Cash Management

Cash management HLL Life Care

DCMS. PMSA PTM COLLEGE

A STUDY ON CASH MANAGEMENT AT HLL

LIFE CARE LTD, AKKULAM, TRIVANDRUM

PROJECT REPORT

Submitted to Kerala University

In partial fulfillment of the requirements for the award of degree of

BACHELOR OF COMMERCE WITH COMPUTER APPLICATION

Submitted by

AJI. R LAL

(Candidate Code: 159 -10 814 002)

Under the guidance of

Asst. Prof. Mr. SHIBI CHANDRADAS. M. S

Department of Commerce and Management Studies

P M S A Pookoya Thangal Memorial Arts & Science College

KADAKKAL, KOTTAPPURAM

2012 – 2013



DECLARATION

I declare that this report entitled “A PROJECT REPORT ON THE STUDY OF

EFFECTIVENESS OF CASH MANAGEMENT” submitted by me for the award of degree of

B com of the University of Kerala is my own work. The report has not been submitted for the

award of any other degree of this university or any other university

Place: Kadakkal AJI. R LAL

Date: 159-10 814 002



ACKNOLOWLEDGEMENT

I wish to express my indebtedness and gratitude to Mr. ARUN of HLL Akkulam

Ltd for giving me support to do this project.

With the deep revence, I express indebtedness to Mr. HASEEN. A. SALAM

(Chairman-PMSA PTM) and Prof. M. SAFARUDEEN (Principal- PMSA PTM) for giving me

an opportunity to pursue Bachelor of Commerce Degree Course in this prestigious institution and

to undertake this project work.

I place on record my deep sense of gratitude to Asst. Prof. GIRISH KUMAR B

Head of the Department of Commerce and Management Studies for generous and timely help

accorded during the programme.

I wish to express gratitude to Asst. Prof. SHIBI CHANDRADAS MS

Department of Commerce and Management studies for moral support and co-operation for this

satisfactory fulfillment of the programme.

I wish to express gratitude to my all friends for moral support and co-operation for

this satisfactory fulfillment of the programme.

Last but not least; my gratitude is to the almighty for showering me with abundant

grace through the entire duration of this training. I believe that the light that God has passed on

me shall be kept alight in all days to come



TABLE OF CONTENTS

CHAPTERS

PARTICULARS

PAGE NO

CHAPTER 1

INTRODUCTION OF THE STUDY

1-9

CHAPTER 2

COMPANY PROFILE

10-16

CHAPTER 3

REVIEW OF LITERATURE

17-21

CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

22-64

CHAPTER 5

FINDINGS AND SUGGESTIONS

65-67

CHAPTER 6

CONCLUSION

68-69

BIBILOGRAPHY

70-71

ANNEXTURE

72-76



LIST OF TABLES

TABLE NO. NAME OF TABLE PAGE NO.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

CURRENT RATIO

ABSOLUTE LIQUID RATIO

CASH TO WORKING CAPITAL

GROSS PROFIT RATIO

NET PROFIT RATIO

CASH TO OTHER INCOME

CASH TO SALES

CASH IN HAND

TRENT ON OTHER INCOME

TRENT ON WORKING CAPITAL

TRENT ON SALES

TRENT ON TOTAL INCOME

TREND ON VARIOBLE COST

CORRELATION BETWEEN CASH AND NET

PROFIT

CORRELATION BETWEEN CASH POSITION AND

TOTAL INCOME

CORRELATION BETWEEN CASH AND TOTAL

SALES

24

27

30

33

36

39

41

44

46

48

50

52

54

56

57

58



LIST OF CHARTS

TABLE NO. NAME OF CHARTS PAGE NO.

1.1

1.2

2.1

2.2

3.1

3.2

4.1

4.2

5.1

5.2

6

7

8

9

10

11

12

13

14

15

16

17

CURRENT ASSETS TO CURRENT LIABILITIES

CURRENT RATIO

CURRENT LIABILITIES AND ABSOLUTE LIQUID

RATIO


CASH AND WORKING CAPITAL

CASH TO WORKING CAPITAL RATIO

GROSS PROFIT AND SALES

GROSS PROFIT RATIO

NET PROFIT AND SALES

NET PROFIT RATIO


CASH TO SALES

CASH IN HAND

TRENT ON OTHER INCOME

TRENT ON WORKING CAPITAL

TRENT ON SALES

TRENT ON TOTAL INCOME

TREND ON VARIABLE COST

CORRELATION BETWEEN CASH AND NET

PROFIT

CORRELATION BETWEEN CASH POSITION AND

TOTAL INCOME

CORRELATION BETWEEN CASH AND TOTAL

SALES

25

26

28

28

29

31

31

34

34

37

37

39

40

41

42

44

46

48

50

52

54



CHAPTER I

INTRODUCTION



Finance is the study of how investors allocate their assets over time under conditions of

certainty and uncertainty. A key point of finance, which affects decision, is the time value of

money, which states that a unit of currency today, is worth more than the same unit of currency

tomorrow. Finance aims to price the assets based on this risk level, and expected rate of return.

Finance can be broken into three different sub categories;

1. Public Finance

2. Corporate finance and

3. Personal Finance

In a business organization finance department is deals with financial activities

Financial management consist Planning, Organizing, Directing, and Controlling of

financial activities such as procurement and utilization of funds of enterprise. It means applying

general management principle of financial resources of the enterprise financial decision include

dividend decision, investment decision and retained earnings etc. the financial management is

generally concerned with procurement, allocation and control of financial resources of a concern.

It ensures regular and adequate supply of fund of the concern. It ensures optimum utilization of

funds. They should utilize maximum possible way at least cost.

Finance management has to make estimation with regards to capital requirement of the

company. This will depend up on expected cost and profit and future programmers and policies

of a concern it can made in an adequate manner which increases earning of enterprise.



Finance is the life blood of every business concern. It is an important function of any

business, as finance is required to meet the various activities of it. Cash is the important current

asset for the operations of the business. It is the basic input needed to kept the business running

on a continuous basis. It is also the ultimate output expected to be realized by selling the services

or product manufactured by the firm. The firm should kept sufficient cash, neither more nor less

cash shortage will disrupt firm’s manufacturing operations while exertive 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.

Financial management occupies a significant place because it has an impact on all

activities of the firm. Its primary responsibility is to discharge the finance function successfully.

Thus financial management is an appendage of the finance function. No one can think of any

business activity in isolation from its financial implications. The management may accept or

reject a business proposition on the basis of its financial viabilities. In other words, the live

executives who are directly involved in a decision making process should give supreme

impotence for financial consideration.

The finance function centers round the management of funds raising and using them

effectively. But the dimensions of financial management are much border than more

procurement of funds. Planning is one of the primary activities of the financial managers. It helps

him to obtain funds under the best consideration. However, financial management should not be

taken to be a profit extracting device. It implies a more comprehensive concept than the simple

objective of profit making. It broader mission should be to protect the interest of the different

sections of the community through maximizing the value of the firm.



The concept of financial management is applicable to an organization irrespective of its

size, nature of ownership and control. They can be applied to any activity or an organization,

which has financial implication. in the words of Raymond Chambers; “ the term financial

management may be applied tom any kind of undertaking or organization regardless of its aims

or constitution.

