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CASH FLOW ANALYSIS OF DP WIRES LTD WITH

IT’S COMPETITOR FOR YEAR 2015,YEAR 2016 AND


YEAR2017
➢ Cash flow provides information about the cash inflow and outflow during an
accounting period of a firm/company. It is developed from balance sheet and
Income
➢ A cash flow analysis of a company can be done by following three
methods:-
• Operating activities
• Financing activities
• Investing activities
Importance of cash flow statements:-
➢ The statement of Cash flows is used by investors and creditors to evaluate
management’s ability to manage cash flow now and in the future.
➢ Access the company’s ability to pay dividends and to pay creditors.
❖ CASH FLOW STATEMENTS OF DP WIRES PVT LTD.
PARTICULAR’S MAR`17 MAR`16 MAR`15
Net cash flow from 1.50 -1.64 0.90
operating activities
Net cash flow from -1.17 -3.46 -0.79
investing activities
Net cash flow from -2.19 6.12 1.39
financing activities
Rs(In Carore)
Source:- https://economictimes.indiatimes.com/d-p-wires-ltd/cashflow/companyid-
66833.cms from where I collected data of cash flow.
❖ CASH FLOW OF STATEMENTS OF HINDUSTAN WIRES
LTD.
PARTICULARS’S MAR`17 MAR`16 MAR`15
Net cash flow from -0.49 6.58 3.51
operating activities
Net cash flow from 0.21 -0.64 0.78
investing activities
Net cash flow from 0.25 -5.97 -4.26
financing activities
Rs(In Carore)
❖ CASH FLOW STATEMENT ANALYSIS OF 2016 YEAR
• Cash flow statement from operational activity:-Cash flow from
operating activities is a section of the cash flow statement that
provides information regarding the cash-generating abilities of a
company's core activities.

➢ Cash Flow from Operating Activities = Net income + Noncash Expenses


+Changes in Working Capital

• Cash flow statement from Investing activity:- An investing activity


also refers to cash spent on investments in capital assets such as
property, plant and equipment, which is collectively referred to as
capital expenditure, or capex.It includes Investment and Fixed
Assets(sale and purchase).

• Cash flow statement from Financing activity:- we can say that cash
flow from financing activities reports the issuance and repurchase of
the company’s own bonds and stock and the payment of dividends. It
includes taking debt or equity and paying debt or dividend.
➢ Cash flow from operating activity of DP Wires PVT Ltd.

PARTICULARS MAR`17
Net Cash flow from operating + 1.50
activities
Net Cash flow from investing -1.17
activities
Net Cash flow from financing -2.19
activities

1. Above table shows that company in FY17 year is in making profit


means this company earns cash profit.
2. From Investing activities, I found that company is purchasing assets to
expand their business.
3. From financing activities, I have known that this company is repaying
its loans or debts.

✓ From above data I can conclude that company is earning so much cash that
It can be able to purchase assets and also able to pay its debts or liabilities.
✓ It means company cash profit is good.

❖ CASH FLOW STATEMENT ANALYSIS OF YEAR 2016

➢ Cash flow statement of DP Wires PVT Ltd for 2016

PARTICULARS MAR`16
Net Cash flow from -1.64
operating activities
Net Cash flow from -3.46
investing activities
Net Cash flow from +6.12
financing activities

1. From operating activities I have known that, this company was not making
cash profit in year 2016.
2. From investing activities I have known that, this company was purchasing
assets and investing in the firm.
3. From financing activities I have known that, this company was taking loans
or debts from outsiders to expand their business.
✓ From above data and 45(age)years of the company I can able to
understand that company is not in good position this year.
✓ Means this company was expanding its business by taking loans or
debts from outsiders

❖ CASH FLOW STATEMENT ANALYSIS OF YEAR 2015

PARTICULARS MAR`15
Net cash flow from operating +0.90
activities
Net cash flow from investing -0.79
activities
Net cash flow from financing +1.39
activities
Rs(In Carore)

1. From the above data I can conclude that from operating


activities this gain cash profit from operating activity.
2. From the investing activity we can say that this company was
purchasing assets and there is a cash outflow.
3. From the financing activity we can say that this company was
taking loans and debts from outsiders.

