Professional Documents
Culture Documents
ON
CASH MANAGEMENT
AT
YAMAHA MOTOR SHOWROOM
PALAMURU UNIVERSITY
UNDER GUIDANCE OF
Ms. Bhagya Lakshmi
Lecturer in Business Management
This is to certified that Ms. S Faiza Tabassum, D/o Shri Shaik Khajapeera,,Hall ticket
no. : 210-3305-8684-1030a student of Swami Vivekananda Degree& PG College,
affiliated to
Palamuru University, Mahabubnagar, has undergone Industrial Training in our
organisation
from 04th March 2024 to 4thApril 2024.
This report is submitted in partial fulfilment of the requirement of the award of “BBA”
Degree from Palamuru University.
DECLARATION
CERTIFICATE
DEPARTMENT OF BUSINESS MANAGEMENT
This is to certify that this project work entitled
“CASH MANAGEMENT AT YAMAHA MOTOR SHOWROOM”
ACKNOWLEDGEMENT
I sincerely think to HON. Principal, KUMAR SWAMI for allowing undertaking this
Project and motivating me in all aspects for the completion of this project work. I also
Thank my project guide, BHAGYA LAXMI , faculty for the kind encouragement and
Constant support in completion of this project work.
I equally thank to MR.MOHAMMED AMAIR , Chief Branch manager of
YAMAHA CORPORATION , for giving me the opportunity to undertake this project
in the esteemed organisation.
ABSTRACT
In a business anything done financially affects cash eventually. Cash is to a business is
what
blood is to a living body. A business cannot operate without its lifeblood cash, and
without
Cash management, there may remain no cash to operate.
Cash movement in business is two-way traffic, it keeps on moving in and out of
business.
The inflow and outflow of cash never coincides. Important aspect which is unique to
cash
management is time dimension associated with the movement of cash. Due to non-
synchronicity of cash inflow an outflow, the inflow may be more than the outflow at a
particular point of time. This needs regulation. Left to itself cash flow is apt to follow
monsoonic pattern, and showers of cash may be heavy, scanty or just normal. Hence
there
is a dire need to control its movement through skilful cash management. The primary
aim of
Cash management is to ensure that there should be enough cash availability when the
needs
Arises, not too much, but never too little.
Cash Management is a marketing term for certain services offered primarily to larger
business
customers. It may be used to describe all bank accounts (such as checking accounts)
provided
to businesses of a certain size, but it is more often used to describe specific services
such as
cash concentration, zero balance accounting, and automated clearing house facilities.
Sometimes, private bank customers are given cash management services.
M.
Chapterno Page larger
Name of the concept
. no. business
customers.
1 1.1 Introduction checking
accounts)
provided to
1.2 Need of the study businesses
of a
1.3 Scope of the study
INDEX
1.4 Objectives of the study
5 5.1 Findings
5.2 Suggestions
5.3 Conclusions
Bibliography
Appendices
CHAPTER – 1
certain size, but it is more often used to describe specific services such as cash concentration , zero
balance accounting , and automated clearing house facilities. Sometimes, private bank customers are
given cash. management services.
Services Generally
CHAPTER -1
1.1 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 realised 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 characteristics of near-cash
assets is
that they can readily be converted into cash. Generally, when a firm has excess cash, it
invests
it invests it in marketable securities.
Cash management helps to meet obligatory cash out flows when they fall due.
Cash management ensures that the firm has sufficient cash during peak times for
Purchase and for other purposes.
Different cash management solutions are being offered for diverse segments.
And
challenge. Hence vendors should come up with a single platform which can
support various cash management products and services as the business grows.
Customisable Solutions:
size and business. Hence vendors should try to come up with a customisable
Unified System:
Integration of corporate customer systems with banking systems can be very
helpful in reconciliation of internal systems with banking systems, and can
support
account management between the bank and customer. And this offers great
scope
for vendors. Today, banks are leveraging cash management systems as a tool to
build long-term trust with corporate customers, because these systems will
empower bank’s customers to be empowered and manager their liquidity
position
at any given time, thus building a trust and strengthening the relationship that
goes
beyond transactions banking.
1.4 OBJECTIVES OF THE STUDY
Research Design
Research is a systematic process of collecting and analysing 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 analysing 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. Itspecifies the methods and procedures for acquiring the information
needed to conduct theresearch effectively. It is the overall operational pattern of the
project that stipulates whatinformation 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,
The study was relatively insufficient, keeping in mind the long duration it can
take at times, to close a particular corporate deal.
The study might not produce absolutely accurate results as it was based on a
sample
taken from the population.
It was difficult getting time and access to senior level Finance / HR managers
(who
had to be talked to, to get required information) due to their busy schedules and
prior commitments.
Introduction
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.
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.
Cash is the important current asset for the operations of the business. Cash is the basic
inputneeded to keep the business running on a continuous basis; it is also the ultimate
output expected to be realised 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 include coins, currency and cheques held by the firm, and balance in its bank
accounts.Sometimes near-cash items, such as marketable securities or bank time’s
deposits,
arealso 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. This kind of investment contributes some profit to the firm.
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 ne 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 firm’s need to hold cash may be attribute to the following the motives:
The transaction motive requires a firm to hold cash to conducts its business in
the ordinary course. The firm needs cash primarily to make payments for
purchases, wages and salaries, other operating expenses, taxes, dividends stock.
The need to hold cash wouldnot arise if there were perfectsynchronisation
between cash receipts and cash payments, i.e., enough cash is received when the
payment has to be made. But cash receipts, the firm should maintain some cash
balance to be able to make required payments. For transactions purpose, a firm
may invest its cash in marketable securities. Usually, the firm will purchase
securities whose maturity corresponds with some anticipated payments, such as
dividends, or taxes in the future. Notice that the transactions motive mainly
refers to holding cash to meet anticipated payments whose timing is not
perfectly matched with cash receipts.
