CERTIFICATE

This is to certify that Project Report, titled “CASH MANAGEMENT IN

YAMAHA MOTERS LTD.” Embodies the original work done by Mr./Ms.

MOHMAD SAIF under College Roll No .…………. and University Roll

No. and University Registration No 2111342453 in partial fulfillment of the

course requirement of BBA – 5th Semester in session 2023-24

(Ms.Rita Dagar)

Project Guide (Finance)

Assistant Professor - Business Admn. Dept.

 CHAPTER – 1

INTRODUCTION TO THE STUDY

 INTRODUCTION

Cash is the important current asset for the operations of the business. Cash is the basic
input needed to keep the business running on a continuous basis; it is also the ultimate
output expected to be realized by selling the service or product manufactured by the firm.
The firm should keep sufficient cash, neither more nor less. Cash shortage will disrupt the
firm’s manufacturing operations while excessive cash will simply remain idle, without
contributing anything towards the firm’s profitability. Thus, a major function of the
financial manager is to maintain a sound cash position. Cash is the money which a firm
can disburse immediately without any restriction. The term cash includes coins, currency
and cheques held by the firm, and balances in its bank accounts. Sometimes near-cash
items, such as marketable securities or bank time’s deposits, are also included in cash. The
basic characteristic of near-cash assets is that they can readily be converted into cash.
Generally, when a firm has excess cash, it invests it in marketable securities.

MEANING AND DEFINITION OF CASH

In the words of I. M. Pandey:
“The term cash includes coins, currency and cheques held by the firm and balances in its
bank accounts. Sometimes near-cash items such as marketable securities or bank time-
deposits are also included in cash. The basic characteristics of near cash assets is that they
can readily be converted into cash. Generally, when a firm has excess cash, it invests it in
marketable securities. This kind of investment contributes some profits to the firm.” Cash
is both the beginning and the end of the working capital cycle, i.e., cash, inventories,
receivables and cash.

In the words of P. V. Kulkarni:

“Cash in the business enterprise may be compared to the blood of the human body; blood
gives life and strength to the human body, and cash imparts life and strength to the
business organization”.
According to J. M. Keyens:
“It is the cash which keeps a business going. Hence every enterprise has hold necessary
cash for its existence”. In a business firm, ultimately, a transaction results in either an
inflow or an outflow of cash. In an efficiently managed business, static cash balance
situation generally does not less. Cash shortage will disrupt the firm’s manufacturing
operation, while excessive cash will simply remain idle, without contributing anything
towards the firm’s profitability. Therefore, for its smooth running and maximum
profitability proper and effective cash management in a business is of paramount
importance.

WHAT IS CASH MANAGEMENT?

Cash management is the process of collecting and managing cash flows. Cash
management can be important for both individuals and companies. In business, it is a key
component of a company's financial stability. For individuals, cash is also essential for
financial stability while also usually considered as part of a total wealth portfolio.
Individuals and businesses have a wide range of offerings available across the financial
marketplace to help with all types of cash management needs. Banks are typically a
primary financial service provider for the custody of cash assets. There are also many
different cash management solutions for individuals and businesses seeking to obtain the
best return on cash assets or the most efficient use of cash comprehensively.

Cash management is a broad term that refers to the collection, concentration, and
disbursement of cash. The goal is to manage the cash balances of an enterprise in such a
way as to maximize the availability of cash not invested in fixed assets or inventories and
to do so in such a way as to avoid the risk of insolvency. Factors monitored as a part of
cash management include a company's level of liquidity, its management of cash
balances, and its short-term investment strategies. In some ways, managing cash flow is
the most important job of business managers. If at any time a company fails to pay an
obligation when it is due because of the lack of cash, the company is insolvent. Insolvency
is the primary reason firms go bankrupt. Obviously, the prospect of such a dire
consequence should compel companies to manage their cash with care. Moreover,
efficient cash management means more than just preventing bankruptcy. It improves the
profitability and reduces the risk to which the firm is exposed. Cash management is
particularly important for new and growing businesses. Cash flow can be a problem even
when a small business has numerous clients, offers a product superior to that offered by
its competitors, and enjoys a sterling reputation in its industry. Companies suffering from
cash flow problems have no margin of safety in case of unanticipated expenses. They also
may experience trouble in finding the funds for innovation or expansion. It is, somewhat
ironically, easier to borrow money when you have money. Finally, poor cash flow makes
it difficult to hire and retain good employees. It is only natural that major business
expenses are incurred in the production of goods or the provision of services.

In most cases, a business incurs such expenses before the corresponding payment is
received from customers. In addition, employee salaries and other expenses drain
considerable funds from most businesses. These factors make effective cash management
an essential part of any business's financial planning. Cash is the lifeblood of a business.
Managing it efficiently is essential for success. When cash is received in exchange for
products or services rendered, many small business owners, intent on growing their
company and tamping down debt, spend most or all of these funds. But while such
priorities are laudable, they should leave room for businesses to absorb lean financial
times down the line. The key to successful cash management, therefore, lies in tabulating
realistic projections, monitoring collections and disbursements, establishing effective
billing and collection measures, and adhering to budgetary restrictions.

UNDERSTANDING CASH MANAGEMENT

Cash is the primary asset individuals and companies use to pay their obligations on a regular basis.
In business, companies have a multitude of cash inflows and outflows that must be prudently
managed in order to meet payment obligations, plan for future payments, and maintain adequate
business stability. For individuals, maintaining cash balances while also earning a return on idle
cash are usually top concerns. In corporate cash management, also often known as treasury
management, business managers, corporate treasurers, and chief financial officers are typically the
main individuals responsible for overall cash management strategies, cash related responsibilities,
and stability analysis. Many companies may outsource part or all of their cash management
responsibilities to different service providers. Regardless, there are several key metrics that are
monitored and analyzed by cash management executives on a daily, monthly, quarterly, and
annual basis. The cash flow statement is a central component of corporate cash flow management.
While it is often transparently reported to stakeholders on a quarterly basis, parts of it are usually
maintained and tracked internally on a daily basis. The cash flow statement comprehensively
records all of a business’s cash flows. It includes cash received from accounts receivable, cash
paid for accounts payable, cash paid for investing, and cash paid for financing. The bottom line of
the cash flow statement reports how much cash a company has readily available.

KEY TAKEAWAYS
 Cash management is the process of managing cash inflows and outflows.

 There are many cash management considerations and solutions available in the
financial marketplace for both individuals and businesses.

 For businesses, the cash flow statement is a central component of cash flow
management.

ADVANTAGES OF CASH MANAGEMENT

The study of cash management is a critical area within finance and accounting that can
provide numerous benefits to both individuals and organizations. Here are some of the
advantages of studying cash management:
For Individuals
1. Financial Security: Learning how to manage cash efficiently helps individuals
secure their financial future by maximizing savings and investments while
minimizing debt and expenses.
2. Budgeting: Effective cash management techniques often start with budgeting,
allowing for better control over income and expenses.
3. Emergency Preparedness: Cash management includes setting aside funds for
emergencies, ensuring financial resilience when faced with unexpected costs.
 4. Goal Setting: An understanding of cash management helps in setting and
achieving both short-term and long-term financial goals.
5. Reduced Financial Stress: Effective cash management can significantly reduce
financial stress by helping you live within your means and prepare for future
expenses.
For Businesses
1. Working Capital Efficiency: Cash management helps businesses maintain
optimal levels of working capital, ensuring that they can meet short-term
liabilities.
2. Profitability: Efficient management of cash can contribute to increased
profitability through effective deployment of excess cash in profitable ventures.
3. Liquidity: Good cash management ensures that a business remains liquid, thereby
avoiding insolvency issues.
4. Strategic Planning: Businesses with a solid grasp of cash management can make
informed decisions about expansions, mergers, or other strategic activities.
5. Risk Mitigation: Proper cash management strategies, like having enough cash
reserves and diversifying investments, help in reducing the financial risk a
business may face.
6. Cost Reduction: Cash management practices can help identify and cut down on
unnecessary costs and expenditures, improving the bottom line.
7. Stakeholder Relations: Transparent and efficient cash management can improve
relationships with stakeholders such as investors, creditors, and shareholders by
demonstrating financial responsibility.
8. Compliance and Reporting: Good cash management can make it easier to
comply with reporting requirements and financial regulations.
9. Negotiation Leverage: A strong cash position can offer negotiation advantages
with suppliers, customers, and creditors.
10. Competitive Advantage: Effective cash management can serve as a source of
competitive advantage, as businesses can more rapidly adapt to market changes
and opportunities.
For Economies and Society
 1. Economic Stability: When the businesses and individuals in an economy manage
cash efficiently, it contributes to overall economic stability.
2. Resource Allocation: Efficient cash management at a macroeconomic level
ensures better allocation of resources, leading to more sustainable growth and
development.
3. Innovation and Investment: Well-managed cash flows can free up capital for
investment in new technologies and business models, promoting innovation.
Studying cash management from these different perspectives can equip one with the tools
needed to navigate various financial challenges successfully.

DISADVANTAGES OF CASH MANAGEMENT

The study of cash management is critical for understanding how organizations and
individuals can optimize their liquidity and investment strategies for better financial
health. However, like any field of study, there are some limitations and disadvantages
associated with it:
1. Complexity: Cash management involves a lot of variables, including but not
limited to, interest rates, inflation, market volatility, and economic cycles. Due to
its complexity, people might find it overwhelming or challenging to comprehend
fully.
2. Cost: Developing an effective cash management system or strategy often requires
investment in technology, personnel, and expertise. For smaller businesses or
individuals, this can represent a prohibitive cost.
3. Risk of Mismanagement: A poor understanding or improper application of cash
management techniques can lead to financial ruin. For instance, over-optimizing
for liquidity might result in lost investment opportunities.
4. Dynamic Nature: Financial markets and economic conditions are ever-changing.
A cash management strategy that works today may not be effective tomorrow,
requiring constant monitoring and adjustments.
 5. Technology Risks: Cash management often relies on sophisticated software and
algorithms. These technologies can be vulnerable to errors, glitches, or even
cyber-attacks, which can have disastrous implications.
6. Regulatory and Compliance Issues: Regulations related to finance and
investment can be complex and subject to change. Misinterpreting or not keeping
up-to-date with these can result in legal repercussions.
7. Dependency on Financial Institutions: Effective cash management often
requires collaboration with banks and other financial institutions. These
relationships come with their own set of risks, including credit risks and
operational risks associated with the institutions themselves.
8. Limited Scope: Traditional cash management principles may not account for non-
financial considerations like ethical considerations, social responsibilities, or the
long-term sustainability of certain financial practices.
9. Short-term Focus: Cash management often focuses on immediate liquidity needs
and short-term investment opportunities. This can sometimes clash with longer-
term strategic goals or lead to missed opportunities in longer-term investments.
10. Resource Drain: For organizations, managing cash effectively often requires
dedicated staff and resources. This is especially difficult for small businesses that
might need to divert resources from other critical areas, such as product
development or marketing.
11. Emphasis on Quantitative Data: Cash management tends to be heavily reliant on
quantitative metrics and models, potentially overlooking qualitative factors like
market sentiment, management quality, or brand value.
12. Human Error: As with any area that involves judgment and decision-making, the
risk of human error in cash management can never be entirely eliminated.
13. Opportunity Cost: Time and resources spent on studying and implementing cash
management could be used for other profitable or necessary activities.
Understanding these limitations can help individuals and organizations implement more
effective cash management strategies and make more informed decisions.
 CHAPTER – 2

INDUSTRY PROFILE
AND
COMPANY PROFILE
 INDUSTRY PROFILE

Overview on Automobile Industry

The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting
about 1.5 million every year. The dominant products of the industry are two wheelers with
a market share of over 75% and passenger cars with a market share of about 16%.
Commercial vehicles and three wheelers share about 9% of the market between them.
About 91% of the vehicles sold are used by households and only about 9% for
commercial purposes. The industry has attained a turnover of more than USD 35 billion
and provides direct and indirect employment to over 13 million people.