The term corporate financial management of companies or corporations consists of the

decision relating to (a) investment-concerned with capital budgeting and current asset

management (b) financial-concerned with determining the best financing mix (c) dividend-

concerned with the solution to the decision of dividend policy.

Cash management is the management of the cash balance of a concern is such a manner

as to maximize the availability of cash not invested in fixed assets or inventories and to avoid the

risk of insolvency. According to Kayner these are three motives for holding cash: the

transactions motives, the precautionary motive, and the speculative motive. The most useful

technique of cash management is the cash budget.

In simple terms, cash management may be defined as management tool to ensure that

sufficient cash is available to meet current and future liabilities, with any surplus being safety

invested to generate the maximum income.

In a business, anything done financially affect cash eventually. Cash is to a business is

what blood is to a living body. A business can’t operate without its lifeblood cash, and without

cash management, these may carmine no cash to operate. Cash movement in a business is two

way traffic, inflow and outflow. Important aspect which is unique to cash management is time

dimension associated with the movement of cash due to non-synchronicity of cash inflow and



outflow, the inflow may be more than the outflow or the outflow may be more than the inflow at

a particular point of time. This needs regulations left to itself cash flow is apt to follow

monsoonal pattern and shows of cash may be heavy, scanty or just normal, hence there is a dire

need to control its movement through skillful cash management. The primary aim of cash

management is to ensure that there should be enough cash availability when the needs arise not

too much but never too little.

Cash management is the management of the cash balances of a concern in such a

manager. On to minimize the availability of cash not invested in fixed assets or inventories and

to avoid the risk of insolvency. According to Keygen these are three motives of bolding cash.

The transaction motive, the precautionary motive, and the speculative motive are the most useful

technique of cash management.

Population explosion is the most important cause to from life care companies in India,

which means population explosion is “a pyramiding of number of a biological population”. As

the number of people in a pyramid increases, so do the problems related to the increased

population that will cause the population changes are the birth rate, death rate and migration.

Population explosion has many reasons like birth rate, poverty, regions etc. These reasons Are

bill fledged in India So a big chance to born a life care organization in India which is also

covered the unemployment in India.

HLL life care limited commenced its journey to serve the nation

in the area of health care, on March 1, 1966 with its incorporation as a corporate entity under the

ministry of health and family welfare of the Government of the India. HLL was setup in the

natural rubber rich state of Kerala, for the production of male contraceptive sheets.



HLL Life Care is the only company world manufacturing and marketing the widest range

of contraceptives. Today it is the leading marketing organization in the country in area of

contraceptives with a market share of over 65 percentage in the rural and semi urban markets

including the highly populated states to up, Bihar, Madyapradesh etc.



Cash management – HLL Life Care, Akkulam

1. Introduction to the study:

HLL is a Mini Ratna and upgrade as a scheduled B Central Public Sector Enterprise. HLL Life

Care Limited is the only company in the world manufacturing and marketing the widest range of

contraceptives. It is unique providing range condoms steroidal, and Tubal Rings etc. HLL

produces today 1.316 billion condoms annually marketing it one of the world’s leading

manufacturer of condoms accounting for nearly 10 percentage of the global production capacity.

Cash management is concerned with how a firm managers its cash levels and operations (cash

collection and payments) cash investments and dis- investments and cash borrowing and lending.

It is very essential for a business for long run and short run process.

In HLL Life Care their cash management was efficiently done. The cash management of past

years was good.

2. Statement of the problem

Finance is the life blood of every business concern. It is an important function of any business, as

finance is required to meet the various activities of it. Cash is the important current asset for the

operations of the business. It is the basic input needed to kept the business running on a

continues basic. It is also the ultimate output expected to be realized by selling the services or

product manufactured by the firm. The firm should kept sufficient cash, neither more nor less

cash shortage will disrupt firm’s manufacturing operations while exertive 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.

HLL Life Care is the leading business in India. It is a very big company .HLL has five places so

it must have an efficient finance management. In HLL an intelligent system of accounting is

followed. The finance department is meant for the effective utilization of funds. The account and

the financial statement are prepared will in time. Usually, transaction is recorded as they occur

book keeping in the recording business transaction in a systematic way.

3. Objective of the study

General objective

To evaluate the efficiency of the cash management of HLL.

Specific objective

To identify the cash efficiency on the basis of available data.

To analyze liquidity position of the firm.

To evaluate cash flow position of the firm.

To study on cash management techniques of the firm.

4. Methodology of the study

The study involves use of secondary data; the balance sheet and cash flow statement are the data

for the study. The study is analytical nature study.

5. Reference period

This study was conducted during 15 years commerce from November 25 to December 10 of

2012

6. Organization of the study

Proposed study consists of six chapters;

First chapter will be the Introduction of the study.

Second chapter will be the Profile of the company.



Third chapter will be the Review of literature.

Forth chapter contains Data analysis and interpretation.

Fifth chapter is Findings and Suggestions.

Sixth chapter is Conclusion and Bibliography.

7. Proposed period of completion of the study

Review of literature - 1 day

Collection of data - 2 day

Analysis of data - 3 day

Interpretation of data - 2 day

Preparation of drafting thesis - 5 day

Completion of the work - 2 days

15 days



CHAPTER II

COMPANY PROFILE



HLL is a Mini Ratna and upgrade as a scheduled B Central Public Sector Enterprise.

HLL Life Care Limited is the only company in the world manufacturing and marketing the

widest range of contraceptives. It is unique providing a range condoms steroidal, and Tubal

Rings etc. HLL produces today 1.316 billion condoms annually marketing it one of the world’s

leading manufacturer of condoms accounting for nearly 10 percentage of the global production

capacity.

HLL’ s Health Care product include: Blood collection bags, Surgical structure, Auto

Disable Syringes, Vaccines, In-Vitro Diagnostic Test Kits, Pharmacy products for women,

Natural products, Hydrocephalus shunt, Tissue expanders, Surgical and Examination Gloves,

Blood banking equipment, Neonatal equipment, Blood Transfusion and intravenous sets,

Vending machines, iron and Folic Acid Tablets, Sanitary Napkins oral rehydration Sults and

Medical plants.

Over the years each of the initiatives taken up by HLL are targeted at reaching quality

health care at the courtship of every family Associate Institute of HLL namely HLFPPT and Life

Spring Hospitals have nursed this to nation’s under served and vulnerable populace, at an

affordable cast. With vast array of innovative for Healthy Generation.

Over the past sixteen years, HLL has steadily setup a strong and sound infrastructure for

marketing. HLL has put in place a vast distribution network covering. It is the leading marketing

organization in the country in the area of contraceptives-with a market share of over 65% in the

rural and semi urban markets including the highly polluted states of UP, Madya pradesh Bihar

etc.



HLL has today, five stages of art manufacturing facilities – two at Thiruvananthapuram

one at Kanangala near Belguam another at Kochi and the fifth one at Manerar in Haryana.

In HLL Life Care there have a strong governing body;

Board of Directors

Shri M Ayyappan – Chairman & Managing Director.