Precautionary Motive
The precautionary motive is the need to hold cash to meet contingencies in the
future. It provides a cushion or buffer to withstand some unexpected emergency.
The precautionary amount of cash depends upon the predictability of cash
flows. If cash flow can be predicted with accuracy, less cash will be maintained
for an emergency. The amount of precautionary cash is also influenced by the
firms ability to borrow at short notice when the need arises. Stronger the ability
of the firm to borrow at short notice, less the need for precautionary balance.
The precautionary balance may be kept in cash set aside for precautionary
reasons is not expected to can anything; therefore, the firm attempts to earn
some profit on it. Such funds should be invested in high-liquid and low-risk
marketable securities.
Precautionary balance should, thus, held more in marketable securities and
relatively less in cash.
Speculative Motive
The speculative motive relates to the holding of cash for investing in profit-
making opportunities as and when they arise. The opportunity to make profit
may arise when the security prices change. The firm will hold cash, when it is
expected that the interest rates will rise and security prices will fall. Securities
can be purchased when the interest rate is expected to fall; the firm will benefit
by the subsequent fall in interest rates and increase in security prices. The firm
may also speculate on materials prices. If it is expected that materials prices will
fall, the firm can postpone materials purchasing and make purchases in future
when price actually falls. Some firms may hold cash for speculative purposes.
By and large, business firms do not engage in speculations. Thus, the primary
motives to hold cash and marketable securities are: the transitions and the
precautionary motives.
CASH MANAGEMENT
Cash management is a broad term that refers to the collection, concentration, and
disbursement of cash. It encompasses a company’s level of liquidity, its management of
cash balance, and its short-term investment strategies. In some ways, managing cash
flow is the most important job of business managers. For some time now, technology
has been the key driving force behind every successful bank. In such an environment,
the abilityto recognise and capture market share depends entirely on the bank’s
competence toevolve technically and offer the customer a seamless process flow.
The objective of a cash management system is to improve revenue, maximise e profits,
minimise costs and establish efficient management systems to assist and accelerate
growth.
The objective of cash management is to have adequate control over the cash position,
so as to avoid the risk of insolvency and use the excessive cash in some profitable way.
The cash is the most significant and highly liquid asset the firm holds. It is significant as
it is used to pay the firm’sobligations and helps in the expansion of business operations.
The concept of cash management can be further understood in terms of the cash
management cycle. The sales generate cash, and this has to be disbursed out. The firms
invests the surplus cash or borrows cash in case of deficit. Thus, it tries to achieve this
cycle at a minimum cost along with the liquidity and control.
An optimum cash management system is one that not only prevents the insolvency but
also reduces the days in account receivables, increases the collection rates, chooses
the suitable investment vehicles that improves the overall financial position of the firm.
Cash management is concerned with the managing of: (i) cash flows into and out of the
firm,(ii) cash flows within the firm, and (iii) cash balances held by the firm at a point of
time by financing deficit or investing surplus cash. Sales generate cash which has to be
disbursed out. The surplus cash has to be invested while deficit has to be borrowed.
Cash management seeks to accomplish this cycle at a minimum cost. At the same time,
it also seeks to achieve liquidity and control.
Cash management assumes more importance than other current asset because cash is the
most significant and the least productive asset that a firm holds. It is significant because
it issued to pay the firm’s obligations.
However, cash is unproductive. Unlike fixed assets or inventories, it does not produce
goods for sale. Therefore, the aim of cash management is to maintain adequate control
over cash position to keep the firm sufficiently liquid and to use excess cash in some
profitable way.
The quantum and speed of the flow can be regulated through prudent financial planning
facilitating the running of business with the minimum cash balance. This can be
achieved by making a proper analysis of operative cash flow cycle along with efficient
management of working capital.
Cash Forecasting
Cash forecasting is backbone of cash planning. It forewarns a business regarding
expected cash problems, which it may encounter, thus assisting it to regulate further
cash flow movements. Lack of cash planning results in spasmodic cash flows.
Liquidity Analysis:
The importance of liquidity in a business cannot be over emphasised . If one does
the autopsies of the businesses that failed, he would find that the major reason for the
failure was their inability to remain liquid. Liquidity has an intimate relationship with
efficient utilisation of cash. It helps in the attainment of optimum level of liquidity.
Economical Borrowings
Another product of non-synchronisation of cash inflows and cash outflows is
emergency of deficits at various points of the time. A business has to raise funds to the
extent and for the period of deficits. Rising of funds at minimum cost is one of the
important facets of cash management.
The ideal cash management system will depend on the firm’s products, organisation
structure, competition, culture and options available. The task is complex, and decisions
taken can affect important areas of the firm. For example, to improve collections if the
credit period is reduced, it may affect sales. However, in certain cases, even without
fundamental changes, it is possible to significantly reduce cost of cash management
system by choosing a right bank and controlling the collections properly.
CASH MANAGEMENT MODELS
Cash management requires a practical approach and a strong base to determine the
requirementof cash by the organization to meet its daily expenses. For this purpose, so
me models were designed to determine the level of money on different parameters. The
Baumol model of cash management helps in determining a firm's optimum cash balance
under certainty. It is extensively used and highly useful for the purpose of
cashmanagement. As per the model, cash and inventory management problems are one
and the same. William J. Baumol developed a model (The transactions Demand for
Cash: An Inventory Theoretic Approach) which is usually used in Inventory
management & cash management. Baumol model of cash management trades off
between opportunity cost or carrying cost or holding cost & the transaction cost. As
such firm attempts to minimise the sum of the holding cash & the cost of converting
marketable securities to cash.
