COMPANY PROFILECOMPANY PROFILE

ABOUT COMPANY

The Escorts Group is among Indias leading engineering conglomerates operating

in the high growth sectors of agri-machinery construction amp material handling

equipment railway equipment and auto components

Having pioneered farm mechanization in the country Escorts has played a pivotal role

in the agricultural growth of India for over five decades One of the leading tractor

manufacturers of the country Escorts offers a comprehensive range of tractors more

than 45 variants starting from 25 to 80 HP Escort Farmtrac and Powertrac are the

widely accepted and preferred brands of tractors from the house of Escorts

A leading material handling and construction equipment manufacturer we manufacture

and market a diverse range of equipment like cranes loaders vibratory rollers and

forklifts Escorts today is the worlds largest Pick n Carry Hydraulic Mobile Crane

manufacturer

Escorts has been a major player in the railway equipment business in India for nearly

five decades Our product offering includes brakes couplers shock absorbers rail

fastening systems composite brake blocks and vulcanized rubber parts

In the auto components segment Escorts is a leading manufacturer of auto suspension

products including shock absorbers and telescopic front forks Over the years with

continuous development and improvement in manufacturing technology and design

new reliable products have been introduced

The Escort Group has also been operating in the ITES and financial services sectors

Throughout the evolution of Escorts technology has always been its greatest ally for

growth In the over six decades of our inception Escorts has been much more than just

being one of Indias largest engineering companies It has been a harbinger of new

technology a prime mover on the industrial front at every stage introducing products

and technologies that helped take the country forward in key growth areas Over a

million tractors and over 16000 construction and material handling equipment that have

rolled out from the facilities of Escorts complemented by a highly satisfied customer

base are testimony to the manufacturing excellence of Escorts Following the globally

accepted best manufacturing practices with relentless focus on research and

development Escorts is today in the league of premier corporate entities in India

Technological and business collaboration with world leaders over the years Globally

competitive indigenous engineering capabilities over 1600 sales and service outlets and

footprints in over 40 countries have been instrumental in making Escorts the Indian

multinational At a time when the world is looking at India as an outsourcing

destination Escorts is rightly placed to be the dependable outsourcing partner of worlds

leading engineering corporations looking at outsourcing manufacture of engines

transmissions gears hydraulics implements and attachments to tractors and shock

absorbers for heavy trailers and armored tanks

In todays Global Market Place Escorts is fast on the path of an internal transformation

which will help it to be a key driver of manufacturing excellence in the global arena For

this we are going beyond just adhering to prevailing norms we are setting our own

standards and relentlessly pursuing them to achieve our desired benchmarks of

excellence

INDIAN TRACTOR INDUSTRY

INTRODUCTION

India is predominantly an agricultural country70 of the population lives in villages

and villagers depends upon agriculture for their bread and butter Since Indian valley

civilization agriculture is the main source of income but at that time the agriculture was

manual work Before independence Indian agriculture was in very bad situation But

since 1947 when India became independent the farmers also became independent

They had seen many ups and downs in their income After independence in five-year

plans first priority was assigned to agriculture government tried best to improve the

industry but a systematic planned approach for development started in 1950 since than

irrigation was recognized as key factor for agriculture Education and research were also

taken as a major initiative

In over six decades of the inception Escorts has been much

more than just being one of Indias largest engineering companies It has been a prime

mover on the industrial front introducing products and technologies and taking the

country forward in key areas

All these developments made mechanization mandatory for agriculture and

imports of tractors began Acceptance of mechanization was slow in fiftyrsquos the use of

tractor was very low Green Revolution was the result of tractor was barely 10000 in

1970 The industry was producing around 25000 to 30000 tractors Today India is the

largest tractor market estimating 2185000 tractors per annum with the annual growth of

123 Today the tractor industry is of about 5000 crores

With the 12 of arable land today India has 47 of the worldrsquos tractor India splits

tractors largely into four categories ie 20-30hp 31-40hp 41-50hp 51amp above 21-30hp

and 31-40hp ranges into together are nearly 76

SEGMENT OF TRACTORS ACCORDING TO HP WISE

Tractor Range 1965-97 1997-98 1998-99 1999-2000

20-30 HP 24 22 17 10

31-40 HP 51 50 54 55

41-50 HP 19 20 22 25

50ampabove 6 8 7 10

Demand for big hp segment is increasing as per the table shown In the budget of 1995-

