Acknowledgement
I am Grateful to Mr. N. SUBRAMANIAN and
Dr.KAVITHASUBRAMANIAN, Secretary and Management Trustee
J.J College of Art & Science (Autonomous), Pudukkottai
for their opportunity give to me.
It is my Privilege to express My Gratitude toward to
Dr.J. PARASURAMAN, M.A., M.B.A., M.C.A., M.Phil, B.Ed.,
Ph.D., Principal, J.J College of Art & Science
(Autonomous), Pudukkottai for having admitted to me in
this college to undergo this course.
I express my special thanks to Mr. S. ADAEKALAVAN,
M.C.A., M.Phil, Head, Department of Commerce, J.J College
of Art & Science (Autonomous), Pudukkottai for his
valuable support and guidance.
I wish to acknowledge my indebtedness and deep sense of
gratitude to my Respected Guide Dr. L.LEO FRANKLIN M.Com,
M.Phil, Ph.D. Assistant Professor and Research
Advisor of Commerce, J.J College of Art & Science
(Autonomous), Pudukkottai for his motivation and valuable
guidance.
I offer my affectionate thanks to my Father and my Mother
and my family members and my Friends for their Co-
operation rendered throughout the project.
I feel highly elated in manifesting my deep sense of
Gratitude and Respect for “The Almighty” for his immense
blessing is all my endeavor’s to complete my project
successfully.
N.
SUBALAKSHMI
1
Abstract
This paper’s core aim is to analyses information about a
company's gross receipts and gross payments for a
specified period of time. The gross receipts and gross
payments will be reported in the cash flow statement
according to one of the following classifications:
operating activities, investing activities, and
financing activities. The net change from these three
classifications should equal the change in a
company's cash and cash equivalents during the reporting
period.
Cash flow is of vital importance to the health of a
business. One saying is:” revenue is vanity, cash flow is sanity, but
cash is king”. What this means is that whilst it may look
better to have large inflows of revenue from sales, the
most important focus for a business is cash flow.
Many businesses may continue to trade in the short- to
medium-term even if they are making a loss. This is
possible if they can, for example, delay paying
creditors and/or have enough money to pay variable
2
costs. However, no business can survive long without
enough cash to meet its immediate needs.
Understanding the basic concepts of cash flow will help
you plan for the unforeseen eventualities that nearly
every business faces.
CONTENTAcknowledgement 0
Abstract 1
CONTENT 2
CHAPTER - I 6
1. GENERAL INTRODUCTION 61.1. OBJECTIVES OF THE STUDY 8
1.2. STATEMENT OF THE PROBLEM 8
1.3. PURPOSE OF THE STUDY 8
1.4. SCOPE OF THE STUDY 8
1.5. RESEARCH QUESTIONS 9
1.6. Geographical scope 9
2. RESEARCH METHODOLOGY 102.1 RESEARCH 102.2 RESEARCH DESIGN 102.3 DATA COLLECTION 112.4 TOOLS USED IN THE ANALYSIS 12
3
2.5 PERIOD OF STUDY 122.6 LIMITATION OF THE STUDY 12
3. CHAPTER SCHEME 13
CHAPTER - II 14
1. REVIEW OF LITERATURE 141.1 Introduction Error! Bookmark not defined.
1.2 BAUMOL’S MODEL 14
1.3 THE MILLER-ORR MODEL 16
1.4 The Drive towards Efficiency, Transparency, Standardization and Integration 17
1.5 CASH MANAGEMENT AND CAPITAL BUDGETING PRACTICES 18
CHAPTER - III 23
1. COMPANY PROFILE 231. INTRODUCTION 23
Quality Assurance 23
Companies & Brands 23
1.1 VISION & MISSION 24
1.2 PRODUCTS AND SERVICES 251.2.1 Venetian Blinds 251.2.2. Vertical Blinds 251.2.3 Wooden / Chic Roll Ups 261.2.4 Roller Blinds 261.2.5 Insect Screens 271.2.6 Curtain Rods 271.2.7 Curtains 271.2.8 Window Film 281.2.9 Sofa 281.2.10 Wall Covering 281.2 .11 Wall Scenery 291.2 .12 Pest Control 291.2.13 Door Mat 30
2. INDUSTRY PROFILE 312.1 Interior Services 31
2.2 Interior Designing 31
2.3 Interior Design Planning 32
2.4 Turnkey Projects on Interior Designing 33
2.5 Space Planning 33
4
2.6 False Ceilings 34
2.7 Wood Work 34
2.8 Glass Work 35
2.9 Acoustic Ceiling 35
2.10 Modular Furniture 36
2.11 Customized Furniture 36
SAMPLING AREA 37
CHAPTER – IV 38
1. DATA ANALYSIS AND INTERPRETATION 381.1 SCHEDULE OF CHANGES IN WORKING CAPITAL YEAR 2010-11 38
1.2 FUND FLOW STATEMENT FOR THE YEAR 2010-11 39
1.3 SCHEDULE OF CHANGES IN WORKING CAPITAL YEAR 2011-12 40
1.4 FUND FLOW STATEMENT FOR THE YEAR 2011-12 41
1.5 SCHEDULE OF CHANGES IN WORKING CAPITAL YEAR 2012-13 42
1.6 FUND FLOW STATEMENT FOR THE YEAR 2012-13 43
1.7 SCHEDULE OF CHANGES IN WORKING CAPITAL YEAR 2013-14 44
1.8 FUND FLOW STATEMENT FOR THE YEAR 2013-14 45
1.9 CASH FLOW STATEMENT FOR THE YEAR 2009-2010 46
1.10 CASH FLOW STATEMENT FOR THE YEAR 2010-11 47
1.11 CASH FLOW STATEMENT FOR THE YEAR 2011-12 48
1.12 CASH FLOW STATEMENT FOR THE YEAR 2012-13 49
1.13 CASH FLOW STATEMENT FOR THE YEAR 2013-14 50
2. RATIO ANAYSIS 512.1 CURRENT RATIO 51
2.2 QUICK RATIO 53
2.3 NET PROFIT RATIO 55
2.4 INVENTORY TURNOVER RATIO 57
2.5 DEBTORS TURNOVER RATIO 59
2.6 DEBT-ASSET RATIO 61
2.7 FIXED ASSETS TURNOVER RATIO 63
2.8 WORKING CAPITAL TURN OVER RATIO 65
STATEMENT OF WORKING CAPITAL 66
2.9 CURRENT ASSETS TO FIXED ASSETS RATIO 67
5
2.10 WORKING CAPITAL TO CURRENT ASSET RATIO 69
3. TREND ANALYSIS 71
4. CASH BUDGETING 73
CHAPTER - V 75
1. FINDINGS, SUGGESTIONS AND CONCLUSIONS 751.1 FINDINGS 75
1.2 SUGGESTIONS 76
1.3 CONCLUSION 78
BIBLIOGRAPHY 79
6
General Introduction
CHAPTER - I1. GENERAL INTRODUCTION
Cash is the important current asset for the
operations of the business. Cash is the basic input
needed to keep the business running on a continuous
basis; it is also the ultimate output expected to be
realized by selling the service or product manufactured
by the firm. The firm should keep sufficient cash,
neither more nor less.
Cash shortage will disrupt the firm’s manufacturing
operations while excessive cash will simply remain idle,
without contributing anything towards the firm’s
profitability. Thus, a major function of the financial
manager is to maintain a sound cash position.
8
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, are also included
in cash.
