Академический Документы
Профессиональный Документы
Культура Документы
ON
CASH FLOW STATEMENT
AT
HYUNDAI
Submitted in partial fulfillment of the requirement of the degree of
BACHELORS OF BUSINESS ADMINISTRATION
Affiliated from
H.N.B. Garhwal University, Srinagar
Submitted by-
)
DEPARTMENT OF MANAGEMENT
INSTITUTE OF TECHNOLOGY & MANAGEMENT
DEHRADUN
ACKNOWLEDGEMENT
At the very outset, I would like to acknowledge with immense gratitude the support
and guidance of some people without whom the project could not have been completed.
Also thanks to them, I learnt a lot more additional things than that just restricted to my
project.
First of all I would like to thank my project guide MR JAYANT MAHAJAN for his
support and patience with me despite him being hard pressed for time.
Also I would like to thank the faculty guide of my college (faculty’s name) who
guided me in my project.
I would also like to thank (other members of your training institute who helped you
out in completion of your project report.)
Last but not the least I would like to thank my parents who have always showed their
full faith in me, and are the biggest source of my encouragement and guidance.
2
CANDIDATE’S DECLARATION
I hereby declare that the work for the project Report entitled CASH FLOW
STATEMENT AT HYUNDAI ” is completely done by me, based on my own work
conducted in “ training institute” for the partial fulfillment of my Bachelors of Business
Administration.
Admittedly I have received suggestions and guidance from my guides.
Date-
(SHAHID )
BBA
3
CONTENTS
Title
i
To whom so ever it may concern ii
Acknowledgement iii
Preface iv
Candidate’s declaration v
Chapter-5 Conclusion
4
Chapter-6 Suggestions
Chapter-7 Bibliography
5
COMPANY PROFILE
Established in 1967, Hyundai Motor Co. has grown into the Hyundai-Kia Automotive
Group which was ranked as the World’s Fifth-Largest Automaker in 2007 and includes
over two dozen auto-related subsidiaries and affiliates. Employing over 75,000 people
worldwide, Hyundai Motor posted sales of US$74.9 billion in 2007 on a consolidated-
basis and US$32.8 billion on a non-consolidated basis (using the average currency
exchange of 929 won per US dollar). Hyundai vehicles are sold in 193 countries through
some 6,000 dealerships and showrooms. Further information about Hyundai Motor Co.
and its products is available at http://www.hyundai-motor.com.
Hyundai Motor India, continuing its tradition of being the fastest growing
passenger car manufacturer, registering total sales of 327,160 vehicles in the calendar
year (CY) 2007, an increase of 9.2 percent over CY 2006. In the domestic market it
clocked a growth of 7.6 percent as compared to 2006 with 200,412 units, while overseas
sales grew by 11.8 percent, with exports of 126,748 units.
HMIL has set up its second plant, which produces an additional 300,000 units per annum,
raising HMIL’s total production capacity to 600,000 units per annum.
6
PRODUCT LINE-UP:
The Santro Xing is a stunning combination of
contemporary looks and functional luxury. It
also incorporates the revolutionary
EUROSAFE Passenger Protection System
that meets the latest European safety standards.
The new Santro Xing combines a fresh new
attitude, warmth and comfort
7
The Tucson 2.0 CRDi, 1991cc, 4 cylinder, 16 valve
engine comes with amazing power 122ps and
245Nm of torque. This soft-roader is highly fuel
economic and yet is very good at engine
performance. Dual airbags provide very high level
of safety.
HMIL is investing to expand capacity in line with its positioning as HMC’s global
export hub for compact cars. Apart from expansion of production capacity, HMIL plans
to expand its dealer network, which will be increased from 232 to 260 this year.
The year 2007 has been a significant year for Hyundai Motor India. It achieved a
significant milestone by rolling out the fastest 400,000th export car. Hyundai exports to
over 90 countries globally; even as it plans to continue its thrust in existing export
markets, it is gearing up to step up its foray into new markets.
The year just ended also saw Hyundai Motor India attaining other milestones with the
launch of the i10 and yet another path-breaking record in its young journey by rolling out
the fastest 1,500,000th car.
8
3.3 Awards and Certifications:
For Environment
ISO 14001
Certification (EMS)
in 2003 from TUV,
Germany
Eco First Award in 2003 from
Kanchi Health & Education
Society
9
National Energy
Conservation Award in
2002 from Govt. of India
11
Hyundai Motor India was named the ‘Manufacturer
of the Year’ award and the 'Best Variant' award for
it’s ‘i-10 Kappa’ engine at the UTVi Autocar Awards
2009.
12
Hyundai i20 wins the ‘Design of the Year’ award at
the NDTV Profit Car & Bike Awards 2010.
