Cash flow, future prospects and

liquidity of manufacturing Companies

Deepashree Mishra
Moni dahal
Prasansa Baniya
Saloni Maharjan
Shailesh Gyawali
Sneha Manandhar
Suprima Poudel
 Introduction
• ABC: Chicken Food manufacturing Company
– Total capital invested: 1,04,19,000
– Location: Tokha
• XYZ: Tobacco (Gutka) Manufacturing Company
– Total capital Invested: 1,00,00,000
– Location: Gokarna
• POR : water tanks and pipes manufacturing
Company
– Total Capital invested: 5,52,65,000
– Location: Thankot
 Objectives
• To understand the Liquidity and future
prospects of ABC company, XYZ company and
PQR company
• To improve our understanding of accounting
by evaluating real world financial situations
and financial reports
• To help make better recommendations and
decisions by interpreting the financial reports
 Methodology
• Source: Secondary data provided by Chartered
Accountants
• Interview with the CAs regarding the
performance of the company
• Informal discussion about the nature of
company
 Tools of Analysis
• Ratio Analysis:
– Liquidity
– Solvency
– Profitability

• Financial ratios are used by businesses and analysts

to determine how a company is financed. Ratios are
also used to determine profitability, liquidity, and
solvency. Liquidity is the firm's ability to pay off short
term debts, and solvency is the ability to pay off long
ABC COMPANY
XYZ Company
PQR Company
 Conclusion
• ABC
Liquidity: Increased but Unable to meet current liabilities
Profitability: Increased Net Profit XYZ .18% - .64% and ROA
No future Prospect - Negative cash flow to capital expenditures ratio from 2018-
2019 might indicate that the company is not in a position to grow

• XYZ
Liquidity: Decreased from 2.2 – 1.1 (while quick assets are unable to meet current
liabilities)
Profitability: Net Profit, ROA- Constant for two years
Solvency: Acceptable and Improving

• PQR
Liquidity: Increased Current Ratio 2.96- present
Profitability: NP and ROA slightly decreased than last year
Solvency: Weaker position of the company in terms of debt repayment
Thank YOU