
Provision for taxation 11,400,000 10,000,000
Profit (loss) after tax 204,407,166 17,331,584
Add: earlier year adjustment 303,823 2,578,732
Profit (loss) available for appropriation 20,103,343 19,910,316
Surplus (defect) B/F from previous year 20,018,185 17,107,869
Total profit available for appropriation 40,121,528 37,018,185

Less: provision for dividend 2,194,350

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Total profit for the year 37,927,178

Transferred to general reserve - 37,018,185

Profit (loss) carried forward 37,927,178 17,000,000

NOTES TO ACCOUNTS 20 - 20,018,185

NOTE- ALL THE FIGURES ARE IMAGENIRY.

PROFIT & LOSS A/C FOR THE YEAR ENDED 31.03.2008

PARTICULARS SCHEDULE AS AT 31.03.2007 AS AT 31.03.2006

INCOME
Sale 13 1,856,069,467 1,422,723,825
Other income 14 42,107,757 61,640,525
INCREASE(DECREASE)in stocks 15 20,578,386 12,218,148
1,918,755,610 1,496,585,498
Expenditure
Raw material consumed 16 1,134,254,259 940,003,491
Manufacturing expenses 17 601,874,707 398,703,847
Administrative and other expenses 18 69,714,721 52,928,908
Financial charges 19 21,636,824 17,041,519
Desperation 5 49,151,372 56,097,568
1,876,631,884 1,146,775,332
Net profit (loss) before tax 42,123,726 31,807,166
Provision for taxation 14,140,790 11,400,000
Profit (loss) after tax 27,982,936 20,407,166
Add: earlier year adjustment 2,22,859 303,823
Profit (loss) available for appropriation 25,60,077 20,103,343
Surplus (defect) B/F from previous year 72,927,178 20,018,185
Total profit available for appropriation 9,868,725 40,121,528

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LESS: Provision for dividend 2,194,350

TOTAL FOR THE YEAR 98,687,255 37,927,178

Transferred to General reserve - -

Profit (loss) carried forward 98,687,255 37,927,178

NOTES TO A/C 20

CHAPTER # 7

BIBLOGRAPHY

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 CHAPTER # 7

BIBLOGRAPHY

Kothari, C.R., Research methodology sultan Chand publications, New

Delhi, 2001.

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 PANDEY, I.M, FINANCIAL MANAGEMENT, VIKAS PUBLICATION
LTD 7th EDDITION.

WEBSITES

www.thomsonpress.com

www.rediff.com

www.indiaforge.com

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