The symbol represents an image of Car Company that produces refined cars with
cutting edge technology.
Expresses the will of the management for harmony and stability
The oval shape symbolizes the earth to expresses the global nature of HMC car.
The H logo stands for the first letter of Hyundai motor company
13
The slanted shape of the H represent progress and a company that will
successfully face future challenges as it continues to raise its standard of quality.
This has helped the company deliver consistently producing some of the finest cars of the
company.
3.7 HMIL VISION
DREAM
STRIVE
ACHIEVE TOGETHER
Executives:
To manufacture and sell a global technology, global quality car reflecting Indian
consumer needs at an appropriate price and attain profitability.
Health:
Regular Health Camps (Eye, Cardiac and Wellness) at the adopted villages
Donated Ultra Sound Machines and Auto Refractometer to Primary Health Center
Infrastructure:
Construction of Cement Roads at Keevalur
Deepening of Ponds in Thandalam & Kattarambakkam
Drinking Water Tank construction at Irrungattukottai
Education:
Construction of High School at Thandalam (Common for Four villages)
Infrastructure Facilities like Fans, Benches for the Schools of nearest 4 villages
Distribution of Note Books and Stationery items to School Children
Picnics for all the 4 school children once a year
TABLE OF CONTENTS
INTRODUCTION
16
TRACTOR INDUSTRY PERFORMANCE
COMPANY’S PROFILE
ESCORTS SYMBOL
MISSION
QUALITY POLICY
BOARD OF DIRECTORS
OUTLINE OF ESCORTS
SUBSIDERIES
BANKERS
INTRODUCTION
PRODUCTS
COMPANY’S FUTURE
CASH MANAGEMENT
INTRODUCTION
17
CASH OUTFLOW
CASH INFLOW
IMPORTANCE
CASH BUDGET
BANK RECONCILIATION
CASH RATIOS
RECEIVABLES MANAGEMENT
PAYABLE MANAGEMENT
RECOMMENDATIONS
LIMITATIONS
BIBLIOGRAPHY
ANNEXURES
INTRODUCTION
Cash is the important current asset for the operation of the business.
Cash is a medium of exchange to purchase the goods and services and to
discharge the liabilities. Cash is the basic input needed to keep the
business running on a continuous basis; it is also the ultimate output
18
expected to be realized by selling the service or product manufactured by
the firm. The firm should keep sufficient cash, neither more nor less.
Cash shortage will disrupt the firm’s manufacturing operations while
excessive cash will simply remain idle, without contributing anything
towards the firm’s profitability. Thus a major function of the financial
manager is to maintain a sound cash position.
19
needs to perform a cash flow analysis on a regular basis, and use cash
flow forecasting so that one can take the steps necessary to head off cash
flow problems.
Cash Budget
20
Collection Disbursement
Cash
Cash Equivalents
IMPORTANCE OF CASH
MANAGEMENT
22
Cash planning cash inflow and outflow should be planned to project
cash surplus or deficit for each period for each period of the planning
period. Cash budget should be prepared for this purpose.
Managing the cash flows the flow of cash should be properly managed.
The cash inflows should be accelerated while, as far as possible, the cash
outflows should be decelerated.
Optimum cash level the firms should decide about the appropriate
level of cash balances. The cost of excess cash and danger of cash
deficiency should be matched to determine the optimum level of cash
balances.
CASH OUTFLOW
CASH INFLOW
25
The purpose of cash flow statement is to report a firm’s cash inflow
and outflows, during a period of time, segregated in to three categories:
operating, investing and financing activities.
26
cash effects or transaction that enter into the determination of net income.
Thus, we see items that not all statement users might think of as
‘operating’ flows-items such as dividends and interest received, as well as
interest paid.
IMPORTANCE
27
The effects of cash and non-cash investing and financing
transaction.
Understand.
28
The Daily Cash Flow report is prepared with an objective to keep
incessant check on the cash flows of the firm, which includes both inflow
and outflow cash. The cash flows are planned to project cash surplus or
deficit for each period i.e daily, monthly, quarterly, semi-annual & annual
basis. The framework of report highlights all the effects, which lead to
cash surplus or deficit. It is a measure, which calculates the details of
daily transaction in terms of sale and purchase, which further includes the
means through which they take place.
29
opening o/s of debtors in domestic, export and other categories. This way
the day to day cash transactions are maintained through the cash flow
report which leads to proper functioning of an organization’s resources
both men & material.
COMPONENTS
The annual cash flow statement at Escort- AMG is prepared for the fiscal
period commencing from 01/10/20XX to 31/09/20XX. They are also
maintaining the daily cash flow report with a purpose of keeping constant
check on the daily flow of cash i.e cash inflow and cash outflow, for
different products categories, their parts and other miscellaneous.