There are certain assumptions that are made in the model. They are as follows:.
1.The firm is able to forecast its cash requirements with certainty and receive a specific
amount at regular intervals.
2.The firm’s cash payments occur uniformly over a period of time i.e. a steady rate of
cash
outflows.
3.The opportunity cost of holding cash is known and does not change over time. Cash
holdings incur an opportunity cost in the form of opportunity foregone.
4.The firm will incur the same transaction cost whenever it converts securities to cash.
Each transaction incurs a fixed and variable cost.
For example, let us assume that the firm sells securities and starts with a cash balance of
C rupees. When the firm spends cash, its cash balance starts decreasing and reaches
zero. The firm again gets back its money by selling marketable securities. As the cash
balance decreases gradually, the average cash balance will be: C/2. This can be shown
in following figure:
Whenever the firm converts its marketable securities to cash, it incurs a cost known as
transaction cost. Total number of transactions in a particular year will be total funds
required (T), divided by the cash balance (C) i.e. T/C. The assumption here is that the
cost per transaction is constant. If the cost per transaction is c, then the total transaction
cost will be:
The total annual cost of the demand for cash will be:
As the demand for cash, ‘C’ increases, the holding cost will also increase and the
transaction cost will reduce because of a decline in the number of transactions. Hence, it
can be said that there is a relationship between the holding cost and the transaction cost.
The optimum cash balance, C* is obtained when the total cost is minimum.
With the increase in the cost per transaction and total funds required, the optimum cash
balance will increase. However, with an increase in the opportunity cost, it will
decrease.
Most firms maintain a minimum amount of cash on hand to meet daily obligations or
as a requirement from the firm's bank. A maximum amount may also be specified to
reflect the tradeoff between the transactions cost of investing in liquid assets
(e.g. Money Market Funds) and the cost of lost interest if the cash is not invested. The
Miller-Orr model computes the spread between the minimum and maximum cash
balance limits as.
Spread= 3(0.75 x transaction cost x variance of daily cash flows / daily interest rate)
^(1/3)
The maximum cash balance is the spread plus the minimum cash balance, which is
assumed to be known.
The "return point" is defined as the minimum cash balance plus spread/3.
Whenever the cash balance hits(or exceeds) the maximum, the firm should invest the
difference between the amount available and the return point: if the minimum is
reached, sufficient securities should be sold to bring it up to the return point.
Graph Explanation:
1. When cash balance reaches point ‘A', the upper limit, company will invest the
surplus to bring down the cash balance to return point.
2. When cash balance touches down point `B', the lower limit, the company would
liquidate some of its securities to increase the balance back to return point.
4. These limits depend upon variance of cash flow, transaction cost and interest
rate.
5. If variability of cash flow is high and transaction cost is high too, then the
limits will be wide apart, otherwise narrow would suffice.
6. If interest rates are high then the narrow limits would be set..
7. To keep interest cost as low as possible, the return point is set 1/3 of the spread
between the lower and upper limit.
Managing cash flow is a contemplative process and requires a lot of analytical thinking.
The various techniques or tools used by the managers to practice cash flow
management are as follows:
Accelerating Collection of Accounts Receivable: One of the best ways to
improve cash inflow and increase liquid cash by collecting the debts and dues
from the debtors readily.
Stretching of Accounts Payable:On the other hand, the company should try to
extend the payment of dues by acquiring an extended credit period from
thecreditors.
Cost Cutting: The company must look for the ways of reducing its operating
cost to main a good cash flow in the business and improve profitability.
Regular Cash Flow Monitoring: Keeping an eye on the cash inflow and
outflow, prioritizing the expenses and reducing the debts to be recovered, makes the
organization’s financial position sound.
Wisely Using Banking Services: The services such as a business line of
credit, cash deposits, lockbox account and sweep account should be used
efficiently and intelligently.
Upgrading with Technology: Digitalization makes it convenient for the
organizations to maintain the financial database and spreadsheets to be assessed
from anywhere anytime.
Limitations of Cash Management
Small business entities which are managed solely, face problems such as lack of skills,
knowledge, time and risk-taking ability to practice cash management.
KEY TAKEAWAY
There are many cash management considerations and solutions available in the
financial marketplace for both individuals and businesses.
The cash flow statement is broken down into three parts: operating, investing,
and financing. The operating portion of cash activities will vary based heavily on
net working capital which is reported on the cash flow statement as a company’s
current assets minus current liabilities. The other two sections of the cash
flow statement are somewhat straighter forward with cash inflows and
outflows pertaining to investing and financing.
INTERNAL CONTROLS
There are many internal controls used to manage and ensure efficient business cash
flows. Some of a company’s top cash flow considerations include the average
length of account receivables, collection processes, write-offs for
uncollected receivables, liquidity and rates of return on cash equivalent investments,
credit line management, and available operating cash levels. In general, cash flows
pertaining to operating activities will be heavily focused on working capital which is
impacted by accounts receivable and accounts payable changes. Investing
and financing cash flows are usually extraordinary cash events that involve special
procedures for funds.
WORKINGCAPITAL
A company’s working capital is the result of its current assets minus current
liabilities. Working capital balances are an important part of cash flow
management because they show the amount of current assets a company has to cover
its current liabilities. Companies strive to have current asset balances that exceed
current liability balances. If current liabilities exceed current assets a company would
likely need to access its reserve lines for payables.In general working capital includes
the following:
Current assets minus current liabilities results in working capita . On the cash flow
statement, companies usually report the change in working capital from one reporting
period to the next within the operating section f the cash flow statement. If net change in
working capital in working capital is positive a company has increased its current assets
available to cover current liabilities which increases total cash on the bottom line. If a
net change in working capital is negative, a company has increased its current liabilities
which reduces its ability to pay them as efficiently. A negative net change in working
capital reduces the total cash on the bottom line. There are several things a company can
do to improve both receivables and payables efficiency, ultimately leading to higher
working capital and better operating cash flow. Companies operating with invoice
billing can reduce he days payable or offer discounts for quick payments. They may also
choose to use technologies that facilitate faster and easier payments such as automated
billing and electronic payments. Advanced technology for payables management can
also be helpful. Companies may chose to make automated bill payments or use direct
payroll deposits to help improve payables cost efficiency.