Shri Raghubir Singh – Addl. Secretary & FA, Min. Of Health &Family

Welfare

Shri Braj Kishore Prasad – Joint Secretary Min. Of Health &Family Welfare

Shri R.P Kahandewal – Director (Finance)

Shri K K Suresh Kumar – Director(Marketing)

Dr. K Mohan Das – Director (Sree Chitha Thirunal Institute For Medical

Science & Technology Medical College Thiruvananthapuram)

Shri V Meenekshi Sundaram – Senior Chartered Accountant

Shri V. Sanjeevi – Managing Director & Chief Executive Officer

Corporate Objective

Maximize utilization of existing plants capacity.

Raise the profitability of the company.

Taking up profitability of the company.

To explore possibilities for strategic alliance for diversification.



To make continues effort for up gradation of technology and quality to be

internationally competitive.

To improve substantially direct marketing for all products.

To maximize cost reduction.

Organizational policies

Provide product and services, conforming to international standards in the health

care area to the complete satisfaction of all the customers and to building healthy

generations.

Achieve a high standard of personal, corporate and business excellence through

continual improvement, human resources development and team work.

Market the product and services of the company globally on the strength of

innovation quality, cost and development.

Melt all statutory and regulatory requirements and be an organization with good

corporate Governance and social responsibility.

HLL committed to quality by mandating that all manufacturing facilities are

certified to a quality system standard.

Corporate Social Responsibility

Hindustan Latex setup Hindustan Latex Family Planning Promotion Trust (HLFPPT) an

organizational mainly for reaching health care and contraceptive aids to the poor and

marginalized in the country. The trust has been undertaking well co-ordinates efforts in

population stabilization and HIV AIDS control.



The company renovated and provided an attractive landscaping at the Kowdiar Park

located near the heart of Thiruvananthapuram city. The company also added recreational

facilities.

Department of Hindustan Latex Limited, Akkulam Plant

Human resource

Finance

IT

Production

Stores

Sales

Purchases

Engineering

Quality Control

R & D

Finance Department

In HLL an intelligent system of accounting is followed. The finance department is meant

for the effective utilization of funds. The account has the financial statement are prepared with

precision accuracy well on time usually, transaction are recorded on the occur book keeping in

recording business transaction in a systematic way.

The finance department at HLL is divided into five section, they are



1. Ledger

2. Party Bills

3. Payroll, Cash and Computer

4. Costing

5. Finalization of accounts

1. Ledger section

The ledger section has to perform the function of passing and setting of all fright

advantages in HLL of bill related to electricity, water charges etc.

2. Party Bill Section

The party bill section deals with the service bill for rendering services such as

phone, typewriter etc. It certifies the bill and prepare for cash or cheque payment

accordingly.

3. Payroll, Cash and Computer Section

In patrol selection, the salary computation is done. The cash section deals with the

payment of salaries of employees. HLL has got a well – integrated M/s. All departments

are computerized.

4. Costing Section

The costing section deals with preparation of quarterly financial reports,

preparation of monthly profitability statement, budget preparation etc.

5. Finalization of Account Section

This section has perform the function of assisting the statutory of government

auditor in connection with audit and accounts of HLL and the preparation, assisting the

coordination of all works with the finalization of accounts of HLL.



The main functions of HLL Akkulam finance department.

i. The facilitate all finance aspects of the unit activities.

ii. To record and report on all financial aspects on the unit activities.

iii. To capture and record the cost of production of various products of the unit.

iv. To analyze and report on various expenditure of the unit a view to control the same.

v. The report on revenue and capital expenditure viz Budget.

vi. To control and manage all personnel related activities.

vii. To ensure statutory complaints of the financial related activities.

viii. To manage the working capital requirement with in the funds provided by the head

office.



CHAPTER III

REVIEW OF LITERATURE



1. Nithin balwani describes the cash flow statement help users of financial statement to evaluate

a companies’ ability to have sufficient cash both on a short- run and a long – run basic for

this reason, the cash flow statement is useful ritually every one interested in the company’s

financial health; short and long term creditors, inventories, management and both current and

prospective competitors.

Cash management is concerned with how a firm managers its cash levels and operations

(cash collection and payments) cash investments and dis investments and cash borrowing and

lending.

2. Eije and Westerman cash normally would not be needed if it were not for the market

imperfections and resulting transactions costs of urgently needing cash and short notice if the

need arises and these is no enough cash von.

3. David G. Coderre Ratio analysis identifies potential frauds by computing the variance in a set

of transactions and then calculating the ratios are; the ratio of the highest value to the lowest

value the ratio of the highest value to the next highest and the ratio of one numerical field to

another, such as the current year to the previous year or one operational area to another.

4. Lakshmanan Sivakunmar. Financial reports are the primary means by which managers

communicate company result to investors, creditors and analysis. There parties user the

reports to judge company performance, to assets creditworthiness, to predict future. Financial

performance, and to analyze possible acquisitions and take – over users of financial

statements must be able to meaning fully interpret financial reports, construct measures of

financial performance and analyze the reporting choice made by companies. Also, since

company managers choose accounting techniques when marketing their reports, users must

learn to undo the effects of this accounting choice. The purpose of this course is to give

foundation for such analysis.

5. Jawahar Lal describes that Financial Statement Analysis an analysis which highlights

important relationship in the financial statement. It focuses on evaluation of past operations

as revealed by the analysis for basic statements. Financial Statement analysis embraces the

methods used in assessing and interpreting the results of past performance and current

financial position as they related to the particular factor of interest ijn investment decision, it



is an important means of assessing past performance and in forecasting and planning future

performance.

6. S N Maheshwari states that accounting ratios are relationship expressed in mathematical

terms between figures which are connected with each other in some manner. Obviously, no

purpose will be served by comparing two sets of figures which are not at all connected with

cash other. Moreover, absolute figures are also until for comparison.

7. Jule.Et,al,says that the cash flow provide considerable information about what is really

happening business beyond that contained in either be income statement or the balance sheet.

Analyzing this statement should not task, instead it will quickly become obviously that the

benefits of understanding the sources and uses of a company’s cash for outweigh the costs of

undertaking some very straight forward analysis.

8. Maynard E.Rafure argues that attempts to improve working capital by delaying paymant to

creditors are counter-productive to individuals and to the economy as a whole. Claims that

attiring debtors and creditors levels for individual tiers with in a value system will rarely

produce any net benefit proposes that stock reduction generates system wide financial

improvements and other important benefits urgent those organizations seeking concentrated

working capital reduction strategies of focus on stock management strategies based on “lean

supply chain” techniques.

9. Smith and Ashburne, financial statements as the end product of financial accounting is a set

of financial statements that purport to reveal the financial position of the enterprise, the result

of its resent activities and analysis of what has been done with earning. The financial

statements are the outcome of preparing final accounts and there statements reveal financial

position and profitability of the concern and the utilization of retained earnings

10. N P.Srinivasan and M Sakthivel Murugan describe that cash flow Analysis is an analysis

based on the movement of cash and bank balance. Under cash flow analysis, all movements

of cash, rather than the movement of working capital would be considered such movements

of cash deposited in a statement of changes in financial position prepared on cash basis.

