ACKNOWLEDGEMENT

This project report is the result of collective effort of group of people besides me. List of those who provided a helpful hand is quite comprehensive but it would be pertinent to mention a few who played major role in completion & preparation of the project. Im enormously grateful to Mr. D.N. Jha (Asst. General Manager, Baidyanath Patna) for providing me opportunity to complete my two months summer project from SHREE Baidyanath AYURVED BHAWAN PVT. LTD. Patna a leading company in AYURVEDIC Medicine of the country India. I would like to thank Mr. Kotiyall Shrikant (Account officer, Baidyanath Patna ) and Mr. Ashok Kumar Sharma (Faculty of Finance L.N.M.I. Patna ) for helping and guiding me to complete this project. I also extend my gratitude towards my project guide Mr. Ashok Kumar Sharma (Faculty of Finance L.N.M.I. Patna ). Nothing can be accomplished without the blessing of parents. I am grateful to my parents for support and encouragement. Finally, I would like to thanks my younger sister as well as all my friends specially who always provided me consistent support and encouragement.

Nitish kumar singh

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CHAPTER- 01

INTRODUCTION
TO

THE TOPIC
An

analysis of Cash Flow Statement of Shree Baidyanath ayurveda BhawaN Pvt. Ltd. PatNa

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1.1- Meaning

and Relevance Financial statement -

of

Introduction to the study:In business as in personal finance, cash flows are essential to solvency. They can be presented as a record of something that has happened in the past, such as the sale of a particular product, or forecasted into the future, representing what a business or a person expects to take in and to spend. Cash flow is crucial to an entity's survival. Having ample cash on hand will ensure that creditors, employees and others can be paid on time. If a business or person does not have enough cash to support its operations, it is said to be insolvent, and a likely candidate for bankruptcy should the insolvency.

The statement of a business's cash flows is often used by analysts to gauge financial performance. Companies with ample cash on hand are able to invest the cash back into the business in order to generate more cash and profit.

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A revenue or expense stream that changes a cash account over a given period. Cash inflows usually arise from one of three activities financing, operations or investing - although this also occurs as a result of donations or gifts in the case of personal finance. Cash outflows result from expenses or investments. This holds true for both business and personal finance.

An accounting statement called the "statement of cash flows", which shows the amount of cash generated and used by a company in a given period. It is calculated by adding noncash charges (such as depreciation) to net income after taxes. Cash flow can be attributed to a specific project, or to a business as a whole. Cash flow can be used as an indication of a company's financial strength.

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1.2 - Objective of study: To know the financial condition of Shree Baidyanath Ayurveda Bhawan Pvt. Ltd. , Patna branch. To estimate the earning capacity of the firm. To assess the financial position of the firm. To decide the future prospect of the firm To know the progress of the firm. To judge the solvency of the firm. To measure the efficiency of the operation. To determine the dept capacity of the firm. To assess the financial performance of the firm. To have comparative study of the cash flow statements of two consecutive years. To help in making financial plans.

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1.3 Scope of study:The data contained in the statement of cash flows can be used to1. Review individual cash flow items for analytic significance. 2. Examine the trend of different cash flow components over time and their relationship to related income statement items. 3. Consider the interrelationship between cash flow components over time. 4. The cash flow statement allows the analyst to distinguish between the actual events that have occurred and the accounting assumptions that have been used to report these events. 5. The cash flow statement provides information about the firm's liquidity and its ability to finance its growth from internally generated funds.

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1.4 Methadology Sources of Data- Organization provided data as secondary sources. Organization provided us the auditors report with balance sheet & profit and loss account of the year 2007-08 & 2008-09. Organization also gave us the balance sheet of the year 2008-09 of the head office Kolkata branch. Nature of study- After getting the data it was framed in the logical way and interpreted so it gave a result and conclusion; it is also represented by graph and diagram so that it is easy to understand by a layman. On the basis of this result what we have got, gave some suggestion to the company (SHREE BAIDYANATH AYURVED BHAWAN PVT LTD PATNA BRANCH) that which step company should take for better result.