"The concept of cash management is not new and it
has acquired a greater significance in the modern world
of business due to change that took place in the conduct
of business and ever increasing difficulties and the
cost of borrowing." Apart from the fact that it is the
most liquid current assets, cash is the common
9
denominator to which all current assets can be reduced
because the other current assets i.e. receivables and
inventory get eventually converted into cash. This
underlines the significance of cash management.
1.1. OBJECTIVES OF THE STUDY
• To find out the cash position of the concern
through ratio analysis.
10
• To analyze the cash management of the company.
• To study the growth of standard in terms of fund
flow statement and cash flow statement.
• To make suggestion and recommendation to improve
the cash position of standard.
1.2. STATEMENT OF THE PROBLEM
Cash management techniques are adopted by
organizations in order to ensure effective
investment of cash and to achieve profitability
both in the short run and long run.
But despite the adoption of these cash management
techniques, still most present fabric industry run
bankrupt to the extent that some are even closed
due to poor cash management.
1.3. PURPOSE OF THE STUDY
The purpose of the study was to establish the
relationship between cash management and profitability
of the concern.
11
1.4. SCOPE OF THE STUDY
The present study concentrates on the
cash position with reference to GOKUL FABRICATES. In
addition to that study contains the analysis of
financial soundness and growth of the firm in the term
of liquidity solvency and trend analysis.
It helps to take short term financial
decision and it indicates the cash requirement needed
for plant or equipment expansion programmers. To find
strategies for efficient management of cash. It helps to
arrange needed funds on the most favorable terms. It
helps to meet routine cash requirement to finance the
transaction. It reveals the liquidity position of the
firm by highlighting the various sources of cash and its
uses.
1.5. RESEARCH QUESTIONS
What are the cash management techniques used in
GOKUL FABRICATES private ltd?
12
What is the profitability of GOKUL FABRICATES
private ltd?
What is the relationship between cash management
and profitability in GOKUL FABRICATES private
ltd?
1.6. Geographical scope
The study was based on GOKUL FABRICATES Pvt, ltd in
Chennai district.
2. RESEARCH METHODOLOGY
2.1 RESEARCH
13
Research is a process in which the researchers wish
to find out the end result for a given problem and thus
the solution helps in future course of action. The
research has been defined as “A careful investigation or
enquiry especially through search for new facts in
branch of knowledge”.
Martyn Shuttleworth - "In the broadest sense of the
word, the definition of research includes any gathering
of data, information and facts for the advancement of
knowledge.
2.2 RESEARCH DESIGN
The research design used in this project is
Analytical in nature the procedure using, which
researcher has to use facts or information already
available, and analyze these to make a critical
evaluation of the performance.
14
2.3 DATA COLLECTION
Data collection is the process of gathering
and measuring information on variables of interest, in
an established systematic fashion that enables one to
answer stated research questions hypotheses, and
evaluate outcomes. The data collection component of
research is common to all fields of study
including physical and social sciences, humanities,
business, etc.
Primary data is the data collected by the researcher themselves, i.e.
15
1. interview2. observation3. action research4. case studies5. life histories6. questionnaires7. ethnographic research8. longitudinal studies
Secondary sources are data that already exists
1. Previous research2. Official statistics3. Mass media products4. Diaries5. Letters6. Government reports7. Web information8. Historical data and information
2.4 TOOLS USED IN THE ANALYSIS
Fund flow statement & cash flow statement.
Trend analysis
Ratio analysis.
Cash Budget.
2.5 PERIOD OF STUDY
16
The present study has taken into account Five years
viz., 2010-2014
2.6 LIMITATION OF THE STUDY
Only secondary data collected from GOKUL FABRICATES
CHENNAI is used for the study, hence the accuracy of the
findings and conclusion of the statement will depend
upon the accuracy of the given data.
Only five years financial statement of GOKUL
FABRICATES CHENNAI is used for this schedule.
The limitations of the tools and techniques used in
the study will also reflect in the outcome of the study.
3. CHAPTER SCHEME
3.1 CHAPTER I
17
This chapter deals with the introduction of the
study, methodology, and objectives of the study,
limitations related to every scheme is discussed and
summarized.
3.2 CHAPTER II
This chapter deals with the review of literature
about this financial performance especially cash
management study.
3.3 CHAPTER III
This chapter presents the profile of the industry
and company for my study unit.
3.4 CHAPTER IV
This chapter explores the implications and findings
of the proposed work related with the analysis and
interpretation of this study from my observation.
3.5 CHAPTER V
This chapter concludes the thesis work by
summarizing the results, my suggestions for improvement
18
of my study unit and conclude my study with the chance
of future research.
CHAPTER - II1. REVIEW OF LITERATURE
This chapter reviews the different existing literature
of different scholars, the definition of cash
management, the appropriate cash management techniques,
the indications of cash management, profitability and
the relationship between cash management and
profitability
1.1 BAUMOL’S MODEL
The Baumol’s model of cash management provides a formal
approach for determining a firm’s optimum cash balance
under certainty. It considers cash management similar
to an inventory management problem. As such, the firm
19
attempts to minimize the sum of the cost of holding cash
(inventory of cash) and the cost of converting
marketable securities to cash.
The baumol’s model makes the following assumptions:
The firm is able to forecast its cash needs with
certainty.
The firm’s cash payments occur uniformly over a
period of time.
The opportunity cost of holding cash is known and
it does not change over time.
The firm will incur the firm sells securities and
starts with a converts securities to cash.
20
1.2 THE MILLER-ORR MODEL
The limitation of the Baumol model is that it does not
allow the cash flows to fluctuate. Firms in practice do
not use their cash balance uniformly nor are they able
to predict do not use their cash inflows and outflows.
The Miller-Orr model overcomes this shortcoming and
allows for daily cash flow variation. It assumes that
net cash flows are normally distributed with a zero
value of mean and a standard deviation. The MO model
provides for two control limits-the upper control limit
and the lower control limit as well as a return point.
If the firm’s cash flows fluctuate randomly and hit the
upper limit, then it buys sufficient marketable
securities to come back to a normal level of cash
balance (the return point). Similarly, when the firm’s
cash flows wander and hit the lower limit, it sells
sufficient marketable securities to bring the cash
balance back to the normal level (the return point)
22
1.3 The Drive towards Efficiency,
Transparency, Standardization and
Integration
Fragmentation is a key driver of corporate
inefficiency. This has long been the case in the
movement of paper checks and related remittance
documents within the U.S. payments system, and the flow
of goods, trade-related documents and funds within the
broader global supply chain. As corporate treasurers
pursue end-to-end automation for treasury and supply-
chain activities, they understand that to achieve
straight-through processing — and the subsequent
23
optimization of working capital globally — they must
integrate the payment and information components of a
transaction.
Based on this drive for efficiency, three
interrelated trends are shaping North America’s cash
management landscape today. First, corporate treasurers
and their banks are driving the convergence towards
electronic payments to better integrate money and
information flows. Second, there is a parallel
convergence in international trade towards open account,
electronic payment and the automation of information
flows, as treasury pushes to integrate the physical and
financial supply chains. On both fronts, solutions are
emerging to digitize paper wherever it persists. Third,
as companies continue to expand globally — and
information and money flows follow — treasury is focused
on standardizing processes and strengthening internal
controls. The objective is to create transparency across
a range of business activities to manage risk and ensure
24
financial reporting integrity in compliance with
Sarbanes-Oxley.
1.4 CASH MANAGEMENT AND CAPITAL BUDGETING
PRACTICES
Virginia department of transportation Richmond,
Virginia.