11. Christian Leuz, he says that the incentives of German firms to voluntary disclose cash flow

statement overtime while cash flow statement are mandated under many GAAP regimes, its

disclosure has been mandatory in Germany until recently never the les, an increasing number

of firms provides cash flow statement voluntarily there firms are likely to be influenced by



recommendations of the German accounting profession, IAS7 as well as the respective

standards of the other countries. The idea of the paper is to study this influence by looking at

the adaptation pattern over time at the format of the cash flow statement. it documents the

development of voluntary cash flow statement discloser by German firm with respect to

“milestone” in the evaluation of German professional recommendations and respective

international standards. The cross sectional determinants of voluntary cash flow statements

are analyzed using profit regressions and factor analyzed. The results are generally consistent

with the idea that capital focuses derive the disclosure of cash flow statements that are in line

with international practice.

12. Bolong Cao, Financial Statements analysis is in of the modern financial analysis. The

financial statements from firm provide the information upon the dynamic and innovative

process of contemporary business practice. By analyzing financial statement, investors,

business pertness managers and Government agencies can infer the efficiency and risks

involved in the business of the firm. Which is extremely important in their decision

according shenanigans from financial statements becomes indispensable in today’s business

world. Researches in modern accounting, corporate finance and investment really heavily on

financial statement analysis techniques. Proteciency in financial statement analysis is also

essential in professional certificate like CPA or CFA-exams.

13. KGC Nair and Jayan states ratio analysis is an important and useful technique to check upon

the efficiency with which working capital being used in the enterprise. Some ratios indicate

the trend or progress or downfall of the firm. It help the financial management in evaluating

the financial position and performance of the firm. The trade creditor, bank, lending

instructions and experienced inventor are use ratio analysis as their initial tool in evaluating

the firm as a desirable borrower as a potential investment outlet.

14. Pandey: clearly explain the standards of ratio analysis. The standards of comparison consist

of past ratio; competitor ratios and projecting ratios. For that he describes the methods under

which ratios can be analyzed, cross sectional analysis and Performa analysis.



15. John.N.Myer – financial statements provide a summary of the accounts of a business

enterprise, the balance sheet reflecting the asset and liabilities and income statements

showing the result of operations during a certain period. It emphasis the importance of

balance sheet and profit and loss account; but ignores the importance of other financial

statements like cash flow statement. Fund flow statement and statement of retained earnings



CHAPTER IV

ANALYSIS AND INTERPRETATION



RATIO ANALYSIS

Ratio analysis is the one of the most powerful tool of financial analysis. It aims at making

use of quantitative information for decision making. A ratio is an expression of relationship

between two figures or two amounts. It is a yard – stick which measures relationship between

two variables. Ratios are simply a mean of highlighting in arithmetical terms the relationship

between figures drowns from various financial statements. Robert Antony defines a ratio as

“simply one number expressed in terms of another”



CURRENT RATIO

Current ratio is the most common ratio for measuring liquidity. It represents the “ratio of

current assets to current liabilities”. It is also called working capital ratio. It is calculating by

dividing current assets by current liabilities

Current ratio =

Current assets are those, the amount of which can be realized with in a period of one

year in includes cash in hand, cash at hand etc.

Current liabilities are those amounts which are payable with in a period of one year-

current liabilities are creditors, bills payable etc.

The current ratio of the firm measures its short term solvency, ie, its ability to meet

short term obligations. In a sound business a current ratio of 2:1 is considered an idle one. It

provides a margin of safety to the creditors

Table 1

year Current Assets Current

Liability

Ratio

2007 21850.11 12550.12 1.74

2008 24244.91 12011.38 2.01

2009 28303.9 17225.8 1.64

2010 25968.68 16109.8 1.61

2011 39406.45 21440.46 1.83

Current asset

Current liabilities



The graph represents of current asset and current is as follows.

Chart 1.1

20072008

20092010

2011

21850.1124244.91

28303.9

25968.68

39406.45

12550.1212011.38

17225.816109.8

21440.46

Current Assets Current Liabiality



The following chart shows the ratios of the past five years

Chart 1.2

INTERPRETATION

From the above table and form the above chart 1.2. it can be seen that the current

ratio during the year 2007 was 1.74 and in 2008 it was an increased to 2.01 while during the year

2009 their was a decreases in to 1.64 during the year 2010the current ratio was decreased to 1.61

but in the case of 2011 the final year it was a slight increase to 1.83 i.e. current assets double the

current liability 9is considered to be satisfactory. But it can be analyzed from the above that

except for the year 2008 the organization did not attained a satisfactory.

20072008

20092010

2011

1.742.01

1.641.61 1.83

Ratio




The ratio is obtained by dividing cash (of course cash in hand and cash at bank) and

marketable securities by current liabilities. It is also known as cash position ratio.

Absolute liquid ratio =

Table 2

YEAR CURRENT

LIABILITIES

ABSOLUTE

LIQUID RATIO

Ratio

2007 12550.12

3246.12

0.258

2008 12011.38

1644.8

0.136

2009 17225.8

5504.47

0.319

2010 16109.8

3981.92

0.247

2011 21440.46

5092.95

0.237

Cash + marketable securities

Current liabilities



The Current liabilities and Absolute Liquid Ratio can be expressed in this chart

Chart 2.1

2007 2008 2009 2010 2011

12550.12 12011.38

17225.816109.8

21440.46

3246.12

1644.8

5504.47

3981.925092.95

CURRENT LIABILITIES ABSOLUTE LIQUID RATIO



The following chart shows the ratio of the past five years

Chart 2.2

INTERPRETATION

We have to seen from the above table and from the above chart that the absolute liquid

ratio during the year 2007 was 0.258 and the subsequent year 2008 the ratio has a slight decrease

to 0.136. While during the year 2009 the ratio has its maximum in last five years to 0.319 but in

2012 it has decreases to 0.247 in 2011 also it have a slight decreases to .237

2007 2008 2009 2010 2011

0.258

0.136

0.319

0.247 0.237

RATIO



CASH TO WORKING CAPITAL

The cash to working capital ratio measures how well a company can meet its short term

liabilities using its liquid assets such as cash and cash equivalents and marketable securities. This

ratio will also help un cover situation where the company may be too heavily spending its cash

on inventory that is not being turned into sales as rapidly as it should be.

Decreasing cash to working capital ratio can indicate the company may be suffering

from low cash reserves, and may not be able to meet its financial obligations. A decreasing ratio

may also mean it has acquired more assets. With more assets, one would hope that it could be

using these additional assets to generate even more cash.

Cash and Cash Equivalents + Marketable Securities

Total Current Assets – Total Current Liabilities

Table 3

YEAR CASH WORKING CAPITAL

RATIO

2007 3246.12

9299.99

0.349

2008 1644.5

12233.53

0.134

2009 5504.47

11078.1

0.496

2010 3891.92

9859.08

0.403

2011 5092.95

17965.99

0.283



The cash and working capital relation can be expressed in this chart

Chart 3.1

The following chart shows the ratio of cash and working capital

Chart 3.2

2007 2008 2009 2010 2011

3246.121644.5

5504.473891.92

5092.95

9299.99

12233.5311078.1

9859.08

17965.99

CASH WORKING CAPITAL

1 2 3 4 5

0.349

0.134

0.496

0.403

0.283

RATIO



INTERPRETATION

It can be seen from the above table and from the above chart that the cash to working

capital ratio during the year 2007 was 0.349 in 2008. It was decreases to .0134 in 2009 it have

increases to 0.496 it is the biggest value in past five years in 2010 it have a decreases to 0.403

also 2011 it have a decreases to 0.283. A higher the ratio indicates the efficient utalisaction of

work.