Farmtrac
Powertrac
Escorts
These products are sold into the market through intermediaries like
dealers, stockists and distributors , these parties charge a commission for
the services provided by them.
Among these parties dealers are given priority over the stockists &
distributors for the delivering the product to the end customer and the
commission also varies in the same manner.
30
The following are the transactions that take place in the daily cash flow
report under the following main heads:
Particulars,
Year to date i.e the very first day of the financial year till the
previuos months end (in which the daily report is being made),
Month to date (from the beginning of the current month till the day
for which report is being made).
31
COLLECTION – The collections is recovered from all those parties to
whom the products is being sold. The parties involved are :
Hyundai ( Direct ) – This includes the sale made through dealers to the
end customer, for which a predetermined amount is given as commission
to the opposite party. If the dealer fails to make the sale till the due date
than he has to pay interest on it thereon.
33
Bank a/c dr. ..........
To party a/c ……
To bank a/c ……
34
( being payment made to bank)
35
Pre shipment finance is normally provided by the commercial
banks. As in the case of many other advances the bank takes into
consideration a number of factors before making the necessary other
advances to exporters viz., (1) honesty, integrity and capital of the
borrower, (2) exporter’s experience in the line, (3) security offered, (4)
the margin of interest (5) the bank’s experience about the exporter to
ensure that his name does not appear on the caution list of the Reserve
Bank.
The following entries to be passed in the books for packing credit loan :
To export a/c ……
To bank a/c ……
Credit note : This note is presented to the other party for the payment to
be made by the opposite party. Whereas debit note is given to the
company by the other party in case of payment is to be made by the
company.
37
OUTSTANDING : Outstanding debtors are calculated by the following
formula –
CASH BUDGET
38
MEANING
A forecast of estimated cash receipts and disbursements for a
specified period of time.
The key to the accuracy of most cash budgets is the sales forecast.
This forecast can be either internal or external analysis, in internal
approach, sales representatives are asked to project sales for the
forthcoming period, We can then consolidate these sales estimates for the
product line. The estimates for the various product lines are then
combined in to an overall sales estimate for the firm. The basic problem
with an internal approach is that it can be too myopic, often significant
trends in the economy and in the industry are overlooked.
BANK RECONCILIATION
40
Bank reconciliation involves comparing the company’s record of
transactions and balances to the bank’s record of transactions and
balances. The company should go through every transaction in their
account and make sure the company and the bank agree on the
transaction.
Bank book
Bank statement
CASH RATIOS
MEANING
Cash ratios are also important tool of cash control. There are
various ratios which explain the efficiency of cash management or vice-
versa. They are the acids test ratio, cash ratio, receivables turnover ratio,
inventory turnover ratio, cash turnover ratio etc.
LIQUIDITY RATIOS –
Liquidity ratio measures the ability of the firm to meet its current
obligations. It is necessary to strike a proper balance between high
liquidity and lack of liquidity. A high degree of liquidity means that a
firm’s fund will be unnecessarily tied up in current assets. Whereas lack
of liquidity, implies failure of a company to meet its obligations due to
lack of sufficient liquidity.
The ratios, which are used for the analysis of Escorts liquidity
position in this report, are:
Current Ratio
Quick Ratio
CURRENT RATIO
42
Current ratio is calculated by dividing current assets by current liabilities:
Current Liabilities
2016-17 2017-18
From the above table it can be interpreted that Escorts liquidity position
is not constant. As a conventional rule a current ratio of 2:1 or more is
considered satisfactory because in a worse situation, even if the value of
current assets become half, the firm will be able to meet its obligations.
Current ratio refers to a margin of safety for creditors therefore higher the
current ratio, the greater the margin of safety.
QUICK RATIO
43
considered to be less liquid therefore calculating quick ratio they are
deducted from current assets.
Current liabilities
2016-17 2017-18
The value of quick ratio is decreasing every year. The satisfactory level
of the quick ratio is 1:1. This shows the worse situation of the company.
The current liabilities are more than the quick assets.
ACTIVITY RATIOS –
Activity Ratios are used to evaluate the efficiency with which the firm
manages and utilizes its assets. The ratios are called Turnover Ratios as
they indicate the speed with which the firm manages and utilizes its
assets.
44
Activity ratios, which are used to analyze Escorts effectiveness in Asset
utilization, are
It indicates the efficiency of the firm in producing and selling its product.
It is calculated by dividing sales by avg. inventory. In a manufacturing
company inventory of finished goods is used to calculate inventory
turnover.
Avg. Inventory
2006-07 2007-08
45
If the company is comfortably meeting the customer needs with 9.73
days inventory of finished goods, all India basis.