The world standings for the Indian automobile sector, as per the Confederation of Indian
Industry, are as follows:

 Largest three-wheeler market

 Second largest two-wheeler market
 Tenth largest passenger car market
 Fourth largest tractor market
 Fifth largest commercial vehicle market
 Fifth largest bus and truck segment

The supply chain of this industry in India is very similar to the supply chain of the
automotive industry in Europe and America. This may present its own set of opportunities
and threats. The order of the industry arises from the bottom of the supply chain i.e., from
the consumers and goes through the automakers and climbs up until the third tier
suppliers. However the products, as channeled in every traditional automotive industry,
flow from the top of the supply chain to reach the consumers.
Interestingly, the level of trade exports in this sector in India has been medium and
imports have been low. However, this is rapidly changing and both exports and imports
are increasing. The demand determinants of the industry are factors like affordability,
product innovation, infrastructure and price of fuel. Also, the basis of competition is the
sector is high and increasing and the life cycle stage is growth. With a rapidly growing
middle class, all the advantages of this sector in India are yet to be leveraged.
Note that, with a high cost of developing production facilities, limited accessibility to new
technology and soaring competition, the barriers to enter the Indian Automotive sector are
high and these barriers are study. On the other hand, India has a well-developed tax
structure. The power to levy taxes and duties is distributed among the three tiers of
Government. The cost structure of the industry is fairly traditional, but the profitability of
motor vehicle manufacturers has been rising over the past five years. Major players, like
Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits
after tax of about 6% to 11%.
The level of technology change in the Motor vehicle Industry has been high but, the rate
of change in technology has been medium. Investment in the technology by the producers
has been high. System-suppliers of integrated components and sub-systems have become
the order of the day. However, further investment in new technologies will help the
industry be more competitive. Over the past few years, the industry has been volatile.
Currently, India’s increasing per capita disposable income which is expected to rise by
106% by 2015 and growth in exports is playing a major role in the rise and
competitiveness of the industry.
Tata Motors is leading the commercial vehicle segment with a market share of about 64%.
Maruti Suzuki is leading the passenger vehicle segment with a market share of 46%.
Hyundai Motor India and Mahindra and Mahindra are focusing expanding their footprint
in the overseas market. Hero Honda Motors is occupying over 41% and sharing 26% of
the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about
58% of the three wheeler market.
Consumers are very important of the survival of the Motor Vehicle manufacturing
industry. In 2008-09, customer sentiment dropped, which burned on the augmentation in
demand of cars. Steel is the major input used by manufacturers and the rise in price of
steel is putting a cost pressure on manufacturers and cost is getting transferred to the end
consumer. The price of oil and petrol affect the driving habits of consumers and the type
of car they buy.
The key to success in the industry is to improve labour productivity, labour flexibility, and
capital efficiency. Having quality manpower, infrastructure improvements, and raw
material availability also play a major role. Access to latest and most efficient technology
and techniques will bring competitive advantage to the major players. Utilising
manufacturing plants to optimum level and understanding implications from the
government policies are the essentials in the Automotive Industry of India.
Both, Industry and Indian Government are obligated to intervene the Indian Automotive
industry. The Indian government should facilitate infrastructure creation, create
favourable and predictable business environment, attract investment and promote research
and development. The role of Industry will primarily be in designing and manufacturing
products of world-class quality establishing cost competitiveness and improving
productivity in labour and in capital. With a combined effort, the Indian Automotive
industry will emerge as the destination of choice in the world for design and
manufacturing of automobiles.
India is the second largest producer of two-wheelers in the world. In the last few years,
the Indian two-wheeler industry has seen spectacular growth. The country stands next to
China and Japan in terms of production and sales respectively.
The automobiles sector is divided into four segments – two-wheelers (mopeds, scooters,
motorcycles, electric two-wheelers), passenger vehicles (passenger cars, utility vehicles,
multi-purpose vehicles), commercial vehicles (light and medium-heavy vehicles), and
three wheelers (passenger carriers and good carriers).It’s evident from the pie chart that
two wheelers have the maximum market share in the domestic Automobile sector.
Source http://ppac.org.in/writereaddata/Report_IPR.pdf
Source http://ppac.org.in/writereaddata/Report_IPR.pdf

For the month of April 2013, the motor cycles segment suffered a slight setback, marking
a negative growth of 2.06% as compared against the same month last year. The scooter
segment recorded a 14.72% growth and mopeds manage a 7.2% growth in April 2013 as
against April 2012.
The pie chart states that there is a significant growth in the market share of scooter
industry from the last decade.
However, the sector has shown a sluggish growth of 12 percent in 2012. The trend is
likely to stay with a 10 percent growth outlined for 2013 citing high ownership costs (fuel
costs, cost of registration, excise duty, road tax) and slow rural income growth. Solid but
cautious growth is expected over the next few years. However, from a long-term
perspective, rising incomes, improved affordability and untapped markets present
promising opportunities for automobile manufactures in India. According to Macquaire
equities research, sale of passenger vehicles is expected to double in the next four years
and growth anticipated is higher than the 16 percent achieved in the past 10 years. Two-
wheeler vehicle segment is expected to show slow growth of 10 percent CAGR over the
period of 2012-2016, suggests the report.
The Government recognizes the impact of the sector on the nation’s economy, and
consequently, the Automotive Mission Plan 2016 launched by it seeks to grow the
industry to a size of US $145bn by 2016 and make it contribute 10 percent to the nation’s
GDP.

Factors that will drive growth in the sector

 Rising incomes among Indian population will lead to increased affordability,

increasing domestic demand for vehicles, especially in the small car segment.
 Fuel economy and demand for greater fuel efficiency is a major factor that affects
consumer purchase decision that will bring leading companies across two-wheeler
and four-wheeler segment to focus on delivering performance-oriented products.
 Product innovation and market segmentation will channelize growth. Vehicles
based on alternative fuels will be an area of interest for both consumers and auto
makers.
 Focus on establishing India as auto-manufacturing hub is reigning in policy
support in form of Government’s technology modernisation fund.
 Industry will seek to augment sales by tapping into rural markets, youth, women
and luxury segments.
According to the Confederation of Indian Industry, auto sector currently employs 787,
7702 people, 58 percent of who are in the passenger car segment. However, there is an
increasing demand for skilled professionals in the domain of effective service delivery,
spares management and support functions. ITIs and Polytechnics provide 530,000
graduates every year, but there is an urgent need for updating courses to keep up with
changing trends in technology, manufacturing, and processes.
Indian two wheeler industries saw a slight growth of 1.04% during the April-May period
of 2013 compared against the same period of 2012. A total of 2,374,253 units were sold
during the period as 2,349,814 units were sold in April-May 2012.

MAJOR COMPANIES
Major players of Automobile Sector in India are:
 HERO
 HONDA
 MAHINDRA
 YAMAHA
 PIAGGIO
 SUZUKI
 BAJAJ AUTO
 TVS
 ROYAL ENFIELD
 HARLEY DAVIDSON
Indian two wheeler industries saw a slight growth of 1.04% during the April-May period
of 2013 compared against the same period of 2012. A total of 2,374,253 units were sold
during the period as 2,349,814 units were sold in April-May 2012. Hero Motor Corp is the
biggest manufacturer in Indian market who sold 1,035,823 units during April-May 2013,
thus registered a 3.54% decline in sales as against same period the previous year where
1,073,815 units were sold. The provision of giving 5 year warranty on every vehicle
didn’t pay off well for Hero.

The notable highlight of the period is the flourishing sales of Vespa, as they sold 8280
units during the period April-May 2013 and posted a growth of 247.02% as against same
period last year. Honda, Yamaha and Royal Enfield had also posted growths while Suzuki
sales took a downturn.
The period April-May of 2013 saw the share of Hero came down to 43.63%. Honda gain
some shares and put themselves at second place replacing Bajaj. Honda holds 19.79%
share as per April-May 2013 while Bajaj has now 17.35% share.

Motorcycle
Sales of Hero declined by 7.27% while Yamaha also saw their sales went down by 9.39%.
Apparently Honda registered 21.33% growth. Royal Enfield and Harley Davidson also
wrapped up the month with concrete sales figures.

Triggered by the decline of sales Hero’s share in motorcycle segment came down to
53.60% for April to May period of 2013. Their former partner Honda with improved share
of 11.67% stays as third place in terms of sales in Indian two wheeler market.

Scooters
The sales of scooter witnessed an encouraging growth by 13.88% in the April to May
period of 2013 as compared to same period of 2012. Hero motor Corp had fared an
uplifting growth of 44.94% during the period April-May 2013 as against April-May 2012.
The newly launched Vespa has also reassured hopes for Piaggio as 8280 units were sold
out in April – May this year. M&M has suffered a steep decline of 48%.

Honda remains mater leader in this segment and owns 50.92% of market share. Hero has
again grew in market share for the period April-May of 2013 and now holds 21.07% of
Scooter market share. To recapture the lost market share, Honda has now introduced
110cc Activa-I priced at around Rs 44,000 and this will provide tough competition to
Hero and Suzuki in coming months.
Moped

TVS is the lone player in moped segment. But their sales had declined by 11.45% for the
period April-May of 2013 as against same period the previous year. To increase Moped
sales, TVS has started TV commercial recently.

SWOT ANALYSIS FOR THE TWO WHEELER INDUSTRY

Strength Weaknesses
 Established brands, Strong Brand Name  Extremely price sensitive
 Fuel efficient  Short PLC
 Style statement  High R and D costs
 Convenient in heavy traffic
 Cheap and affordable
 Easy and cheap finance availability
 Patents
 Good reputation among customers
 Economical price
 Safety
 Comfort level
 Opportunities
 Growing premium segment
 Increasing dispensable income
 Environmental concerns
 Exports increasing
 Very strong demand in the 100cc
segment dominated by limited players.
Threats
 The Rs.1 Lakh car
 Cut throat competition
 Increasing number of players in the
market
 Rising raw material costs
 Increasing rates of interest on Finance
 COMPANY PROFILE

INFORMATION

 Type : Public (K.K.)

 Traded as : TYO 7272

 Industry : Automotive

 Founded : July 1, 1955

 Headquarters : Iwata, Shizuoka, Japan

 Area Served : Worldwide

 Key people : Yoshihiro Hidaka

(President & Representative Director)

 Products : Motorcycles,
Commuter Vehicles & Scooters,
Recreational Vehicles, Boats, Marine
 Engines, Snowmobiles,
Small Tractors, Personal Watercraft,
Electrically Power Assisted Bicycles,
Automobile Engines

 Owner : Yamaha Corporation (9.92% 2017) Toyota

Group (2.8%)

 Number of employees : 52,664 (as of December 31, 2014)

 Subsidiaries : Minarelli MBK

 Website : Yamaha Motor Global

INTRODUCTION OF YAMAHA MOTOR

Yamaha is a Japanese manufacturer of motorcycles, marine products such as boats
and outboard motors, and other motorized products. The company was established in
1955 upon separation from Yamaha Corporation (however Yamaha Corporation is still
the largest shareholder with 9.92%, as of 2017) and is headquartered in Iwata, Shizuoka,
Japan. The company conducts development, production and marketing operations through
109 consolidated subsidiaries as of 2012. Led by Genichi Kawakami, the company’s first
president, Yamaha Motor began production of its first product, the YA-1, in 1955. The
125cc motorcycle won the 3rd Mount Fuji Ascent Race in its class.