GROSS PROFIT RATIO

The gross profit ratio plays an important role in two management areas of financial

management, the ratio serves as a valuable indicator of the firms ability to utilize effectively out

side sources of funds.

Gross Profit Ratio =

This ratio help to ascertaining whether the average percentage of mark up on the goods is

maintained or not It also indicate the degree to which selling price per unit may decline with out

resulting in losses from operations to the firm.

Table 4

YEAR GROSS PROFIT

SALES

RATIO

2007 20353.62

24348.17

83.59

2008 23816.11

31556

75.47

2009 23959.35

36641.2

65.39

2010 32704.97

44006.29

74.32

2011 43276.38

51564.33

83.97

Gross Profit X 100

Net sales



The gross profit and sales relation can be expressed in the chart

Chart 4.1

The following chart shows the ratio of sales and gross profit ratio

Chart 4.2

2007 2008 2009 2010 2011

20353.6223816.11 23959.35

32704.97

43276.38

24348.17

3155636641.2

44006.29

51564.33

GROSS PROFIT SALES

2007 2008 2009 2010 2011

83.5975.47

65.39

74.32

83.97

RATIO



INTERPRETATION

As from the above table it can be seen that the gross profit ratio in 2007 it was 83.59

then it was a decreasing tendency from 2007 to 2010. In 2008 it was decreased to 75.47 also

2009 and 2010 it was 65.39 and 74.32 but in 2011 it was an increase to 83.97.how ever the gross

profit should be adequate to cover operating expenses and to provide for fixed charges divineds

and building up to reserve.



NET PROFIT RATIO

This ratio is also called as the net profit to sale or net profit margin ratio. It is determined

by dividing the net income after tax to the net sales for the period and measures the profit per

rupee of sale

In this context, the term net profit “net profit after interest and tax but before dividend”

The ratio is used to measure the overage profitability and hence it is very useful to profitability

of the business. Higher the ratio better is the operational efficiency of the concern

Table 5

YEAR NET PROFIT

SALES

RATIO

2007 2724.03

24348.17

11.18

2008 2189.11

31556

6.93

2009 1689.32

36641.2

4.61

2010 2230.31

44006.29

5

2011 2726.81

51564.33

5.2

Net Profit X 100

Sales



The net profit and sales can be expressed in the chart

Chart 5.1

The following chart shows the ratio of net profit and sales in chart 5.2

Chart 5.2

2724.03 2189.11 1689.32 2230.31 2726.81

24348.17

31556

36641.2

44006.29

51564.33

2007 2008 2009 2010 2011

NET PROFIT SALES

11.18

6.93

4.615 5.2

2007 2008 2009 2010 2011

RATIO



INTERPRETATION

From the above table, it can be seen the highest value in the past five years 11.18. It have

a decreasing tendency to 6.93 in 2009 it was decreased to 4.61 in 2010 it was a slight increase to

5.00 in 2011. It was also an increase to 5.2




Table 6

YEAR CASH

OTHER INCOME

RATIO

2007 3246.12

3207.13

1.012

2008 1644.8

3448.89

0.476

2009 5504.47

1879.47

2.928

2010 3891.92

2041.89

1.95

2011 5092.95

2555.52

1.99

The cash and other income can be expressed in the chart 6.1

Chart 6.1

2007 2008 2009 2010 2011

3246.12

1644.8

5504.47

3891.92

5092.95

3207.133448.89

1879.47 2041.89

2555.52

CASH OTHER INCOME



The ratio of cash and other income can be expressed in the chart 6.2

Chart 6.2

INTERPRETATION

As from the above table and from the above it can be seen the ratio of cash to other

income during the year 2007 was 0.012 and for the year 2008 the same was 0.476. it can be

further analyzed that during the year 2009 the ratio had been increased to 2.928 and during this

year the ratio is at its maximum while for the year 2011 the value of the ratio was 1.99 the ration

shows that while the amount in the other income increases the cash position of the organization

also increases and vice versa

2007 2008 2009 2010 2011

1.012

0.476

2.928

1.95 1.99

RATIO



CASH TO SALES

Table 7

YEAR CASH

SALES

RATIO

2007 3246.12

24348.17

1.33

2008 1644.8

31556

0.052

2009 5504.47

36641.86

0.15

2010 3891.92

44006.29

0.09

2011 5092.95

51564.33

0.098

The cash and sales can be expressed in the chart 7.1

Chart 7.1

20072008

20092010

2011

3246.121644.8 5504.47

3891.925092.95

24348.17 31556 36641.8644006.29

51564.33

CASH SALES



The ratio of cash and sales can be expressed in the chart 7.1

Chart 7.2

INTERPRETATION

Having regarded the ratio of cash to sale it can be seen from the above that during the year 2007

the ratio of cash to sales was 1.33 and for the year 2008 the same was 0.052. While during the

year 2009 the ratio of cash of sales was 0.150 for the year 2012 the same 0.190. It can be also

analyzed that during the year 2011 the ratio of cash and sales was 0.098 the above ratio indicates

that indicates that when the sales increases that cash position also increases and thus the

organization can achieve the better liquidity position

1 2 3 4 5

1.33

0.0520.15

0.09 0.098

RATIO



TREND ANALYSIS

The trend method determines the direction upwards or downwards and involves the computation

of the percentage relationship that cash statement item hears to the same item in have year. Trend

analysis of ratio indicates the direction of change. This kind of analysis of particularly applicable

to the particular item of profit and loss account. The ratio analysis will reveal the financial

condition of the firm more reliable when trends in ratios over time are analyzed. The trend

analysis of ratio considerable significance to financial analysis because is studies ratios several

years and isolates to financial analysis because it studies ratio of several years and isolates the

exceptional instances occurring in one or two periods.



CASH IN HAND

Table 8

YEAR CASH IN HAND TREND RATIO

2007 3246.12

100

2008 1644.8

50.669

2009 5504.47

169.57

2010 3981.92

122.66

2011 5092.95

165.89

Chart 8

100

50.669

169.57

122.66

165.89

0

20

40

60

80

100

120

140

160

180

2007 2008 2009 2010 2011

TREND RATIO



INTERPRETATION

As from the above table and from the above chart it can be seen that trend in cash in hand shows

an increasing trend in expect for the year 2008 companied to the base year 2007. During the year

2008 the trend ratio had been decreased by 49.331.it can be also analyzed that during the year

2009 the trend ratio had been increased by 69.57. While for the year 2010 the trend had been

increased by 22.66 it can be also analyzed that for the last year 56.89. It can be also analyzed that

for the last year 56.89. It can be also analyzed that the increase in trend in cash is a favorable

situation and vice versa.