Our review has found that Transportation has made
significant progress or completed most of the
recommendations made in our 2008 special report.
Complete implementation of these changes will take at
least four to five years.
Over the last two years, Transportation’s
management has started not only implementing
recommendations, but more importantly begun implementing
a change in the corporate and cultural structure of the
organization. The success of change with Transportation
will depend on whether a true structural change in
organization takes place. The measure of success will
25
require a substantial long-term commitment by management
to not only making the change, but to prevent
backsliding into Transportation’s old approaches.
In some ways, the accomplishments to date are the
easy part of change. The harder part lays ahead in
funding and implementing new systems, continuing to make
the changes to get closer to capital budgeting process,
and overcoming Transportation’s corporate and cultural
structure to improve project management. The success of
this effort is highly dependent on management guidance
and direction, and current management has demonstrated
their dedication towards this effort. If any management
change occurs, it is essential that they have the same
commitment; otherwise, progress may be negatively
impacted.
Transportation is restoring fiscal accountability
by implementing several budgetary and financial changes,
including adopting a debt management policy and model.
Additionally, they are establishing a methodology to
26
identify statewide transportation priorities and
developing project management policies.
Transportation has completed several budgetary and
financial changes, including attempts to make the Six-
Year Improvement Program a realistic management tool and
reduce the projects with a deficit status.
However, to ensure accurate matching on cash
inflows and outflows, Transportation must begin
estimating the cost of projects by fiscal year.
Transportation does not currently have sufficient
controls and processes in place to manage the rate at
which they spend funds.
For major projects, Transportation has begun
assigning a project management team that follows a
project from its inception to its completion. However,
it is still too early in the process to determine if the
policies put into place will provide Transportation with
better project management. However, the actions to date
27
are those considered best practices in both the private
and public for large organizations. Maintenance is still
an area of concern at Transportation. The growing
maintenance requirements and the limited ability to
budget on a needs-based approach increases the risk of
inappropriately applied funding. Once the asset
management system is fully implemented a needs-based
approach will be possible and Transportation will be
able identify and prioritize maintenance projects.
1.5 Ms. KATHERINE M. LANDMANN CONTROLLER
WASHINGTON UNIVERSITY IN ST. LOUIS CAMPUS.
This final report presents the results of our audit
of the cash management procedures used by Washington
University in St. Louis (University) to control the
funds paid by the Payment Management System (PMS) during
the three years ended June 30, 2000.
We found that the University did not have adequate
policies and procedures in place to monitor daily cash
28
balances and to precisely calculate interest earned on
positive daily cash balances. In monitoring the daily
cash balances, the University did not consider (1)
outstanding checks and (2) overhead costs as incurred.
In addition, the University did not use the appropriate
interest rates when calculating the interest remitted to
the Federal government.
We determined that the amount of excess interest
remitted by the University was comparable to the amount
of interest that should have been remitted if
appropriate procedures had been used. We believe that
this occurrence was a coincidence due to off setting
factors in the University’s calculation of the amount to
be remitted.
We are recommending that the University revise its
written policies and procedures to effectively monitor
the daily cash balance and to accurately compute the
Federal remittance. We made four specific
recommendations for improving the University’s cash
29
management procedures. The University concurred with two
and is still evaluating the third. However, they did not
accept our fourth recommendation. The University’s
response is included in its entirety as Appendix A.
1.6 CASH MANAGEMENT BY ENID BEVERLY JONES
It is a Financial Overview for School
Administrators is a succinct overview of public school
finance, presenting concepts of importance to both site-
based and central-office leaders. A pragmatic blend of
theoretical concepts and factual information provides
readers with an excellent synopsis of public school
finance.
The economics and politics of education are
discussed in the context of human capital and the role
of public education in the United States as an
investment in human capital. Author Enid Jones, who is
an associate professor of school finance at Fayetteville
State University, stresses the importance of investment
in human capital and its necessity for an educated,
productive workforce.
30
The chapter on adequacy and equity provides an
understanding of the two concepts so frequently debated
in school finance. As more states struggle with funding
issues, this subject matter is timely and useful.
Cash Management seems intended for use nationwide
with information on basic school business procedures,
including budgeting and financing of school facilities.
The use of lay terminology and relevant examples make
the book valuable both in graduate school classes on
educational leadership and in the hands of practicing
administrators.
(Cash Management: A Financial Overview for School
Administrators, by Enid Beverley Jones, Scarecrow Press,
Lanham, Md., 2001)
31
CHAPTER - III
1. COMPANY PROFILE
1. INTRODUCTION
GOKUL FABRICATORS is a South India’s leading manufactures and
supplies of window blinds, established in the year of 1996.
Our Strength is well appreciated satisfied customers in throughout
south India.
32
Quality Assurance
International Standard Quality and inspects before final delivery.
Neat, clear and spacious work station Quick and timely delivery of consignment, Dedicated staff for proper management.
Companies & Brands
Trade Mark –GOKULUX
Gokul Fabricators
Manufacturing –Window Blinds & Insect Screen System
Gokul Furnishings Pvt Ltd.
Home Furnishings Curtains & Fabrics.
Gokul Pest Control
Specialist: Termite Control
Shri Balalji Decors
Interior Decoration,Wall Paper, Sun Control Film & Floorings
33
1.1 VISION & MISSION
1.1.1 Vision:
Efficiently managed.
Dedicated to the entire customer fulfillment and
attractive share holders’ significance.
Innovative, capitalist and empowered team
continually creating value and attaining universal
bench mark.
Nurturing culture of caring, faith and incessant
learning while meeting the expectations of
employees, share holders, creditors, customers and
society.
1.1.2Mission:
The Company Vision will be realized by achieving a
series of multifaceted Mission objectives stated below:
Gokulux offer the after sales & services as follows
GOKUL FABRICATORSAll Type of Window Blinds, Insect System & Awnings.Repair & Services under Taking for Window Blinds, InsectSystem, Awnings
GOKUL FURNISHINGS PVT LTD
34
Home Furnishing Like-Curtains, Road, Sofa lining,Scalape Design work under taken.
SHRI BALAJI DECORShri Balaji Decors have been established ourselves asone of the leading interior decors in Chennai.
GOKUL PEST CONTROLGokul Pest Control is to be standard as a company whodeliver complete consumer happiness. We afford complete,complex and specialized services for termites,cockroaches, rats, silverfish, mice, rodents, ants etc.
1.2 PRODUCTS AND SERVICES
1.2.1 Venetian Blinds
25mm Aluminum Blinds are
available in wide range of Colors in Plain, Metallic and
perforated Horizontal Blinds with metal head rail and
bottom rail offer the durability combined with
35
flexibility of slats makes it easy to maintain and hence
a longer life.100 Colours Available.
1.2.2. Vertical Blinds
The vertical Blinds are
manufactured to the highest possible standards. Using
the latest components and fabrics. Gokul Vertical Blinds
concentrate on color and texture, Runner Spacer all
systems luxury, smooth and trouble free operation.500
Shades Available
1.2.3 Wooden / Chic Roll Ups
Wooden / Chic Roll ups in a range
of pleasing shades with a choice of Pine Cedar, Peach,
Maple, Teak and other wood stains. A glamorous
36
compliment for any room available in natural beauty of
exotic Bamboo
1.2.4 Roller Blinds
Vista Roller blinds offer
designers unique flexibility in windows treatments. It
comes standard with manual control system or an optional
motorized control which is concealed and easy to install
directly into the roller tube
Awnings
Vista awning has been designed after years of R&D
and is corrosion resistant to retain their original
appearance after several years of use. The awning come
in a galaxy of fabrics in most enchanting colour
combinations which brighten up the entire exterior
space, with minimum maintenance as the awning fabric is
treated for repellency and colour fastness. Vista
37
awnings also have the option for motorization. Awnings
available in different models
1.2.5 Insect Screens
Allows circulation of Fresh Air,
Abundant natural light, Washable, Easy to install,
Stretch-proof, durable. Accepted standard worldwide. 5
Colour Available, Velcro Type, Door Type, Roller Type
available
1.2.6 Curtain Rods
The Vista range of curtain rods are
a 21st Century concept for curtain installation, curtain
rods are made of a single piece and can be supplied in a
size from 3’ to 12’ length.