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1.5 Limitations As limitation is concern, since the training duration is only of two months which is a less duration and we cant study deeply in this short interval of time Since this is summer training so we face a lot of problems during these days due to temperature. The study is based on the result of limited period i.e. 3 year hence the result obtained can be applied for selected period. The data we got is only of the one unit of Baidyanath, so that we couldnt compare the performance with the competitors. From provided data absence of several items like interest, corporate tax, no. of share etc so that we couldnt find several relevant facts.

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CHAPTER- 02

A brief study about the Organization

Shree Baidyanath Ayurved Bhavan Pvt. Ltd. (Patna)

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2.1 Origin of Shree Baidyanath Ayurved Bhawan Pvt. Ltd.

Shree Baidyanath Ayurved Bhawan Pvt. Limited, popularly known as Baidyanath is one of the leading company of Ayurvedic medicines. The company has been playing a pioneering role in establishing a relation between the ancient knowledge of Ayurveda with the modern science and research since 1917. Pandit Ram Dayal Joshi established Shree Baidyanath Ayurved Bhawan Private Limited to combine the resources of AYURVEDA with modern research and manufacturing technology. It is one of the India's most respected companies, manufacturing the largest range of Ayurvedic products in the world. It has seven hundred different products in the market.

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2.2 -History of Shree Baidyanath Ayurved Bhawan Pvt. Ltd.

Baidyanath is established in the year 1917 in Kolkata. It has five different branches at five different places i.e. KOLKATA, PATNA, JHASHI, NAGPUR & NAINI(Allahabad). Kolkata is the head office of Shree Baidyanath Ayurved Bhawan Pvt. Limited. Baidyanath Kolkata has registered under companies act 1956 with all its four different branches i.e. {PATNA, JHASHI, NAGPUR & NAINI(Allahabad)} in the year 1948. In the year 1947 it became a company. It is the member of CII (confederation of Indian Industries). Most of its units are GMP and ISO certified. Baidyanath Patna has an extension branch at HAJIPUR(Bihar). And its financial transaction or book of account is completely separate to the Baidyanath Patna. Baidyanath is working for the development and of AYURVEDA, because AYURVEDA is a 5000 year old Science of health care and herbal treatment. AYURVEDA, is highly effective in common and complicated ailments, assures long term relief and has no side effects. AYURVEDA is now backed by modern scientific research and technologies and provides its gentle healing touch to millions around the world.

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2.3- The Achievements of Baidyanath

A range of over 700 Ayurvedic product 1600 dedicated and trained employees. Regular updated centralized research & development facilities. Over 3500 exclusive showrooms supervised by fully qualified medical practitioners. More than 10000 distributors Export the products to several countries in the world. Establishment and supervision of specialized Ayurvedic hospitals. Publication of the monthly Ayurvedic magazine SACHITRA AYURVEDA. 5 (five) free clinics serving to over 300 patients every day. Running 2 (two) leading schools in two Indian states.

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2.4 - Corporate Mission of Shree Baidyanath Ayurved Bhawan Pvt Ltd.

To be the global name in AYURVEDA and its related spheres by leveraging on the Baidyanath brand equity, vast experience, core knowledge and competence, procurement expertise, modern manufacturing and research capabilities.

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2.5 - Vision and core values of Shree Baidyanath Ayurved Bhawan Pvt. Ltd.
From the Desk of Chairman-

At Baidyanath, we believe in offering you quality of life. Simply because, we know that to cope with the frenzied pace of today's life, you always strive to keep fit and healthy. To meet the needs of healthy modern living, you need supports that are natural and safe. That allow you to live life to the fullest.

We found these answers in the ancient wisdom of AYURVEDA. And since 1917 we used our vast experience and expertise, delved deep into the resources of AYURVEDA, and blended it seamlessly with modern research and manufacturing technology. The result is the creation of a whole range of Ayurvedic lifestyle solution products that help you lead a better life, naturally.

Director, SHREE Baidyanath AYURVED BHAWAN Pvt. Ltd.

