CAFFF

A STUDY ON
“CASH FLOW ANALYSIS”
WITH SPECIAL REFERENCE TO
HSBC PVT LTD (HYDERABAD)
(Submitted in Partial Fulfillment of the Award of the Degree Of)
MASTER OF BUSINESS ADMINISTRATION
Submitted By
M.B.A
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DECLARATION
I here declare that the project report entitled “CASH FLOW ANALYSIS” has been
prepared by me in partial fulfillment of the requirements for the award of the degree of
“MASTER OF BUSINESS ADMINISTRATION” also declare that this project work is a
result of my effort and it has not been submitted to any other university for the award of any
degree or diploma.
PLACE:
DATE:
H.T NO: 12761E005
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ACKNOWLEDGMENT
With a profound sense of thankfulness, I acknowledge my indebtedness to my company

guide Mr.RADHA KRISHNA (RELATIONSHIP MANAGER) Faculty Guide
Mr.D.VENKATA RAMANA for their valuable guidance, timely suggestions and constant
encouragement. Their insightful criticisms and patience throughout the duration of this project
have been instrumental in allowing this project to be completed.
My sincere thanks are to the name of Director, Mr. DEV PRASADH name of HOD,
LAKSHMAN SWAMY and all the staff members of Department of management studies, For
their consistent guidance in my project work. Their continual support and careful attention to
the details involved in producing a document of this nature are very much appreciated.
H.T NO: 12761E005
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CONTENT PAGE
CH. NO. PURTICULARS PAGE

NO.
CHAPTER -1 INTRODUCTION
OBJECTIVES OF THE STUDY

NEED FOR THE STUDY
SCOPE OF THE STUDY
RESEARCH METHODOLOGY
LIMITATIONS OF THE STUDY
LETERATURE REVIEW
CHAPTER -2
CHAPTER -3 COMPANY PROFILE
INDUSTRY PROFILE
CHAPTER-4 ANALYSIS & INTERRETATION OF THE STUDY
CHAPTER -5 FINDINGS OF THE STUDY

SUGGESTIONS
CHAPTER-06
CONCLUSIONS
BIBLIOGRAPHY
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CHAPTER - I
INTRODUCTION
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INTRODUCTION
Cash flow is a significant guide to the money related official and loan bosses for
assessing the employments of assets by the firm and in deciding how these utilizations
were financed. An income articulation demonstrates where stores originated from and
where it was utilized amid the period under survey. They are essential apparatuses for
correspondence and Very supportive for money related administrators in arranging the
halfway and financing of the Firm.
Income proclamation is an announcement of Cash stream. Income implies the
development of trade out and out of a business concern. In stream of money is a known
as source out stream of money is called utilization of money. The term money here
stands for and bank adjust.
Income Statement demonstrates the adjustments in position between two monetary
record dates. It gives the subtle elements in regard of money create and connected amid
the bookkeeping time frame. The Transactions which increment the money position of
the business are known as in streams of money (Ex: Sales of present and settled
resources, issue of offers and debentures and so forth.) The exchanges which diminish
the money position are known as out streams (Ex: Purchase of present and settled
resources, recovery of debentures, and execution says and other long haul delineates)
Cash stream proclamations constants on exchanges that directly affect money. This
announcement delineates factors in charge of such in stream and out stream of money.
To sum things up, income articulation outlines procedure of changes in real money
position between dates of asset reports. An income proclamation resembles receipt and
installments account in rundown frame.
The net stream money is equivalent to net benefit however this can't be valid in all
cases in light of the nearness of non-money from activities certain alterations are to be
made to the net benefit as uncovered by benefit and misfortune account.
There are three strategies for deciding money from activities to be specific.
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1. Cash deals strategy.
2. Net Profit/Net misfortune strategy.
3. Cash from activities: Cash deals – Cash buys – Cash working costs.
Money assumes a vital part in the monetary existence of a business. A firm needs
money to influence installment to its providers, to bring about everyday to costs and to
pay rates, wages, premium and profits and so forth. Truth be told, what blood is to a
human body, money is to a business undertaking. In this manner, it is extremely
fundamental for a business to keep up a sufficient adjust of money. For instance, a
worry works productively yet it doesn't have adequate money adjust topay profits, what
message does it pass on to the investors and open as a rule. Consequently,
administration of money is exceptionally basic. There ought to be center around
development of money and its reciprocals.
Money implies, trade out hand and request stores with the bank. Money proportional
comprises of bank overdraft, money credit, here and now stores and attractive
securities. Income Statement manages stream of money which incorporates money
reciprocals and also money. This announcement is extra data to the clients of Financial
Statements. The announcement demonstrates the approaching and active of money. The
announcement evaluates the capacity of the venture to produce money and use it.
Consequently a Cash-Flow explanation might be characterized as an outline of receipts
and payment of money for a specific timeframe. It likewise clarifies purposes behind
the adjustments in real money position of the firm.
Money streams are money inflows and surges. Exchanges which increment the money
position of the element are called as inflows of money and those which diminish the
money position as surges of money. Income Statement follows the different sources
which get money, for example, money from working exercises, offer of present and
settled resources, issue of offer capital and debentures and so forth and applications
which cause outpouring of money, for example, misfortune from tasks, buy of present
and settled resources, reclamation of debentures, inclination shares and other long haul
obligation for money. To put it plainly, an income articulation demonstrates the money
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receipts and distributions amid a specific period. The announcement of income serves
various goals which are as per the following:
Income articulation goes for featuring the money created from working exercises.
• Cash stream explanation helps in arranging the reimbursement of advance

timetable and substitution of settled resources, and so on.
• Cash is the focal point of every single budgetary choice. It is utilized as the
reason for the projection of future contributing and financing designs of the venture.
• Cash stream proclamation finds out the fluid position of the firm in a superior
way. Banks and money related establishments for the most part incline toward income
proclamation to examine liquidity of the obtaining firm.
• Cash stream Statement helps in proficient and viable administration of money.

The administration for the most part investigates income proclamations to comprehend
the inside produced money which is best used for installment of profits.
Meaning of 'Income'
1. A income or cost stream that progressions a money account over a given period.
Money inflows for the most part emerge from one of three exercises - financing,
activities or contributing - despite the fact that this likewise happens because of gifts or
blessings on account of individual back. Money surges result from costs or
speculations. This remains constant for both business and individual fund.
2. An bookkeeping articulation called the "announcement of money streams",