The company's products includes motorcycles, scooters, motorized bicycles, boats, sail
boats, personal water craft, swimming pools, utility boats, fishing boats, outboard motors,
4-wheel ATVs, recreational off-road vehicles, go-kart engines, golf carts, multi-purpose
engines, electrical generators, water pumps, snowmobiles, small snow
throwers, automobile engines, surface mounters, intelligent machinery, industrial-
use unmanned helicopters, electrical power units for wheelchairs and helmets. The
company is also involved in the import and sales of various types of products,
development of tourist businesses and management of leisure, recreational facilities and
related services. Yamaha’s motorcycle sales are the second largest in the world outboard
motor and Yamaha is the world leader in water vehicle sales.

HISTORY
Beginnings: 1955
The motorcycle division of Yamaha was founded in 1955, and was headed by Genichi
Kawakami. Yamaha's initial product was a 125 cc (7.6 cu in) two-cycle, single cylinder
motorcycle, the YA-1, which was a copy of the German DKW RT 125. The YA-1 was a
competitive success at racing from the beginning, winning not only the 125cc class in the
Mt. Fuji Ascent, but also sweeping the podium with first, second and third place in the All
Japan Autobike Endurance Road Race that same year. Early success in racing set the tone
for Yamaha, as competition in many varieties of motorcycle racing has been a key
endeavor of the company throughout its history, often fueled by a strong rivalry
with Honda and other Japanese manufacturers.

Yamaha began competing internationally in 1956 when they entered the Catalina Grand
Prix, again with the YA-1, at which they placed sixth. The YA-1 was followed by the YA-
2 of 1957, another 125cc two stroke, but with significantly improved frame and
suspension. The YD-1 of 1957 was a 250cc two-stroke twin cylinder motorcycle,
resembling the YA-2, but with a larger and more powerful motor. A performance version
of this bike, the YDS-1 housed the 250cc two-stroke twin in a double downtube cradle
frame and offered the first five-speed transmission in a Japanese motorcycle. This period
also saw Yamaha offer its first outboard marine engine.

Success And Growth In The 1960

By 1963 Yamaha's dedication to both the two-stroke engine and racing paid off with their
first victory in international competition, at the Belgium GP, where they won the 250cc
class. Success in sales was even more impressive, and Yamaha set up the first of its
international subsidiaries in this period beginning with Thailand in 1964, and the
Netherlands in 1968. 1965 saw the release of a 305cc two-stroke twin, the flagship of the
company's lineup. It featured a separate oil supply which directly injected oil into the
gasoline prior to combustion (traditionally riders had to pre-mix oil into gasoline together
before filling the gas tank on two stroke engines). In 1967 a new larger displacement
model was added to the range, the 350cc two stroke twin R-1. In 1968 Yamaha launched
their first four-stroke motorcycle, the XS-1. The Yamaha XS-1 was a 650cc four-stroke
twin, a larger and more powerful machine that equaled the displacement and performance
of the popular British bikes of the era, such as the Triumph Bonneville and BSA Gold
Star. Yamaha continued on with both the two-stroke line and four-stroke twins at a time
that other Japanese manufacturers were increasingly moving to four cylinder four-stroke
machines, a trend led by Honda in 1969 with the legendary CB-750 four-stroke four-
cylinder cycle.

Four Stroke Era Begins: The 1970

Not until 1976 would Yamaha answer the other Japanese brands with a multi-cylinder
four stroke of their own. The XS-750 (and later 850) a 750cc triple cylinder machine with
shaft final drive was introduced almost seven years after Honda's breakthrough bike.
Yamaha's first four-cylinder model, the XS-1100 followed in 1978, again with shaft drive.
Despite being heavier and more touring oriented than its rivals it produced an impressive
string of victories in endurance racing. The 1970s also saw some of the first dedicated off-
road bikes for off-road racing and recreation. Yamaha was an early innovator in dirt-bike
technology, and introduced the first single-shock rear suspension, the trademarked
"Monoshock" of 1973. It appeared in production on the 1974 Yamaha YZ-250, a model
which has continued in production, with many updates, until 2015, making it Yamaha's
longest continuous model and name.Yamaha continued racing throughout the 1960s and
1970s with increasing success in several formats. The decade of the 1970s was capped by
the XT500 winning the first Paris-Dakar Rally in 1979.

1980s: Diversification and Innovation

By 1980 the combination of consumer preference and environmental regulation made four
strokes increasingly popular. Suzuki ended production of their GT two stroke series,
including the flagship water-cooled two-stroke 750cc GT-750 in 1977. Kawasaki, who
had considerable success throughout the 1970s with their two-stroke triples of 250cc,
350cc, 500cc and 750cc ended production of road-going two strokes in 1980. Yamaha
bucked this trend and continued to refine and sell two-strokes for the street into the 1980s.
These bikes were performance oriented, water-cooled twin cylinder machines, designed to
achieve excellent performance taking advantage of the lower weight of two strokes. The
RZ-250 of 1980 was the progenitor of this series. The RZ-350, the largest displacement
model, was a popular hot-rod bike of the 1980s and continued to be sold in some countries
into the early 1990s. Throughout the 1980s the motorcycle industry gradually went from
building a few basic but versatile models designed to work well in many roles, to offering
many more specialized machines designed to excel in particular niches.

These included racing and performance street riding, touring, motocross racing, endure
and recreational off-road riding, and cruising. Yamaha branched out from the relatively
small number of UJMs (Universal Japanese Motorcycle) at the start of the decade to a
much larger set of offerings in several clearly defined markets at the end of the decade.
The XV750 of 1981 featured an air-cooled V-twin four stroke engine and cruiser styling,
and was one of the first Japanese cruiser style motorcycles. By the end of the 1980s
Yamaha had offered dozens of cruiser styled bikes in a variety of displacements and
engine configurations. The RZV500 was one of the first "reply-racers", a near copy of
Kenny Roberts competition GP bike, it featured a liquid-cooled two-stroke motor of
500cc displacement in a V4 configuration, along with a perimeter frame and full fairing.
A more popular and practical high-performance model for the street was introduced in
1985, the FZ750.

The 1990s: Performance bikes and a spin-off brand

In 1998 Yamaha marketed a 1000cc four cylinder road bike called the YZF 'R1', this
model introduced a new style of gearbox design which shortened the overall length of the
motor/gearbox case, to allow a more compact unit. This, in turn allowed the motor to be
placed in the frame further forward, designed to improve handling in a short wheel-based
frame. In 1995, Yamaha announced the creation of Star Motorcycles, a new brand name
for its cruiser series of motorcycles in the American market. In other markets, Star
motorcycles are still sold under the Yamaha brand.

The 2000s: Expansion and consolidation

In 2007, Yamaha established the Philippine operations and distributes Yamaha
motorcycles under the corporate name of Yamaha Motor Philippines, Inc., one of more
than 20 worldwide subsidiaries operating on all continents.

YAMAHA MOTORS PRODUCTS

Bike: Yamaha FZ Version 3.0

Price: 1.07 lakh

Bike: Yamaha MT 15
Price: 1.49 lakh

Bike: Yamaha Saluto RX

Price: 57,695 – 61,338

Bike: Yamaha SZ-RR V2.0

Price: 72,395 – 73,453
 Bike: Yamaha YZF R1
Price: 19.24 lakh

Bike: Yamaha Cygnus Alpha

Price: 55,342 – 58,786

Bike: Yamaha Fascino

Price: 61,629 – 66,167
Bike: Yamaha MT-09
Price: 10.13 lakh

Bike: Yamaha Ray Z

Price: 54,439

Bike: Yamaha Saluto

Price: 57,695 – 61,338
 Bike: Yamaha YZF R15
Price: 19.24 lakh

Bike: Yamaha YZF-R3

Price: 3.77 lakh

YAMAHA MOTORS SWOT ANALYSIS

Yamaha motors SWOT Analysis, Competitors & USP. SWOT Analysis is a proven
management framework which enables a brand like Yamaha to benchmark its business &
performance as compared to the competitors and industry. Yamaha is one of the leading
brands in the automobiles sector. Below is the Strengths, Weaknesses, and Opportunities
& Threats (SWOT) Analysis of Yamaha motors.

Strengths:
 Excellent branding, advertising and global distribution.

 Yamaha Motor Corporation has over 39,000 employees.

 One of the major brand in motorsport like MotoGP, World superbike etc.

 Yamaha produces scooters from 50 to 500 cc, and a range of motorcycles from 50
to 1,900 cc, including cruiser, sport touring, sport, dual-sport, and off-road.
  Extremely high Size and reach of company.

Weaknesses:
 Bikes like R15, R1 are quite expensive.

Opportunities:
 Two-wheeler segment is one of the most growing industries.

 Export of bikes is limited i.e. untapped international markets.

Threats:
 Strong competition from Indian as well as international brands.

 Dependence on government policies and rising fuel prices.

CORPORATE VISION AND MISSION
Vision:
Vision we constantly deliver best-fit global it services and solutions to improve client’s
competitive advantage.

Mission:
Kando is a Japanese word used by Yamaha to describe their corporate mission. Kando in
translation describes the sensation of profound excitement and gratification derived from
experiencing supreme quality and performance. Some reasonable English synonyms are
"emotionally touching" or "emotionally moving". Stated by the president of Yamaha,
Takuya Nakata, Yamaha looks to maintain dominance above its competition through
creativity and innovation.

MAIN ACTIVITIES OF YAMAHA MOTORS

Providing New Excitement:
Yamaha’s corporate mission of being a “Kando Creating Company” is an expression of
our desire to offer our customers around the world products and services that bring joy
and unexpected exhilaration of the kind that enriches their lives with new fulfillment, in
harmony with society and the environment. Being such a company requires us to
constantly uphold our standing as an excellent engineering, manufacturing and marketing
enterprise with a prominent global presence. Product creation begins with the customer.
Our task as a manufacturer is to enhance our competitiveness by maximizing and
optimizing the value of the products we provide to customers, in terms of their appeal,
reliability and cost performance, in ways that exceed customer expectations.

Approach to Quality:
Yamaha Motor is working daily to improve quality and to provide customers with peace
of mind and confidence as well as a sense of excitement. The Basic Policies for Quality
form the standard against which these activities are judged. As Yamaha Motor’s president
has declared, these are Group wide policies under which “To constantly provide peace of
mind, confidence and a sense of excitement to customers, we strive to achieve the best
quality possible, by creating suitable standards of safety and reliability to realize high-
quality products and services effectively, taking a customer-oriented approach that
emphasizes a deep sense of emotion in accordance with the spirit of the Yamaha Brand
Charter.”Under these policies, we formulated the YQ2021 Companywide medium-term
quality policy covering the years 2019-2021, which sets three specific goals for our
business activities: quality that provides exceptional excitement; quality that challenges;
and quality that is trusted.In addition, the Yamaha Group's Quality Assurance Standards
conforming to ISO9001 form the basis for continuous improvement to quality
management systems.

Structure for Improving Quality:

The Product Assurance Committee is the highest organization for determining quality
assurance Companywide. This committee deliberates policies and measures for quality,
the formulation, revision, and abolishment of Quality Assurance Standards, and responses
to quality-related issues. Its decisions are passed on to persons responsible for quality
management at operating divisions and administrative divisions at Quality Assurance
Meetings, and implemented at manufacturing sites. We have also established a Market
Quality Information Oversight Committee, which is authorized by the President and CEO
to investigate and make reports, for the purpose of appropriately maintaining market
quality information processing operations including information regarding product defects
in each market and information regarding maintenance covered by product guarantees.