Area of cash management includes basically cash planning and forecasting strategic of
cash management techniques, optimum cash balance and investing the excess stash on
marketable securities.
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
theses 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’s, 1999). Thus, cash
budget is arrived as through a projection of future cash receipt and cash disbursements
of the firm over various internals of time there the 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.
In this method involves forecasting for each terms of receipts and payments.
The prime aim of receipt and disbursements forecasts is to summarise these flows
during a predetermined period (Pandey, 1999).
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.
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.
To eliminate idle cash balances. Every dollar held as cash rather than
used to augment revenues or decrease expenditures represents a lost
opportunity. Funds that are not needed to cover expected transactions can
be used to buy back outstanding debt or can be invested to generate a
flow of funds into the Treasury’s account.
The following is a list of services generally offered by banks and utilised by larger
businesses and corporations:
Balancing a check book can be a difficult process for a very large business, since it
issues so many checks it can take a lot of human monitoring to understand which
checks have not cleared and therefore what the company’s true balance is. To
address this, banks have developed a system which allows companies to upload a
list of all the checks that they on al daily basis, so that at the end of the month the
bank statement will show not only which checks have cleared, but also which have
not.
Large retailers who collect a great deal of cash may have the bank pick this cash up
via an armoured car company, instead of asking its employees to deposit the cash.
Services are usually offered by the cash management division of a bank. The
Automated Clearing House is an electronic system used to transfer funds between
banks. Companies use this to pay others, especially employees ( this is how direct
deposit works). Certain companies also use it to collect funds from customers. This
system is criticised by some customer advocacy groups, because under this system
banks assume that the commonly initiating the debit is correct until proven
otherwise.
Corporate clients who actively manage their cash balances usually subscribe to
secure web-based reporting of their account and transaction information at their lead
bank. Theses sophisticated compilations of banking activity may include balances n
foreign currencies, as well as those at other banks.
Large or national chain retailers often are in areas where their primary bank does not
have branches. Therefore, they open bank accounts at various local banks in the
area. To prevent funds in these accounts from being idle and not earning sufficient
interest, many of theses companies have an agreement set with their primary bank,
whereby their primary bank uses the Automated Clearing House to electronically
“pull” the money from theses banks into a single interest-bearing bank account.
Lockbox services:
Often companies which receive a large number of payments via checks in the mail
have the bank set up a post office box for them, open their mail, and deposit any
checks found. This is referred to as a “lockbox” service.
Positive Pay:
Positive pay is a service whereby the company electronically shares its check
register of all written checks with the bank. The bank therefore will only pay checks
listed in that register, with exactly the same specifications as listed in the register.
This system dramatically reduces check fraud.
Sweep Accounts;
Are typically offered by the cash management division of a bank. Under this system,
excess funds from a company’s bank accounts are automatically moved into a
money market mutual fund overnight, and then moved back the next morning. This
allows them to earn interest overnight. This is the primary use of money market
mutual funds.
Zero Balance Accounting:
Wire Transfer:
Controlled Disbursement:
This is another product offered by banks under Cash Management Services. The
bank provides a daly report, typically early in the day, that provides the amount of
disbursements that will be charged to the customer’s account. This early knowledge
of daily funds requirements allows the customer to invest any surplus in intraday
investment opportunities, typically money market investments. This is different
from delayed disbursements, where payments are issued through a remote branch of
a bank and customer is able to delay the payment due. To increased float time. In the
last, other services have been offered the usefulness of which has diminished with
the rise of the Internet.
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
matte, 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
minimising the opportunity cost of holding cash and maximising 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.
Birman and Mc Adam’s (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 balanced 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. He hypothesised 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 presented evidence on the question f economics of scales. He
concluded that cash varies less than proportionately with the assets of firms.
He hypothesised 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 analysed 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 non-payment is infinite. He added that the firm or the individual is presumed to
hold that amount of money which minimises 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 maximises
profits by an equivalent amount.
Sprenkle (1967) in their article “Large Economics Units, Banks and the Transactions
Demand for Money” on quarterly journal of economics, ( 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 equaliser
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, Vodel and Mandal 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. Nadir (1969) suggested that the estimates of elasticity of
demand for money with respect to scale or production are unequivocally equal to
unity.
Taking cognisance of the fact that the optimisation the operating decision subject to
various financial constraints is possible, Charles, Cooper and Miller (1959) had
applied Linear 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 linear -
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 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.
CHAPTER – 3
3.1 INDUSTRY PROFILE
The world standings for the Indian automobile sector, as per the Confederation of
IndianIndustry, are as follows:
The Indian passenger car market was valued at US$ 32.70 billion in 2021, and it is
expected to reach a value of US$ 54.84 billion by 2027 while registering a CAGR of
over 9% between 2022-27. The global EV market was estimated at approximately US$
250 billion in 2021 and by 2028, it is projected to grow by 5 times to US$ 1,318 billion.
India accomplished a significant milestone, with the sale of 8,32,434 Evs in 2023-24
(till August 2023).