which demonstrates the measure of money produced and utilized by an organization in
a given period. It is figured by including noncash charges, (for example, devaluation) to
net salary after expenses. Income can be ascribed to a particular venture, or to a
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business in general. Income can be utilized as a sign of an organization's budgetary
quality.
In business as in individual fund, money streams are basic to dissolvability. They can
be exhibited as a record of something that has occurred before, for example, the offer of
a specific item, or guage into the future, speaking to what a business or a man hopes to
take in and to spend. Income is pivotal to an element's survival. Having plentiful money
close by will guarantee that banks, workers and others can be paid on time. On the off
chance that a business or individual does not have enough money to help its tasks, it is
said to be ruined, and an imaginable contender for chapter 11 should the indebtedness
proceed.
The announcement of a business' money streams is regularly utilized by investigators to
measure monetary execution. Organizations with sufficient money available can put the
money once more into the business so as to produce more money and benefit.
An income proclamation is a standout amongst the most critical monetary articulations
for a venture or business. The announcement can be as basic as a one page examination
or may include a few calendars that encourage data into a focal explanation.
An income explanation is a posting of the streams of money into and out of the
business or undertaking. Consider it your financial records at the bank. Stores are the
money inflow and withdrawals (checks) are the money outpourings. The adjust in your
financial records is your net income at a particular point in time.
An income proclamation is a posting of money streams that happened amid the past
bookkeeping time frame. A projection of future streams of money is known as an
income spending plan. You can think about an income spending plan as a projection
without bounds stores and withdrawals to your financial records.
An income explanation isn't just worried about the measure of the money streams yet
additionally the planning of the streams. Numerous money streams are built with
different eras. For instance, it might list month to month money inflows and surges over
a year. It not just undertakings the money adjust staying toward the finish of the year
yet in addition the money adjust for every month.
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Working capital is an essential piece of an Cash flow. It is characterized as the measure
of cash expected to encourage business tasks and exchanges, and is ascertained as
present resources (money or close money resources) less present (liabilities due amid
the forthcoming bookkeeping time frame). Figuring the measure of working capital
gives you a brisk examination of the liquidity of the business over the future
bookkeeping time frame. In the event that working capital has all the earmarks of being
adequate, building up an income spending plan might be not basic. Yet, in the event
that working capital has all the earmarks of being inadequate, an income spending plan
may feature liquidity issues that may happen amid the coming year.
Income examination is a strategy for breaking down the financing, contributing, and
working exercises of an organization. The essential objective of income examination is
to distinguish, in an auspicious way, income issues and also income openings. The
essential report utilized as a part of income examination is the income articulation.
Since 1988, the Securities and Exchange Commission (SEC) has required each
organization that records reports to incorporate an income articulation with its quarterly
and yearly reports. The income proclamation is helpful to directors, loan specialists,
and speculators since it deciphers the profit provided details regarding the wage
statementhich are liable to announcing controls and bookkeeping choices into a
straightforward outline of how much money the organization has created amid the
period being referred to. "Income measures genuine cash streaming into, or out of, an
organization's ledger," Harry Domash notes on his Web webpage,
WinningInvesting.com. "Not at all like revealed income, there is little an organization
can do to exaggerate its bank adjust."
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NEED AND IMPORTANCE
1. To know about the future plans of the company depend upon the cash flow analysis of
the company.
2. This study helps in finding the comparison between the past and performance
Of the company.
3. This study also helps up the goals and objectives for future in the content of cash flow
control.
4. This analysis to these statements will provide the decision maker to understand
strengths and weaknesses of the firm.
5 This analysis is important for the management and also for outside dealing with
organization is moving
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OBJECTIVE OF THE STUDY
 To Evaluate and analyze the financial performance of the HSBC LTD

 To Draw conclusions and offer suggestions for improvement of the financial
performance of the above said organization in the light of finding of the study.
 To study the resources pattern and their utilization with a view to analysis the cash flow
of HSBC LTD
 To evaluate the sources of funds and their application by using cash flow techniques of
financial statements.
 To analyze profitability and capital structure of company.
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METHODOLOGY
The data collection of the study consists
1. Primary source of data
This is first hand in nature and can be collected through
 Officers of accounting section.
 Executives and staff of finance and accounts department.
 Personal observation.
2. Secondary data
Methods of collection of the secondary data which is already exists are
 Financial management text books.
 Journal and magazines and newspapers.
 Text books.
 Worldwide webs.
3. Tools/Techniques used for analysis
 Cash flow statement
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SCOPE OF THE STUDY
The study of cash flow analysis of HSBC LTD is a very wide topic. In the Study many
factors that need detailed analysis could not be discussed in detail because Of the limitations
regarding length of the project and available time. The scope of the Study has, therefore, been
limited to the presentation of, cash flow statements and their Analysis.
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LIMITATIONS OF THE STUDY
The limitations of the present study are:
1. In the study many factors that need detailed analysis could not discussed in detail Because of
the limitations regarding length of the project and available time.
2. The study is subject to limitations of the nature of cash flow analysis tools and Techniques.
3. It is not always possible to make future estimation on the basis of the past as it is always
does not come true.
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CHAPTER - II
REVIEW OF LITERATURE
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REVIEW OF LITERATURE
A typical cash flow statement is divided into three parts: cash from operations (from
day by day business exercises like gathering installments from clients or influencing
installments to providers and representatives); to money from speculation exercises (the buy or
offer of advantages); and money from financing exercises (the issuing of stock or acquiring of
assets). The last aggregate demonstrates the net increment or reduction in real money for the
period.
Income articulations encourage basic leadership by giving a premise to judgments concerning

the benefit, money related condition, and monetary administration of an organization. While
chronicled income articulations encourage the orderly assessment of past money streams,
anticipated (or star forma) income proclamations give bits of knowledge with respect to future
money streams. Anticipated income proclamations are regularly created utilizing verifiable
income information altered for expected changes in value, volume, loan fees, et cetera.
To improve assessment, a legitimately arranged income explanation recognizes repeating and

nonrecurring money streams. For instance, gathering of money from clients is a repeating
action in the ordinary course of tasks, while accumulations of money continues from secured
bank credits (or the buy of specific speculations or capital resources) is regularly not thought
about a repeating movement in the typical course of activities.
As opposed to nonrecurring money inflows or surges, most repeating money inflows or

outpourings happen (regularly much of the time) inside each money cycle (i.e., inside the
normal time skyline of the money cycle). The money cycle (otherwise called the working cycle
or the profit cycle) is the arrangement of exchanges or financial occasions in a given
organization whereby:
1. Cash is changed over into merchandise and enterprises.
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2. Goods and administrations are sold to clients.
3. Cash is gathered from clients.
To an expansive degree, the instability of the individual money inflows and surges inside the
money cycle will manage the working-capital necessities of an organization. Working capital
by and large alludes to the normal level of unlimited money required by an organization to
guarantee that all partners are paid on an auspicious premise. Much of the time, working
capital can be checked using a money spending plan.
Money Flows are inflows and surges of money and money counterparts. The announcement of
income demonstrates three principle classifications of money inflows and money surges, in
particular: working, contributing and financing exercises.
(a) Operating exercises are the main income producing exercises of the endeavor.
(b) Investing exercises incorporate the procurement and transfer of longterm resources and
different speculations excluded in real money counterparts.
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(c) Financing exercises are exercises that outcome in change in the size and creation of the
proprietor's capital (counting Preference share capital on account of an organization) and
borrowings of the venture.
Income is the development of cash into or out of a business, venture, or money related item. It
is typically estimated amid a predefined, limited timeframe. Estimation of income can be
utilized for ascertaining different parameters that give data on an organization's esteem and
circumstance. Income can e.g. be utilized for computing parameters:
• To decide a task's rate of return or esteem. The season of money streams into and out of
activities are utilized as contributions to monetary models, for example, interior rate of return
and net present esteem.
• To decide issues with a business' liquidity. Being beneficial does not really mean being
fluid. An organization can come up short in view of a lack of money even while productive.
• As an elective measure of a business' benefits when it is trusted that collection

bookkeeping ideas don't speak to monetary substances. For instance, an organization might be
notionally gainful however creating minimal operational money (as might be the situation for
an organization that trades its items as opposed to offering for money). In such a case, the
organization might infer extra working money by issuing offers or raising extra obligation
back.
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• Cash stream can be utilized to assess the 'quality' of wage produced by collection
bookkeeping. At the point when net wage is made out of huge non-money things it is viewed
as low quality.
• To assess the dangers inside a money related item, e.g. coordinating money
prerequisites, assessing default hazard, re-speculation necessities, and so forth.
Income is a non specific term utilized diversely relying upon the unique circumstance. It might
be characterized by clients for their own particular purposes. It can allude to genuine past
streams or anticipated future streams. It can allude to the aggregate of all streams included or a
subset of those streams. Subset terms incorporate net income, working income and free
income.
Step by step instructions to Analyze a Company's Cash Flow Statement
Albeit detailed income (or misfortunes) per share frequently take the spotlight in the monetary
features, income can be a significantly more important measure of an organization's long haul
money related wellbeing.
Income is precisely what it sounds like. It is money created and utilized by an organization's
business. It is accounted for in a money related articulation indicating three years of
information in the organization's yearly 10-K documenting with the Securities and Exchange
Commission (SEC). It is likewise revealed quarterly in an organization's 10-Q filings with the
SEC.
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Here is one technique to rapidly assess an organization's income proclamation.
The income explanation has three segments, income created by or utilized by tasks, income
produced by or utilized by contributing exercises, and income created by or utilized by
financing exercises.
Income created by or utilized by activities mirrors the money delivered by (or utilized by) the
organization's continuous tasks. It bars noncash things, for example, devaluation, amortization
and stock-construct pay that are expensed with respect to the benefit and misfortune
articulation. What's more, it considers money created by or utilized by working capital. Income
produced by (or utilized by) activities is a standout amongst the most imperative numbers on
the income proclamation, since it is the money accessible from continuous tasks to reinvest in
the business, reimburse obligation, pay profits, and so on.
Presently take a gander at money created by or utilized by contributing exercises. This