Quality Enhancement Activities:

To ensure that employees have ingrained, quality-related knowledge and skills, training
for quality is annually held for new hires, for employees related to manufacturing two to
five years after being hired, and for persons newly appointed to management positions. In
addition, education and training programs are annually in place to enhance the skills of
employees, to ensure that they are technologically proficient with regard to quality related
specifically to their type of work and specialization. With those programs as a base, all
employees undertake the “I am Yamaha” activities for enhancing quality during their
actual work. These activities encourage a strong sense of ownership in every employee, so
that each individual believes, “It is I, and no one else, who is personally responsible for
making the Yamaha brand shine.” This attitude, along with a customer-oriented approach,
allows employees to refine their powers of perception (ability to make discoveries) and to
enhance the quality of their work. Both as an organization and as individuals, we will
strive to further improve quality by working to:
 Enhance our customer sense
 Increase interaction
 Learn from mistakes
 Do high-quality work
Specifically, this includes the operation of a Learning through Experience Hall that uses
product and panel displays to learn from past mistakes, planning events for interaction
with other companies, issuing educational leaflets, and conducting awareness surveys.
Moreover, product divisions undertake their own effective activities based on their
respective circumstances, to further increase awareness and create more opportunities for
learning.
 CHAPTER – 3
REVIEW OF LITERATURE
Introduction:

Review of literature is actually a process of consulting published books, journals and

unpublished (dissertation, field work) literatures related and relevant to one's selected
topics. The main purpose of literature review is to find out what works have been done in
the area of the research problem and what remains undone in the field of research being
undertaken. While conducting the research study, previous studies should also not be
ignored to avoid duplication of studies.

In this chapter, the review of various books, research studies have been made to make
clear about the concept of cash management as well as to recall the theories and previous
studies made by various researchers.

Review of Text Books:

The basic concept of cash management has been searched in to this section of literature
review. Text books that have been prescribed under academic studies are the primary
sources on the basic concept of cash management.

Definition of Cash and Cash Management:

Cash is lifeblood of the business, which is the most important component of the working
capital. It is the most liquid assets, have vital important to daily operations of the firm.
Cash is the common denominator to which all current assets can be reduced because the
other major liquid, that is receivable and inventory get eventually converted into cash
(Khan and Jain, 1999). This underlines the significance of cash management cash
provides liquidity, but it doesn't pay interest; it is just one of the raw materials that you
need to do business. It is expensive keeping your capital tied up in large inventories of
raw materials when it could be earning interest (Brealey & Myers, 1999:884).

The term cash with reference to cash management is used in two senses. In a narrow
sense it is used broadly to cover cash (currency) and generally accepted equivalents of
cash such as cheques, drafts and demand deposits in bank. The broader view of cash also
includes near cash assets, such as marketable securities and time deposits in the banks.
The main characteristic of these is that they can be readily sold and converted into cash.
They also provide a short-term investment outlet for excess cash and are also useful for
meeting planned outflow of funds. We employ the term cash management in the broader
sense. Irrespective of the form in which it is held a distinguished feature of cash, as an
assets is that it has no earning power ….(Khan & Jain, 1986, p. 663-664).

So simply starting, management of near cash assets, i.e. marketable securities, time
deposits in bank, is called cash management. Broadly speaking, receivables and
inventory is also termed as management of cash because receivables and inventory are
also supposed to readily converting into cash.

According to modern approach financial management can be broken down into major
decisions as function of finance, which is: (a) Investment decision, (b) Financing
decision and (c) Dividend policy decision. Cash management function comes under
investment decision. Investment decision refers to two major decisions.

(1) Selection of long term assets, which will yield a return over a return over a period
oftime in future, i.e. more than a year, and

(2) Selection of short term assets or current assets which can generally be converted
into cash with a year.
The latter decision function is also termed as working capital management, which is
concerned with the management of current assets. The tow basic components of working
capital management are:

(i) An overview of working capital management as a whole.

(ii) Efficient management of the individual current assets like cash

receivablesand inventory.

Cash management deals with the second component of working capital management, the
management of cash or near cash assets such as marketable securities and time deposits
in banks, receivables and inventory.

Motives for Holding Cash:

Cash is the common denominator to which all other current assets can be converted into
readily or in near future, and thus it is the most liquid current asset. Cash when held as an
asset has no earning capacity. Nevertheless business firm have to hold cash for three
different motives, they are:

(a) Transaction motive, (b) Precautionary motive, and (c) Speculative motive

Keynes has identified. However M.Y. Khan and P.K. Jain have also taken into
consideration.

(d) Compensation motive, yet another motive.

(a) Transaction motive refers to the need for cash to meet payments related to
ordinary course of business transactions payments of purchases, labour takes and
dividends. In day to day business transactions a firm necessarily requires cash to meet
payments of its purchases wages operating expenses. Financial charges like interests,
taxes dividends etc. like wise in the course of daily business transactions. Cash are
generated from sale of goods or services, returns on outside investments etc. This
receiving of cash is called cash inflows and the payments of cash are termed as cash
outflow. In practice, cash inflow and outflow seldom coincides, and thus of cash inflow
and outflow seldom coincides, and thus of cash outflow. Such requirement of cash to
meet scheduled payments in course of daily business transaction is known as transaction.

(b) Precautionary motive for holding cash is the need for cash to maintain a cushion
to meet unexpected contingencies, such as the situation of natural calamities like earth
quake, floods, strikes, etc. Sharp increase in raw material cost dramatic showdown in
collection of accounts receivables, unexpected cancellation of order for goods owing to
dissatisfaction of customers etc.

(c) Speculative motive refers to the holding of cash by the firms to take advantage of
opportunities when the firm would face unexpected situations and which are typically out
of course of business. Precautionary motive is defensive in nature; to put it differently,
the purpose for holding cash under precautionary motives lies in fulfilling cash
requirements should any unexpected opportunities such as to purchase raw materials at a
reduced price on instant payment, buying securities when interest rates are speculated to
decline, etc.

(d) Compensation motive refers to the holding of cash balance to compensate banks
for providing certain services and loans to the firm such as clearance of cheque, supply of
credit information, transfer of funds, etc. For the services provided by the bank as stated
above, the clients are required to maintain a minimum balance of cash at bank, which can
not be utilized by the clients. Since the proportion of this cash balance cannot be utilized
in firm for the transaction purposes the bank they can use the money to earn some return.
Such balances held by banks for the services they provide to their clients are called
compensating balance likewise under some sort of loan agreements between a bank and
its customers. Compensating balance is required as a condition precedent to the grant of
loan, when the supply of credit is restricted and interest rates are rising.
Out of the four motives for holding cash, the most important ones are transaction motive
and the compensation motive. This is because precautionary balances can be met by sort
terms borrowings and business firms normally do not speculate and thus doesn't require
speculative balances.

Business with regular gross income in the form of cash payments for goods or services
need relatively small cash working balances. If the bus company with its sign 'pay as you
enter' cannot meet demand for cash, the trouble is not with the working capital but with
the whole business. To the extern that either regulating of income or cash term is taking
the supply of cash funds should be increased; forecasting is the calculation of all
reasonable probabilities about the business future.

Area of Cash Management:

Area of cash management includes basically cash planning and forecasting strategic of
cash management techniques, optimum cash balance and investing the excess cash on
marketable securities.

(i) Cash Planning and Forecasting (Cash Budget)

Cash planning is a technique to plan and control the use of cash. It protects the financial
condition of the firm by developing a projected cash statement (Pandey, 1999). Cash
budget is a summary statement of the firm's expected cash inflows and out flows over a
projected time period. It gives information on the timing and magnitude of expected cash
flow and cash balance over the projected period. This information helps the financial
manager to determine the future cash needs firm, plan for the financing of these needs
and exercise control over the cash and liquidity of the firm. (Van Horne, 1996)
Cash budget serves two purposes. The first is the budget alerts the financial manager to
future cash needs, second the cash flood forecasts provide a standard or budget, against
which subsequent performance can be judged (Brealey and Myers, 1999). Thus, cash
budget is arrived as through a projection of future cash receipt and cash disbursements of
the firm over various intervals of time there the cash budget refers the short term cash
forecasts. So, one of the significant role of the short term forecast is to pinpoint when the
money will be needed and when it can be repaid. Another use of cash forecasts is to help
in managing the investment of surplus cash in marketable securities. There are two most
commonly used methods of short term cash forecasting and control.

(a) Receipt and Disbursement method:

In this method involves forecasting for each terms of receipts and payments. The prime
aim of receipt and disbursements forecasts is to summarize these flows during a
predetermined period (Pandey, 1999).

(b) Adjusted Net Income Method:

It is sometimes called the source and uses approach. Mainly, it has three sections: source
of cash, uses of cash and the adjusted cash balance. This procedure will help in adjusting
estimated earning on an accrual basis to a cash basis. It also help in anticipating the
working capital movements.

(ii) Basic Strategy of Cash Management/Cash Cycle

The broad cash management strategies are essentially related to the cash turnover process
that is the cycle refers to the process by which cash is used to purchase materials from
which are produced goods, which are then sold to customers who later pay the bills. The
 33

A B C D E

Material Material Payments Cheque Good

cash cycle involves several steps among the way as funds flow from the firm's accounts
as shown in below. Fig: 4 several

Steps of cash cycle (Solmon and Pringle 1978).

A firm has no control over the time involved between stages A and B. The lag between D
and E is determined by the production process and inventory policy. The time between
stages E and F is determined by credit terms and the payments policy of customers.

(iii) Minimum Operating Cash:

The higher the cash turnover, the less is the cash a firm requires. A firm should, therefore
try to maximize the turnover. But it must maintain a minimum amount of operating cash
balance so that it does not run out of cash. The minimum level of operating cash is
determiner by dividing the total operating annual outlays by the cash turnover rate. Cash
management strategies are intended to minimize the operating cash balance requirement.
(Khan & Jain 1999)
2.2.3 Cash Management Techniques/Processes

The efficiency of cash management techniques means speedy cash collection and
delaying payment on account payable.

(i) Managing Cash Collection:

In managing cash efficiently, the cash inflow process can be accelerated through
systematic planning and refined techniques. Some techniques of speedy cash collection
practiced by various business firms are given below.

(a) Concentration Banking:

In this techniques of decentralized collection of account receivable, large branches as

collection centers for receiving payment from customers. In stead of all the payments
being collected at the head office the firm, the cheques for a certain geographical area are
collected at a specified local collection center. Concentration banking, as a system of
decentralized billing and multiple collection points, is a useful technique to expedite the
collection of account receivable. It reduces the time needed in the collection process by
mailing time.

(b) Lock Box System.

Concentration banking system of collection of account receivable, processing for purpose

of internal accounting is involved, that is some time elapses before a cheque is deposited
by the local collection centre in account. The lock box system cares this kind of problem,
a part from effecting economy in mailing and clearance times. Under this system firms
hire a post office lock-box at important collection centers. The customer is required to
remit payments to the post office lock box. The main advantage of a lock box system is
that cheques are deposited at banks sooner and become collected branches sooner than if
they were processed by the company prior to deposit. In other words, the lag between the
time cheques are received by the company and the time they actually are deposited at the
bank is eliminated; but it is more costly. (Van Horn 1996).

(c) Transferring Funds:

A transfer mechanism is a system for moving funds between accounts at different banks.

The three main transfer mechanisms are:

Wire Transfer: It is the faster way to move cash between banks, eliminating transit
float. Wire transfer are typically initiated on a standing other basis company head
quarters will make a written authorization to a local depository bank to transfer funds to
the firm's concentration bank when the amount exceeds some target level.

Depository Transfer Cheque (DTC): DTCs us a cheque restricted for deposit at a

particular bank. DTCs provide a means for moving funds from local depository bank into
concentration banks. DTCs may also be initiated by central company management is
response to deposit reports from local office and lock box banks, or on a prearranged
schedule.
Electronic Depository Transfer Cheque (EDTC): EDTC is a paperless electronic
image transfer via the automated clearing house (ACH) network developed. The EDTC
avoids the use the mails and has a uniform one -business- day clearing time. EDTC is
generally initially initiated by central company management.