✓ From above analysis I can say that company was earning


profit and purchasing or investing on assets .
✓ Company was taking loans and debts because company
wanted to expand their business.
COMPARISION OF CASH FLOW DATA OF THIS COMPANY FOR
YEAR 2015 TO YEAR 2016 AND YEAR 2016 TO YEAR 2017

PARTICULAR’S MAR`17 MAR`16 MAR`15


Net cash flow from 1.50 -1.64 0.90
operating activities
Net cash flow from -1.17 -3.46 -0.79
investing activities
Net cash flow from -2.19 6.12 1.39
financing activities
Rs(In Carore)

✓ From the above all data we have found that cash flow from operating
activity cash profit was decreased in the year 2015 to year2016,means
company had not earned any profit from this year & there is increase in cash
profit in the year 2016 to year 2017.Means income from sales is increases
this year 2015 to year 2016, year 2016 to year 2017.
✓ From the investing activities data we have found that assets purchased from
year 2015 to year 2016 is increased. From the year 2016 to year 2017 asset
purchased or investment is decreased.
✓ From the year 2015 to year 2016 I have found that debt or liabilities
increased from year 1.39 to 6.12 carore. In the year 2016 to year 2017
liability had been paid to 2.19 carore.
BALANCE SHEET OF DP WIRES PVT.LTD

Particulars Mar'17 Mar'16 Mar'15

Liabilities 12 Months 12 Months 12 Months

Share Capital 2.50 2.50 2.50

Reserves & Surplus 25.34 20.34 18.16

Net Worth 27.84 22.84 20.65

Secured Loan 17.27 11.29 3.59

Unsecured Loan 13.08 12.42 4.20

TOTAL LIABILITIES 58.18 46.55 28.44

Gross Block 28.04 26.84 22.98

(-) Acc. Depreciation 19.86 18.58 17.26

Net Block 8.18 8.27 5.72

Capital Work in Progress .00 .00 .00

Investments .00 .00 .00

Inventories 25.90 16.06 10.50

Sundry Debtors 30.80 26.79 24.15

Cash and Bank 1.65 3.51 2.49

Loans and Advances 14.83 13.86 7.40

Total Current Assets 73.18 60.21 44.55

Current Liabilities 20.56 21.14 21.42

Provisions 2.61 .80 .41

Total Current Liabilities 23.17 21.93 21.83

NET CURRENT ASSETS 50.00 38.28 22.72

Misc. Expenses .00 .00 .00

TOTAL ASSETS(A+B+C+D+E) 58.18 46.55 28.44


Rs (in Crores)
COMPARISION BETWEEN DP WIRES PVT LTD WITH
HINDUSTAN WIRS LTD

❖ CASH FLOW DATA OF DP WIRES PVT LTD AND HINDUSTAN


WIRES PVT LTD

Cash flow statement Cash flow Cash flow Cash flow


from from from
operating investing financing
activity activity activity
MAR`17(DP Wires 1.50 -1.17 -2.19
Pvt Ltd)
MAR`17(Hind.Wires -0.49 0.21 0.25

Ltd)
MAR`16(DP Wires -1.64 -3.46 6.12
Pvt Ltd)

MAR`16(Hind.Wires 6.58 -0.64 -5.97

Ltd)
MAR`15(DP Wires 0.90 -0.79 1.39
Pvt Ltd)
MAR`15(Hind.Wires 3.51 0.78 -4.26

Ltd)

✓ From above data March`17 we can differentiate between


performance DP Wires and Hindustan Wires Ltd on the basis of
cash flow statement.

• In the year 2017 DP Wires cash flow pattern is (+ ,-,-)


means that this company earn so much cash profit that it
purchase assets and repay their debts.
• In the case of Hindustan wires Pvt Ltd. It is believed that
company does not earn profit and it sells its assets and
taking loans from the outsiders .So that company can stay
In the market. Its cash flow pattern is (-,+,+).

▪ In the year 2016

• In the year 2016 DP Wires Pvt Ltd cash flow pattern was
(-,-,+) means company was not earning cash profit and
company purchases assets and it take loans from the outsiders.
Because company want to expand their businesses.
• In the year 2016 Hindustan Wires Pvt Ltd cash flow pattern
was(+,-,-) means this company earned cash profit more in
comparison to DP wires Pvt Ltd, also purchases assets and
invest more in comparison to DP wires Pvt Ltd and this
company also repay its debt or loans means this company was
having good performance as compared to DP Wires Pvt Ltd.

▪ In the year 2015

• In the year 2015 DP Wires Pvt Ltd cash flow pattern was (+,-
,+) means this company is earning profit and purchasing assets
and taking loans or debts from the outsiders means this
company further wants to expand their business.
• In the year 2015 Hindustan Pvt Ltd cash flow pattern was (+,+,-
) means this was earning profit 3.51 crore which is more than
profit of DP Wires Pvt Ltd which was 0.90 crore . In investing
activity company was selling his assets and this company is
repay its debt because this company want to pay its debts or
loans. Company selling his assets whereas in the case of DP
wires. DP Wires purchasing its assets worth 0.79 crore
.Hindustan Wires Ltd repay its debts and loans worth 4.26
whereas DP wires Pvt Ltd taking loans from outsiders to
expand their business. It means that DP Wires in the year
2015was in better position because was expanding their
business by taking loans purchased assets and repay of debts.

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