The electric vehicle (EV) market is estimated to reach Rs. 50,000 crore (US$7.09
billion) in India by 2025. A study by CEEW Centre for Energy Finance recognised a
US$ 206 billion opportunity for electric vehicles in India by 2030. This will necessitate
a US$ 180 billion investment in vehicle manufacturing and charging infrastructure.
According to NITI Aayog and he Rocky Mountain Institute (RMI), India’s EV finance
industry is likely to reach Rs. 3.7 lakh crore (US$ 50 billion) by 2030. A report by the
India Energy Storage Alliance estimated that the EV market in India is likely to increase
at a CAGR of 36% until 2026. In addition, the projection for the EV battery market is
expected to expand at a CAGR of 30% during the same period.
Indian automotive industry is targeting to increase the export of vehicles by five times
during 2016-26. In FY23, total automobile exports from India stood at 47,61,487.
Indian automobile exports of two-wheelers stood at 36,52,122 in FY23.
Factors that will drive growth in the sector
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.
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.
COMPANY PROFILE
INFORMATION
Industry : Automotive
Products : Motorcycles,
Commuter Vehicles & Scooters,
Engines, Snowmobiles,
The company’s products includes motorcycles, scooters, motorised 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 leader in water vehicle sales.
HISTORY
Beginnings: 1955
The motorcycle division of Yamaha was founded in 1955, and was headed
by GenichiKawakami. 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 acompetitive success at racing from the
beginning, winning not only the 125cc class in theMt. Fuji Ascent, but also
sweeping the podium with first, second and third place in the AllJapan Autobike
Endurance Road Race that same year. Early success in racing set the tonef o r
Yamaha, as competition in many varieties of motorcycle racing has
been a key endeavour of the company throughout its history, often
f u e l l e d b y a s t r o n g r i v a l r y 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.
By 1963 Yamaha’s dedication to both the two-stroke engine an 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 Start. Yamaha continued on with both the two-
stroke line and four-stroke twins at a time that other Japanese manufactures 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.
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, 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.
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 Robert’s 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.
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.
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, Weakness, and
Opportunities & Threats (SWOT) Analysis of Yamaha motors.
Strengths:
One of the major brand in motorsport like MotoGP, World Super bike 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.
Weakness:
Opportunities:
Threats:
Vision:
Vision we constantly deliver best-fit global it services and solutions to improve client’s
competitive advantage.
Mission:
Kando is 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.
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 realise high- quality products and services effectively, taking a customer-oriented
approach that emphasises a deep sense of emotion in accordance with the spirit of the
Yamaha Brand Charter”. Under theses 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.
The Product Assurance Committee is the highest organisation 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. It’s 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 authorised 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.
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 ate technologically proficient witch regard to quality
related specifically to their type of work and specialisation. Within those programs as a
base, all employees undertake the “I am Yamaha” activities for enhancing quality during
their actual work. Theses 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 organisation and
as individuals, we will strive to further improve quality by working to:
Increase interaction
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, products divisions undertake their own effective
activities based on their respective circumstances, to further increase awareness and
create more opportunities for learning.
Approach to Service:
The Yamaha Motor Group views after sales services as an important aspect of quality,
and that principle is laid out in our Basic Policies for Quality as “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 realise high-quality products and services effectively”. Under these
policies, we have introduced the slogan “One to One Service”for the active creation
of positive relationships with each individual customer. Accordingly, we operate the
Yamaha Technical Academy (YTA) program around the world to train service
technicians as per our proprietary unified global standard. Trainers in each country
who have been trained by headquarters hold regular classes for the service staff in
their country, so that they acquire technical skills that are up to Yamaha’s unified
global standard. This program has three levels of accreditation – Bronze,Sliver, and
Gold – and dealers display certificates showing the level that the dealership has
received. In 2018, the percentage of technicians in our 24 major countries with YTA
certification was 76% (of a targeted 80%), and the percentage of dealerships with a
certified technician was 84%. In addition, the Yamaha Parts & Accessories Academy
is a similar training program covering the parts and accessories that are essential for
after sales service.
The Yamaha World Technician Grand Prix is one of our activities to deliver even
greater customer satisfaction by enhancing the technical abilities used in daily work
by service staff who have been trained at the YTA. The top finishers at regional
preliminary rounds gather at our headquarters once every two years to compete in a
contest to determine the world champions in the ares of “high level of technical
skills,” “easy-to-understand explanations,” and “Kando response.” Service staff from
around the world participates in this competition, and their motivation to be a top
finisher is reflected in their daily service activities.
Responding to Customers:
We want customers to use our products with peace of mind for a long time. This
makes a stable supply of parts indispensable. To prevent shortages for motorcycles,
we maintain a minimum of a 10-year supply of parts, and have built a system where
customers can order parts list published on the website, so that customers can use a
personal computer or smartphone to identify the parts they need and order them from
dealers. Our service activities also include a “time commitment service”, mainly in
the ASEAN region where many people use motorcycles as a means of daily
transportation. For example, we tell the customer, “ A regular inspection will take this
long,” or “An oil change will take this long,” committing to the amount of time the
customer has given us and not causing stress for the customer by saying, “We don’t
know when it will be finished.”
The Yamaha Motor Group views opinions and requests from customers as
expressions of their expectations for their products and services, so we carefully
respond to each opinion and request we receive, in the belief that raising the level of
customer satisfaction will lead to trust. Based on this spirit, they undertake various
activities to know how customers evaluate and use our products to make in the future.
For example, we send an Internet survey to customer who have purchased a new
product, and in some cases , they may ask the customer in person for a more detailed
evaluation. Their Customer Communication Centre (available only in Japan) handles
customer inquiries
Customer safety is our first priority, and in addition to enhancing product quality,
we continue to put our maximum effort into activities which explain to
customers in an
appropriate manner how to use our products correctly. Theses efforts include the
publication of catalogues and brochures that convey the attractiveness of our products
and product manuals that explain correct product use, as well as safety promotion
activities such as riding schools that allow customers to gain first-hand knowledge
about using our products. The following is an introduction of some of the activities
organised by our various businesses that help customers understand how to use our
products properly.