38
1.2.7 Curtains
Polyester, Jaccard, Netted and all
quality curtain cloth available. We are dealing in all
leading mills. Tailoring undertaken. Scalape model and
window curtain like French Pleat, Box Pleat, Loop Type
etc., for our professional tailoring unit makes it real
rich.
1.2.8 Window Film
Type of Films
Privacy Films
Reflective Type
Non Reflective Type
Safety Films
FOOL RINGS
1.2.9 Sofa
39
Sofa sets and cushion beds as per
your Design and expectation with 200 varieties of
American Velvet also undertaken Relining of Existing
Sofa Sets.
1.2.10 Wall Covering
Indian and imported widest range of
Wall Papers is available to suit your needs. Our
experienced and skilled workers fix Wall Papers with
precision.
Economical time saving and maintenance free, glossy,
matt, two tones satin and metallic finisher, can be
recoated by any number of times.
1.2 .11 Wall Scenery
40
Wall Scenery available in all price
ranges and different sizes.
1.2 .12 Pest Control
We are handling the followings:
Pre Constructions Anti Termite Treatment
Post Construction Anti Termite Treatment
Rodent Control
Disinfestations Services
Wood Borer Treatment
Mosquito Control
Garden Pest Control
1.2.13 Door Mat
1) Vinyl Looped Matting, Durable easy maintenance,
100% washable Hygienic & clear, fire resistant seven
shades is available.
41
2) Duroturf brand, Instant lawn and Cusion matt
available in different colors
COMPANY CONTACT DETAIL:
CORPORATE OFFICE: Gokul FabricatesNo: 27 First FloorsSecond Avenue Ashok NagarChennai-6000 83Ph No: 044-24896731/ 999431104
42
2. INDUSTRY PROFILE
Furniture - furnishings that make a room or other
area ready for occupancy; "they had too much furniture
for the small apartment"; "there was only one piece of
furniture in the room"
A piece of equipment necessary or useful for
comfort or convenience. Furnishings The furniture,
appliances, and other movable articles in a home or
other building. Furnishings Wearing apparel and
accessories.
Part of the furniture Informal someone or something
that is so long established in an environment as to be
accepted as an integral part of it has been here so long
that he is part of the furniture
2.1 Interior Services
Backed by a team of dexterous architects and
interior designers who are well versed with their domain
of space planning, interior designing, space planning,
43
interior architectural planning, customized furnishings
and executing feasible answers to the same, we are
counted as one of the leading firms engaged in
undertaking a spectrum of interior designing services
that include the following:
2.2 Interior Designing
The Company offer services for interior designing
that are done keeping in mind the taste and preferences
of our clients. The interior designing services offered
by them are executed within a committed time frame and
are offered as per the current trends in this sector.
They also ensure that they keep in mind the budget of
their clients and deliver them services as per their
requirement.
2.3 Interior Design Planning
Owing to their in-depth expertise in the interior
designing sector, they execute services such as interior
design planning that are meticulously planned and
44
exhibit the aesthetics of any abode. Known for
contemporary outlook, their services for interior design
planning are executed for residences, offices and other
commercial set ups.
Interior Architectural Planning and Designing
Interior architectural planning and designing can
be described as a practice concerned with designing a
space - walls, windows, doors, finishes, textures,
light, furnishings and furniture. A special team of
Interior designers is deployed to develop a serviceable,
safe, and aesthetically pleasing space for a client.
They undertake specialized interior designing
services that are characterized by reliability,
flexibility and time adherence and can be executed in
spaces that are commercial, industrial, or residential.
Backed by a team of Interior designers who work in close
proximity with architects and clients to thoroughly
evaluate the aesthetic tastes of the client and
translate the outlay of a space, as per the needs of the
occupants, and the style that best suits both. Also, we
45
ensure to leave no stone unturned in offering
unblemished services with excellent finish right from
the color coordination of the walls to electrical
fittings.
2.4 Turnkey Projects on Interior Designing
They provide complete turnkey projects on Interior
designing with all interior-designing facilities such as
architectural designing, interior designing, interior
decoration, maintenance and landscaping in a package or
individually. They use a combination of highly skilled
interior designers and sophisticated technology to turn
imaginative idea into real design in order to render
unbeatable Turnkey Projects.
2.5 Space Planning
Adopt at undertaking space planning services that
are recognized for their brilliant conceptualization and
the gradual build up towards flawless execution, they as
46
a firm; have earned a positive niche in the interior
designing industry.
In the modern world of space crunch, it is
extremely important that each centimeter of space is
meticulously brought into effective use. With their
dexterous project managers, they are able to offer space
planning services in an efficient manner.
2.6 False Ceilings
They undertake services pertaining to designing and
installing false ceilings as per the specifications of
their clients. False ceiling systems solve the problem
of dirty, unhygienic ceilings that are difficult, and
expensive to clean by providing a bright, durable and
hygienic surface, which is easily maintained. This
extremely practical false ceiling system is suitable for
any area requiring a fixed, non-porous, non-fibrous and
non-absorbent ceiling.
47
False Ceilings has varied advantages such as:
• Waterproof
• Termite Proof
• Fire Retardant
• Economical
• Maintenance free
Also, being non-porous and non-absorbent, false
ceilings can incorporate flush fitting lighting, air
vents and sprinklers that are easy to install &
available in various colors shades.
2.7 Wood Work
They are proficient in undertaking wood work as per
the specifications provided by their clients. With a
pool of talented designers, interior engineers and
carpenters they execute their services like wood
paneling, construction of cupboards, windows, doors and
much more, using premium quality termite free wood, that
is quality checked on various quality parameters.
48
2.8 Glass Work
The Company successfully undertake and execute
glass work services that bespeak of innovation,
archetypal designing and panache they lend to the
surroundings. With a well-knitted and expert team of
professionals who understand the intricacies involved in
the fragile work of glass, ensure that they put in hard
work, which results in splendid art forms.
They are instrumental in offering services
pertaining to the following:
• Stained glass
• Etched glass
• Artistic glass work in arches and widows
2.9 Acoustic Ceiling
As one of the leading names engaged in offering
acoustic ceiling services, they have been highly
49
recommended across the nation by their content clients
for their reliable and pioneering services.
Acoustic ceilings are popularly used as an instant
fix for unappealing rooms. Instead of an expensive
renovation of a dilapidated ceiling, a grid can be
installed in a few hours and acoustic ceiling tiles
fixed over them. Our interior designers and decorators
pay minute attention to the meticulous designing of the
work taken upon by them. Factors such as color
coordination, electric fittings and safety are always
stressed upon to render services that are ideal in every
aspect.
2.10 Modular Furniture
They undertake services pertaining to modular
furniture, which is a convenient answer to the
traditional space occupying furniture. Backed by their
team of adept designers and carpenters they are able to
design a range of modular furniture, which is craved
using excellent and termite free wood. Procured from
50
reliable sources across the nation their wood is quality
tested on various parameters, before giving it the shape
of modular furniture.