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2.6 - Organizational Structure

SHREE Baidyanath AYURVED BHAWAN PRIVATE LIMITED, PATNA

DIRECTOR

PRESIDENT MARKETING

PRESIDENT PRODUCTION

PRESIDENT FINANCE & ADMISTRATION

G.M. MARKETING

G.M. PRODUCTION FINANCIAL MANAGER H.R. MANAGER

REGIONAL SALES MANAGER ##

REGIONAL SALES MANAGER ##

ACCOUNTING MANAGER

SALES MANAGER

REGIONAL SALES MANAGER ##

SALES REPRESENTATIVE

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2.7- International Presence

AYURVEDA was born out of man's respect for Nature and more people are turning to Nature to find answers to not just physical problems, but spiritual questions as well. With the increasing popularity of herbal healthcare all over the world, Baidyanath is all set to conquer the global market. The Company's export division is rapidly widening its network worldwide, making its presence felt in the following countries BANGLADESH USA UK ITALY GERMANY FRANCE NETHERLAND LATVIA SINGAPORE MAURITIUS KENYA SEYCHELLES GREECE MOROCCO NEW ZEALAND AUSTRALIA Baidyanath also undertakes outsourced work for international brands of different countries.

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2.8 - Corporate Social Responsibilities

(CSR) of Shree Baidyanath Ayurved Bhawan Pvt. Ltd.
1. Baidyanath has been Running Ayurvedic Hospitals
successfully.

2. It Publishes a monthly magazine - "Sachitra Ayurved" 3. It has 5 free clinics serving over 300 patients each day. 4. Its Institution got awards for significant research on
AYURVEDA.

5. It is running two leading schools in two states of India. 6. It gave donation to Humanity Trust - Development of
Humanity Hospital for Poor Patients.

7. It gave donation to Manav Vikas Kendra - Rehabilitation &

Research Institute for Handicapped.

8. It provided employment to deaf & dumb people. 9. It Joined Hands with Rotary Club to help orphans.

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CHAPTER- 03

About topic
aN Analysis OF CASH FLOW StateMeNt

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3.1- Meaning
Financial statement analysis is defined as the process of identifying financial strengths and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and the profit and loss account. There are various methods or techniques that are used in analyzing financial statements, such as comparative statements, schedule of changes in working capital, common size percentages, funds analysis, trend analysis, and ratios analysis. Financial statements are prepared to meet external reporting obligations and also for decision making purposes. They play a dominant role in setting the framework of managerial decisions. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements.

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Cash flow is the movement of cash into or out of a business, project, or financial product. It is usually measured during a specified, finite period of time. Measurement of cash flow can be used

To determine a project's rate of return or value. The time of cash flows into and out of projects are used as inputs in financial models such as internal rate of return, and net present value.

To determine problems with a business's liquidity. Being profitable does not necessarily mean being liquid. A company can fail because of a shortage of cash, even while profitable.

As an alternate measure of a business's profits when it is believed that accrual accounting concepts do not represent economic realities. For example, a company may be notionally profitable but generating little operational cash (as may be the case for a company that barters its products rather than selling for cash). In such a case, the company may be deriving additional operating cash by issuing shares, or raising additional debt finance.

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Cash flow can be used to evaluate the 'quality' of Income generated by accrual accounting. When Net Income is composed of large non-cash items it is considered low quality.

To evaluate the risks within a financial product. E.g. matching cash requirements, evaluating default risk, re-investment requirements, etc.

Cash flow is a generic term used differently depending on the context. It may be defined by users for their own purposes. It can refer to actual past flows, or to projected future flows. It can refer to the total of all the flows involved or to only a subset of those flows. Subset terms include 'net cash flow', operating cash flow and free cash flow.

Cash flow is determined by looking at three components by which cash enters and leaves a company: core operations, investing and financing.

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 Cash flows from Operating Activities:Measuring the cash inflows and outflows caused by core business operations, the operations component of cash flow reflects how much cash is generated from a company's products or services. Generally, changes made in cash, accounts receivable, depreciation, inventory and accounts payable are reflected in cash from operations. Cash flow is calculated by making certain adjustments to net income by adding or subtracting differences in revenue, expenses and credit transactions (appearing on the balance sheet and income statement) resulting from transactions that occur from one period to the next. These adjustments are made because non-cash items are calculated into net income (income statement) and total assets and liabilities (balance sheet). So, because not all transactions involve actual cash items, many items have to be re-evaluated when calculating cash flow from operations.