Yamaha mainly targets the middle-class people who are looking for something
stylish, offering good mileage guarantee and will not break the bank. It also targets
youths who are within the 25-35 year group bracket. Fortunately, the biggest part of
the population today comprises of the middle class, with the youth age group also
taking a great claim of the population. The company has one of the most excellent
advertisements, branding, global distribution and promotion strategies that have
enabled it to be present in almost all the countries in the world. Yamahas presence is
well felt mainly in the North American continent, Europe, and Asia especially Japan.
It’s presence in Africa is not as formidable but very considerable. Yamaha is available
in a number of subsidiaries with some of its groups including Yamaha Fine
Technologies Co Ltd, Yamaha Pro Audio, Yamaha Golf Cart Company, Yamaha
Music Communications Company Ltd, Yamaha Motor Company, Yamaha Mechanic
Corporation and Yamaha Living Tee Corporation etc.
Yamaha has a very heart touching tagline in the form of “Yes Yamaha touching your
heart”. This is one of the aspects of the company’s promotion mix that have been able
to attract a lot of potential customers. It’s dedication to producing competitive
products for globally visible activities such as in motorsports has enabled it to cut and
edge for itself. The WorldSuperbikeand the Moto GP are some very popular brands
within these sporting activities thus helping the company in their promotion mix.
Yamaha is involved in corporate missions where it strives to ensure that the society is
emotionally moved and touched by its CSR activities. It’s Yamaha Music Foundation
has also given back to the community by promoting music popularisation and music
education in Japan since 1966.
India Yamaha Motor Private Limited is the wholly owned Indian subsidiary of
Yamaha Motor company, headquartered at Chennai, India. Yamaha Motor Company
Japan made its initial foray into India in 1985 as a joint-venture with Escorts Group.
In August 2001, it became a 100% subsidiary of Yamaha Motor Co., Ltd. Japan
(YMC). In 2008, Mitsui& Co., Ltd. Entered into an agreement with YMC to become
a joint-investor in India. It produces a range of motorcycles for domestic
consumption and export including the FZ, SZ, Saluto, Fazer, and YZF. Yamaha own
three plants for manufacture of two-wheelers in India: one in Faridabad, Haryana, one
in Surajpur, Uttar Pradesh, and one in Chennai, Tamilnadu. It is from theses three
plants that Yamaha handles production of motorcycles and parts for both domestic as
well as overseas markets. While the Faridabad plants was started in 1965, the
Surajpur plants followed with its inception in 1984 and Chennai in 2014.
The Yamaha YZ450F won the AMA Supercross Championship two years in a row, in
2008 with Chad Reed, and 2009 James Stewart. Yamaha was the first to build a
production monoshock motocross bike and one of the first to have a water-cooled
motocross production bike. Yamaha’s first Motocross competition four-stroke bike,
the
YZ400F, won the 1998 USA outdoor national Championship with factory rider Doug
Henry. Sine 1962, Yamaha made production road racing Grand Prix motorcycles that
any
licensed road racer could purchase. In 1970, non-factory privateer teams dominated the
250cc World Championship with Great Britain’s Rodney Gould winning the title on a
Yamaha TD2. Yamaha also sponsors several professional ATV riders in several areas of
racing, such as cross country racing and motocross. Yamaha has had success in cross
countrywith their YFZ450, ridden by Bill Balance, winning 9 straight titles since 2000.
Yamahas other major rider, Traci Cecco, has ridden the YFZ450 to 7 titles, with the
first
In 2000. In ATV motocross, Yamaha has had success with Dustin Nelson and Pat
Brown, both who race the YFZ450.
DIVISIONS
Yamaha Motors is a highly diversified company which produces products for a large
number of industries and consumer market segments:
Motorcycles: Sport bikes, Star Cruiser bikes, trail bikes, road racers and motor
cross racers
Marine engines: Outboard motors, electric marine motors, marine diesel engines
and stern drives
Yamaha parts and accessories, apparel, cycle helmets and motor oil
AUTOMOBILE ENGINES
Yamaha has built engines for other manufacturers vehicles beginning with the
development and production of the Toyota 2000GT (1967). The cylinder head from the
Toyota 4A-GE
engine was developed by Yamaha and built at Toyota’s Shimayama plant alongside the
4A and 2A engines. In 1984, executives of the Yamaha Motor Corporation signed a
contract with the Ford Motor Company to develop, produce, and supply compact 60 3.0
Liter DOHC V6 engines for transverse application for the 1989-95 Ford Taurus SHO.
From 1993 to 1995, the SHO engine was produced in 3.0 and 3.2 Liter versions.
Yamaha jointly designed the 3.4Liter DOHC V-8 engine with Ford for the 196-99 SHO.
Ford and Yamaha also developed the Zeeta-SE branded 4-cylinder engines used in
several Ford cars like the small sports car Ford Puma. From 2005 to 2010, Yamaha
produced a 4.4 Litre V8 for Volvo. The B8444S engines were used in the XC90 and S80
models, whilst also adapted to 5.0L configuration for Volvo’s foray into the V8
Supercars with the S60. British sports car maker Noble also uses a bi-turbo version of
the Volvo V8 in their M600.