96 the central government has given subsidy of Rs 30000 per tractor The subsidy was

for the user of low up segment tractors (for small farmers) The government wants to

increase the usage of tractor for higher agriculture production In the budget of

year1998-99 the finance minister Mr Yashwant Sinha has levied 8 excise duty on the

imports This was to save the Indian tractor industry form the slow down of economy

and the East Asian Crises According to economic survey of 1997-98 the production of

agriculture has dropped by 205 Until 1993-94 small tractor (below 25hp) were

exempted fro the excise in bid to encourage small farmers Because in India almost

65 of farmers has less than 4 acres of arable land

According to business India due to the Mahindra amp Mahindra and Swaraj tractors

would be benefited about Rs 10000 to Rs12000 per tractor as compared to others

which imports parts from abroad The compound average growth rate during last six

years has been around 15 The level of tractorization is high in Punjab amp Haryana at

around 95amp74 tractors per thousand hectares respectively The tractor demand is driven

by agriculture Products Interest Rates Total

Agricultural Credit Total Irrigation Facilities and Crop Pattern Among them credit is

strongly correlated with the tractor sale Nearly 80 of the tractorrsquos sale is through

credit

Financial Pattern

As stated above that 80 of the tractor is financed through credit rates essentially

through commercial banks regional banks rural banks and state level land development

banks The credit worthiness of the farmer is ascertained to have minimum holding of 6

areas of cultivated land to be eligible for loan However bank can provide a loan on

smaller landholding subject to farmer establishing his credit worthiness The credit

inflow since financial year 1996 is increasing support from NSBARD This has already

allocated 2000 crores from current year

HISTORICAL BACKGROUND

Indian agricultural in the fifties followed age bound tradition and was considered

backward The country did not produce enough food grain to feed its 36 crores

population and famines were recurrent features Import of food grains became necessary

to meet the short fall in domestic production there by causing a drain on scare foreign

exchange resources It therefore became imperative to high priority to the development

of agriculture

First phase of development (1960-1967)

Farm mechanism made a small beginning in the first five year PLAN Tractors were

imported for introduction is isolated pockets However acceptance of mechanization was

a slow process due to lack of awareness about its economic usefulness and versatility

The decade 1960 saw green revolution both increase in production and productivity with

the parallel emphasis on industry The birth of Indian tractor industry took place in

1959-60 when

import was restricted amp five manufacturing units were set up in private sector all with

collaboration It was in this background that production of tractors in the country in

1960

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS EICHER TRACTORS

LTD

WEST GERMANY 1959

MS HINDUSTAN

TRACTORS LTD

CZECHOSLOVAKIA 1963

MS TRACTORS amp

FARM EQUIPMENT

LTD(TAFE)

UK 1963

MS ESCORTS LTD POLAND 1964

MS INTERNATIONAL

TTACTORS CO OF

INDIA LTS LATER

RENAMED AS

MAHINDRA amp

MAHINDRA

UK 1965

The total indigenous production of tractors by 1965 was just 6000 The real spurt in

mechanization of agriculture came in the introduction of high yielding variety (HYV) of

seeds in 1966-67 and their enthusiastic adoption by farmers particularly in the wheat

growing northern region With the successful introduction and acceptance these high

quality seeds there was a upspring in the demand of tractors in 1967 and demand started

multiplying at an annual rate of almost 50 (19671800-197033000)A natural

consequent of sharp upsurge and consequent shortage was heavy price premium on

tractors Recognizing the situation imports of tractors were liberalized and over and

above the domestic production of 20000 in 1970 3000 tractors were imported

Second phase of development (1968-1980)

Since the pace of indigenous five tractors manufacturing units already set up far below

expectation the Government decided to provide diligence to the tractor industry in 1968

and invites new entrepreneurs Benefiting from this forward-loo

king policy six more units came in during 1971-1974 These were

NAME COLLABORTION YEAR OF

COMMENCEMENT

MS ESCORTS

TRACTORS LTD

UK 1971

MS HMT LTD CZECHOSLIVAKIA 1971

MS KIRLOSKAR

TRACTORS LTD

WEST GERMANY 1974

MS PUNJAB

TRACTORS LTD

INDIGENOUS 1974

MS HARSHA

TARCTORS LTD

USSR 1975

Not withstanding the above progress on the setting up to new units Tractor industry ran

into difficulties from 1969 onwards and by 1972 domestic tractor production stagnated