For example, depreciation is not really a cash expense; it is an amount that is deducted from the total value of an asset that has previously been accounted for. That is why it is added back into net sales for calculating cash flow. The only time income from an asset is
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accounted for in CFS calculations is when the asset is sold. Changes in accounts receivable on the balance sheet from one accounting period to the next must also be reflected in cash flow. If accounts receivable decreases, this implies that more cash has entered the company from customers paying off their credit accounts - the amount by which AR has decreased is then added to net sales. If accounts receivable increase from one accounting period to the next, the amount of the increase must be deducted from net sales because, although the amounts represented in AR are revenue, they are not cash. An increase in inventory, on the other hand, signals that a company has spent more money to purchase more raw materials. If the inventory was paid with cash, the increase in the value of inventory is deducted from net sales. A decrease in inventory would be added to net sales. If inventory was purchased on credit, an increase in accounts payable would occur on the balance sheet, and the amount of the increase from one year to the other would be added to net sales. The same logic holds true for taxes payable, salaries payable and
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prepaid insurance. If something has been paid off, then the difference in the value owed from one year to the next has to be subtracted from net income. If there is an amount that is still owed, then any differences will have to be added to net earnings.

Cash flows from Investing activities Changes in equipment, assets or investments relate to cash from investing. Usually cash changes from investing are a "cash out" item, because cash is used to buy new equipment, buildings or short-term assets such as marketable securities. However, when a company divests of an asset, the transaction is considered "cash in" for calculating cash from investing.

Cash flows from Financing activities. Changes in debt, loans or dividends are accounted for in cash from financing. Changes in cash from financing are "cash in" when capital is raised, and they're "cash out" when dividends are paid. Thus, if a company issues a bond to the public, the company receives cash
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financing; however, when interest is paid to bondholders, the company is reducing its cash. Cash Flow Statement deals with flow of cash which includes cash equivalents as well as cash. This statement is an additional information to the users of Financial Statements. The statement shows the incoming and outgoing of cash. The statement assesses the capability of the enterprise to generate cash and utilize it. Thus a Cash-Flow statement may be defined as a summary of receipts and disbursements of cash for a particular period of time. It also explains reasons for the changes in cash position of the firm. Cash flows are cash inflows and outflows. Transactions which increase the cash position of the entity are called as inflows of cash and those which decrease the cash position as outflows of cash. Cash flow Statement traces the various sources which bring in cash such as cash from operating activities, sale of current and fixed assets, issue of share capital and debentures etc. and applications which cause outflow of cash such as loss from operations, purchase of current and fixed assets, redemption of debentures, preference shares and other
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long-term debt for cash. In short, a cash flow statement shows the cash receipts and disbursements during a certain period. The statement of cash flow serves a number of objectives which are as follows: Cash flow statement aims at highlighting the cash generated from operating activities . Cash flow statement helps in planning the repayment of loan schedule and replacement of fixed assets, etc. Cash is the centre of all financial decisions. It is used as the basis for the projection of future investing and financing plans of the enterprise. Cash flow statement helps to ascertain the liquid position of the firm in a better manner. Banks and financial institutions mostly prefer cash flow statement to analyses liquidity of the borrowing firm. Cash flow Statement helps in efficient and effective management of cash.

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 The management generally looks into cash flow statements to understand the internally generated cash which is best utilised for payment of dividends.