The advantages of modular furniture are as follows:
• Easily portable
• Contemporary designs
• Occupies less space
• Dimensionally accurate
• Excellent finishes available such as: Mahogany,
chocolate, dark brown
2.11 Customized Furniture
They are skilled in offering customized furniture,
which is designed as per the specifications offered by
the clients. Being adroit in following instructions and
coming up with designs that are extremely innovative and
less space occupying, our range stands up to the
international quality levels.
51
They undertake services at the premises of the
client or else at their own site, using wood that is
sourced from reliable sources across the nation. Offered
by them is a range of dining tables, sofa sets,
armchairs, relaxing chairs and much more.
Customized Furnishings
They offer splendid services in regard to
customized furnishings that entail drapery rods,
curtains and much more. Being elegantly color
coordinated our range scores high on graceful designing
and attractive hues.
They offer our assortment as per the specificationsprovided to them by the client.
SAMPLING AREA
Showing composition of respondents of Gokul Furnishings
Pvt Ltd
Companies(members)(Nos.) 9
GOKUL FABRICATES plants(Nos.) 3
Manpower Employed(Nos.) Approx. 460
52
CHAPTER – IV
1. DATA ANALYSIS AND INTERPRETATIONTABLE NO : 4. 1
1.1 SCHEDULE OF CHANGES IN WORKING CAPITAL YEAR 2010-11
Particulars 2009-10Rs
2010-11Rs
IncreaseRs
DecreaseRs
Current Assets
Debtors
Cash& bankbalances
Loans&Advances
CurrentLiabilities
Creditors
Net Workingcapital
21,26,500
4,35,930
1,40,900
17,25,300
9,78,030
23,22,660
2,48,083
8,60,200
6,80,200
27,50,743
1,96,160
--------
7,19,300
10,45,100
----------------
------------
1,87,847
-----------------
---------------
---------
53
Increase inworkingcapital
17,72,713 17,72,713
TOTAL 27,50,743
27,50,743 19,60,560 19,60,560
Source: Annual Report
INTERPRETATION
The working capital shows a Net increase in
working capital at Rs. 17,72,713 for the year
2010-11. The main contribution is Debtors, loans &
advances, Current Liability are increasing in trend,
cash & bank balance are decreased in trend.
TABLE NO: 4.2
1.2 FUND FLOW STATEMENT FOR THE YEAR 2010-11
Source: Annual Report
Particulars Rs Rs
54
Sources of funds:
Fund from operation
Sales of investment
Total sources (A)
Application of funds:
Assets purchased
Repayment of long
term loan
Total application(B)
Increase in working
capital
20,26,00
0
4,00,0
00
32,
384
33,
000
24,26,000
65,384
17,72,713
INTERPRETATION
In this above table the fund flows
statement shows that funds are not utilized properly in
the year 2010-11. The company has to use the fund to
increase their funds in other securities like government
securities and other companies securities. The company
has to increase their source of the funds.
55
TABLE NO:4. 3
1.3 SCHEDULE OF CHANGES IN WORKING CAPITAL YEAR 2011-12
Particulars 2010-11Rs
2011-12Rs
IncreaseRs
DecreaseRs
CurrentAssets
Debtors
Cash& bankbalances
Loans&Advances
CurrentLiabilities
CurrentLiability
Net Workingcapital
Increase inWorking
23,22,660
2,48,083
8,60,200
6,80,200
27,50,743
33,32,341
14,607,00
29,31,964
24,80,920
7,90,500
60,83,084
26,83,881
16,20,720
8,61,960
1,10,300
33,32,341
56
Capital
TOTAL 60,83,084 60,83,084
43,04,601 43,04,601
Source: Annual Report.
INTERPRETATION
The working capital shows a net working capitalat Rs. 3332341 for the year 2011-12. The maincontributions are in cash & bank balances, loans&advances are increasing in trend, Debtors are decreasedin trend.
TABLE NO : 4.41.4 FUND FLOW STATEMENT FOR THE YEAR 2011-12
Source: Annual Report
Particulars Rs RsSources of funds:
Fund from operation
Sales of investment
Total sources (A)
Application of funds:
44,79,18
3
15,00,
000
59,79,183
57
Assets purchased
Tax paid
Repayment of loan
Total application(B)
Increase in working
capital
9,76,078
11,78,38
4
28,49,15
0
26,46,842
33,32,341
INTERPRETATION
In this above table the fund flows statement shows
that funds are not utilized properly in the year 2011-
12. The company has to use the fund to increase their
funds in other securities like government securities and
other companies securities. The company has to increase
their source of the funds.
TABLE NO: 4. 5
58
1.5 SCHEDULE OF CHANGES IN WORKING CAPITAL YEAR 2012-13
Particulars2011-12
Rs2012-13
Rs
IncreaseRs
DecreaseRs
Current Assets
Debtors
Cash& bankbalances
Loans& Advances
CurrentLiabilities
CurrentLiability
Net Working capital
Increase inWorking Capital
14,60,700
29,31,964
24,80,920
7,90,500
60,83,084
25,07,146
25,89,646
47,36,084
24,10,000
12,87,340
84,48,390
11,28,946
18,04,120
70,920
4,96,840
25,07,146
TOTAL 84,48,390 84,48,390
30,03,986
30,03,986
Source: Annual Report
INTERPRETATION
The working capital shows a net working capital at
Rs. 25,07,146 for the year 2012-13 The main
contributions are Debtors, cash & bank balances, loans&
advances are increasing in trend.
59
TABLE NO: 4.6
1.6 FUND FLOW STATEMENT FOR THE YEAR 2012-13
Source: Annual Report
Particulars Rs RsSources of funds:
Fund from
operation
Long term loans
borrowed
Total sources (A)
Application of funds:
Assets purchased
Repayment of long
term loan
Total application(B)
Increase in
working capital
39,27,03
7
2,50,0
00
4,1
1,160
12,
58,731
41,77,037
16,69,891
25,07,146
60
INTERPRETATION
In this above table the fund flows statement shows
that funds are not utilized properly in the year 2012-
13. The company has to use the fund to increase their
funds in other securities like government securities and
other companies securities. The company has to increase
their source of the funds.
TABLE NO: 4. 7
1.7 SCHEDULE OF CHANGES IN WORKING CAPITAL YEAR 2013-14
Particulars2012-13
Rs2013-14
RsIncrease
RsDecrease
Rs
CurrentAssets
Debtors
Cash& bank
25,89,646
47,36,084
59,30,150
4,35,850
33,40,504
43,00,23
61
balances
Loans&Advances
CurrentLiabilities
Creditors
Net Workingcapital
Increase inWorkingCapital
24,10,000
12,87,340
84,48,390
30,55,070
64,10,000
12,72,540
1,15,03,460
40,00,000
14,800
4
30,55,070
TOTAL 1,15,03,460
1,15,03,460
73,55,304
73,55,304
Source: Annual Report
INTERPRETATION
The working capital shows a net working capital
at Rs. 3055070 for the year 2013-14. The main
contributions are Debtors, loans& advances are
increasing in trend, cash & balance is decreased in
trend.