(ii) Managing Disbursements:

Effective controls of disbursements can also result more availability of cash. The
objective in disbursements is to slow them down as much as possible. The combination
of fast collection and slow disbursements will in maximum availability of funds.

(a) Using float:

One way of maximizing cash availability is 'playing the float' for disbursement, float is
the difference between the total money amount of cheques drawn on a bank account and
the balance shows on the banks book. It is possible of course for a company to have a
negative balance on its books. A positive bank balance, because cheques outstanding
they are drawn. If the size of float can be estimated accurately, bank balances can be
reduced and the funds invested to earn positive return. For using float company should
pay from distant bank or scientific cheque cashing analysis.

(b) Centralized Disbursement:

In this system all the payments should be made by the head office from a centralized
disbursement account. Such as arrangement would enable a firm to delay payments and
conserve cash for several reasons. First, it involves increase transit time. Second, since
the firm has a centralized bank account a relatively smaller total cash balance will be
needed. Third, schedules can be tightly controlled and disbursement made exactly on the
right day.
 (c) Avoidance of Early Payments:

According to the terms of credit, a firm is required to make a payment with in a

stipulated period. It entitles a firm to cash discounts. If payments are delayed beyond the
due date, the credit standing may be adversely affected, so that the firms would find it
difficult to secure trade credit later. But if the firm pays its accounts payable before the
due date it has no special advantage (Khan and Jain 1999).

(d) Accruals:

Accruals are defined as current by not yet paid for such as remuneration to employees,
payment of taxes, payment of rent, who render service in advance and receive payments
later. The longer the period after which payment is made the greater is the amount of free
financing consequently and the smaller is the amount of cash balance required.

(iii) Electronic Fund Transfer:

Now a day, computer is widely used for transfusing the funds that regulating changes
have been emitted greater competition among financial Institutions. Another aspect of
changing environment is the increased satisfaction in computer application to cash
management and in electronic fund transfer. With such system a customer's cheque is
scanned electronically and verified by computer.

The increased use of electronic system is moving the economy towards electronic data
interchange (EDI). EDI's efforts in float management: it will be possible to forecast the
timing of cash flows with greater accuracy. Traditional practices in areas such as credit
terms based on paper/ mail/ manual procuring are likely to be subject to change (Weston
and Copland, 1992). Most money movement today is in the form of electronic funds
transfers (EFTS) a practically all financial records are stored in computer memories and not on paper.

2.2.4 Cash Management Model:

In cash management model, it is assumed that the firm on average is growing and is a net user of cash.
Marketable securities represent a buffer stocks between episodes of external financing, which is drawn as
required periodically. Ordering cost is represented by the clerical and transactions cost of making transfers
between the investment portfolio and the cash account. The holding cost is the interest foregone on cash balance
held. Assuming that expenditure occurs evenly over time and that cash replenishments come in jump sums at
periodic intervals, the optimal size of the cash transfer is formulated as follows:

2bT
C i

Where,

c= the optimal for the period of time involved.

b= the cost of the transaction in the purchase or sale of marketable securities i= the applicable interest
rate on marketable securities.
Cash cycle:

They refer to the process by which cash is used to purchase material from which are produced goods, which are
then sold to customers who later pay bills. Thus opportunities to improve cash cycle help in best management of
cash. The cash cycle involves several steps along the way as found flow from the firm accounts as shown as
below.

P Q R S T U V W X
39

Time (days)
 Figure: 7 Cash Cycle

(Source: Ezra Soloman and John J. Pringle: An introduction to financial Management)

P= Material order Q= Material received
R= Payment S= Cheque clearance
U= Customer’s mails
T= Good sold
payment
V= Payment received X= Funds collected.
The financial needs of corporation is affected by the total time lag from point P to 'X' showing from the above
cash cycle figure we are concerned with the time period involved in stages QRS and UVWX. It may be
mentioned that a firm has no control over time involved between stage Q and R and similarly S and T and So on
is determined by production company needs a certain period (i.e. weeks/months) to collect fund from beginning
to ends of material ordered to have ultimate cash. Different shop has their different during period to go for
further steps. In this way after going through all steps, the funds will be collected. In short, cash cycle plays a
vital role in the business operation activities and such cycle can be repeated in time to time as circulating blood
of human body. This is applicable only for direct selling of customer goods but in a manufacturing concern, the
time lag may be still greater.

2.3 Review of Journals and News Papers:

Advance and research based journals of finance are hardly found in Nepal. Very limited numbers of journals of
finance cannot cover its full dimensions. Though, in this section articles from various national and international
journals are reviewed and the attempt is concentrated to build the sound conceptual framework of subject matter,
which may helps for the study.

W.J Baumol, at his article "the transaction demand for cash: An inventory theoretic Approach" on quarterly
journal of economic (Vol, LXV, Nov, 1952) identifies cash maintenance as analogues to inventory maintenance
and demonstrates that the model of economic order quantities that is applicable to inventory management is
perfectly applicable in cash management tool. He has presented model in view of minimizing the opportunity
cost of holding cash and maximizing the return on the available funds, the cash balance should be maintained at
a minimum level and the funds not required from immediate use be invested in the marketable securities.
Similarly, M.H. Miller and Orr. D, in their article " a Model of the Demand for money in firms" on quarterly
journal of economic, (Vol, LXV, Aug, 1996) have developed a model known as Miller-Orr model, that takes into
account the realistic pattern of cash flows and prescribed when and how much to transfer from cash to
investment account and viceversa.

Ram M. Saksena at his article, "Towards more efficient cash management" on quarterly journal of management
quality ( Vol.No. 5, 1974) identified that the term cash management has a meaning according to the purpose for
which it is used and persons with varying branches of knowledge implies various meaning of cash. Economics
considered cash, as the means to satisfy human want, the lawyer the view that cash is the legal tender money
issued by a determinate authority. However, our concern of the meaning of cash is an asset constituting the most
liquid item among all the assets. But to obtain cash involves cost because corporation has to rise through issue to
share or by borrowing with interest. In through generation money market procurement is liability and wasted
opportunity unless it is not put to its optimal use.

Birman and McAdams (1962) in their article "Management Decision for Cash and

Marketable Securities" on graduate school of business have applied the Economic Order Quantity model like
Baumol, Bailey (1962) considered cash balance held by the firm to be a productive asset similar to any other
asset. He stated that ".......cash balance held by business firms is obviously a productive resource similar to any
other. Presumably, this is because....... they reduce the other resources required for a given level of production,
by facilitating payments". Meltzer (1963) adjudged wealth as an explanatory variable of cash balance
determination and sales as the measure of wealth. He hypothesized that the amount of money held by firms is the
function of the market rate of interest and wealth. He concluded that "the results suggest strongly that the cross-
section demand for money by firms is a function of sales, to a first approximation linear in the logarithms and
unit elastic." Frazer (1964) examined the percentage of cash to liquid assets as a function of total assets of firms,
and presented evidence on the question of economics of scales. He concluded that cash varies less than
proportionately with the assets of firms.

According to Whalen (1965) in his article "A cross Section Study of Business Demand for Cash" on journal of
finance, (September, 1965) has found the speculative demand for money may be considered as a function of
wealth. Assets and sales are the explanatory variables to determine the cash balance of the firm. Since Whalen
attempted to incorporate assets as well as transactions into the demand function, the analysis presented by him in
order to determine the cash holding of the firm differed from Meltzer's model. He hypothesized that the cash
holding of the firm is not only for transaction purpose but also as an investment. Miller-Orr (1966) assumed that
a firm's cash flows could be analyzed by a stochastic process. He followed Baumol's model, without question
and deduced that the firm's pattern of payment and receipts is fixed and that the cost of nonpayment is infinite.
He added that the firm or the individual is presumed to hold that amount of money which minimizes the interest
cost. He further advised holding money rather than bonds, since there is transaction cost associated with the
conversion of bonds into money. This reduces the cost of transaction and maximizes profits by an equivalent
amount.

Sprenkle (1967) in their article "Large Economics Units, Banks and the Transactions

Demand for Money" on quarterly journal of economic, (Vol, LXXX, Aug, 1966: 436442) have assumed that
money had all the attributes of ordinary inventoried goods. Vogel and Maddala (1967) assumed that the demand
for cash, government securities and liquid assets is a function of wealth determination. According to them the
firm is assumed to allocate its financial holdings among assets so as to equalizer the marginal rates of return,
adjusted for risk involved. This result differ from Meltzer only in that Meltzer estimated on the demand equation
for the industry for each year, whereas, Vogel and Maddal employed the dummy variables and estimated pooled
regression with yearly data. They had also included assets as explanatory variables in the demand for money
equation and determined the economics of scale. Nadiri (1969) suggested that the estimates of elasticity of
demand for money with respect to scale or production are unequivocally equal to unity.

Taking cognizance of the fact that the optimization the operating decision subject to various financial constraints
is possible, Charnes, Cooper and Miller ( 1959) had applied Liner Programming Model for the first time to
finance their article " Application of Linear Programming to Financial Budgeting and cost of Funds". Moreover,
their model determines the opportunity cost of long term funds. The major quantitative conclusions that are
obtained from the above liner – programming model is considered as major input for capital investment analysis.
Therefore, their model is too general to be applied to the short – run cash management problem.

Ijiri, Y Levy, F.K and R.C Lyon (1963) in their article " A linear programming Model for Budgeting Model for
Budgeting and financial planning" on journal of accounting research (vol, 1 no 2 autum 1963) have had extended
the first linear programming model established by charnels, cooper and Miller, with the marketable securities
transaction, but in a very general form and is limited to single period.

2.4 Review of Unpublished Dissertations:

We can find numerous studies conducted for the partial fulfillment of master's degree.

Some of them, which are relevant to this study, are reviewed.

One of these was presented by Mr. Bijaya Pradhan in 1997, entitled “A study of cash management of salt trading
corporation limited”. The thesis was based on the secondary data of the company for the part six years and it
analyzed the major aspects of cash management such as analysis of liquidity position, cash management system
and account receivable through various financial ratio analysis. The major findings of this study have been
presented as follows:

a) Management has taken liberal credit policy to sales of goods. Hence the cash and bank balance of the
study period is minimum of account receivable.

b) Salt Trading Corporation limited (STCL) could not make the best use of available cash balance
prudently.

c) The cash collection efficiency in this corporation is very low.

d) Management of cash collection efficiency in this corporation is very low.

e) Optimum cash balance not maintained. The cash & bank balance with respect to current assets has been
in fluctuating trend. Similar is the cash with respect to the total assets.

In the like manner, a somehow related thesis to cash management was present by Mr. Krishna Narayan Shrestha
in the year 2000, entitled 'A study on inventory management in Royal Drugs company limited'. The analysis
were carried on the basis of inventory management formulate such as economic order quantity and Re-order
level. Mr. K.N. Shrestha computed inventory values theoretically and compared it with actual quantity of
inventory in the firm in relation with other factors such as time, working days, and so, on. The deviations from
theory suggested the condition of actual inventory management practice of the firm. In spite of the approach to
analysis being different from the general tools of analysis only a portion of cash management i.e. only the
inventory management aspect has been analyzed the analysis being based only on three types of raw materials
purchased.

Thus it was identified that there are still a lot to explore in cash management function of the financial literature.
It was clear from review of literature that a dissertation on cash management is one of the uncommon
undertakings and this bears originality of its kind. However, before commencing this undertaking, there were
several alternatives to begin an undertaking of the thesis.