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3.2- Cash Flow Statement based on AS-3 (revised) presents separately cash generated and used in operating, investing and financing activities.
Cash and relevant terms as per AS-3 (revised) As per AS-3 (revised) issued by the Accounting Standards Board 1. (a) Cash fund :Cash Fund includes (i) Cash in hand (ii) Demand deposits with banks, and(iii) Cash equivalents. (b) Cash equivalents are short-term, highly liquid investments, readily Convertible into cash and which are subject to insignificant risk of changes in values. 2. Cash Flows are inflows and outflows of cash and cash equivalents. The statement of cash flow shows three main categories of cash inflows and cash outflows, namely : operating, investing and financing activities. (a) Operating activities are the principal revenue generating activities of the enterprise. (b) Investing activities include the acquisition and disposal of long term assets and other investments not included in cash equivalents.
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(c) Financing activities are activities that result in change in the size and composition of the owners capital (including Preference share capital in the case of a company) and borrowings of the enterprise.

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3.3 As per AS-3 the Inflow and outflow of cash are :

Operating Activities Cash Inflow Cash sales Cash recieved from debtors Comission and fees Royalties and other Revenues Cash outflow Cash Purchase Payment to creditors Cash Operating Expenses Payment of wages and taxes

Investing Activities

Cash Inflow
Sale of fixed assets Sale of Investment Interest Recieved Dividend Recieved
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Cash outflow
Purchase of fixed assets Purchase of investment

financing Activities

Cash Inflow

Cash outflow

Issue of shares
Issue of debentures in cash Proceeds from terminal borowings

Repayment to borowings
Intrests paid to debentures Dividend paid to share holders.

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3.4Some Facts About Cash Flow Statement:

(i) Only listed companies are required to prepare and present Cash Flow statement.

(ii) The Accounting period for the Cash Flow Statement is the same for which Profit and Loss Account and Balance Sheet are prepared.

(iii) Cash flow items are as (a) Cash flow from operating activities (b)Cash flow from investing activities (c) Cash flow from financing Activities. (iv) Operating activities include revenue producing activities which are not investing and financing activities. (v) There are two methods of calculating cash flow from operating activities namely Direct method and Indirect method. SEBI (Securities Exchange Board of India) Guidelines recommend for only direct method.

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(vi) Extra ordinary Items : The Cash flow associated with extra ordinary items should be classified as arising from operating, investing financing activities. For example, the amount received from Insurance Company on account of Loss of Stock or loss from earthquake should be reported as cash flow from operating activities.

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3.5 - Financial Analysis TechniquesThere are several techniques for the financial analysis, which are represented in the diagramComparative financial statement is one of them,

FINANCIAL ANALYSIS TECHNIQUES

2. Trend Percentage

4. Fund flow Analysis

6. Cost
Volume Profit Analysis

3. Common size
financial statement

5. Cash flow Analysis

1.Comparative Financial Statement

7. Ratio Analysis

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3.6 -Objective of Cash flow

To analyse the cash position Short term cash planning and management Evaluation of liquidity. Analysis of cash flow from different Activity. Composition of operating performance. Helpful in estimating future cash flow. Helpful in formation of policies. Useful to outsiders. Growth Changes in operating profitability. Changes in operating efficiency

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3.7- Importance of Cash Flow StatementThere is a significant importance of cash flow to a business.Cash flow is the inflow and outflow of cash or liquidized finances. The following are some advantages of inward and outward flow of cash. Income Assurance: The biggest importance of cash flow is that the business organization tends to have an assured income irrespective of the outside economic condition. Many business corporations have a very well balanced and uniform inward and outward cash flow. Ensures Timely Payment:The uniform and assured cash flow, in both the directions, ensures two principal payments, namely, the salaries of employees are paid on time and installments of all loans are made on time. This safeguards the trust of employees and upholds the credit rating. Return Ratio: The analysis of cash flow ensures that the business is not investing finances in the wrong avenues, and investments already made are paying off well. This ratio is often termed as return over asset ratio.

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Keeps You Out of Debt: The timely cash inflow plays a very instrumental role in keeping you out of debt, as a timely inflow of cash prevents you from taking small loans. Saves Unnecessary Expenditure: The use of inward and outward cash flow, prevents all unnecessary expenditure such as piled up interest, late payment charges, etc. Timely Investments: As the inflow and outflow of cash is on time, you are left with adequate free and liquid finances, which you may invest in time bound instruments and securities. Importance of cash flow can be summarized in a very simple manner, by comparing it with a balance scale. When we measure anything, with a balance scale, we immediately realize the comparative, differences between the heavier and lighter. These kinds of flows can be put down into what is known as cash flow statement, which is like a balance scale. This statement that shows the inward and outward balances, helps us to locate unnecessary expenditures, and income that is due but not received.