TREND ON OTHER INCOME

TABLE 9

YEAR OTHER INCOME

TREND RATIO

2007 3207.13

100

2008 3448.89

107.538

2009 1879.47

58.6

2010 2041.89

63.667

2011 255.52

79.68

CHART 9

100107.538

58.663.667

79.68

2007 2008 2009 2010 2011

TREND RATIO



INTERPRETATION

As from the above table and from the above chart it can be seen that the trend on other

income shows a decreasing trend expect for the year 2008.it can be also analyzed that during the

year 2008 the trend had been increased by 7.538 while for the year 2009 the trend had been

decreased by 41.4, during the year 2010 the decreases was 36.333 during the last year 2011 the

trend had been 20.32 the decrees in other income is not a favorable situation to the business as it

renders a liquidity position



TREND ON WORKING CAPITAL

TABLE 10

Chart 10

100

131.54119.11

106.01

193.18

2007 2008 2009 2010 2011

TREND RATIO

YEAR WORKING CAPITAL

TREND RATIO

2007 9299.99

100

2008 12233.53

131.54

2009 11078.08

119.11

2010 9859.08

106.01

2011

17965.99

193.18



INTERPRETATION

It can be seen from above table and from the above chart that the trend on working

capital shows an increasing trend when compared to the base year 2007. During the year 2008

the trend had been increased by 31.54 and for the year 2009 the increase was 19.11 while for the

year 2010 the increase was 6.01 during the last year 2011 the increase was 93.18.



TREND ON SALES

Table 11

Chart 11

100

129.6032

150.491

180.7376

211.779

2007 2008 2009 2010 2011

TREND RATIO

YEAR SALES

TREND RATIO

2007 24348.17

100

2008 31556

129.6032

2009 36641.86

150.491

2010 44006.29

180.7376

2011

51564.33

211.779



INTERPRETATION

It can be seen from the above table and from the above chart that the trend on sales shows

increasing trends when compared to the base year 2007. During the year 2008 the trend had been

increased by 29.60 and for the year 2009 the increase was 50.49 while for the year 2010 the

increase was 80.73 during the last year 2011 the increase was 111.77



TREND ON TOTAL INCOME

Table 12

YEAR TOTAL INCOME TREND RATIO

2007 28906.99

100

2008 33968.22

117.5087

2009 98188.29

132.1

2010 46548.03

161.02

2011 54119.85

187.22

CHART 12

100

117.5087132.1

161.02

187.22

2007 2008 2009 2010 2011

TERND RATIO



INTERPRETATION

It can be seen from the above table and from the above chart that the trend on total

income always shows an increasing trend. During the year 2008 the trend had been increased by

17.5087and for the year 2009 the same had been increased by 32.10 while during the year 2010.

The same had been increased by 61.02 and for the year 2011 the same had been increased by

87.22



TREND ON VARIABLE COST

Table 13

YEAR VARIABLE COST TREND RATIO

2007 20417.71

100

2008 24284.87

118.94

2009 26957.16

132.02

2010 33117.83

162.201

2011 39488.15

193.4

Chart 13

100118.94

132.02

162.201

193.4

2007 2008 2009 2010 2011

TREND RATIO



INTERPRETATION

It can be seen from the above table and from the above chart that the trend on variable

cost always shows an increasing trend. During the year 2008 the trend had been increased by

18.94 and for the year 2009 the same had been increased by 32.03. while during the year 2010

the same had been increased by 62.201 and for the year 2011 the same had been increased by

93.40



CO-EFFICIENT OF CORRELATION

Co-Efficient of Correlation is an algebraic method of measuring the correlation. Under this

method, we measure correlation by finding a value known as co- efficient of correlation using an

appropriate formula. Correlation co-efficient is a numerical value. It shows the degree on the

extent of correlation between two variables.

This is no association between cash position and net profit.

Ho: There is no association between cash position and net profit.

H1: There is no association between cash position and net profit.

Table 14

CORRELATION BETWEEN CASH AND NET PROFIT

YEAR CASH NET

PROFIT(Y)

XY X2 Y2

2006-07 3246.12

2724.03

8842528.264

10537295

7420339

2007-08 1644.8

2189.11

3600648.128

2705367

4792203

2008-09 5504.47

1689.32

9298811.26

30299190

2853802

2009-10 3981.92

2230.31

8880915.995

15855687

4974283

2010-11 5092.95

2726.81

13887506.99

25938140

7435493

TOTAL ∑X=19470.26

∑Y=11559.58

∑XY=44510410.64

∑ X2=85335679

∑ Y2=27476120

= -.1881



INTERPRETATION

Here the value of r is -.1881 which shows a negative correlation.

There for we accept the null hypothesis.

There for there is no association between cash position expenses and net profit.

Table 15

CORRELATION BETWEEN CASH POSITION AND TOTAL INCOME

YEAR CASH Total

Income(Y)

XY X2 Y2

2006-07 3246.12

28906.99

93835558.38

10537295

835614070.9

2007-08 1644.8

33968.22

55870928.26

2705367

1153839970

2008-09 5504.47

38188.29

210206296.7

30299190

1458345493

2009-10 3981.92

46548.03

185350531.6

15855687

2166719097

2010-11 5092.95

54119.85

275629690.1

25938140

2928958164

TOTAL ∑X=19470.26

∑Y=

201731.4

∑XY=

820893005

∑ X2=

85335679

∑ Y2=

8543476795

= 0.56



INTERPRETATION

Here is the value of r is 0.569 which shows a positive correlation. Therefore accept the null

hypothesis.

This is no association between cash position and income.

Ho: There is no association between cash position and total expenses.

H1: There is no association between cash position and net profit.

Table 16

CORRELATION BETWEEN CASH POSITION AND TOTAL SALES

YEAR CASH Total

expenses (Y)

XY X2 Y

2

2006-07 3246.12

26182.96

84993030.12

10537295

685547394.4

2007-08 1644.8

31779.11

52270280.13

2705367

1009911832

2008-09 5504.47

36498.97

200907485.4

30299190

1332174811

2009-10 3981.92

44317.72

176469615.6

15855687

1964060306

2010-11 5092.95

51393.04

261742183.1

25938140

2641244560

TOTAL ∑X=19470.26

∑Y= 190171.8

∑XY= 776382594.3

∑ X2= 85335679

∑ Y2= 7632938904

= 0.581



INTERPRETATION

Here the value of r is 0.581 which shows a positive correlation. Therefore accept the null

hypothesis.

There is no relationship between cash position and sales.

STATEMENT OF CHANGES IN CASH FLOW STATEMENT FOR THE YEAR 2008-09

particulars

2008

2009

Change

% of Changes

Cash flow from operating

activities

Profits for the year Adjustment for:

Depreciation & amortization

Interest paid

Profit or Loss on Asset

Interest received

Operating profit

Before working capital changes

Increase or Decrease in sundry

debtor

Increase or decrease in other

receivable

Increase or decrease in inventory

Increase or decrease in trade and

other payables

Cash generate from operation

Income tax paid

2142.95

733.07

447.10

305.75

(174.01)

2843.36

(4597.43)

(68.21)

739.07

(364.18)

(1447.39)

(823.80)

(2271.19)

1654.43

899.59

420.64

1.34

(100.37)

3375.63

(281.42)

12227

(1785.96)

8928.70

8359.22

(815.86)

7543.36

-488.52

166.52

473.54

307.09

73.64

532.27

4316.01

190.48

-2525.03

7292.88

9806.61

7.594

5272.17

-22.79

22.71

105.91

-100.43

-42.31

18.71

-93.87

-279.250

-341.65

-2002.55

-677.537

-0.963

232.13



Net cash from

Investing activities

Cash flow from financing

activities

Proceeds from long term

borrowings

Proceeds from other borrowings

Interest paid

Dividend paid

Dividend tax paid

Reserve and surplus

Net cash used in financing

Activities

Net Increase or decrease in cash

equivalent

Cash and cash equivalent at the

beginning of period


end of the payment

Cash and cash equivalent

comprise

Cash in hand

Balance with schedule bank

(2510.12)