Alternatives such as case study, comparative analysis, study of more than two enterprises, etc were some of these
like wise, the other variations of alternatives are the types by legal status of enterprises existing in the country;
for instance private enterprise, public enterprise, partnership enterprise, government enterprise, or the other
combination could be the type of goods or services these enterprise are producing for instance pharmaceutical
industry cigarette factory, financial institutions, paper and paper products industry, and so on. These
complications got simplified after the following literature review.

Another study Sabin Prakesh Suinju - 2005 on cash management in Public

manufacturing enterprises of Nepal, A case study of Royal Drugs Ltd.

The main objectives of this study are:

a) To examine and critically analyses the cash mgmt practices in RDL

b) To examine the liquidity position of Royal Drugs Ltd.

c) To examine the cash flow statement of Royal Drugs Ltd.

d) To analyze the cash budgeting practice of Royal Drugs Ltd.

e) To recommend viable suggestions to cope up with cash management short coming in Royal Drugs Ltd
etc.

The major findings of this study are:

Overall cash management:

a) RDL doesn't have any definite policy reading how much of cash balance to hold each fiscal year.

b) RDL has not been forecasting cash balance taking in to consideration on the sales volume.
 c) RDL fails to maintain on adequate proportion of cash in its current assets.

d) Cross analysis related that RDL fails to collect receivables from its sundry debtors timely.

e) RDL has not been precisely meeting its current liabilities indicate that for some FYS such cash and bank
balance held is excessively high whereas for some other FYS such cash and bank balance is extremely low.

Liquidity position:

Overall the liquidity position of the firm has been found moderately dissatisfactory.

Cash flow statement:

Overall clearly cash inflow and out flow in R.D.L is not in properly managed. Surplus cash has not been
properly employed to earn returns by investing in short term investment opportunities.

Cash Budgeting practice:

Overall cash budgeting practice of ROL is poor.

The thesis submitted by Mr. Gopal Jung Raymajhi. on the topic “Cash Management System of Lumbini Bank
Limited” (2008) points out that Cash management in the banking sector of Nepal is primarily based on the
traditional practices, which lack in a scientific approach. A more serious aspect of cash management has been
the absence of any formalized system of cash planning and cash budgeting in menu of the banking sector,
although the executives of some banks do practice forecasting of cash requirements on a formal basis.

The main objectives are:

a) To study the recording practice of this Bank

b) To study the reporting practice of this Bank

c) To find out the current weakness in cash management system of this Bank.

d) To discover the possibilities furthers improvement in order to strengthen the cash management policy
practice of Lumbini Bank Limited.
 e) To find out the tendency of income and expenditure.

f) To analyze the financial study of Lumbini Bank Limited.

The major findings are:

a) Cash management in the banking sector of Nepal is primarily based on the traditional practices, which
lack in a scientific approach. A more serious aspect of cash management has been the absence of any
formalized system of cash planning and cash budgeting in menu of the banking sector, although the
executives of some banks do practice forecasting of cash requirements on a formal basis.
b) Modern practices with respect to debt collection, monitoring the payment behavior of customers and
relevant banking arrangements in connection with collection of receivable have been virtually ignored in
many banking sectors.
c) The study revealed the majority of the banking sector did not face any serious liquidity problem.
However, this was not because of the effectiveness of cash planning and budgeting. The problem of liquidity
actually did not arise due to the coincidence of delay in receivables collection being matched by delayed
payment to creditors.
d) By and large most banking sector had periodic accumulation of surplus cash and corresponding cash
shortage from time to time. However, none of the bank considered the implications of holding idle cash
balance and few took into account the potential benefit of investing surplus in marketable securities. Those,
which did, failed to consider the cost of administering such investments.
e) There has been wide variations overtime in the state of financial health of the banking sector in terms of
the composition of current assets and current liabilities as revealed by the relevant financial ratios.
f) Regression analysis revealed that there was little effect of the opportunity cost of holding cash on the
cash balances held by the banking sector. Neither interest rate nor the rate of inflation had any effect on the
cash balance. Further there was very little evidence of the effect of economy of scale on cash balance holding
in most cases.

2.5 Research Gaps:

Research on cash management is an essential component of studies in the field of financial management. The
works in cash management areas have been unlined by and large to the techniques of cash management with out
any systematic assessment of their implications. So far few empirical studies have been made consistent with the
increasing attention towards cash management.

There are also very limited studies conducted on accounts cash management in the context of Nepal. These few
studies conducted earlier have now become old and not given the real picture of recent practices. Many studies
and developed theories after completing those early studies in Nepal.

Thus there is need to carry out a study to asses' recent development in cash management and it should be find out
whether their findings are matching Nepalese practices. In conclusion, the main short coming of previous
dissertations that laid foundation to this research is:

a) Lack of proper cash budget and cash flow statement analysis in most of the

dissertations.

b) Lack of use of testing of hypothesis to analyze primary data.

 CHAPTER – 4

RESEARCH METHODOLGY
Research Design
Research is a systematic process of collecting and analyzing information (data) in order to increase our
understanding of the phenomenon about which we are concerned or interested. A Research Design is the
framework or plan for a study which is used as a guide in collecting and analyzing the data collected. It is the
blue print that is followed in completing the study. The basic objective of research cannot be attained without a
proper research design. It specifies the methods and procedures for acquiring the information needed to conduct
the research effectively. It is the overall operational pattern of the project that stipulates what information needs
to be collected, from which sources and by what methods.

Types of Data Collected

There are two types of data used. They are primary and secondary data. Primary data is defined as data that is
collected from original sources for a specific purpose. Secondary data is data collected from indirect sources.

 Primary Sources
These include the Balance sheet and Profit and loss Account method.

 Secondary Sources
These include books, the internet, company brochures, the company website, competitor’s websites etc.
newspaper articles etc.

Research methodology is a crucial aspect of any study, including one on cash management. A well-designed
research methodology helps ensure that the study is conducted systematically, the data collected is reliable, and
the results are valid and meaningful. Here is a general outline of the research methodology for a study on cash
management:

1. Research Design:

 Determine whether your study will be exploratory, descriptive, causal, or a combination of these
approaches.

 Define the scope of your study, including the time frame and geographical area.
2. Research Objectives:

 Clearly state the objectives of your study. What do you want to achieve through your research on
cash management?

3. Data Collection:

 Identify the sources of data for your study. These may include financial reports, company records,
interviews, surveys, and industry publications.

 Determine whether you will use primary data (collected directly) or secondary data (existing data
from other sources).

 Develop a data collection plan, including the data collection instruments and methods.

4. Sampling:

 If applicable, define your target population and select a sample from it.

 Explain the sampling method you will use (e.g., random sampling, stratified sampling) and the
rationale behind your choice.

5. Data Collection Instruments:

 Describe the tools and instruments you will use to collect data. For example, if you are conducting
interviews, specify the interview questions.

6. Data Collection Procedures:

 Explain how data will be collected, including the frequency and timing of data collection.

 Provide details on how you will ensure data quality and reliability.

7. Data Analysis:

 Define the analytical techniques you will use to analyze the collected data. Common methods for
cash management studies may include financial ratio analysis, regression analysis, or qualitative
content analysis of interviews or case studies.

 If using software for analysis (e.g., Excel, statistical software), mention it.

8. Ethical Considerations:
  Discuss ethical considerations related to your research, such as ensuring data privacy and
obtaining informed consent when conducting interviews or surveys.

9. Data Presentation:

 Explain how you will present your findings, including the use of tables, charts, graphs, and
narrative descriptions.

10. Conclusion and Recommendations:

 Summarize your findings and draw conclusions based on your analysis.

 Provide actionable recommendations for improving cash management practices, if applicable.

11. Limitations:

 Identify any limitations of your study, such as data constraints, sample size limitations, or potential
biases.

12. References:

 List all the sources, literature, and references you used to inform your research.

13. Appendices:

 Include any supplementary material, such as data collection forms, questionnaires, or detailed
financial statements, in the appendices.

Remember to tailor your research methodology to the specific objectives and context of your cash management
study. Additionally, ensure that your methodology is rigorous and aligns with best practices in research.

OBJECTIVE OF THE STUDY

The objectives of a study on cash management typically revolve around understanding, optimizing, or improving
various aspects of an organization's cash handling and financial operations. These objectives can vary depending
on the specific focus and context of the study. Here are some common objectives for a study of cash
management:
  TO Evaluate the current cash management practices within YAMAHA to determine their
efficiency and effectiveness.

 TO Analyze the YAMAHA historical cash flows to identify patterns, trends, and fluctuations.

 Forecast future cash flows to ensure that the organization can meet its financial obligations.

 TO Examine how cash management strategies can optimize working capital by balancing cash on
hand with investments in short-term assets or liabilities.

 Assess the organization's ability to maintain sufficient liquidity to cover short-term financial
obligations.

 Determine the appropriate level of cash reserves to mitigate liquidity risks.

 Identify opportunities to reduce the costs associated with cash handling, banking services, or
financing.

 Explore alternatives to expensive short-term financing options.

 Evaluate the organization's exposure to cash-related risks, such as fraud, currency fluctuations,
interest rate changes, or changes in payment terms.

 Develop strategies to mitigate these risks.

The specific objectives of a cash management study will depend on the organization's goals, challenges, and the
broader economic and industry context. The research should aim to provide insights and recommendations that
help the organization make informed decisions to improve its cash management practices.

SCOPE OF THE STUDY

The scope of a study on cash management can vary depending on the specific objectives and focus of the
research. Here are some key aspects and areas that you can consider when defining the scope of your cash
management study:

1. Organizational Context:
  Determine whether your study will focus on cash management within a specific type of
organization (e.g., small business, multinational corporation, non-profit organization, government
agency) or across various types.

2. Industry or Sector:

 Specify whether your study will concentrate on a particular industry or sector (e.g., retail,
manufacturing, healthcare, finance) and explore how cash management practices differ within that
sector.

3. Geographical Scope:

 Define the geographical scope of your study (e.g., a single country, multiple countries, global
perspective) to understand how cash management practices may vary based on location and
regulatory environments.

4. Time Frame:

 Decide whether your study will have a historical perspective, focus on current practices, or have a
future-oriented outlook to analyze trends and developments in cash management.

5. Objectives and Research Questions:

 Clearly state the research objectives and questions that your study aims to address. For example:

 What are the key principles and best practices in cash management?

 How do different organizations optimize their cash flows?

 What impact does cash management have on financial performance?

6. Key Components of Cash Management:

 Specify which aspects of cash management you will investigate. This may include:

 Cash flow forecasting

 Working capital management

 Liquidity management

 Payment processing
  Investment of excess cash

 Debt management

By defining the scope of your cash management study in a clear and concise manner, you can ensure that your
research objectives are achievable and that your study contributes meaningfully to the understanding of cash
management practices in your chosen context.

LIMITATION OF THE STUDY

When conducting a study of cash management, it's important to recognize and acknowledge the limitations that
may affect the scope, generalizability, and reliability of your findings. Here are some common limitations that
you may encounter in a study of cash management:

1. Data Availability and Quality:

 Limited access to accurate and comprehensive financial data from organizations can constrain the
depth and accuracy of your analysis.

 Data quality issues, such as errors or inconsistencies in financial records, can affect the reliability
of your findings.

2. Sample Size and Representativeness:

 If your study relies on a limited sample of companies or organizations, the results may not be
broadly applicable or representative of the entire industry or market.

 Difficulty in obtaining a diverse and representative sample can introduce selection bias.

3. Timeframe:

 The choice of the study period can impact the relevance and generalizability of your findings. A
short study period may not capture long-term cash management trends and challenges.

4. External Factors:

 Economic fluctuations, changes in market conditions, or unexpected events (e.g., natural disasters,
pandemics) can influence cash management practices and outcomes. These external factors are
often beyond the control of the researcher.