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3.8 - Advantages
In financial accounting, a cash flow statement or statement of cash flows is a financial statement that shows a company's incoming and outgoing cash during a time period. All three statements are arranged from the same accounting information, but each statement serves its individual function. The statement of cash flow reports the movement of cash into and out of your business in a given year. Cash is the lifeblood of your company. The cash flow statement reports your business' sources and uses of cash and the beginning and ending values for cash and cash equivalents each year. It also includes the combined total change in cash and cash equivalents from all sources and uses of cash. Cash flow statements format planning involves forecasting and tabulating all significant cash inflows and analyzing the timing of expected payments in detail. We have highly skilled cash flow financing professionals prepare comprehensive periodic cash flow projections that can assist you in tasks such as budgeting, business planning and fund raising.

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Advantages of the cash flow statement

Helps the newly formed companies to know their inflow and outflow of cash and thus prevent cash shortage

Helps the investors judge whether the company is financially sound

Cash flow statement records the inflow and outflow of cash over a period of time

We provides Cash Flow statements on monthly, quarterly, six monthly or yearly bases

Helps the company to know whether it will be able to cover payroll and other immediate expenses

These statements will be highly helpful for planning and management of future financial commitments

This helps them have an accurate analysis of the firm's ability to meet its current liabilities. Our Accounting Firms possessing years of experience and expertise catering to the diverse requirements of global clients can help prepare periodic cash flow statements format historical or projective. We deliver integrated Cash Flow financing management solutions that go beyond recommendations and reports. These statements will be extremely helpful for planning and management of future financial commitments. Availing Cash Flow financing statements Format preparation support from us will act as a very useful money management tool that provides warnings in advance of periods of high expenditure and low sales.
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3.9 Uses & significance of cash flow analysis

1. Since a cash flow statement is based on the cash basis of accounting, it is very useful in the evaluation of cash position of a firm. 2. A projected cash flow statement can be prepared in order to know the future cash position of a concern so as to enable a firm to plan and coordinate its financial operations properly. 3. A comparison of the historical and projected cash flow statements can be made so as to find the variations and deficiency or otherwise in the performance so as to enable the firm to take immediate and effective action. 4. A series of intra-firm and inter-firm cash flow statements reveals whether the firms liquidity (short-term paying capacity) is improving or deteriorating over a period of time and in comparison to other firms over a given of time. 5. Cash flow statement helps in planning the repayment of loans, replacement of fixed assets and other similar long-term planning of cash. It is also significant for capital budgeting decisions. 6. It better explains the causes for poor cash position inspite of substantial profits in a firm by throwing light on various applications of cash made by the firm. It further

helps in answering some intricate questions like-what happened to the net profits? Where did the profits go? Why more dividends could not be paid inspite of sufficient available profit?
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7. Cash flow analysis is more useful and appropriate than funds flow analysis for short term financial analysis as in a very short period it is cash which is more relevant then

the working capital for forecasting the ability of the firm to meet its immediate obligations. 8. Cash flow statement prepared according to AS 3(Revised) is more suitable for making comparisons than the funds flow statement as there is no standard format used for the same. 9. Cash flow statement provides information of all activities classified under operating, investing and financial activities, The funds statement even when prepared on cash basis, did not disclose cash flows from such activities separately, thus cash flow statement is more useful than the funds statement

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3.10 Limitations of Cash flow analysis

I. As cash flow statement is based on cash basis of accounting, it ignores the basic accounting, it ignores the basic accounting concept of accrual basis. II. Some people feel that as working capital is a wider concept of funds, a funds flow statement provides a more complete picture than cash flow statement. III. Cash flow statement is not suitable for judging the profitability of a firm as non-cash charges are ignored while calculating cash flows from operating activities.