SNOWMOBILES
In 2007, Yamaha became the only snowmobile manufacturer to use a four-stroke only
across its line-up (in the United States only – the VK 540 model remained available as a
2-stroke in other markets). Yamaha had introduced 4-strokes to their line-up in 2003
with the release of the RX-1. This 4 cylinder model became the first performance-
oriented 4-stroke snowmobile on the market (it was not the first modern 4-stroke
snowmobile produced- that honour belongs to Arctic Cat for their Yellowstone Special
(released in 2000), which was designed as a rental sled that could meet Yellowstone
National Park’s stringent emission requirement). However, Yamaha received much
criticism for its weight disadvantage when compared to similar 2-strokes, despite its
fuel economy and low-range torque. Yamaha further used 4-stroke technology to
introduce the 80FI engine equipped in the Phazerand Venture Lite models in order to
provide small displacement, lower horsepower models marketed towards smaller
riders . This engine had one of the highest specific output of any 4-stroke in production,
with 160 HP/L. Yamaha achieves this even without the use of a forced induction system.
Yamaha is also a key player in the “4- Stroke Wars”, which are a series of
advertisements from opponent Ski-Doo, who claim their E-Tec-equipped 2-strokes are
still cleaner and more efficient than 4-strokes, while Yamaha claims the 4-strokes are
cleaner and more reliable. Yamaha also broke a multi-year absence from sno-cross in
the winter of 2006/2007 with their introduction of a factory race team headed by former
Arctic Cat racer Robbie Malinowski. Yamaha was the first brand to win with a 4-stroke
snowmobile in a professional snow cross race during 2006 at the WPSA Snow cross
Championship.
In a partnership with Arctic Cat (now owned by Textron), Yamaha Motor Company
supplies the 1,050cc 3-cylinder (135+ HP) and 998cc 3-cylinder turbocharged (180+
HP) engines for use in a collaborative chassis sold under each brand name. While there
are similarities between the respective manufacturers models, small differences can be
noted. SR Viper ( Arctic Cat 7000-series equivalent) and SideWinder ( Arctic Cat 9000-
series equivalent) models are equipped with Yamaha clutches and changes to certain
plastic body panels (such as the colour, suspension set-up, windshield and inter cooler
housing on turbocharged models). The suspension layout, chassis, gauge package, and
handlebar switchgear remain the same for both Yamaha and Arctic Cat snowmobiles.
This partnership was established for the 2014 model year with the introduction of the
2014 SR Viper and Arctic Cat 7000-series line-up. In 2017, Arctic Cat and Yamaha
introduced the world’s most powerful snowmobile engine with the release of the
SideWinder and 9000-series line-ups.Sidewinder SRX LE (Spring Order only)
Sidewinder LTX LE (Spring Order only) LTX SE (In-Season “Sport”), & LTX DX (In-
Season “Comfort”) Sidewinder XTX LE (Spring Order only) & XTX SE (In-Season)
Sidewinder BTX LE (Spring Order only) Sidewinder MTX LE (Spring Order only) SR
Viper LTX (In-Season) VK 540 (In-Season) Sno Scoot 120 &Sno Scoot 200 Historic
“Japan Built” models (such as the Apex and R/S Vector lineups) and most SR Viper
models were removed from production to support the sale of “hold-over” units from
previous models years at MSRP.
BALANCE SHEET
Years
Particulars 2022 2021 2020
Equity & liabilities SH funds
Non-current liabilities
Long term borrowing 37,59,71,569 35,56,90,357 34,64,41,847
Deferred tax liabilities _ _
Other long term liabilities 21,81,24,972 32,57,88,979 37,26,23,974
Long term provisions 2,73,21,161 2,52,28,322 2,66,82,000
62,14,17,702 70,67,07,658 74,77,47,821
Current liabilities
Short term borrowing 36,84,95,542 30,00,23,735 30,45,16,203
Trade payables 1,24,56,75,628 1,98,64,90,310 1,96,74,79,731
Other current liabilities 15,08,22,775 3,95,30,439 7,30,78,406
Short term provisions 13,41,35,450 13,61,19,389 11,66,64,877
1,89,91,29,395 2,46,21,63,873 2,46,17,39,216
Total 4,85,04,07,793 5,53,90,53,967 5,65,96,42,543
Assets
Non-current assets
a. Fixed assets
i. Tangible assets 2,47,75,06,139 2,31,48,58,681 2,28,05,11,429
ii. Intangible assets 41,63,925 56,56,703
iii. Capital work in progress 17,63,37,360 19,18,24,040
2,48,16,70,064 2,49,68,52,743 2,47,23,35,469
b. Non-current investments 2,14,76,940 2,14,76,940 2,14,76,940
c. Deferred tax assets 1,78,03,360 3,61,08,849
d. Long term loans 18,49,74,747 19,19,34,988 18,80,55,338
e. Other non-current assets 6,64,64,805 28,15,16,301 42,20,55,338
2,75,45,86,556 3,00,95,84,333 3,14,00,31,824
Current assets
a. Current investments 1,08,75,88,405 1,35,64,07,164 1,66,41,50,391
b. Inventories 40,04,97,644 65,92,23,336 41,14,33,969
c. Trade receivables 1,85,66,728 2,99,96,457 2,57,68,781
d. Cash & cash equivalent 30,42,98,359 18,47,14,405 15,75,18,135