(134.15)

376.91

174.01

(308.45)

(2401.8)

1468.69

2351.69

(447.1)

(257.8)

(43.81)

3071.67

(1601.32)

3246.12

1644.80

74.48

1570.32

(2669.87)

(2702.39)

74.37

100.37

5395.77

1466.72

1332.51

920.64

155.00

26.53

15.02

1712.08

3859.67

1644.80

5504.47

28.18

5476.29

-159.75

-2568.24

-302.54

-73.64

-506.7

-7797.57

-1.97

-1019.18

-473.54

102.8

17.28

-3056.65

3313.4

613.55

0

5429.99

-1542.14

3831.49

6.634

1914.454

-80.268

-42.31

-164.273

-324.655

-0.134

-43.33

105.91

-39.87

-99.511

-206.917

18.90

0

-7290.534

0

-98.20

232.94



STATEMENT OF CHANGES IN CASH FLOW STATEMENT FOR THE YEAR 2008-09

2009

2010

Change

% of Changes

Cash flow from operating

activities

Profits for the year Adjustment

for:

Depreciation & amortization

Interest paid

Profit or Loss on Asset

Interest received

Operating profit

Before working capital changes

Increase or Decrease in sundry

debtor

Increase or decrease in other

receivable

Increase or decrease in inventory

Increase or decrease in trade and

other payables

Cash generate from operation

Income tax paid

Net cash from

1654.43

899.59

420.64

1.34

(100.37)

3375.63

(281.42)

12227

(1785.96)

8928.70

8359.22

(815.86)

7543.36

(2669.87)

(2702.39)

74.37

2661.40

1279.07

756.05

1.53

197.89

4100.17

1459.05

1332.33

823.96

1091.72

3959.14

831.72

3127.42

6417.82

3311.12

172.83

606.97

379.48

-164.59

0.49

-97.52

824.54

1740.47

-1454.6

2609.92

-8020.42

-4400.08

-15.86

-4415.94

-3747.95

-608.73

98.46

97.52

36.68

42.18

-17.87

14.17

97.16

21.46

-618.46

-1189.66

-146.13

-115.756

-52.63

1.94

-58.54

140.37

22.52

132.39

97.16



Investing activities

Cash flow from financing

activities

Proceeds from long term

borrowings

Proceeds from other borrowings

Interest paid

Dividend paid

Dividend tax paid

Reserve and surplus

Net cash used in financing

Activities

Net Increase or decrease in cash

equivalent


beginning of period


end of the payment

Cash and cash equivalent

comprise

Cash in hand

Balance with schedule bank

100.37

5395.77

1466.72

1332.51

920.64

155.00

26.53

15.02

1712.08

3859.67

1644.80

5504.47

28.18

5476.29

197.89

278.72

3014.70

191.82

1505.63

756.05

155.35

26.40

1635.26

1522.54

5504.47

3981.92

27.13

3954.92

3981.92

-80.47

2381.07

-1658.54

-1838.14

164.59

-0.35

0.13

-15.02

-3347.34

-5382.21

3859.67

-1527.55

-1.05

-1494.37

40.59

-44.12

-113.07

-137.07

-17.87

0.725

-0.49

-100

195.51

-139.447

234.65

-27.66

-3.72

-27.288



LEAST SQUARE METHOD

It is widely used statistical employed to study trends in revenue, costs, production and

other data and other data and to investigate the relationship among accounting and financial

variables. Method of least squares is a method of drawing regression line by principle of least

squares. The principal least squares is that principle which states that the line of best fit should

be drawn in such a manner that the sum of the squares of difference between the known value of

the dependent variables and the corresponding values of it obtained from the line of best fit

should be the least.

TREND VALUE OF CURRENT ASSETS FOR FUTURE YEARS

Table 18

YEAR

CURRENT

ASSET

Y

X

XY

X2

TREND

2005-06 13486.07 -2 -26972.14 4 16486.898

2006-07 21850.11 -1 -21850.11 1 19628.839

2007-08 24244.91 0 0 0 22770.78

2008-09 28303.88 1 28303.9 1 25912.721

2009-10 25968.88 2 51937.76 4 29054.662

TOTAL 113853.9 0 31419.41 10

y = a + bx

a = ∑y = 112061.4 = 22770.78

b = ∑xy = 34008.79 = 3141.941

∑x2

Trend value of profit

Trend value in 2012 = 35338.544

Trend value in 2013 = 38480.485

Trend value in 2014 = 41622.426

Trend value in 2015 = 44764.367



Trend Value of Current Assets for Future Years

Table 18

YEAR

PROFIT

Y

X

XY

X2

TREND

2005-06 3114.87 -2 -6229.94 4 2945.56

2006-07 2750.88 -1 -2750.88 1 2665.23

2007-08 2142.95 0 0 0 2384.9

2008-09 1654.43 1 1654.43 1 2104.57

2009-10 2261.40 2 4522.8 4 1824.24

TOTAL 11924.53 0 -2803.39 10

y = a + bx

a = ∑y = 11924.53 = 2384.906

b = ∑xy = -2803.39 = -280.339

∑x2

Trend value of profit

2012 = 2384.906+-280.339 X 4 = 1263.55

2013 = 2384.906+-280.339 X 5 = 983.25

2014 = 2384.906+-280.339 X 6 = 702.92

2015 = 2384.906+-280.339 X 7 = 422.54



CHAPTER V

FINDINGS AND SUGGESTIONS



FINDINGS

The major findings of the study are the following.

By studying Ratio analysis it has been found the current ratio of the firm is not attain a

satisfactory expected level expect for one year of the study period. The Absolute Liquid Ratio,

cash to other income and cash to working capital shows a satisfactory level in the year 2009

which means at this year company have shown a good solvency position.

It has found from the ratio analysis of gross profit and net profit the company has shown

a good increasing rate of profit for the last consecutive years.

From trend analysis it has been found that trend on working capital, sales, total income

and variable cost shown an increasing trend throughout the analysis period were as trend on cash

in hand and other income shown a fluctuating trend throughout the study period.

By seeing the co-efficient correlation it has been found that the relation between cash

position and net profit shows a negative correlation were as cash and sales, cash and total

income, cash and total expenses shows a positive correlation. For positive correlation there will

be positive relationship for both the variables and vice versa.

From least square method it has been found that there an increasing trend on current asset

as well as decreasing trend on profit for coming 5 years.



SUGGESTIONS

1. HLL must maintain apt liquidity position. This indicates that the HLL needs to

improve its short-term financial position.

2. Block funds used properly and profitability.

3. Firm should maintain optimum cash balance throughout the year.

4. Solvency position is to be studied and steps to be taken for improving it.

5. Debt Equity Mix should be maintained optimum level.

6. Fund managers give more importance to utilization of fund.

7. Step to be taken to increase the working capital of the firm to meet short term

obligation.