5. Data Privacy and Confidentiality:

  Legal and ethical constraints related to data privacy and confidentiality may limit your access to
sensitive financial information, which could affect the comprehensiveness of your analysis.

6. Subjective Measures:

 Some aspects of cash management, such as assessing the effectiveness of cash flow forecasting or
risk management strategies, may rely on subjective assessments and opinions, which can introduce
subjectivity and bias.

It's essential to acknowledge these limitations in your research and discuss how they may have affected the
validity and reliability of your findings. Additionally, suggesting avenues for future research that can address
these limitations can enhance the overall value of your study
 CHAPTER – 5

DATA ANALYSIS AND INTERPRETATION

  DATA ANALYSIS AND INTERPRETATION

The data analysis portion is the backbone of any primary or secondary research . there are various tools of data
analysis that helps the researcher to interpret his data into final results .

the data collected in this research was analyzed using the most effective tool of market
research i.e.,SPSS(statistical package for social sciences)

The parameters were set up giving preference to non demographic factors more than
demographic factors. the data was analyzed on the total of 20 parameters as mentioned below

i. Customer’s Age

ii. Marital Status

iii. Profession

iv. Education

v. Attitude Of Dealer

vi. Explanation Of Product Features By The Dealer .

vii. Sales Terms And Conditions

viii. Product Display In The Showroom

ix. Cleanliness In Showroom And Service Station

x. Atmosphere

xi. Cleanliness Of Purchased Bike

xii. Time Taken In Delivery

xiii. Explanation Of Bike Functions

xiv. PDI and checks made

xv. Time taken in documentation

xvi. Salesman follow up

xvii. Reminder of first service

xviii. Action to complains

xix. Replacement condition

xx. Dealer representation of brand

 GRAPHICAL DATA INTERPRETATION

1. Which sex of customer prefer motor bike?

Male 99.5

Female 0.5

Interpretations: Shown in the above graph shows that 99.5% male has been preferably to
motor bike and rest of female prefer than.
2. What is the preference of married and unmarried people for bikes?

Married 15%

Unmarried 85%

Interpretation:

85% unmarried people attitude towards motor bike whenever rest of 15% married people attitude towards
motor bike.
3. Which age group of customer prefer motor bike more ?

Age 18- 25- 35-

Group 25 35 45 About 45

Percentage 65% 20% 10% 5%

Interpretation:

65% age group of 18-25 preferred a motor bike, 20% of age group 25-35, 10% of age group of 35-45 and the rest of
age group above 45 years old
4. How do professional/occupational people show there preference towards motor bike:

Student 45%

Service 40%

Business 5%

Self Employed 5%

Others 5%

Interpretation:

Occupationally and professional the motor bike has been used i.e. 45% preferred by student, in the service level it is
used 40% and the rest of used in business, self employed and for other purposes used

5. How do income wise customer show there interest towards motor bike ?
 10000-15000 35%

15000-20000 40%

20000-50000 15%

50000-100000 5%

Above one lac 5%

Interpretation:

In the base of economically, it is used in the base of income i.e. 35% of income group 10,000-15,000, 40%
of 15,000 - 20,0000, 15% of income group of 20,000-50,000 and rest of used in the rarely above income of
50,000.
6. Which company of bikes is preferred mostly by customers?

Hero Honda 40%

Bajaj 45%

Yamaha 10%

TVS 3%

Honda 2%

Interpretation:

40% motor bike company and its models liked by people of Hero Honda, second position of Bajaj
and third position of Yamaha and rest of TVS and other companies.
7. Are customers satisfied with the bikes they use ?

Yes 99.50%

No 0.50%

Interpretation:

Approximately 100% customer satisfaction level of motor bike products and a rarely can say that no
comments about it

8. For which specific feature bikes are used by the customers ?

 Speed 40%

Power/BHP 5%

Mileage 30%

Design 5%

Brand 5%

Pick up 2%

Color 5%

Comfort 8%

Interpretation:
65% age group of 18-25 preferred a motor bike, 20% of age group 25-35, 10% of age group of
35-45 and the rest of age group above 45 years old.

9. How do people come to know about motor bikes?

TV 35%

Newspaper 15%

Friend 12%

Product Show 10%

Family 8%

Test Ride 2%

Internet 10%

Hoarding 8%

Interpretation:
The aware and know about motor bike products about 35% by TV channels, 15% newspapers /
magazines, 12% by friends, 10% by product show, 10% through internet, 8% by family and
others through test riding and hoardings.

10. for what reason people use bike?

Passion 30%

Self Satisfaction 8%

Cruising /
Long Drive 30%

Show Off 2%

Commuting 20%

Power 10%

Interpretation:
The most important things to likewise any brand of motor bike through company, brand, passion and
fashion, satisfaction and comfortability i.e. in the base of passion 30%, long drive 30%, commuting 20%
and power 10% and the rest of others

CHAPTER – 6
CONCLUSION AND SUGGESTIONS
 CONCLUSION AND SUGGESTIONS

Certainly, here's a sample conclusion and suggestions for a study of cash management at
Yamaha Motors:

Conclusion:

In this study, we conducted an in-depth analysis of Yamaha Motors' cash management

practices, aiming to understand its approach to liquidity management, cash flow
forecasting, and working capital optimization. We have drawn several key conclusions
based on our research:

1. Effective Liquidity Management: Yamaha Motors demonstrates effective

liquidity management through its prudent cash reserve policies and access to
various sources of short-term financing. This approach has enabled the company
to meet its short-term obligations and capitalize on strategic opportunities.

2. Cash Flow Forecasting: Yamaha Motors employs robust cash flow forecasting
models that take into account various factors affecting its cash flows, including
seasonal fluctuations and market dynamics. This proactive approach enhances its
ability to make informed financial decisions.

3. Working Capital Optimization: The company focuses on optimizing its working

capital by efficiently managing accounts receivable, accounts payable, and
inventory turnover. This strategy contributes to improved cash flow and
profitability.

4. Risk Management: Yamaha Motors has integrated risk management into its cash
management strategy, particularly concerning currency exchange risk and interest
rate risk. This proactive approach mitigates potential financial vulnerabilities.

5. Technology Adoption: The company has embraced technology solutions for cash
management, such as online banking platforms and cash management software,
streamlining its operations and enhancing efficiency.
 6. Continuous Improvement: Yamaha Motors continuously evaluates and refines
its cash management practices to adapt to changing market conditions and
regulatory requirements, highlighting its commitment to financial sustainability.

Suggestions:

Based on our findings, we offer the following suggestions to further enhance Yamaha
Motors' cash management practices:

1. Comprehensive Liquidity Planning: Consider developing a comprehensive

liquidity planning framework that integrates short-term and long-term financial
goals to optimize the allocation of excess cash reserves.

2. Enhanced Working Capital Strategies: Continuously review and optimize

working capital strategies, focusing on reducing days sales outstanding (DSO) and
days inventory outstanding (DIO) while extending days payable outstanding
(DPO) where feasible.

3. Automation and Digitalization: Explore opportunities to further automate cash

management processes and embrace advanced digitalization tools to improve
efficiency, reduce errors, and enhance real-time visibility into cash flows.

4. Advanced Analytics: Implement advanced analytics and predictive modeling to

enhance cash flow forecasting accuracy and identify potential liquidity risks and
opportunities more effectively.

5. Sustainability Initiatives: Align cash management strategies with sustainability

goals by considering environmentally responsible investments and reducing the
environmental impact of financial operations.

6. Continuous Training and Development: Invest in ongoing training and

development for finance and treasury teams to ensure they remain well-equipped
to manage evolving cash management challenges and opportunities.
 7. Benchmarking: Continuously benchmark Yamaha Motors' cash management
practices against industry best practices and peer companies to identify areas for
improvement and innovation.

8. Diversification of Funding Sources: Explore diversification in sources of short-

term financing to reduce reliance on a single source, enhancing financial
resilience.

In conclusion, Yamaha Motors has demonstrated a commendable commitment to effective

cash management, contributing to its financial stability and growth. By implementing the
suggested improvements and continuously adapting to changing financial landscapes,
Yamaha Motors can further strengthen its cash management practices and maintain its
position as a leader in the industry.
CHAPTER – 7 ANNEXURE
BALANCE SHEET

Assets
Fiscal year is January-December. All values JPY.

ITEM
2018 2019 2020 2021 2022
ITEM

Cash & Short Term Investments

138.41B 124.74B 272.67B277.56B 299.65B
Cash & Short Term Investments

Cash & Short Term Investments Growth

- -9.88%118.60% 1.80% 7.96%
Cash & Short Term Investments Growth

Cash Only
138.16B 122.72B 267.18B274.94B 296.82B
Cash Only

Short-Term Investments
- - - - -
Short-Term Investments

Cash & ST Investments / Total Assets

9.74% 8.14% 16.62% 15.14% 13.72%
Cash & ST Investments / Total Assets

Total Accounts Receivable

318.5B 333.74B 281.25B301.58B 400.13B
Total Accounts Receivable

Total Accounts Receivable Growth

- 4.79% -15.73% 7.23% 32.68%
Total Accounts Receivable Growth

Accounts Receivables, Net

318.5B 333.74B 281.25B301.58B 183.14B
Accounts Receivables, Net

Accounts Receivables, Gross 330.23B 344.52B 295.91B316.38B 200.55B

ITEM
2018 2019 2020 2021 2022
ITEM

Accounts Receivables, Gross

Bad Debt/Doubtful Accounts

(11.74B)(10.77B)(14.66B) (14.8B)(17.41B)
Bad Debt/Doubtful Accounts

Other Receivable
- - - - 216.99B
Other Receivable

Accounts Receivable Turnover

5.25 4.99 5.23 6.01 5.62
Accounts Receivable Turnover

Inventories
329.17B 356.75B 312.32B405.36B 525.85B
Inventories

Finished Goods
208.44B 224.01B 169.83B211.92B 285.43B
Finished Goods

Work in Progress
58.68B 64.32B 74.94B 92.07B 115.76B
Work in Progress

Raw Materials
62.05B 68.42B 67.56B101.37B 124.66B
Raw Materials

Progress Payments & Other

- - - - -
Progress Payments & Other

Other Current Assets

63.69B 59.54B 55.32B 60.19B 80.05B
Other Current Assets

Miscellaneous Current Assets 63.69B 59.54B 55.32B 60.19B 80.05B

ITEM
2018 2019 2020 2021 2022
ITEM

Miscellaneous Current Assets

Total Current Assets

849.76B 874.76B 921.56B 1.04T 1.31T
Total Current Assets

Net Property, Plant & Equipment

335.76B 356.29B 338.79B354.13B 390.98B
Net Property, Plant & Equipment

Property, Plant & Equipment - Gross

961.65B 1.03T 1.01T 1.07T 1.16T
Property, Plant & Equipment - Gross

Buildings
103.57B 111.2B 106.98B114.48B 129.33B
Buildings

Land & Improvements

81.5B 88.69B 84.52B 86.82B 86.86B
Land & Improvements

Computer Software and Equipment

- - - - -
Computer Software and Equipment

Other Property, Plant & Equipment

26.88B 26.04B 25.19B 25.95B 26.57B
Other Property, Plant & Equipment

Accumulated Depreciation
625.89B 670.64B 671.76B711.86B 766.88B
Accumulated Depreciation