classification incorporates capital consumptions (regularly called augmentations to property
and gear), acquisitions or offers of organizations or property for money, and other contributing
exercises. Regularly it will be a negative number ruled by spending on capital activities at the
same time, contingent upon the idea of the business, that isn't generally the case.
At last, investigate the effect of financing exercises on money. Trade inflows out this class
could originate from, in addition to other things, bank borrowings, obligation issuance, and the
offer of value. Employments of money for monetary purposes incorporate vital installments on
obligation, share repurchases and money profit installments.
The aggregate of the money created by or utilized by these three classes is appeared on the
income articulation (after the impact of trades rates, assuming any, on money) as the year's net
change in real money and money counterparts. This figure, when added to money toward the
start of the detailing time frame, will bring about the money and money counterparts held by
the organization toward the finish of the announcing time frame.
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In assessing an organization's three year income execution think about the accompanying.
Initially, do its tasks reliably create money and what is the pattern of this figure? In a perfect
world, you might want to see determinedly positive income produced by tasks. In the event that
this number is developing every year, that is far superior.
Second, to what degree is money created by tasks adequate to pay yearly capital uses and
money profits? This figure (income from tasks net of capital consumptions and profits) is some
of the time called free income. This is an exceptionally helpful measure since it reveals to you
how much money an organization has left finished every year, in the wake of reinvesting in its
business and paying its investors, to exploit extra development openings, increment the profit,
repurchase stock, or simply set away for a blustery day. Thus, this figure can give you a
thought of an organization's capacity to climate a log jam or a downturn, to develop its
business long haul, and to keep up and develop its profit.
The free income number talked about above prohibits money used to make acquisitions or
from the offer of organizations. In any case, if acquisitions are a key piece of an organization's
long haul development methodology and, subsequently, it routinely buys different
organizations, you might need to consider this your income examination.
This article just compresses how to assess the trade stream articulation out a simple path in
view of authentic numbers. A more advanced dismemberment of an organization's income
articulation, considering the particular attributes of its business and its industry, would
regularly be all the more noteworthy. Also, the income articulation does not reveal to you what
money necessities an organization faces, for example, a substantial chief installment on
obligation coming due or the need to fabricate another plant. By the by, dissecting free income,
even fundamentally, can enable you to recognize open organizations deserving of further
examination and give significant bits of knowledge into the budgetary strength of organizations
in which you officially claim shares.
Points of interest of Cash Flow Statement:
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1. It helps the recently shaped organizations to know their inflow and outpouring of
money.
2. It causes the speculators to judge whether the organization is fiscally stable or not.
3. It causes the organization to know whether it will have the capacity to cover the finance
and different costs.
4. It causes the banks to know the organization's capacity to reimburse.
5. A income proclamation is given on month to month premise or quarterly premise or six

month to month premise or yearly premise.
6. These articulations help to have an exact investigation of the company's capacity to

meet its present liabilities.
7. A income proclamation is useful for arranging and overseeing future budgetary duties.
8. A income proclamation abridges the organization's money receipts and money

installments over some undefined time frame.
9. It is valuable for deciding the transient capacity of the worry to meet its liabilities as it
does exclude non money things.
10. A income articulation gives indispensable data about the organization's execution as
well as about its significant exercises amid the year.
Weaknesses of Cash Flow Statement:
1. By itself, it can't give an entire investigation of the budgetary position of the firm.
2. It can be translated just when it is in affirmation with other money related explanations
and other investigative devices like proportion examination.
Income Indicator Ratios:
Presentation
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This area of the budgetary proportion instructional exercise takes a gander at income pointers,
which center around the trade being produced out terms of what amount is being created and
the wellbeing net that it gives to the organization. These proportions can give clients another
take a gander at the money related wellbeing and execution of an organization.
Now, we as a whole realize that benefits are vital for an organization. Notwithstanding,
through the enchantment of bookkeeping and non-money based exchanges, organizations that
seem extremely gainful can really be at a budgetary hazard on the off chance that they are
producing little money from these benefits. For instance, if an organization influences a huge
amount of offers using a loan, they to will look productive yet haven't really gotten money for
the business, which can hurt their monetary wellbeing since they have commitments to pay.
The proportions in this area utilize income contrasted with other organization measurements to
decide how much money they are producing from their deals, the measure of money they are
creating liberated, and the measure of money they need to cover commitments. We will take a
gander at the working income/deals proportion, free income/working income proportion and
income scope proportions.
Income Indicator Ratios: Operating Cash Flow/Sales Ratio
This proportion, which is communicated as a rate, thinks about an organization's working

income to its net deals or incomes, which gives speculators a thought of the organization's
capacity to transform deals into money.
It is troubling to see an organization's deals develop without a parallel development in working

income. Positive and negative changes in an organization's terms of offer and additionally the
gathering knowledge of its records receivable will appear in this pointer.
Equation:
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Income Coverage Ratios
This proportion measures the capacity of the organization's working income to meet its
commitments - including its liabilities or progressing concern costs.
The working income is just the measure of money produced by the organization from its
principle tasks, which are utilized to keep the business financed.
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As per AS-3 the inflow and outflow of cash are :
Operating Activities
Inflows Outflows
Cash sale Cash purchases
Cash received from debtors Payment to creditors
Cash received from commission and fees Cash operating expenses
Royalty and other revenues Payment of wages
Income tax
Investing Activities
Inflows Outflows
Sale of fixed assets Purchase of fixed assets
Sale of investment Purchase of investment
Interest received
Dividend received
Financing Activities
Inflows Outflows
Issue of shares Cash repayments of amounts borrowed
Issues of debentures in cash Interest paid on loans/debentures
Proceeds from long term short term borrowings Dividends paid on equity and preference share
capital
The larger the operating cash flow coverage for these items, the greater the company's
ability to meet its obligations, along with giving the company more cash flow to expand its
business, withstand hard times, and not be burdened by debt servicing and the
restrictions typically included in credit agreements.
Formulas:
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Free Cash Flow/Operating Cash Flow Ratio
The free cash flow/operating cash flow ratio measures the relationship between free cash flow
and operating cash flow.
Free cash flow is most often defined as operating cash flow minus capital expenditures, which,
in analytical terms, are considered to be an essential outflow of funds to maintain a company's
competitiveness and efficiency.
The cash flow remaining after this deduction is considered "free" cash flow, which becomes
available to a company to use for expansion, acquisitions, and/or financial stability to weather
difficult market conditions. The higher the percentage of free cash flow embedded in a
company's operating cash flow, the greater the financial strength of the company.
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IMPORTANT OF FINANCIALS
Financial analysis is very important for the management, shareholder,

investers and general public. Following are important points in this regard.
1. It simplifies, summarize and systematizes a long arise of accounting figures, which

prove very useful to the interested parties as it helps these in arriving at valuable decisions.
2. Financial analysis is invaluable aid to the management in discharge of its basic function
of fore, planning, co-ordinatinon, communication and control.
3. It identifies the financial health of enterprises the evaluating important aspects of

business like liquidity, solvency, profitability, capital gearing, extra, such an evaluation
enables conclusion to be drawn regarding financial health of business.
4. The proHSBC of analysis financial statements involves the preparation and

interpretation of meaning device such as ratios and trend percentages. So with the
preparation of meaning devices the data become easy to establish its relationship and other
data can be easily ranked in terms of its relative significance.
5. Without analysis of financial statement it is impossible to interpret the financial

statements figures. Therefore interpretation requires analysis.
6. Owing to the increasing demand for analytical information by business executive,

bankers and other it is neULTRATECH PVTary to have analysis and interpretation of
financial and operatintg data.
The financial statements are a mirror, which reflect the financial position and operating
strength are weakness of the business enterprise.
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TOOLS OF FINANCIAL ANALYSIS
The analysis of financial statements consists of relationship and trends, top

