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
2007
2008
2009
2010
2011
21850.11
24244.91
28303.9
25968.68
39406.45
12550.12
12011.38
17225.8
16109.8
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.
2007
2008
2009
2010
2011
1.74
2.01
1.64
1.61 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
17225.8
16109.8
21440.46
3246.12
1644.8
5504.47
3981.92
5092.95
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
3246.12
1644.5
5504.47
3891.92
5092.95
9299.99
12233.53
11078.1
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
20353.62
23816.11 23959.35
32704.97
43276.38
24348.17
31556
36641.2
44006.29
51564.33
GROSS PROFIT SALES
2007 2008 2009 2010 2011
83.59
75.47
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
4.61
5 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
3207.13
3448.89
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
2007
2008
2009
2010
2011
3246.12
1644.8 5504.47
3891.92
5092.95
24348.17 31556 36641.86
44006.29
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
0.052
0.15
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
100
107.538
58.6
63.667
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
131.54
119.11
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
117.5087
132.1
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
100
118.94
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
Y2
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

ANNEXURE

ANNEXURE
BALANCE SHEET AS AT 31ST
MARCH
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

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