TABLE NO: 4.8
62
1.8 FUND FLOW STATEMENT FOR THE YEAR 2013-14
Source: Annual Report
Particulars Rs RsSources of funds:
Fund from operation
Sales of fixed assets
Total sources (A)
Application of funds:
Fixed assets purchased
Repayment of long term
loan
Total application(B)
Increase in working
capital
30,40,270
7,25,83
0
4,85
,030
2,26
,000
37,66,100
7,11,030
30,55,070
INTERPRETATION
In this above table the fund flows statement shows
that funds are not utilized properly in the year 2013-
14. The company has to use the fund to increase their
funds in other securities like government securities and
63
other companies’ securities. The company has to increase
their source of the funds
TABLE NO : 4.91.9 CASH FLOW STATEMENT FOR THE YEAR 2009-2010
Cash Flow from Operating ActivitiesNet Income 20,07,130Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 2,71,000Changes in other accounts affecting operations(Increase)/decrease in accounts receivable 1,20,50,7
00(Increase)/decrease in inventories 4,35
,300 (Increase)/decrease in prepaid expenses 1,60
,000 Increase/(decrease) in accounts payable 70,93
,856Net cash provided by operating activities 20,07,
130Cash Flow from Investing ActivitiesCapital expenditures 10,00,000Proceeds from sales of equipment 1,20,50,7
00Proceeds from sales of investments 51,51,644Investments in subsidiary 10,00,000 Net cash provided by investing activities 25,50,000
64
Cash Flow from Financing ActivitiesPayments of long-term debt 21,26,500Proceeds from issuance of long-term debt 21,26,500
Dividends paid 30,754Purchase of treasury stock 2,40,500
Net cash provided by financing activities 2,96,600
Increase in Cash 4,35,930 Source: Annual ReportINTERPRETATION
From the above table cash flow statement shows
there is increase in cash of Rs.4,35930. The net income
amounted Rs.20,07,130 and the cash flow from investing
activities as Rs.25,50,000 in the year of 2009-2010 and
the cash flow from financing activities Rs.2,96,600.
TABLE NO: 4.10
1.10 CASH FLOW STATEMENT FOR THE YEAR 2010-11
Cash Flow from Operating ActivitiesNet Income 19,71,863Adjustments to reconcile net income to netcash provided by operating activities:Depreciation and amortization 2
,71,000Changes in other accounts affecting operations(Increase)/decrease in accounts receivable 1,35,30,9
00 (Increase)/decrease in inventories 5,
65,450 (Increase)/decrease in prepaid expenses 1,60,000Increase/(decrease) in accounts payable 87,53,5
74Net cash provided by operating activities 19,71,8
65
63Cash Flow from Investing ActivitiesCapital expenditures 10,00,0
00Proceeds from sales of equipment 1,35,30,9
00Proceeds from sales of investments 87,53,
574Investments in subsidiary 10,00,
000Net cash provided by investing activities 29,50,000Cash Flow from Financing ActivitiesPayments of long-term debt 23,22,
600
Proceeds from issuance of common stock 5,65
,450
Dividends paid 1
2,658
Purchase of treasury stock 4,35,
300
Net cash provided by financing activities 2,72
,946 Decrease in Cash 1,87,847
Source: Annual Report
INTERPRETATION
From the above table cash flow statement showsthere is decrease in cash of Rs.1,87,847. The net incomeamounted Rs.19,71,863 and the cash flow from investingactivities as Rs.29,50,000 in the year of 2010-2011 andthe cash flow from financing activities Rs.2,72,946.
TABLE NO: 4.11
1.11 CASH FLOW STATEMENT FOR THE YEAR 2011-12
66
Cash Flow from Operating ActivitiesNet Income 17,04,981Adjustments to reconcile net income to netcash provided by operating activities:Changes in other accounts affecting operations(Increase)/decrease in accounts receivable 1,44,45,7
60(Increase)/decrease in inventories 6,70,840
(Increase)/decrease in prepaid expenses 1,60,000
Increase/(decrease) in accounts payable 96,46,370 Net cash provided by operating activities 61,84,174Cash Flow from Investing ActivitiesCapital expenditures 10,00,000Proceeds from sales of equipment 11,60,0
00Proceeds from sales of investments 6,70,000Investments in subsidiary 10,00,
000Net cash provided by investing activities 61,84,
174Cash Flow from Financing ActivitiesPayments of long-term debt 14,607,00
Proceeds from issuance of common stock
6,
70,840
Dividends paid 1
3,765
Purchase of treasury stock 5,65
,450
Net cash provided by financing activities 2,90
,560 Increase in Cash 26,83,881
Source: Annual ReportINTERPRETATION
From the above table cash flow statement showsthere is increase in cash of Rs.26,83,881. The net
67
income amounted Rs.17,04,981 and the cash flow frominvesting activities as Rs.61,84,174 in the year of2011-12 and the cash flow from financing activitiesRs.2,90,560.
TABLE NO: 4. 12
1.12 CASH FLOW STATEMENT FOR THE YEAR 2012-13
Cash Flow from Operating ActivitiesNet Income 30,40,270Adjustments to reconcile net income to netcash provided by operating activities:Changes in other accounts affecting operations(Increase)/decrease in accounts receivable 1,90,84,9
40(Increase)/decrease in inventories 6,90,
200 (Increase)/decrease in prepaid expenses 1,60
.000Increase/(decrease) in accounts payable 1,35,96.5
91Net cash provided by operating activities 84,06,230Cash Flow from Investing ActivitiesCapital expenditures 10,00,000Proceeds from sales of equipment 1,90,84,9
40 Proceeds from sales of investments 1,46,46
,591
Investments in subsidiary 10,00,000
Net cash provided by investing activities 2,50,000
Cash Flow from Financing ActivitiesPayments of long-term debt 2,58,96
68
,46
Proceeds from issuance of common stock 6,90
,240
Dividends paid 1
4,160
Purchase of treasury stock 6,70,8
40
Net cash provided by financing activities 3,10
,320 Increase in Cash 18,04,120 Source: Annual ReportINTERPRETATION
From the above table cash flow statement shows
there is increase in cash of Rs.18,04,120. The net
income amounted Rs.30,40,270 and the cash flow from
investing activities as Rs.2,50,000 in the year of 2012-
13 and the cash flow from financing activities
Rs.3,10,320.
TABLE NO: 4.13
1.13 CASH FLOW STATEMENT FOR THE YEAR 2013-14
Cash Flow from Operating ActivitiesNet Income 30,40,270Adjustments to reconcile net income to netcash provided by operating activities:Changes in other accounts affecting operations(Increase)/decrease in accounts receivable 2,20,38,1
00(Increase)/decrease in inventories 6,75
,400(Increase)/decrease in prepaid expenses 1,60
,000
69
Increase/(decrease) in accounts payable 1,54,77,120
Net cash provided by operating activities 1,14,465,00
Cash Flow from Investing ActivitiesCapital expenditures 10,00,00
0Proceeds from sales of equipment 15,45,0
00Proceeds from sales of investments 1,54,77,1
20Investments in subsidiary 10,00,0
00Net cash provided by investing activities 1,50
,000Cash Flow from Financing ActivitiesPayments of long-term debt 59,30,
150
Proceeds from issuance of common stock 6,75
,400Dividends paid 15,154
Purchase of treasury stock 6,90
,200
Net cash provided by financing activities 3,19
,600Decrease in Cash 43,00,234 Source: Annual Report
INTERPRETATION
From the above table cash flow statement shows
there is decrease in cash of Rs.43,00,234. The net
income amounted Rs.30,40,270 and the cash flow from
investing activities as Rs.1,50,000 in the year of 2013
– 2014 and the cash flow from financing activities
Rs.3,19,600.