determine whether the financial position of the company is satisfactory or not. The
analytical methods or devices, listed below are used to ascertain or measure the
relationships among the financial stetements items.
Analysis methods and devices used in analyzing financial statements are as
follows:
Comparative financial statements.
Common size financial statements.
Trend ratios
Ratio Analysis
Cash Flow Statements
They may be discussed as under:
Comparative financial statements:-
Statements prepared in a form the reflects data for two or more periods are know as
Compared with similar data for a previous period or a number of prior period. Annual data
can be compared with similar data for prior years. Comparative statements can be prepared
for both types for financial statements balance sheet shows the effect of operations on the
assets and liabilities i.e., change in the financial position during the period under
consideration. The comparative profit and loss account will present a review of operating
activities of the business.
Common Size financial Statements:-
Comparative statements that give only the vertical percentage of ratios for financial data
without giving rupee values are known as Common Size Financial statements. They are
also known as 100% statements. A common size statements show the relation of each
component to the whole. It is useful in vertical financial analysis and comparison of two
business enterprise at a certain date.
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Trend Analysis:-
Under the technique of trend analysis the ratio of different items for various periods are
calculated and then a comparison is made. An analysis of the ratios over the past few years
may well suggests the trend or direction in which the concern is going-upward or
downward.
Ratio Analysis:-
Ratio analysis is the most widely used tool of financial analysis. It is essentially an attempt
to develop meaningful relationship between individual items or groups of items in the
balance sheet or profit and loss account. The objects and utility of ratio
analysis is confined not only to the internal parties but to the credit suppliers, bans and
leading institution also. Ratio analysis tells about the financial position of the enterprise as
to whether the capital structure of the business is in proper order, whether the capital
structure of the enterprise is satisfactory, whether the credit policy in relation to sales and
purchase is sound and whether the company is creditworthy. Thus, ratio analysis highlights
the liquidity, solvency, profitability and capital gearing position.
CASHFLOW ANALYSIS:-
Cash flow analysis is a valuable aid to the financial executive and creditors for evaluating
the uses of funds by the firm and in determining how these uses were financed. A cash flow
statement indicates where funds came from and where it was used during the period under
review. They are important tools for communication and very helpful for financial
executives in planning the intermediate and long-term financing of the firm.
When it is desired to explain to management the source of cash and its uses during a
particular period of time, a statement know as cash flow statement is prepared. A statement
of cash flow reports the inflows (receipts) and outflow (payments) of cash and its
equivalent of an organization during a particular period. It provides important information
that compliments profit and loss account and balance sheet. A statement of cash flow report
cash receipts and payments classified according to the entities major activities- operating,
investing and financial during the period.
The main object of cash flow analysis is to show the causes of changes in cash balance
during the period under consideration. Cash flow analysis also provides the information to
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the management regarding movement of cash and the availability of cash. This analysis is
not only concerned with the good or bad management of cashes but also the liquidity
position of the concern. It also helps the management in short-term financial decision
relating to liquidity.
UTILITY OF CASH FLOW ANALYSIS:
A cash flow statement is very important for financial management. It is an essential
tool of short-term financial analysis, as a business enterprise needs sufficient cash to
meet its various obligations in the near future such as payments for purchase of
fixed assets, expanses of business etc., A historical analysis of the different source
and application cash will enable the management to make reliable cash flow
projections for the immediate future. It may then plan out for investment of surplus or
meeting the deficit, if any.
The main uses of cash flow analysis are as follows:-
Help in efficient cash management: Cash flow analysis helps in evaluating financial polices
and cash position, as the cash is the basis for all operations. A projected cash flow
statement will enable the management to plan and coordinate the financial operations.
Help in internal financial management: Cash flow analysis provides information

about funds, which will be available from operations. This will help the management in
determining polices regarding internal financial management, e.g., dividend policies,
possibility of repayment of long-term debt, etc.
LIMITATIONS OF CASH FLOW ANALYSIS:-

Cash flow analysis is a useful tool of financial analysis, but it has its own limitations. Of
cash flow analysis are as follows:
Cash flow statement cannot be equated with the income statement. An income statement
takes into account both cash as well as non-cash items and therefore, net cash flow does not
means net income of the business.
The cash balance as disclosed by the cash flow statement may not represent the real liquid
position of the business it can be easily influenced by postponing purchase and other
payments. Cash flow statements cannot replace the income statement or the funds flow
statement or the fund flow statement. Each of them has a separate function to perform.
30
CASH FLOW ANALYSIS AND STATEMENT:
Cash flow analysis is a method of analyzing the financing, investing, and operating
activities of a company. The primary goal of cash flow analysis is to identity, in a timely
manner, cash flow problems as well as cash flow opportunities. The primary document
used in cash flow analysis is the cash flow statement. Since 1988, the Securities and
Exchange Commission (SEC) has required every company that files reports to include a
cash flow statement with its quarterly and annual reports. The cash flow statement is useful
to managers, leaders, and investors because it translates the earnings reported on the
income statement—which are subject to reporting regulations and accounting decisions—
into a simple summary of how much cash the company has generated during the period in
question. “Cash flow measures real money flowing into, or out of, a company’s bank
account,” Harry Domash notes his Web site, WinningInvesting.com. “Unlike reported
earnings, there is little a company can do to overstate its bank balance.”
THE CASH FLOW STATEMENT:

A typical cash flow statement is divided into three parts: cash from operations (from daily
business activities like collecting payments from customers or making payments to
suppliers and employees); cash from investment activities (the purchase or sale of assets);
and cash from financing activities (the issuing of stock or borrowing of funds). The final
total shows the net increase or decrease in cash for the period.
Cash flow statements facilitate decision making by providing a basis for judgments
concerning the profitability, financial condition, and financial management of a company.
While historical cash flow statements facilitate the systematic evaluation of past cash
flows, projected (or pro forma) cash flow statements provide insights regarding future cash
flows. Projected cash flow statements are typically developed using historical cash flow
data modified for anticipated changes in price, volume, interest rates, and so on.
To enhance evaluation, a properly-prepared cash flow statement distinguishes between
recurring and nonrecurring cash flows. For example, collection of cash from customers is a
recurring activity in the normal course of operations, where as collections of cash proceeds
from secured bank loans (or issuances of stock, or transfers of personal assets to the
company) is typically considered a recurring activity. Similarly, cash payments to vendors
31
is a recurring activity, whereas repayments of secured bank loans (or the purchase of
certain investments or capital assets) is typically not considered a recurring activity in the
normal course of operations. In contrast to nonrecurring cash inflows or outflows, most
recurring cash inflows or outflows occur (often frequently) within each cash cycle (i.e.,
within the average time horizon of the cash cycle). The cash cycle (also known as the
operating cycle or the earnings cycle) is the series of transactions or economic events in a
given company whereby:
Cash is converted into goods and services.
Goods and services are sold to customers.
Cash is collected from customers.
To a large degree, the volatility of the individual cash inflows and outflows within the cash
cycle will dictate the working-capital requirements of a company. Working capital
generally refers to the average level of unrestricted cash required by a company to ensure
that all stakeholders are paid on a timely basis. In most cases, working capital can be
monitored through the use of a cash budget.
32
PREPARATION OF CASH FLOW STATEMENTS:
Cash flow statement is prepared with the help of balance sheet, income statement, and
surplus appropriations statement and other given information. The measurement of cash
flow is primarily based on income statement as the items in any income statement6 are
shown on actual basis, where as in cash flow statement they are shown cash basis.
Cash flow measurement depends primarily on determining cash receipt and disbursements
over a given period.
The measurement of cash flow constitutes two aspects, determining the inflow of
cash and outflow of cash. The items constitution inflows of cash are the sources of cash
while outflow of cash is the application of cash.
SORCE OF CASH OR CASH INFLOWS:
The transactions, which increase the cash position of the firm, are called as sources of cash
of cash inflows. The main sources of cash inflow are as follows:
Increase in share capital: - Share capital raised whether in the form of preference of equity
capital would constitute inflow of cash. The inflow would be to the extent of actually
received on issue of share. However, issue of share by capitalization of reserves or issue of
share for consideration other that cash or issue of share in conversion of debentures or
long-term loans would not be a cash inflow.
Issue of debenture, loans etc: - The net amount received on the issue of debentures and
rising of loan will constitute inflow of cash. However, if the debentures are issued or loans
raised for consideration other cash, it will not constitution inflow of cash.
Reduction in or sale of assets: - Sale proceeds of fixed assets and long-term investment
to the extent payment being received in cash would be inflow of cash. Similarly, decrease
in debtors and bill receivable will be inflow of cash.
Other receipts: - There may also be some other sources of cash inflows. For example,
sale proceeds of by-products of waste material, cash receipts of dividends and interest,
income-tax refund, compensation received etc.
APLICATION OF CASH OR CASH OUTFLOW:
Operation loss: - If a business is operating at a loss then to that extent it is treated as
application of cash or cash flow.
Reduction of redeemable shares of debentures: - Amount actually paid on the redeemable
of preference share or debentures constitute outflow of cash. While paying back the
33
preference capital, arrears of dividend may also be paid. However, if equality share are
allocated in repayment of preference capital or debentures, there will be no cash outflow.
Decrease in or repayment of loans: - Decrease in the long-term or short-term loans,
creditors and bills payable also constitute outflow of cash.
Increase in or purchase of non-current assets: - The acquisition of fixed assets and
investments also involves the use of cash. For example, if furniture is purchased for cash, it
will constitute an outflow of cash. However, if the acquisition is made on credit or by the
issue of shares or debentures, it will not involve out of cash.
Other payments: - Payments of dividend, income tax, interest, compensation etc., also
constitute outflow of cash.
FORM OF CASH FLOW STATEMENT: -
There is no set format for cash flow statements; it can also be prepared in two forms,
either in report form or in an account form. Under both these form any of the following
types may be adopted:-
Reminder type :- Under this type, the cash flow statement is divided into two parts sources
of cash and application .The difference of the total of the sides would show increase in cash
or decrease in during under study.
Self balance type :- Under this method, cash flow statement is prepared in the same way as
in reminder type but in this method the short side of the statement is balanced by showing
change in the balance of cash. Which the cash balance shown in the current year balance
sheet. This method is most popular and widely used in practice.
Reconciling type: - Under this method opening and closing balances of cash are tallied in
it, the statement starts with the opening balance of cash. In this balance all the inflow of
cash are added and all outflows of cash are
Detected, the resulting figure will be closing balance of cash, which must tally, with the
balance shown in the current year’s balance sheet. This method is most popular and widely
used in practice.
34
CHAPTER-3
COMPANY PROFILE
INDUSTRY PROFILE
35
HSBC BANK PROFILE
FOUNDER:
Years of establishment: HSBC was established in 1865 to finance trade between Europe and
Asia. For over 150 years we have connected customers to opportunities. We enable businesses
to thrive and economies to prosper, helping people to realize their ambitions
HSBC was born from one simple idea – a local bank serving international needs. In March
1865, HSBC opened its doors for business in Hong Kong, and today we serve around 38
million customers worldwide in 67 countries and territories.
The experiences of the past 150 years have formed the character of HSBC. A glance at our
history explains why we believe in capital strength, in strict cost control and in building long-
term relationships with customers. HSBC has weathered change in all forms – revolutions,
economic crises, new technologies – and adapted to survive. The resulting corporate character
enables HSBC to meet the challenges of the 21st century.
MISSION & VISION:
HSBC Holdings
Vision:
"We aspire to be one of the world's great specialist banking
Groups, driven by commitment to our core philosophies and
Values"
Mission:
Through an international network linked by advanced technology, including a rapidly growing
e-commerce capability, HSBC provides a comprehensive range of financial
services: personal financial services; commercial banking; corporate, investment banking and
markets; private banking; and other activities.
36
MILE STONES :( ACHIEVEMENTS):
1865
The Hongkong and Shanghai Banking Corporation Limited opened in Hong Kong on 3 March
1865 and in Shanghai one month later. It was the first locally owned and locally managed
bank.
1875
By 1875 HSBC was present in seven countries across Asia, Europe and North America. It
financed the export of tea and silk from China, cotton and jute from India, sugar from the
Philippines and rice and silk from Vietnam.
1900
By 1900, after strong growth under Chief Manager Thomas Jackson, the bank had expanded
into 16 countries and was financing trade across the world. Bullion, exchange and merchant
banking were important features of the bank’s business.
1910
In the early 20th century, HSBC widened the scope of its activities in Asia. It issued loans to
national governments to finance modernisation and infrastructure projects such as railway
building.
1918
The First World War brought disruption and dislocation to many businesses. By the 1920s,
however, Asia was beginning to prosper again as new industries developed and trade in
commodities such as rubber and tin soared.
1935
The 1930s brought recession and turmoil to many markets. Nonetheless, HSBC asked
architects Palmer and Turner to design a new head office in Hong Kong: “Please build us the
best bank in the world.” The cutting-edge art deco building opened in 1935.
37
1941
The bank faced one of its most challenging times during the Second World War. Staff in Asia
showed huge courage in the face of adversity. Many became prisoners of war. Only the
London, Indian and US branches remained in full operation.
1950
At the end of the war, HSBC took on a key role in the reconstruction of the Hong Kong
economy. Its support helped both established manufacturers and newcomers to grow their
businesses in Hong Kong.
1972
By the 1970s the bank had expanded through acquisition. HSBC bought Mercantile Bank and
The British Bank of the Middle East in 1959. In 1972 it formed a merchant banking arm,
extending its range of services.
1992
In the 1980s HSBC bought Marine Midland Bank in the US. In 1992, the newly created HSBC
Holdings plc made a recommended offer for full ownership of the UK’s Midland Bank.
Following the acquisition, HSBC moved its headquarters to London.
1998
In 1998, the bank announced it would adopt a unified brand, using HSBC and the hexagon
symbol everywhere it operated.
2017
As new markets blossom and flourish, HSBC continues to be where the growth is, connecting
customers to opportunities. The bank enables businesses to thrive and economies to prosper,
helping people fulfil their hopes and dreams and realise their ambitions.
38
BOARD OF DIRECTORS:
Name
Relationships Title Age
(Connections)
Antonio Simoes 38 Relationships CEO & Director 42
Jean Beunardeau 53 Relationships Chief Executive Officer of HSBC France 55
Other Board Members On Board Members

Type of Board
Name (Connections) Relationships Primary Company Age
Members
Jonathan Symonds 56Relationships Chairman of Mesoblast Limited 58
CBE, BA, FCA the Board
John Trueman 10Relationships Vice Chairman HSBC Bank Plc 74
Douglas Flint CBE 58Relationships Unit Chairman Institute of International 62
Finance, Inc.
DEPARTMENTS:
HSBC serves its customers in India through our four global businesses:
Retail Banking and Wealth Management: The Bank offers a wide range of services and
products to resident as well as non-resident Indian customers based in various countries across
the globe.
Commercial Banking: Commercial Banking (CMB) provides services to business and
corporate clients. Our services include business accounts, global liquidity and cash
management solutions, trade services, and a range of borrowing solutions.
Global Banking and Markets: Global Banking and Markets business provides financial
products and services for corporate and institutional clients. This includes transaction banking,
treasury services, investment banking, advisory, capital markets, foreign exchange, fixed
income and derivatives.
39
OTHER DEPARTMENT
Global Asset Management: HSBC Asset Management (India) Private Limited,