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CHAPTER- 4

ANALYSIS of Cash Flow Statement-

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Cash flow statementCASH FLOW STATEMENT 2007-08

CASH FLOW FROM OPERATING ACTIVITIES NET PROFIT BEFORE TAX AND EXTRA ORDINARY ITEMS PROFIT ON SALES OF FIXED ASSETS INTEREST INCOME ON FD INTEREST PAID DEPRECIATION NET OPERATING PROFIT BEFORE W.C. CHANGES DECREASE IN INVENTORIES DECREASE IN SUNDRY DEBTORS DECREASE IN LOANS AND ADVANCES DECREASE IN CURRENT LAIBILITIES NET CASH FROM OPERATING ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES PURCHASE OF FIXED ASSETS SALE OF FIXED ASSETS INTEREST RECEIVED NET PROFIT FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES INTEREST PAID PAYMENT OF THE LOANS CHANGE INCURRENT ACCOUNT WITH HO NET CASH FROM FINANCIAL ACTIVITIES NET INCREASE IN CASH CASH AND CASH EQUIVALENTS AT THE BEGINNING CASH AND CASH EQUIVALENT AT THE END 88,05,521.02 (11,136.00) (1,92,464.38) 17,61,991.12 19,87,996.00 1,23,51,907.76 69,35,834.00 14,92,544.38 90,27,752.93 (50,57,092.38) 2,47,50,946.69 (71,62,568.14) 25,200.00 1,92,464.38 (69,44,903.76) (17,61,991.12) (46,42,646.57) (66,08,134.28) (1,30,12,771.97) 47,93,270.96 27,66,553.58 75,59,824.54

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CASH FLOW STATEMENT 2008-09

CASH FLOW FROM OPERATING ACTIVITIES NET PROFIT BEFORE TAX AND EXTRA ORDINARY ITEMS PROFIT ON SALES OF FIXED ASSETS INTEREST INCOME ON FD INTEREST PAID DEPRECIATION NET OPERATING PROFIT BEFORE W.C. CHANGES DECREASE IN INVENTORIES INCREASE IN SUNDRY DEBTORS DECREASE IN LOANS AND ADVANCES INCREASE IN CURRENT LAIBILITIES NET CASH FROM OPERATING ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES PURCHASE OF FIXED ASSETS SALE OF FIXED ASSETS INTEREST RECEIVED NET PROFIT FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES INTEREST PAID RAISING OF THE LOANS CHANGE INCURRENT ACCOUNT WITH HO NET CASH FROM FINANCIAL ACTIVITIES NET INCREASE IN CASH CASH AND CASH EQUIVALENTS AT THE BEGINNING CASH AND CASH EQUIVALENT AT THE END 84,42,739.72 (10,284.00) (9,94,854.12) 15,24,255.20 19,91,840.70 1,09,53,697.50 14,48,096.00 (82,58,223.14) 11,69,789.88 1,72,46,461.52 2,25,59,821.76 (63,03,900.00) 49,999.30 9,94,854.12 (52,59,046.58) (15,24,255.20) 41,22,961.00 (79,45,474.00) (53,46,768.20) 1,19,54,006.96 75,59,824.54 1,95,13,831.50

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42.Change in current assets

1. There is decrease in inventory in 2008 & 2009, it implies that cash outflow is less then cost of goods sold figure.

INCREASE/DECREASE IN INVENTORIES
1 -1,000,000.00 2

-2,000,000.00

-3,000,000.00 (INCREASE)/DECREASE IN INVENTORIES

-4,000,000.00

-5,000,000.00

-6,000,000.00

-7,000,000.00

-8,000,000.00

2. There is decrease in sundry debtors in 2008 which shows cash collection is greater than the sales figure, while in 2009 there is
NITISH KUMAR SINGH (09148)

increase in sundry debtors which shows cash collection from customer is less than sales figure (as shown in P/L A/C).