Total Investments and Advances 96.2B 134.67B 131.19B131.99B 112.91B

ITEM
2018 2019 2020 2021 2022
ITEM

Total Investments and Advances

Other Long-Term Investments

69.16B 107.58B 104.91B102.08B 73.53B
Other Long-Term Investments

Long-Term Note Receivables

96.06B 109.61B 183.79B205.46B 251.98B
Long-Term Note Receivables

Intangible Assets
8.52B 8.64B 11.24B 28.42B 39.64B
Intangible Assets

Net Goodwill
- - - - -
Net Goodwill

Net Other Intangibles

8.52B 8.64B 11.24B 28.42B 39.64B
Net Other Intangibles

Other Assets
9.58B 21.31B 29.32B 37.49B 38.02B
Other Assets

Total Assets
1.42T 1.53T 1.64T 1.83T 2.18T
Total Assets

Total Assets Growth

- 7.88% 7.05% 11.70% 19.12%
Total Assets Growth

Liabilities & Shareholders' Equity

All values JPY.
ITEM
2018 2019 2020 2021 2022
ITEM

ST Debt & Current Portion LT Debt

288.63B 188.3B 114.86B 144.93B 336.4B
ST Debt & Current Portion LT Debt

Short Term Debt

162.95B 151.92B 86B 62.95B 172.99B
Short Term Debt

Current Portion of Long Term Debt

125.68B 36.38B 28.86B 81.98B 163.42B
Current Portion of Long Term Debt

Accounts Payable
140B 134.99B 143.95B 165.18B 177.73B
Accounts Payable

Accounts Payable Growth

- -3.58% 6.63% 14.75% 7.60%
Accounts Payable Growth

Income Tax Payable

10.11B 7.35B 8.25B 16.88B 25.76B
Income Tax Payable

Other Current Liabilities

141.85B 165.69B 163.76B 186.28B 212.98B
Other Current Liabilities

Dividends Payable
- - - - -
Dividends Payable

Accrued Payroll
14.11B 14.52B 14.69B 15.33B 18.8B
Accrued Payroll

Miscellaneous Current Liabilities 127.74B 151.17B 149.07B 170.94B 194.18B

ITEM
2018 2019 2020 2021 2022
ITEM

Miscellaneous Current Liabilities

Total Current Liabilities

580.58B 496.33B 430.81B 513.27B 752.87B
Total Current Liabilities

Long-Term Debt
77.42B 185.62B 362.04B 324.19B 284.99B
Long-Term Debt

Long-Term Debt excl. Capitalized Leases

69.44B 178.98B 354.42B 316.19B 271.58B
Long-Term Debt excl. Capitalized Leases

Non-Convertible Debt
69.44B 178.98B 354.42B 316.19B 271.58B
Non-Convertible Debt

Convertible Debt
- - - - -
Convertible Debt

Capitalized Lease Obligations

- - - - -
Capitalized Lease Obligations

Provision for Risks & Charges

56.99B 61.67B 60.57B 52.15B 49.94B
Provision for Risks & Charges

Deferred Taxes
(20.31B) (14.6B) (11.24B) (15.47B)(29.34B)
Deferred Taxes

Deferred Taxes - Credits

4.66B 12.93B 13.79B 15.26B 14.75B
Deferred Taxes - Credits

Deferred Taxes - Debit 24.97B 27.53B 25.03B 30.73B 44.08B

ITEM
2018 2019 2020 2021 2022
ITEM

Deferred Taxes - Debit

Other Liabilities
4.44B 24.44B 24.54B 27.37B 26.45B
Other Liabilities

Other Liabilities (excl. Deferred Income)

4.44B 24.44B 24.54B 27.37B 26.45B
Other Liabilities (excl. Deferred Income)

Deferred Income
- - - - -
Deferred Income

Total Liabilities
724.09B 780.98B 891.75B 932.24B 1.13T
Total Liabilities

Non-Equity Reserves
- - - - -
Non-Equity Reserves

Total Liabilities / Total Assets

50.96% 50.95% 54.34% 50.86% 51.71%
Total Liabilities / Total Assets

Preferred Stock (Carrying Value)

- - - - -
Preferred Stock (Carrying Value)

Redeemable Preferred Stock

- - - - -
Redeemable Preferred Stock

Non-Redeemable Preferred Stock - - - - -

ITEM
2018 2019 2020 2021 2022
ITEM

Non-Redeemable Preferred Stock

Common Equity (Total)

657.48B 705.23B 714.64B 859.23B 1T
Common Equity (Total)

Common Equity / Total Assets

46.27% 46.01% 43.55% 46.88% 45.94%
Common Equity / Total Assets

Common Stock Par/Carry Value

85.8B 85.91B 85.97B 86.1B 86.1B
Common Stock Par/Carry Value

Retained Earnings
572.71B 607B 644.35B 761.48B 894.05B
Retained Earnings

ESOP Debt Guarantee

- - - - -
ESOP Debt Guarantee

Cumulative Translation
Adjustment/Unrealized For. Exch. Gain
(118.28B)(119.45B)(141.13B)(103.47B)(55.72B)
Cumulative Translation
Adjustment/Unrealized For. Exch. Gain

Unrealized Gain/Loss Marketable

Securities
35.21B 45.18B 43.86B 41.52B 29.17B
Unrealized Gain/Loss Marketable
Securities

Revaluation Reserves
10.41B 10.43B 10.43B 10.43B 10.43B
Revaluation Reserves
ITEM
2018 2019 2020 2021 2022
ITEM

Treasury Stock
(727M) (733M) (734M) (11.72B)(31.73B)
Treasury Stock

Total Shareholders' Equity

657.48B 705.23B 714.64B 859.23B 1T
Total Shareholders' Equity

Total Shareholders' Equity / Total Assets

46.27% 46.01% 43.55% 46.88% 45.94%
Total Shareholders' Equity / Total Assets

Accumulated Minority Interest

38.27B 46.59B 34.51B 41.44B 51.23B
Accumulated Minority Interest

Total Equity
695.74B 751.83B 749.16B 900.67B 1.05T
Total Equity

Liabilities & Shareholders' Equity

1.42T 1.53T 1.64T 1.83T 2.18T
Liabilities & Shareholders' Equity

PROFIT AND LOSS ACCOUNT

ITEM
2018 2019 2020 2021 2022
ITEM
Sales/Revenue
1.67T 1.66T 1.47T 1.81T 2.25T
Sales/Revenue
Sales Growth
- -0.50% -11.62% 23.19% 24.05%
Sales Growth
Cost of Goods Sold (COGS) incl. D&A 1.22T 1.22T 1.1T 1.31T 1.61T
ITEM
2018 2019 2020 2021 2022
ITEM
Cost of Goods Sold (COGS) incl. D&A
COGS Growth
- 0.37% -10.06% 18.75% 23.67%
COGS Growth
COGS excluding D&A
1.17T 1.17T 1.05T 1.25T 1.55T
COGS excluding D&A
Depreciation & Amortization Expense
46.41B 49.69B 48.24B 51.13B 59.82B
Depreciation & Amortization Expense
Depreciation
- - - - -
Depreciation
Amortization of Intangibles
- - - - -
Amortization of Intangibles
Gross Income
455.17B 442.33B 371.81B 506.84B 633.75B
Gross Income
Gross Income Growth
- -2.82% -15.94% 36.32% 25.04%
Gross Income Growth
Gross Profit Margin
- - - - 28.19%
Gross Profit Margin
SG&A Expense
304.37B 319.69B 284.32B 318.66B 399.47B
SG&A Expense
SGA Growth
- 5.03% -11.06% 12.08% 25.36%
SGA Growth
Research & Development
102.77B 102.02B 94B 95.29B 105.22B
Research & Development
Other SG&A
201.6B 217.67B 190.33B 223.38B 294.25B
Other SG&A
Other Operating Expense
10.02B 7.28B 5.82B 5.84B 9.41B
Other Operating Expense
Unusual Expense
183M 327M 3.01B 2.95B (432M)
Unusual Expense
EBIT after Unusual Expense
(183M) 115.04B 78.67B 179.39B 225.3B
EBIT after Unusual Expense
Non Operating Income/Expense (6.94B) 2.84B 5.16B 15.48B 14.61B
ITEM
2018 2019 2020 2021 2022
ITEM
Non Operating Income/Expense
Non-Operating Interest Income
4.24B 3.66B 3.92B 3.39B 4.77B
Non-Operating Interest Income
Equity in Affiliates (Pretax)
2.35B 2.47B 864M 4.09B 5.3B
Equity in Affiliates (Pretax)
Interest Expense
3.36B 3.38B 3.63B 2.65B 4.17B
Interest Expense
Interest Expense Growth
- 0.51% 7.22% -26.90% 57.51%
Interest Expense Growth
Gross Interest Expense
3.36B 3.38B 3.63B 2.65B 4.17B
Gross Interest Expense
Interest Capitalized
- - - - -
Interest Capitalized
Pretax Income
136.88B 120.63B 84.99B 199.7B 245.8B
Pretax Income
Pretax Income Growth
- -11.88% -29.54% 134.97% 23.08%
Pretax Income Growth
Pretax Margin
- - - - 10.93%
Pretax Margin
Income Tax
32.38B 36.57B 29.22B 35.57B 56.22B
Income Tax
Income Tax - Current Domestic
37.03B 34.49B 27.76B 38.74B 61.67B
Income Tax - Current Domestic
Income Tax - Current Foreign
- - - - -
Income Tax - Current Foreign
Income Tax - Deferred Domestic
(4.64B) 2.09B 1.46B (3.16B) (5.45B)
Income Tax - Deferred Domestic
Income Tax - Deferred Foreign
- - - - -
Income Tax - Deferred Foreign
Income Tax Credits
- - - - -
Income Tax Credits
Equity in Affiliates - - - - -
ITEM
2018 2019 2020 2021 2022
ITEM
Equity in Affiliates
Other After Tax Income (Expense)
- - - - -
Other After Tax Income (Expense)
Consolidated Net Income
104.5B 84.05B 55.77B 164.13B 189.58B
Consolidated Net Income
Minority Interest Expense
11.13B 8.32B 2.7B 8.55B 15.14B
Minority Interest Expense
Net Income
93.37B 75.74B 53.07B 155.58B 174.44B
Net Income
Net Income Growth
- -18.88% -29.93% 193.15% 12.12%
Net Income Growth
Net Margin Growth
- - - - 7.76%
Net Margin Growth
Extraordinaries & Discontinued Operations
- - - - -
Extraordinaries & Discontinued Operations
Extra Items & Gain/Loss Sale Of Assets
- - - - -
Extra Items & Gain/Loss Sale Of Assets
Cumulative Effect - Accounting Chg
- - - - -
Cumulative Effect - Accounting Chg
Discontinued Operations
- - - - -
Discontinued Operations
Net Income After Extraordinaries
93.37B 75.74B 53.07B 155.58B 174.44B
Net Income After Extraordinaries
Preferred Dividends
- - - - -
Preferred Dividends
Net Income Available to Common
93.37B 75.74B 53.07B 155.58B 174.44B
Net Income Available to Common
EPS (Basic)
267.35 216.82 151.89 445.67 511.47
EPS (Basic)
EPS (Basic) Growth
- -18.90% -29.95% 193.41% 14.77%
EPS (Basic) Growth
Basic Shares Outstanding 349.23M 349.3M 349.4M 349.09M 341.05M
ITEM
2018 2019 2020 2021 2022
ITEM
Basic Shares Outstanding
EPS (Diluted)
267.35 216.82 151.89 445.67 511.26
EPS (Diluted)
EPS (Diluted) Growth
- -18.90% -29.95% 193.41% 14.72%
EPS (Diluted) Growth
Diluted Shares Outstanding
349.23M 349.3M 349.4M 349.09M 341.2M
Diluted Shares Outstanding
EBITDA
187.19B 165.05B 129.91B 233.47B 284.69B
EBITDA
EBITDA Growth
- -11.83% -21.29% 79.71% 21.94%
EBITDA Growth
EBITDA Margin
- - - - 12.66%
EBITDA Margin
 BIBLIOGRAPHY

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 https://www.scribd.com
 https://bard.google.com/chat
 https://global.yamaha-motor.com/
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