investment manager to HSBC Mutual Fund, offers a flexible product range to individual and
institutional investors including fixed income/pension mandates for large institutional clients.
Global Service Delivery: Global Service Delivery in India has more than 24,000 employees
and operates out of 11 Group Service Centres (GSCs). There are three centres each in
Bangalore and Hyderabad; while Gurgaon, Kolkata, Mumbai, Chennai and Vizag have one
centre each.
HSBC Securities and Capital Markets (India) Private Limited: HSBC Securities and Capital
Markets (India) Private Limited: HSBC Securities and Capital Markets (India) Private Limited
offers services in Investment Banking (IB), Infrastructure and Real Estate, Equities research
and stock broking. The IB business includes mergers and acquisition advisory services and
equities capital markets. Infrastructure and Real Estate Group services are provided to
governments, large corporates and top-tier banks. Equities research and stock broking
primarily cater to the institutional client base which includes foreign institutional investors,
foreign portfolio investors, local institutions, mutual funds, insurance companies, and select
high net worth and corporate clients.
Global Software Development: HSBC Global Software Delivery in India (registered entity -
HSBC Software Development (India) Private Limited (HSDI)) is spread across five locations
in Pune and Hyderabad. It supports the Group’s IT requirements worldwide through
development, maintenance and diverse banking applications.
Audit Services: HSBC Professional Services (India) Private Limited (HPSI) provides internal
audit services to global businesses and global functions across the HSBC Group and is also
involved in regional audit work in Asia-Pacific.
HSBC InvestDirect: HSBC InvestDirect (India) Limited (HIDL) through its subsidiary HSBC
InvestDirect Financial Services Limited (HIFSL) offers lending to high net worth individuals
and corporate customers.
Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited: This is a joint
venture between Canara Bank, Oriental Bank of Commerce and HSBC Insurance (Asia
Pacific) Holdings Limited.
In 1998, the bank announced it would adopt a unified brand, using HSBC and the hexagon
symbol everywhere it operated.
40
As new markets blossom and flourish, HSBC continues to be where the growth is, connecting
customers to opportunities. The bank enables businesses to thrive and economies to prosper,
helping people fulfil their hopes and dreams and realise their ambitions.
COMPETITION
Competitors
1. BNP Paribas
2. Citigroup
3. China Construction Bank Corporation
4. Deutsche Bank
5. Bank of America
6. National Australia Bank
7.Standard Chartered Bank
8.Royal Bank of Scotland
SWOT Analysis
Strengths
1.Strong brand name and good financial position
2.Present in various business groups like commercial banking, investment
banking, financial services and private banking
3.Diverse customer base decreases risk
4.Employs over 275,000 people globally
5.Has over 7500 offices in around 87 countries
Weaknesses
1.US a declining market
2.Weak retail banking as compared to competition
Opportunities
1.Expansion in other countries
2.Diversifying portfolios for customers
3.Lower interest rates will boost market share
Threats
1.Changing govt regulations and financial crisis like recessions
2.Stiff competition from global leaders
PRODUCTS OF HSBC
An HSBC financial professional can help you evaluate additional investment
choices, including:
Mutual funds.
Fixed income investment products.
Structured products.
41
INDUSTRY PROFILE
BANKING & FINANCIAL SERVICES INDUSTRY

With the potential to become the fifth largest banking industry in the world by 2020 and third
largest by 2025 according to KPMG-CII report, India’s banking and financial sector is
expanding rapidly. The Indian Banking industry is currently worth Rs. 81 trillion (US $ 1.31
trillion) and banks are now utilizing the latest technologies like internet and mobile devices to
carry out transactions and communicate with the masses.
The Indian banking sector consists of 26 public sector banks, 20 private sector banks and 43
foreign banks along with 61 regional rural banks (RRBs) and more than 90,000 credit
cooperatives. Factors promoting growth of Banking and Financial Services
The Banking Laws (Amendment) Bill that was passed by the Parliament in 2012 allowed the
Reserve Bank of India (RBI) to make final guidelines on issuing new bank licenses. Moreover,
the role of the Indian Government in expanding the banking sector is noteworthy. It is expected
that the new guidelines issued by RBI will curb practices of impish borrowers and streamline
the loan system in the country. In the coming time, India could see a rise in the number of
banks in the country, a shift in the style of operation, which could also evolve by incorporating
modern technology in the industry.

Another emerging trend witnessed by the banking sector is the use of social media platform
like Facebook to attract customers. In September 2013 ICICI bank launched a Facebook bill
payment and fund transfer service called ‘Pockets’ for customer convenience.
According to a report by Zinnov, a Globalization and Market Expansion firm, ‘IT adoption in
BSFI sector in India’, the Information Technology Industry spend in BFSI vertical is expected
to reach USD 3.5 billion by Financial Year 2014. The study also highlighted ‘the growing
maturity of Indian BFSI organizations in IT adoption, as technology is seen as a driver of
business value. Technology firms have great potential to explore in the BFSI sector, which
contributes to eight per cent of India's Gross Domestic Product.’
Insurance
The Indian insurance industry is estimated to grow at a compounded annual growth rate
(CAGR) of 14.1 per cent, and reach US$ 111.9 billion in 2015 from US$ 66.5 billion in 2011,
42
according to a report by BRIC data. This would make India the third-largest market for
insurance in the world by 2015. India’s present position is at number 12, among top global
markets for insurance. Number of policies sold is expected to increase to 85.21 million in
2015 from 53.23 million in 2010. The 2014-15 Union Budget should exempt insurance
products from taxation to provide investors an incentive to buy a policy. The insurance
industry can gain leverage from India's burgeoning population only by providing a special tax
window for insurance policies.
Health Insurance
In the non- insurance industry, health insurance is the second largest segment in India; with
players in both the public and private sectors playing an active role. The industry is
concentrated around 4 major public sector companies namely, New India Assurance, United
India Insurance, National Insurance and Oriental Insurance.

The Indian health insurance industry has seen major growth in the past 6 years. The Indian
health insurance industry is expected to grow at a CAGR of 37.2% from FY’2011 - FY’2016;
with surging medical costs, rising population and increased awareness among consumers in the
country.
43
RECRUITMENT TRENDS IN BSFI INDUSTRY
The Banking and Financial Services Industry is expected to recruit about 8.4 million people as
per the growth rate each year. BSFI workforce requirement between 2008 and 2022 is expected
to be about 4.2 million and sector may create up to 20 lakh new jobs in the next 5-10 years.
Advantaged by issuance of new licenses and efforts being made by the RBI and the
Government to expand financial services into rural areas, the hiring trend may further get a
boost from the public sector banks. Since most banking workforce is scheduled to retire in the
times to come, they would be in dire need of fresh talent. According Randstad India, global HR
service provider in India, the banking sector will generate 7-10 lakh jobs in the coming decade
and the sector would be the among top job creators in 2014.

According to ‘Human Resource and Skill Requirements in the Banking, Financial Services &
Insurance Sector (2022) report, apart from the on-rolls employment there is significant
contractual employment across all the above segments through various financial positions such
as Direct Selling Agents (DSA’s), Insurance agents, Mutual Fund Advisors, etc.
Challenges in BFSI
The major challenge faced by the Indian Banking and Financial sector is that the level of
financial exclusion in India is alarming and there is an urgent need to find a plausible solution
to the same. The IBA–BCG survey of banks revealed that the level of confidence in finding
profitable solutions for financial inclusion is not very high. Financial inclusion has solely been
the responsibility of public banks up until now, but by using inclusive growth as one of the
criteria for new licences (new banks have to open 25 per cent of their branches in rural areas);
the RBI will have made the new private sector banks responsible as well. Currently, public
sector banks have more branches than any other bank group in the rural and semi-urban areas.

The banking and insurance industry is challenged by competitive pressures, changes in
customer loyalty, stringent regulatory environment and entry of new players, all of which are
pressuring the organizations to adopt new business models, streamline operations and improve
processes.