70
2. RATIO ANAYSIS
2.1 CURRENT RATIO
Current ratio may be defined as the relationship between
current assets and current liabilities. This ratio is
known as working capital ratio. Is a measure of general
liquidity and is most widely used to make the analysis
of short term financial position.
Current AssetCURRENT RATIO = Current Liability
TABLE NO. 4.14
CURRENT RATIO
Year CurrentAssets
CurrentLiability
CurrentRatio
2009-10 31,38,630 17,25,300 1.822010-11 39,96,393 26,80,200 1.492011-12 65,44,424 37,90,500 1.732012-13 64,25,930 42,87,340 1.502013-14 52,61,800 32,72,540 1.61
Source: Annual Report
INTERPRETATION
71
The current ratio is in the fluctuating trend.
The top most value of the ratio in the Year 2009-10 is
1.82% and lower value of ratio in the year 2010-11 is
1.49%.
CHART NO : 4.1
CURRENT RATIO
72
2.2 QUICK RATIO
Quick ratio also knows as acid test or liquid ratio
established a relationship between quick (or) liquid
liabilities. An asset is said to be liquid if it can be
converted into within a short period without loss of
value. The other liquid assets are bills receivables,
such debtors, marketable securities and temporary
investments.
Current Assets-(Stock)QUICK RATIO = Current Liabilities-(Bank Overdraft)
TABLE
NO: 4.15
73
QUICK
RATIO
Year Quick Assets CurrentLiability Quick Ratio
2009-10 27,03,330 17,25,300 1.572010-11 34,30,943 26,80,200 1.282011-12 58,73,584 37,90,500 1.552012-13 57,35,730 42,87,340 1.332013-14 45,86,400 32,72,540 1.40
Source: Annual Report
INTERPRETATION
The quick ratio is in the fluctuating trend. The
top most value of the ratio in the Year 2009-10 is 1.57
and lower value of ratio in the year 2010-11 is 1.28.
CHART NO: 4.2
QUICK RATIO
74
The Net Profit ratio is found out by dividing Net
Profit by Net Sales.
Net Profit Ratio = Net Profit/Net Sales
The financial figures for Net Profit Ratio shown
above which is used for the calculation of Net
Profit/Net Sales and the result are shown in the
following table.
Net ProfitNET PROFIT RATIO = × 100
Net Sales
TABLE NO: 4.16
NET PROFIT RATIO
Year Net Profit Net Sales Net ProfitRatio
2009-10 20,07,130 1,20,50,700 16.655
2010-11 19,71,863 1,35,30,900 14.573
2011-12 17,04,981 1,44,45,760 11.802
2012-13 22,22,056 1,90,85,940 11.642
2013-14 30,40,270 2,20,38,100 13.795Source: Annual Report
INTERPRETATION
The net profit ratio is in the increasing trend
except 2010-2011 is 11.64. The top most value of the
ratio in the year 2009-10 is 16.66% and lowest value of
ratio in the year 2012-13 is 11.64%
76
2.4 INVENTORY TURNOVER RATIO
Inventory turnover ratio implication the number of times
the stock has been turn over during the period and
evaluates the efficiency with which a firm is able to
manage its inventory.
Cost of Goods (Sales-GrossProfit)
INVENTORY TURNOVER RATIO = Average Stock/Closing
Stock
TABLE NO : 4.17
INVENTORY TURNOVER RATIO
Year Cost ofGoods
AverageStock
InventoryTurnoverRatio
2009-10 76,07,056 3,37,900 22.5122010-11 95,98,424 5,00,375 19.1822011-12 1,05,42,980 6,18,145 17.0552012-13 1,46,27,231 6,80,520 21.494
78
2013-14 1,66,01,920 6,82,800 24.314Source: Annual Report
INTERPRETATION
The inventory turnover ratio is fluctuating trend.
The top most value of the inventory turnover ratio in
the year 2010-11 is 14.50% and lowest inventory turnover
ratio in the year 2011-12 is 17.06.
CHART NO: 4.4
INVENTORY TURNOVER RATIO
79
2.5 DEBTORS TURNOVER RATIO
Debtor’s turnover is found out by dividing sales
(since all sales are in credit) by year-end balance of
Debtors.
80
The financial figures for Sales and Debtors used
for the calculation of debtor’s turnover ratio and the
result are shown in the following table.
Net Credit SalesDEBTORS TURNOVER RATIO =
Debtors
TABLE NO : 4.18
DEBTORS TURNOVER RATIO
Year Credit Sales DebtorsDebtorsTurnoverRatio
2009-10 1,20,50,700 21,26,500 5.6672010-11 1,35,30,900 23,22,660 5.8252011-12 1,44,45,760 14,60,700 9.8892012-13 1,90,85,940 15,89,646 12.0062013-14 2,20,38,100 17,40,550 12.661
Source: Annual Report
INTERPRETATION
Debtors turnover ratio results in increasing trend
which may ultimately results in maintaining sales.
Above shows the debtors turnover ratios were increasing
from 2009-14 from 5.67% to 12.66%.
81
2.6 DEBT-ASSET RATIO
Debt-Asset ratio is found out by dividing Total
debt by Assets.
The financial figures for Debt-Asset Ratio shown
above which is used for the calculation of Total
Debt/Assets and the result are shown in the following
table.
Total DebtDEBT-ASSET RATIO =
Total Asset
TABLE NO: 4.19
DEBT-ASSET RATIO
Year Total Debt Total Assets Debt-AssetRatio
2009-10 21,26,500 67,72,630 0.313
2010-11 23,22,660 97,59,393 0.237
2011-12 14,60,700 1,25,74,674 0.116
2012-13 15,89,646 1,53,33,570 0.103
2013-14 17,40,550 1,73,59,040 0.100Source: Annual Report
INTERPRETATION
The debt-asset ratio is fluctuating trend. The top
most value of the ratio in the year 2009-10 is 0.31% and
lowest value of ratio in the year 2013-14 is 0.10%
84
2.7 FIXED ASSETS TURNOVER RATIO
Fixed Assets turnover ratio is found out by
dividing sales by fixed asset (Net Block)
The financial figures for Sales and Fixed Assets
used for the calculation of Fixed Assets turnover ratio
and the result are shown in the following table.
Sales FIXED TURNOVER RATIO =
Fixed Asset (Net Block)
TABLE NO : 4.20
FIXED ASSETS TURNOVER RATIO
Year Credit Sales Net BlockFixed AssetsTurnoverRatio
2009-10 1,20,50,700 36,34,000 3.3162010-11 1,35,30,900 57,63,000 2.3472011-12 1,44,45,760 60,30,250 2.395
86
2012-13 1,90,85,940 89,07,640 2.1422013-14 2,20,38,100 79,97,240 2.755
Source: Annual Report
INTERPRETATION
The fixed assets turnover ratio is in the
increasing trend except in the year 2013-14 is 2.76%.
The top most value of the ratio in the year 2009-10 is
3.31% and lowest value of the ratio in the year 2012-13
is 2.14%.
CHART NO: 4.7
FIXED ASSET
TURNOVER RATIO
87
Working Capital = Current Assets − Current Liabilities
YEAR SALES(Rupees)
WORKINGCAPITAL(Rupees)
RATIO( Times )
2009-10 12050700 1413330 8.5262010-11 12730900 3316193 3.8392011-12 14445760 6753924 2.1382012-13 19085940 9138590 2.0882013-14 22038100 12178860 1.809
Source: Annual Report
INTERPRETATION
This ratio indicates whether working capital has
been effectively utilized in making sales or not.
From the table it is noted that working capital had
some fluctuation in the middle of the study period, yet
the company was able to increase it in the later years.