Fixed Assets
2015-16 2016-17
Escorts fixed asset turnover have increased in 2003-04. The fixed asset
turnover of 2.78 implies that it is producing Rs.2.78 of sales for one
rupee of capital employed.
Avg. Debtors
2015-16 2016-17
Creditors
2015-16 2016-17
Though the days are very high and apparently appears to substitute right
collection, this extended credit has its own drawback like:
48
The payment period of Escorts Limited is 90 days in 2007-08, which is
more reasonable than previous years. This helps to make good quality
product and also better relationship with suppliers.
Working capital turnover ratio has its own significance in the business
organizations. It shows the efficiency of the firm. How much sale that the
company get with the utilization of the limited working capital.
2006-07 2007-08
RECEIVABLE MANAGEMENT
49
The term receivable is defined as “debt owed to the firm by
customers arising from sales of goods in the ordinary course of business”.
The sale of goods on credit is an essential part of modern day business.
The credit sales are generally made on open account in the sense that
there are no formal obligations through a financial instrument. However
extension of credit involves risks and cost. Management should weigh
the benefits as well as the cost to determine the goal of receivable
management. The benefits from receivables are the increased sales and
profits anticipated because of more liberal policy. When firm extend trade
credit, i.e. invest in receivables, they intend on increase the sales level.
The motive of liberal credit policy can be either growth oriented or sales
retention. The extension of credit has a major impact on sales, costs and
profitability. Other things being equal, a relatively liberal policy and
therefore higher investments in receivables will produce larger sales.
However the cost will be higher with liberal policies then with more
stringent measures. Therefore account receivable management should
aim at a trade- of between profit and risk.
The costs associated with the extension of credit and account receivables
are
collection cost
capital cost
delinquency cost
default cost
DECISION AREAS
50
CREDIT POLICIES
CREDIT TERMS
COLLECTION POLICIES
CREDIT FACILITIES
Escort provides thirty days interest free credit to the dealers. For this in
respect of all hundis the company bears 30 days interest and the
remaining cost of interest, delayed payment charges are borne by the
dealers.
52
Bouncing of hundis/ cheques drawn in favor of the
company is viewed very strongly and usually following actions are taken.
Tractor supplies are suspended and restored only after all dues are
cleared.
PAYABLE MANAGEMENT
54
RECOMMENDATIONS
INVENTORY
DEBTORS
CREDITORS
Though high payout days may be appartenly beneficial for the company.
It has it very heavy long term cost like high interest cost, bad credit
ratings and shyness of good quality / standard suppliers.
56
RATIOS
The company should try to improve its current situation. The ratios,
which are taken in this research to evaluate the company’s position, are
Current ratio, Quick ratio and Activity ratio. These ratios show the actual
position of the company. The Quick ratio is declining since 2001-02 till
now. There is a drastic declining in the working capital turnover ratio.
This ratio goes to –ve position in current year compared to previous. The
Debts collection period is 359 days for Exporters. This shows the poor
collection policy. The current ratio is 1.12 in 2006-07, which is not upto
the ideal ratio. This shows that the current assets are equal to the current
liabilities. Not satisfactory.
OTHERS –
57
New market strategies should be devised from time to time. This is
because, even if the tractor is of good quality, the competitors may
produce the same product with additional features and at lower
prices.
58
LIMITATIONS
59
Although every effort has been in to collect the relevant
information through the sources available, still some relevant information
could not be gathered.
Time: The time duration could not provide ample opportunity to study
every detail of working capital management of the company.
BIBLIOGRAPHY
BOOKS
60
Financial Management- S.K Gupta
www.escortsagri.com
www.economictimes.com
www.planware.com
www.icraindia.com
Annual Reports
61
ANNEXURES
1SToct 2016- 30th September 2017 1st oct 2017 – 30th sept 2018
Operating income 2,012.00 2,092.0
Material consumed 1,470.66 1,540.0
Manufacturing expenses 47.68 50.7
Personnel expenses 202.63 204.0
Selling expenses 114.57 118.6
Adminstrative expenses 69.12 57.4
Expenses capitalised -
Cost of sales 1,904.66 1,970.9
Operating profit 107.34 121.1
Other recurring income 0.04 20.8
62
Adjusted PBDIT 107.38 141.9
Financial expenses 55.93 89.7
Depreciation 42.87 44.9
Other write offs - 3.3
Adjusted PBT 8.58 3.9
Tax charges 47.13 -10.8
Adjusted PAT -38.55 14.8
Non recurring items 17.56 -21.2
Other non cash adjustments 32.86
Reported net profit 11.87 -6.4
Earnigs before appropriation -133.59 -145.4
Equity dividend -
Preference dividend -
Dividend tax -
Retained earnings -133.59 -145.4
PROFIT AND LOSS ACCOUNT
65