44
Road Ahead
An IBA-FICCI-BCG report suggests that India’s gross domestic product (GDP) growth will
make the Indian banking industry the third largest in the world by 2025. According to the
report, the domestic banking industry is set for an exponential growth in coming years with its
assets size poised to touch USD 28,500 billion by the turn of the 2025. With the deposits
growing at a CAGR of 21.2 per cent (in terms of INR) in the period FY 06–13, there has been
evident growth in the overall industry.
This growth can be attributed to banks shifting focus to client servicing. Public as well as
private sector banks are underlining the importance of technology infrastructure, in order to
improve customer experience and gain a competitive edge. Utilizing the popularity of internet
and mobile banking, banks are increasingly adopting an integrated approach for asset–liability
match, credit and derivatives risk management.
Introduction
The banking sector in India is on a growing trend. It has vastly benefitted from the surge in
disposable income of individuals in the country. There has also been a noticeable upsurge in
transactions through ATMs, and also internet and mobile banking. Consequently, the different
banks, viz public, private and foreign banks have invested considerably to increase their
banking network and thus, their customer reach.
The banking industry in India has the potential to become the fifth largest banking industry in
the world by 2020 and third largest by 2025 according to a KPMG-CII report. Over the next
decade, the banking sector is projected to create up to two million new jobs, driven by the
efforts of the RBI and the Government of India to integrate financial services into rural areas.
Also, the traditional way of operations will slowly give way to modern technology.
Market Size
The Indian banking sector is fragmented, with 46 commercial banks jostling for business with
dozens of foreign banks as well as rural and co-operative lenders. State banks control 80
percent of the market, leaving relatively small shares for private rivals.
Banks have opened 7.73 crore accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY)
till November 19, according to Ms Snehlata Shrivastava, Additional Secretary, Department of
Financial Services, Ministry of Finance, Government of India. Of the 77.3 million accounts,
public sector banks have opened 62.1 million accounts with a total balance of Rs 4,946.03
45
crore (US$ 802.64 million), and have distributed RuPay debit cards to around 43 million
accounts.
Total banking sector credit is anticipated to grow at a CAGR of 18.1 per cent to reach US$ 2.4
trillion by 2017. The total banking assets in India touched US$ 1.8 trillion in FY13 and is
anticipated to cross US$ 28.5 trillion in FY25
Investments
There have been many investments and developments in the Indian banking sector in the past
few months. Some of the recent major are:
Kotak Mahindra Bank became the first bank to get the permission from Reserve Bank of India
(RBI) to set up a wholly-owned non- insurance company.
Kotak Mahindra Bank plans to acquire HSBCBank in an all-stock deal. The deal will make
Kotak the fourth-largest private bank in the country in terms of total business. ING
shareholders will now get 725 Kotak Bank shares for every 1,000 shares they hold.
Axis Bank Ltd has signed a memorandum of understanding (MoU) with South Korea-based
NongHyup Bank to enhance cooperation in treasury, trade and other businesses. The MoU
seeks to reinforce trade and economic relationships between South Korea and India, and will
promote mutual development through business cooperation
Axis Bank Ltd has raised US$ 500 million by selling five and a half year bonds maturing in
2020 to investors across the globe. The bank will use the money generated from the bond sale
to meet the funding requirement of its foreign branches and for general corporate purposes.
ICICI Bank Ltd has raised Yuan 600 million (US$ 96.61 million) by selling bonds to investors
in Asia and Europe. This money, will be used to finance Indian companies abroad. This is the
third bond sale in three years by ICICI Bank to raise money in Chinese currency
Bharatiya Mahila Bank Ltd (BMB) has launched its internet banking facility by the name
BMBSmartBanking, along with its newly designed website. Currently, this women focused
bank has branch network of 33 branches and all of them on core banking solutions with onsite
ATMs.
The United Economic Forum (UEF) has signed a MoU with the Indian Overseas Bank (IOB)
for financing entrepreneurs from backward communities to set up businesses in Tamil Nadu.
As part of the agreement, entrepreneurs who have been chosen by the UEF, will get term loan /
working capital requirements from the bank.
Government Initiatives
46
There have been a lot of developments in the Indian banking sector in the
To help Micro Small and Medium Enterprises (MSME), RBI has permitted setting up of an
exchange-based trading platform to facilitate financing of bills raised by such small entities to
corporate and other buyers, including government departments and PSUs.
The Government of India plans to reduce its stake in public sector banks to 52 per cent. The
reduction of stake is expected to fetch the government Rs 89,120 crore (US$ 14.46 billion) on
the basis of the share prices as on November 21, 2014.
The Government of India has cleared a proposal by HSBCBank Ltd, to increase the foreign
investment limit in the lender while taking the view that the stake held by its parent Housing
Development Finance Corp Ltd (HDFC) amounts to overseas investment. The Foreign
Investment Promotion Board (FIPB) has approved HSBCBank’s proposal to increase foreign
investment in the bank to 74 per cent.
The Reserve Bank of India (RBI) has created four verticals, which will be looked after by each
of the deputy governors, as part of organisational restructuring move.
To give a boost to ship building in the country, the Export-Import Bank of India (Exim Bank)
is planning to set up a dedicated Rs 1,500 crore (US$ 243.37 million) fund with Government
support.
Road Ahead
With the advancements in technology, mobile and internet banking services have come to the
fore. Banks in India are focusing more and more to provide better services to their clients and
have also started upgrading their technology infrastructure, which can help improve customer
experience as well as give banks a competitive edge.
Many banks, including the likes of HDFC, ICICI and AXIS are exploring the option to launch
contact-less credit and debit cards in the market soon. The cards, which use near field
communication (NFC) mechanism, will allow customers to transact without having to insert or
swipe.
47
CHAPTER-4
DATA ANALYSIS &
INTERPRETATIONS
48
CASH FLOW STATEMENT OF HSBC FOR THE YEAR OF 2014
PARTICULARS AMOUNT
Net Profit Before Tax 0.00
Net Cash From Operating Activities -1124.99
Net Cash (used in)/from

-53.87
Net Cash (used in)/from Financing Activities 997.41
Net (decrease)/increase In Cash and Cash

-181.45
Equivalents
Opening Cash & Cash Equivalents 6571.97
Closing Cash & Cash Equivalents 6390.52
49
BALANCE SHEET AS ON 31st MARCH 2014 HSBC
LIABILITIES AMOUNT ASSETS AMOUNT

Rs Rs
Cash & Balances with

Total Share Capital 505.12 4,387.27
RBI
Balance with Banks,
Equity Share Capital 505.12 2,003.24
Money at Call
Share Application
0.00 Advances 53,379.96
Money
Preference Share Capital 0.00 Investments 25,917.65
Reserves 3,587.36 Gross Block 1,382.03
Revaluation Reserves 465.68 Accumulated Depreciation 587.17
Net Worth 4,558.16 Net Block 794.86
Deposits 74,094.30 Capital Work In Progress 15.56
Borrowings 3,974.40 Other Assets 2,627.50
Total Debt 78,068.70
Other Liabilities &

6,499.18
Provisions
Total Liabilities 89,126.04 Total Assets 89,126.04
50
PROFIT AND LOSS ACCOUNT FOR THE YEAR 2014
PARTICULARS AMOUNT
Income
Interest Earned 5,863.71
Other Income 625.10
Total Income 6,488.81
Expenditure
Interest expended 3,489.42
Employee Cost 866.91
Selling and Admin Expenses 414.23
Depreciation 86.13
Miscellaneous Expenses 956.93
Preoperative Exp Capitalised 0.00
Operating Expenses 1,558.15
Provisions & Contingencies 766.05
Total Expenses 5,813.62
Net Profit for the Year 675.18
Extraordionary Items 0.00
Profit brought forward 40.99
Total 716.17
Preference Dividend 0.00
Equity Dividend 176.79
Corporate Dividend Tax 24.80
Per share data (annualised)
Earning Per Share (Rs) 13.37
Equity Dividend (%) 35.00
Book Value (Rs) 81.02
Appropriations
Transfer to Statutory Reserves 514.04
Transfer to Other Reserves -0.01
Proposed Dividend/Transfer to Govt 201.59
Balance c/f to Balance Sheet 0.55
Total 716.17
51
PARTICULARS AMOUNT
Net Cash From Operating Activities 1956.28

-101.33
Net (decrease)/increase In Cash and Cash Equivalents 2035.93
52
Rs Rs
RBI
Balance with Banks,
Money at Call
Share Application
0.00 Advances 62,386.43
Money
Preference Share
0.00 Investments 27,981.77
Capital
Accumulated
Revaluation Reserves 456.59 664.49
Depreciation
Net Worth 5,189.87 Net Block 822.72
Capital Work In
Deposits 85,180.22 2.28
Progress
Other Liabilities &
8,092.26
Provisions
BALANCE SHEET AS ON 31st MARCH 2015
53
PARTICULARS AMOUNT
income
Interest earned 7,382.18
Other Income 841.80
Expenditure
Depreciation 86.37
Miscellaneous Expenses 1,206.30
Net Profit for the Year 845.39
Total 845.94
Appropriations
Transfer to Other Reserves 211.99
Total 845.93
54
PARTICULARS AMOUNT
-209.32
Net Cash (used in)/from Financing Activities -49.92
55