8. Excess funds invested to diversified projects.

9. Even through the firm is doing well but the bad debts are also increasing so the

management needs to take necessary steps for reducing bad debts.

10. The firm can adopt modern method of cash management.

11. The firm should fix proper working capital and inventory level.



CHAPTER VI

CONCLUSION



CONCLUSION

In this study, an analysis on Efficiency of Cash Management of HLL was done. The

Efficiency of the firm during last five years is taken up for study. The Efficiency of fund has

been analyzed on the basis o0f the data collected from the Annual report of HLL. The Efficiency

of Cash Management in HLL was analyzed with the help of Ratio Analysis and Correlation Co-

efficient.

The study conducted in HLL was successful. The study also guides to get knowledge

regarding actual functioning of the Firm. Cash Flow Statement of the firm reveals that overall

performance of cash management of the firm is above average level. So cash managers give

more importance to utilization of cash through using profitable pattern.



BIBLIOGRAPHY



BIBLIOGRAPHY

Adesh Sharma, “Investment and Financing in Pesticides Industry in India,” Indian

Journal of Finance and Research, Vol.V. No.2 July 1999,p.67-83

Agrawal N.K.: Analysis of Financial Management, New Delhi, National Publiting House,

2001.

Vijaykumar and A. Venkathachalam, “Working capital and Profitability- An Empirical

Analysis, “The Management Accountant, October 1995 p. 748-750

Bari R.R.( Ed.): Selected Reading in Cash Management, Delhi Triveni Publication 200.

Reports and Journals

Annual report of HLL Life Care

Accounting review

Project Report of SENTHIL.E

Websites

1. www.accounting4management.com

2. www.wikipedia.org

3. www.lifecarehll.com

4. www.ec-finance.com

5. www.seribid.com

6. www.businessknowhow.com

http://www.accounting4management.com/

http://www.wikipedia.org/

http://www.lifecarehll.com/

http://www.seribid.com/

http://www.businessknowhow.com/



ANNEXURE



ANNEXURE

BALANCE SHEET AS AT 31STMARCH

Particulars 2005-06 2006-07 2007-08 2008-09 2009-2010 SOURCES OF

FUNDS

Shareholder’s Share capital

Reserves

&surplus

LOAN FUNDS

Secured loan Grants/liability

payable as per

contract

APPLICATION

OF FUNDS Fixed assets

Gross block

Less:

Depreciation

Net block Capital work-in-

progress

CURRENT

ASSETS,

LOANS &

ADVANCES

Investments

current asset, loan & advances

Inventories

Sundry debtors

Cash &bank balances

Other current

assets Loan &advances

1553.50

8174.22

1461.52

0.00

1553.50

9442.66

2849.56

375.02

1553.50

10688.95

6669.94

100.14

1553.50

1124.99

94699.17

143.36

1553.50

12470.75

8771.72

327.58

11189

14220.74

19012.53 22416.02 23123.55

10907.36

7054.46

11608.04

7688.67

13967.92

83336.52

16293.74

9004.05

22422.43

10173.79

3852.90

36.68

3919.37

705.00

5631.40

839.15

7289.69

3541.53

12248.64

230.41

3889.58 4624.37 6470.55 10831.22 12479.05

0.00

3153.48

5726.64

2187.35

173.60

2245.000

0.00

5083.53

8356.95

3246.12

580.61

4582.90

308.45

4338.32

12954.38

1644.80

426.57

4880.84

506.70

6130.51

13235.80

5504.47

373.62

3059.50

785.42

5312.00

11776.75

3981.92

1912.59

2985.62



Less: current

liability

&provision Current

liabilities

PROVISION

Net current asset

Deferred tax liability(Net)

13486.07 21850.11 24244.91 28303.90 25968.88

4382.77

1620.23

9991.64

2558.48

409.15

2602.23

16554.99

670.81

15370.20

739.60

6003.00 12550.12 12011.38 17225.80 16109.80

7483.07

(183.41)

9299.99

296.38

12233.53

0.00

11078.10

0.00

9859.08

0.00

11189.24 14220.74 19012.53 22416.02 23123.55



PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH

Particulars

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

Income

Sales & services

Less : Excise duty

Net sales other

income

Less/ Add: increase

or decrease in stock

and work in progress

Exchange

Fluctuations

Total

Expenditure Material consumed

Finished goods &

stock in progress

Power & Fuel charges

Water charges

Employee salary and

benefits

Other production

expenses

Administrative

expenses

Marketing expenses

Insurance charges

Finance charges

Depreciation

Value of finished

goods purchased

Pay revision arrears

Exchange rate

fluctuation

Voluntary retirement

Contract expenses

Profit For The Year

Profit period

adjustment

21406.60

118.02

24492.34

144.17

31709.17

153.17

36760.48

118.62

44177.90

171.61

21288.58

1427.47

(170.39)

-

24348.17

3207.13

1351.69

-

31556.00

3448.89

(1036.67)

-

36641.86

1879.56

-

-

44006.29

2041.89

-

499.85

22545.66 28906.99 33968.22 38521.42 46548.03

5709.22

-

1168.42

38.46

4408.36

825.29

1735.56

2904.46

54.60

49.25

613.78

1886.99

-

-

42.07

-

7217.47

-

1280.68

55.22

4812.76

912.62

1995.54

3548.97

61.33

272.50

661.18

5345.88

-

-

18.81

8662.52

-

1431.80

57.79

6314.07

1147.66

2777.51

5017.90

52.09

447.10

733.07

5137.60

-

-

-

10593.02

(1581.64)

1934.74

92.67

7216.90

1471.90

3029.80

3631.97

53.91

920.64

899.59

7377.68

504.68

326.24

11142.28

723.79

1980.73

145.15

8645.44

1618.76

4009.65

4663.05

66.30

756.05

1279.07

8691.36

519.63

-

-

76.46

19436.46 26182.96 31779.11 36832.10 44317.72

3109.19

5.68

2724.03

26.85

2189.11

(46.16)

1689.32

(34.89)

2230.31

31.09



Profit For The Year

Before Tax

Provision for income

tax-current year

Deferred tax

Provision for income

tax-previous year

Fringe benefit tax-

current year

Fringe benefit tax-

previous year

Provisions written

back

Profits Available For

Appropriation

Appropriation

Interim dividend

Tax on interim

dividend

Proposed dividend

Tax on proposed

dividend

Transfer to general

reserve

Balance carried to

Balance sheet

Earnings per

share(basic)

Earnings per

share(Diluted)

3114.87

2750.88

2142.95

1654.43

2261.40

1103.56

(155.35)

26.06

76.72

-

1103.56

(155.35)

26.06

76.72

-

842.15

(274.89)

8.07

105.20

34.89

-

707.53

43.22

75.38

89.89

-

(19.41)

789.77

184.22

(214.98)

0.00

-

0.00

2063.88

1746.78

1427.82

757.83

1493.39

232.50

34.89

180.30

25.29

1590.91

155.00

21.73

257.80

43.81

1268.44

155.00

26353

-

-

1246.29

0.00

0.00

155.35

26.40

576.07

-

-

233.03.

39.60

1220.76

Nil

Nil

Nil

Nil

Nil

-

-

-

-

919.10

919.10

487.82

487.82

961.31

961.31

Cash Management

Business

income cash

sales cash

cash position

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