INCREASE/DECREASE IN SUNDRY DEBTORS

10,000,000.00

8,000,000.00

6,000,000.00

4,000,000.00

(INCREASE)/DECREASE IN SUNDRY DEBTORS

2,000,000.00

2009 -2,000,000.00 2008

3. Loans & Advances has decreased in both the years which shows that there is cash inflow.

NITISH KUMAR SINGH (09148)

INCREASE/DECREASE IN LOANS AND ADVANCES

2009 -1,000,000.00 -2,000,000.00 -3,000,000.00 -4,000,000.00 -5,000,000.00 -6,000,000.00 -7,000,000.00 -8,000,000.00 -9,000,000.00 -10,000,000.00 (INCREASE)/DECREASE IN LOANS AND ADVANCES 2008

NITISH KUMAR SINGH (09148)

Change in current liabilities

There is increase in current liabilities in the year 2009, so there is an increase in cash flow from operations. While in the year 2008 there was decrease in current liabilities which shows there is decrease in cash flow.

There is decrease in sundry creditors in the year 2008 that indicates cash payments to creditors are greater than purchase figure. But in the year 2009 there is increase in sundry creditors. That implies cash payment to creditors are less than the purchase figure.
NITISH KUMAR SINGH (09148)

4.3 CASH FLOW FROM INVESTING ACTIVITIES

1. There is cash outflow in both years (2008 & 09) due to purchase of fixed assets. While there is very less cash inflow due to sale of fixed assets.

NITISH KUMAR SINGH (09148)

2. There is cash inflow due to the interest received in both years(2008 & 09)

NITISH KUMAR SINGH (09148)

4.4 CASH FLOW FROM FINANCING ACTIVITIES

1. There is cash outflow due to the interest paid in both years(2008 & 09)

2. There is cash outflow due to the payment of loans in the year 2008,while in 2009 there is cash inflow due to the amount raised from the loans.

NITISH KUMAR SINGH (09148)

RAISING/PAYMENT OF THE LOANS

5,000,000.00 4,000,000.00 3,000,000.00 2,000,000.00 1,000,000.00 -1,000,000.00 -2,000,000.00 -3,000,000.00 -4,000,000.00 -5,000,000.00 -6,000,000.00

RAISING OF THE LOANS 2009 2008

3. There is decrease in cash due to the amount withdrawal from current account with head office.

NITISH KUMAR SINGH (09148)

CHAPTER- 05

Conclusion & Suggestion

NITISH KUMAR SINGH (09148)

7.1 - ConclusionAfter the comparative analysis of the Cash Flow Statements of the three consecutive years, we see that the companys performance was found good in the year 2009 which was the recession period. The company was trying to reduce the current and fixed liabilities by the means of clearance. It has paid to its share holders and the interests to the dividend holders in the year. The company had an excess of cash flow with itself and had no opportunities to invest or utilize the cash in the recessionary period. Therefore as an alternative, it has tried to create the assets both fixed and current assets to make the utilization of cash available. The domestic as well as the foreign sales has shown an increase which shows the bright future prospects of the organization.

NITISH KUMAR SINGH (09148)

7.2 - Suggestion
1. The organization deals with the seasonal products, therefore there should be proper inventory of the products, but it should be in an appropriation which should not block the cash uselessly. 2. The cash in hand and bank should be appropriate to meet the day to day cash requirements. 3. To make optimum utilization of cash for the purpose of business operating system. 4. To adoption of different models of optimum cash

management. 5. To maintain maximum cash inflow from operating activities.

NITISH KUMAR SINGH (09148)

Bibliography
Several text books of Financial Management like as FINANCIAL MANAGEMENT
FINANCIAL MANAGEMENT FINANCIAL MANAGEMENT FINANCIAL MANAGEMENT ACCOUNTING FOR MANAGEMENT -

S.M. Maheshwari
I.M. PANDEY KHAN & JAIN P. CHANDRA N.P. SRINIVASAN

FINANCIAL ACCOUNTING FOR MANAGEMENT - AMRISH GUPTA AUDITORS REPORT OF SHREE Baidyanath AYURVED BHWAN PVT. LTD. PATNA

Website of Baidyanath

- www.baidyanath.com

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NITISH KUMAR SINGH (09148)