Rs RS
Total Share Capital 505.12 Cash & Balances with RBI 9,454.74
Balance with Banks,
Equity Share Capital 505.12 643.10
Money at Call
Share Application
0.00 Advances 74,348.29
Money
Preference Share
Capital
Revaluation Reserves 1,724.40 Accumulated Depreciation 741.62
Net Worth 7,347.71 Net Block 2,195.83

Other Liabilities &
8,106.43
Provisions
56
PARTICULARS AMOUNT
Income
Interest earned 9,447.30
Other Income 1,232.67
Expenditure
Depreciation 101.82
Net Profit for the Year 1,387.03
Total 1,387.51
Appropriations
Total 1,387.51
57
PARTICULARS AMOUNT

-309.76
58
59

RS RS
RBI
Balance with Banks,
Money at Call
Share Application
0.00 Advances 96,534.23
Money
Preference Share
Capital
Accumulated
Revaluation Reserves 1,685.98 893.35
Depreciation
Capital Work In
Deposits 138,702.83 7.86
Progress
Other Liabilities &

9,647.43
Provisions
60
PARTICULARS AMOUNT
Income
Expenditure
Employee Cost 1,152.36
Selling and Admin Expenses 1,082.54
Depreciation 136.58
Total 1,727.20
Appropriations
Transfer to Statutory Reserves 1,171.89
Total 1,727.20
61
PARTICULARS AMOUNT
Net Cash From Operating Activities -505.07

-200.43
Net (decrease)/increase In Cash and Cash Equivalents -208.24
62

Rs Rs
Total Share Capital 505.12 Cash & Balances with RBI 12,468.24
Balance with Banks,

Money at Call
Share Application Money 0.00 Advances 119,315.30
Preference Share Capital 0.00 Investments 54,403.53
Revaluation Reserves 1,615.97 Accumulated Depreciation 1,101.50
Other Liabilities &

5,483.01
Provisions
63
PARTICULARS AMOUNT
Income
Expenditure
Employee Cost 1,354.99
Depreciation 160.14
Total 2,075.75
Appropriations
Transfer to Statutory Reserves 1,177.09
Total 2,075.75
64
EXPENDITURE AMOUNT INCOME AMOUNT
Interest expended 9,110.27 Interest Earned 13,302.68
Employee Cost 1,354.99 Other Income 1,974.74
Depreciation 160.14
Preoperative Exp Capitalised 0
Extraordionary Items 0
Profit brought forward(-) 0.83
Total 15,277.42 15,277.42
EXP&ICOME FOR THE YEAR 2017
65
CHAPTER - V
FINDING SUGGETIONS,
CONCLUSION
66
FINDING
1. The cash flow statement we can conclude that cash in a better position.
2. The company has invested in the purchase of fixed assets. It has also paid adequate
dividends to the shareholders.
3. The company is constantly investing in purchase of fixed assets and promote repayment of
loans.
4. From the study we can conclude that the HSBC Ltd Gross Profit is high in all years, higher
the gross profit better the results.
5. From the study the Net profit of HSBC Ltd it is indicates the organization efficiency of the
management, manufacturing, selling, administrative and other activities of the firm is not good.
67
SUGGESTIONS
The following are the suggestions for the HSBC Ltd:
1) The performance in maintenance the Cash of the organization is good. This shows the
health of financial strength of organization.
2) The Debt-Equity is in down ward trend. There is sufficient scope provision to avail the
further debt.
3) The fixed assets and capital are to be improved, as it is very marginal in the year 2014
and 2016 It reflects the in appropriation of the fixed assets and capital employed in the
organization. This situation can be avoided by increasing the sales.
4) The management is to minimize the administrative expenditure to the extent possible to
increase the cash from operation or (net profits different), which is found very low.
5) The management of HSBC Ltd., have to examine efforts to increase the cash from
operation or (net profits different) in the same way as achieved better results in case of
gross profit.
68
CONCLUSION
In the previous chapters, we analyzed the cash flow statement of HSBC Ltd. The present
chapter is a summary on the performance of the company based on its financial analysis an
attempt has been made to recommend improvements in its performance to achieve the
objective of the company.
69
BIBLIOGRAPHY
BOOKS REFFERED
3) ANNUAL REPORTS OF HSBC LTD.
4) BOOKS REFERS
5) FINANCIAL MANAGEMENT M.Y. KHAN & P.K.JAIN
6) FINANCIAL MANAGEMENT PRASANNA CHANDRA
WEB SITES:
BOOKS & AUTHORS

FINANCIAL MANAGEMENT PRASANNA CHANDRA
6th EDITION
FINANCIAL MANAGEMENT I.M.PANDEY
FINANCIAL MANAGEMENT KHAN AND JAIN
FINANCIAL MANAGEMENT F.M.VANHORNE
Web Site
S.no Web sites
01 www.ashokleyand.com
70

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A STUDY ON

“CASH FLOW ANALYSIS”

WITH SPECIAL REFERENCE TO

HSBC PVT LTD (HYDERABAD)

(Submitted in Partial Fulfillment of the Award of the Degree Of)

MASTER OF BUSINESS ADMINISTRATION

“MASTER OF BUSINESS ADMINISTRATION” also declare that this project work is a

H.T NO: 12761E005

With a profound sense of thankfulness, I acknowledge my indebtedness to my company

H.T NO: 12761E005

CH. NO. PURTICULARS PAGE

OBJECTIVES OF THE STUDY

LIMITATIONS OF THE STUDY

CHAPTER-4 ANALYSIS & INTERRETATION OF THE STUDY

CHAPTER -5 FINDINGS OF THE STUDY

• Cash stream explanation helps in arranging the reimbursement of advance

• Cash stream Statement helps in proficient and viable administration of money.

2. An bookkeeping articulation called the "announcement of money streams",

 To Evaluate and analyze the financial performance of the HSBC LTD

1. Primary source of data

This is first hand in nature and can be collected through

 Officers of accounting section.

 Executives and staff of finance and accounts department.

Methods of collection of the secondary data which is already exists are

 Financial management text books.

 Journal and magazines and newspapers.

3. Tools/Techniques used for analysis

 Cash flow statement

The limitations of the present study are:

Income articulations encourage basic leadership by giving a premise to judgments concerning

To improve assessment, a legitimately arranged income explanation recognizes repeating and

As opposed to nonrecurring money inflows or surges, most repeating money inflows or

1. Cash is changed over into merchandise and enterprises.

3. Cash is gathered from clients.

• As an elective measure of a business' benefits when it is trusted that collection

Step by step instructions to Analyze a Company's Cash Flow Statement

Presently take a gander at money created by or utilized by contributing exercises. This

Points of interest of Cash Flow Statement:

4. It causes the banks to know the organization's capacity to reimburse.

5. A income proclamation is given on month to month premise or quarterly premise or six

6. These articulations help to have an exact investigation of the company's capacity to

8. A income proclamation abridges the organization's money receipts and money

Weaknesses of Cash Flow Statement:

Income Indicator Ratios:

Income Indicator Ratios: Operating Cash Flow/Sales Ratio

This proportion, which is communicated as a rate, thinks about an organization's working

It is troubling to see an organization's deals develop without a parallel development in working

Financial analysis is very important for the management, shareholder,

1. It simplifies, summarize and systematizes a long arise of accounting figures, which

3. It identifies the financial health of enterprises the evaluating important aspects of

4. The proHSBC of analysis financial statements involves the preparation and

5. Without analysis of financial statement it is impossible to interpret the financial

6. Owing to the increasing demand for analytical information by business executive,

The analysis of financial statements consists of relationship and trends, top

Help in internal financial management: Cash flow analysis provides information

LIMITATIONS OF CASH FLOW ANALYSIS:-

THE CASH FLOW STATEMENT:

Other Board Members On Board Members

Global Asset Management: HSBC Asset Management (India) Private Limited,

BANKING & FINANCIAL SERVICES INDUSTRY

Net Cash From Operating Activities -1124.99

Net Cash (used in)/from

Net Cash (used in)/from Financing Activities 997.41

Net (decrease)/increase In Cash and Cash