e. Short term loans 30,42,98,359 18,47,14,405 15,75,18,135
f. Other current assets 28,48,70,101 29,91,28,273 26,07,39,443
2,09,58,21,237 2,52,94,69,634 2,51,96,10,720
Total 4,85,04,07,793 5,53,90,53,967 5,65,96,42,543
PROFIT & LOSS ACCOUNT
Years
S.N Particulars 2022 2021 2020
1 Income
Revenue from operation (gross) 5,73,48,06,718 6,33,60,48,456 10,94,46,49,232
Less: Excise duty 60,51,43,905 49,71,74,792 56,00,98,922
Revenue from operation (net) 5,12,96,62,813 5,83,88,73,663 10,38,45,50,310
2 Other income 5,21,46,810 10,47,09,272 9,90,03,129
3 Total revenue (1+2) 5,18,18,09,623 5,94,35,82,936 10,48,35,53,439
4 Expenditure
a. Cost of material consumed 3,80,52,90,777 3,16,31,01,843 4,43,40,90,575
b. Purchase of stock in trade 32,35,65,623 1,77,01,85,893 5,07,30,13,743
c. Changes in investments -33,35,78,325 -33,59,95,134 -58,95,41,198
d. Employee benefits expense 17,87,32,303 21,36,15,124 20,76,77,447
e. Finance costs 11,02,98,251 9,85,72,432 9,47,97,735
f. Depreciation, amortisation exp. 15,30,88,368 17,91,98,892 18,36,28,723
g. Other expenses 92,36,39,402 83,23,08,251 1,01,78,16,953
Total expenses 5,16,10,33,399 5,92,09,87,301 10,42,14,83,978
5 Profit/loss before exceptional (3-4)
6 Exceptional items 2,07,76,224 2,25,95,635 6,20,69,461
7 Profit/loss before extraordinary (5+6)
8 Extraordinary items 2,07,76,224 2,25,95,635 6,20,69,461
9 Profit/loss before tax (7+8) 2,07,76,224 2,25,95,635 6,20,69,461
10 Tax expenses:
a. Current tax expenses for current year
b. Less: MAT credit
c. Current tax expenses relating to prior years 4,30,000 -3,24,625
d. Net current tax expense 4,30,000 -3,24,625
e. Deferred tax 1,78,03,360 1,83,05,489
4,30,000 1,78,03,360 1,79,80,864
11 P/L after tax(9+10) 2,12,06,224 4,03,98,995 8,00,50,325
Earning per equity share
Basic and diluted (in R/s.) 0.05 0.1 0.2
1.CURRENT RATIO:
Formula: Current Assets Current Ratio
= ———————-
Current Liabilities
Table: 4.1
Graph : 4.1
Current Ratio
3,000,000,000
2,500,000,000
2,000,000,000
1,500,000,000
1,000,000,000
500,000,000
Interpretation:
This graphshows the current financial position of Yamaha Motors Showroom on the
basis of current ratio. In 2020 the current ratio is 32% &2021 the current ratio is
33% will be increase with the value of 1% on previous year. In 2022 the current
ratio is 35% will be increase with the value of 2% on previous year.
2. QUICK RATIO:
Table : 4.2
Graph :4.2
Quick ratio
2,500,000,000
2,000,000,000
1,500,000,000
Quick Assets
Quick Laibilities
Total Ratio
1,000,000,000
500,000,000
0.38
0 0.35
2019-20 0.24
2020-21
2021-22
Interpretation:
This graph is related to quick ratio of Yamaha Motors Showrooms. In the year 2020
the quick ratio is 25% and in the year 2021 the quick ratio is 36% will be increase
with the value of 11% on previous year. In 2022 the quick ratio 39% will be increase
with the value of 3% on previous year.
3. DEBT-EQUITY RATIO:
Table : 4.3
Graph :4.3
Debt-equity ratio
2,500,000,000
2,000,000,000
500,000,000
0.32
0 0.28
0.27
2019-20
2020-21
2021-22
Interpretation:
This graph shows debt-equity ratio of Yamaha Motors Showrooms. In 2020 the debt-
equity ratio is 31% and 2021 the debt-equity ratio is 32% will be increase with the value
of 1% on previous year. In 2022 the debt-equity ratio 37% will be increase with the
value of 5% previous year.
Formula:
Table : 4.4
Graph : 4.4
350,000,000
300,000,000
250,000,000
Long term debt
200,000,000 Net assets
Total Ratio
150,000,000
100,000,000
50,000,000
1.91
0 5.28
2019-20 5.99
2020-21
2021-22
Interpretation:
This graph shows debt to capital employed ratio of Yamaha Motors Showrooms.
In 2020 the debt to capital employed ratio is 45% and 2021 the debt to capital
employed ratio is 40% will be decrease with the value of 5% on previous year.
In 2022 the debt to capital employed ratio 15% will be decrease with the value
of 25% on previous year.
5. PROPRIETARY RATIO:
Formula :
Shareholders’ funds
Proprietary Ratio = ———————————
Capital employed (net assets)
Table 4.5
Graph : 4.5
Proprietary ratio
2,500,000,000
2,000,000,000
Shareholders funds
1,500,000,000 Net assets
Total Ratio
1,000,000,000
500,000,000
11.85 35.22 42.34
0
2019-20 2020-21 2021-22
6.TOTAL ASSETS TO DEBT RATIO:
Formula:
Totalassets
Total assets to debt ratio = ———————————
Longterm debts
Table : 4.6
Graph : 4.6
5,000,000,000
4,000,000,000
3,000,000,000
2,000,000,000
1,000,000,000
12.9 15.57 16.34
0
2019-20 2020-21 2021-22
Formula :
Table :4.7
Graph : 4.7
INVENTORY TURNOVER RATIO
12,000,000,000
10,000,000,000
8,000,000,000
6,000,000,000
4,000,000,000
2,000,000,000
14.32 9.61 26.6
0
2019-20 2020-21 2021-22
Formula :
Table : 4.8
Graph : 4.8
TRADE RECEIVABLES TURNOVER RATIO
12,000,000,000
10,000,000,000
8,000,000,000
6,000,000,000
4,000,000,000
2,000,000,000
25.24 8.86 12.81
0
2019-20 2020-21 2021-22
Interpretation:
Formula :