Hence the turnover indicates that company had
utilized its working capital efficiently and the company
can also try to work on this to get more effective
values.
89
TABLE NO : 4.22
2.9 CURRENT ASSETS TO FIXED ASSETS RATIO
Source: Annual Report
INTERPRETATION
91
YEARCURRENTASSETS(Rupees)
FIXEDASSETS
(Rupees)
RATIO(Times)
2009-10 2260324 820000 2.756
2010-11 1950571 1040550 1.874
2011-12 2444821 1569766 1.557
2012-13 2672840 1488700 1.795
2013-14 2644950 1699500 1.556
The level of current assets can be measured by
using this current asset to fixed assets ratio.
From the table it is noted that the ratio is
between the average ratio and this indicates the company
had a moderate current asset policy throughout the study
period.
CHART NO: 4.9
CURRENT ASSETS TO FIXED ASSETRATIO
92
2.10 WORKING CAPITAL TO CURRENT ASSET RATIO
YEARWORKINGCAPITAL(Rupees)
CURRENTASSETS
(Rupees)
RATIO( Times )
2009-10 16,79,724 22,60,324 0.743
2010-11 13,50,037 19,50,571 0.692
2011-12 18,44,130 24,44,821 0.754
2012-13 18,85,740 26,72,840 0.705
2013-14 18,39,950 26,44,950 0.695 Source: Annual Report
INTERPRETATION
From the table working capital ratio registered a
fluctuating trend during the study period this is noted.
Hence it is found that the working capital ratio is
managed by using the cash & bank balance available in
the company.
94
TABLE NO: 4.24
3. TREND ANALYSIS
Y = a + bX
Where a = ∑Y ; b = ∑XY
n X∑ 2
Cash / Bank
YEAR X X2
Cash / Bank(Rs )Y
XY(Rs)
2009-10 -2 4 1319224 -26384482010-11 -1 1 384335 -3843352011-12 0 0 505632 02012-13 1 1 805350 8053502013-14 2 4 645250 1290500TOTAL 5 10 3659791 -926933
Source: Annual Report
96
a = 3659791 / 5 = 731958.2
b = 926933 / 10 = 92693.3
Cash/Bank value in 2014-15 will be about 731958.2.
TABLE NO: 4.25
INVENTORIES
YEAR X X2
Inventories(Rs )Y
XY(Rs)
2009-10 -2 4 1,20,500 -2,41,0002010-11 -1 1 1,80,550 -1,80,5502011-12 0 0 2,01,560 02012-13 1 1 2,51,560 2,51,5602013-14 2 4 2,86,000 5,72,000TOTAL 5 10 10,40,170 4,02,010
Source: Annual Report
a = 1040170 / 5
= 208034
b = 402010/10
= 10201.0
97
Inventories value in 2013-14 will be about 208034
4. CASH BUDGETING
A firm is well advised to hold adequate cash
balance but should avoid excessive balances. The firm
has, therefore, to assess its need for cash properly.
The cash budget is probably the most important tool in
cash management. It is device to help a firm to plan and
control the use of cash. It is a statement showing the
estimated cash inflows and cash outflows over the
planning horizon. In the other words, the net cash
position of a firm as it moves from one budgeting sub
period to another is highlighted by the cash budget.
CASH BUDGET
98
TABLE NO : 4. 26
PARTICULARS 2009-10 2010-11 2011-12 2012-13 2013-14a OPENING WORKING IN PROGRESS
240500 435300 565450 670840 690200
b Receipts 12050700
13530900
14445760
19085940
22038100
c Payments 2447874 1991868 2212059 2249119 2409160d NET CASH FLOW (b-c) 9602826 1153903
21223370
11683682
11962894
0e Cumulative NetCash Flow 2007130 4479193 1704981 8406230 1144650
0
f (a+e) 2247630 4914493 2270431 9077070 12136700
g Minimum Cash Balance Requirement
100000 100000 100000 100000 100000
SURPLUS RELATIONTO THE MINIMUMCASHBALANCE REQUIREMENT (F-G)
2147630 4814493 2170431 8977070 11136700
Source: Annual Report
INTERPRETATION
In the above table it clearly determines the
availability of the cash balance in the subsequent year.
It will clearly determine the minimum cash balance
99
requirement of the concern. In the 2013-14 leads to
higher need of cash balance 11136700 lakhs. The cash
balance is highly required for the day- to day
transaction.
CHART NO : 4.11
CASH BUDGET
100
CHAPTER - V
1. FINDINGS, SUGGESTIONS AND CONCLUSIONS
1.1 FINDINGS
The net working capital shows every year has been
increase in the working capital.
The schedule of changes in working capital the
current assets are mainly in increasing trend and
liabilities are in decreasing trend.
The fund flow statement shows the funds were
properly used and the increasing in working
capital reflects on the day-to-day operation.
The fund flow statement every year the net working
capital had been increased.
The cash flow statement shows that the sources of
funds had been increased and the application of
funds has been decreased.
Current ratio analysis states there is a
fluctuating trend.
101
The trend analysis shows the inventories and
cash/bank value will be increased in subsequent
year.
The cash budget early determines the availability
of cash balance in subsequent transaction.
Cash to current assets ratio has huge fluctuations
during the period.
Cash position in of the company has uneven trend.
Uneven trend in networking.
The company has its working capital ratio has been
above the standard norms during the period 2009-
2014.
Liquidity position of the company is satisfied.
Current assets are not properly utilized by the
concern towards the turnover.
Working capital turnover ratio in the year 2009-
2010 better when compare to the previous year.
The company has spent huge expenses.
102
1.2 SUGGESTIONS
The cash position of the company has not been
properly maintained. So the company has to make an
effort to reduce the expenses and also cash to
current assets ratio.
Company can utilize their assets properly.
Modernized equipments can purchase.
From current ratio, overall ratio was above the
accepted norms of 0.5. So the company has to reduce
the overall ratio avoid the unnecessary cash kept
in ideal.
Company can properly maintain their debtors to
sales turnover ratio.
A Working capital ratio has been maintained below
the norms.
A management may take necessary steps to employee
more members of staff considering the burden of
work load.
103
Advertisement publicity should be given so as to
make awareness to the public.
The company must motivate the respective employees
to get best efforts out of them.
The company has to raise the long term investment
and utilize the current assets.
104
1.3 CONCLUSION
The study is conducted at GOKUL FABRICATES, Chennai
with the title of a study on Cash management. This study
was conducted mainly with help of secondary data
obtained from the unit.
The company should use the minimum investment in
inventory to organize it profitability. Whether the
company may invest large size of inventory to the
concern. The efficient and production levels are
decreased. So the concern should maintain the maximum
investment in inventory. The company able to achieve the
Cash management objectives in proper way. May be any
researcher will do their research work in the field for
over all financial performance (or) particularly working
capital management in future.
105
BIBLIOGRAPHY
NO TITLE OF THE BOOK AUTHORPUBLICATION
YEAR
1 FinancialManagement
M.Y. Khan&P.K. Jain
McGraw HillPublishing
(2001)
2 FinancialManagement
P.V. Kuldarni HimalayaPublishing
House(2001)
3 Pinciples ofManagementAccounting
S.N. Maheswari Sultan Chand(2002)
4 FinancialManagement
I.M. Pandey VikasPublishingHouse(2003)
5 ResearchMethodology
C.R. Kothari WishwaPrakashan(1999)
WEBSITE:
www.gokulfabricates.in
www.abb.in
www.ge.in
106
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