at a level of 20000units primarily due to continuing of imports of tractors Problem was

further compounded by the oil crisis in 1973-74 and the resultant economic crisis and

inflationary pressures which persisted till middle of 1975

The tractor market started slowly pocking up from 1975 (31000tractors) because of

relative price stability govt directives of the commercial banks increase rural lending

expansion of rural branches of commercial banks good monsoons which resulted in

bumper harvests and accelerated pace of extension of irrigation facilities This trend

continued throughout the late seventies and by 1979-80 yearly market off take had risen

to a level of 62000tractors

Third phase of development (1980-86) The buoyancy in the tractor market experienced in the late seventies continued tell 1981-82 when 78000

tractors were sold The encouraging trend led to the setting up of more for the manufacture of tractors

during 1981-86 These units were

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS AUTO TRACTORS

LTD

UK 1981

MS PRATAP STEEL

ROLLING MILL LTD

INDIGENOUS 1983

MS VST TRACTORS

LTD

JAPAN 1986

However the sale of tractors plummeted to a low level of 66000 tractors in the year

1982-83 in the wake of severe credit squeeze imposed by reserve bank of India

The demand for tractors again picked up when the credit squeeze was eased and a sale

of 80000units was recorded in the year 1984-85 for next year Tractor industry stagnated

causing closure of five manufacturing units as detailed below

NAME YEAR OF CLOSURE

PINE TRACTORS LTD 1983

HARSHA TRACTORS LTD 1987

AUTO TRACTORS LTD 1987

KISLOSKAR TRACTOR LTD 1991

PRALAP STEEL ROLLING MILLS

(HARYANA TRACTORS LTD)

1996

Fourth phase of development( 1987 onwards)

In the year 1987-88 the country saw a severe drought situation This was a difficult

period and it widely anticipated that crop yield would be severely affected Under such a

situation it was necessary to have provisions for supply of power to perform farm

operation at proper time in order to fully exploit the limited moisture content left in soil

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88)Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms

except for a 2 year slack period due to general economic slowdown and political

turmoil In fiscal 1997-98 tractors sales refaced an all time high record of 250000This

impressive growth has influenced 3 more players as listed below to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT

INTERNATIONAL

TRACTORS LTD

INDIGENOUS 1997

BAJAJ TEMPO LTD INDIGENOUS 1997

NEW HALLAND

TRACTORS (INDIA)

PVT LTD

ITALY 1998

JOHN DHEER

TRACTORLTD

POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their familyrsquos prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

Throughout the evolution of Escorts technology has always been its greatest ally for

growth In the over six decades of our inception Escorts has been much more than just

being one of Indias largest engineering companies It has been a harbinger of new

technology a prime mover on the industrial front at every stage introducing products

and technologies that helped take the country forward in key growth areas Over a

million tractors and over 16000 construction and material handling equipment that have

rolled out from the facilities of Escorts complemented by a highly satisfied customer

base are testimony to the manufacturing excellence of Escorts Following the globally

accepted best manufacturing practices with relentless focus on research and

development Escorts is today in the league of premier corporate entities in India

Technological and business collaboration with world leaders over the years Globally

competitive indigenous engineering capabilities over 1600 sales and service outlets and

footprints in over 40 countries have been instrumental in making Escorts the Indian

multinational At a time when the world is looking at India as an outsourcing

destination Escorts is rightly placed to be the dependable outsourcing partner of worlds

leading engineering corporations looking at outsourcing manufacture of engines

transmissions gears hydraulics implements and attachments to tractors and shock

absorbers for heavy trailers and armored tanks

In todays Global Market Place Escorts is fast on the path of an internal transformation

which will help it to be a key driver of manufacturing excellence in the global arena For

this we are going beyond just adhering to prevailing norms we are setting our own

standards and relentlessly pursuing them to achieve our desired benchmarks of

excellence

INDIAN TRACTOR INDUSTRY

INTRODUCTION

India is predominantly an agricultural country70 of the population lives in villages

and villagers depends upon agriculture for their bread and butter Since Indian valley

civilization agriculture is the main source of income but at that time the agriculture was

manual work Before independence Indian agriculture was in very bad situation But

since 1947 when India became independent the farmers also became independent

They had seen many ups and downs in their income After independence in five-year

plans first priority was assigned to agriculture government tried best to improve the

industry but a systematic planned approach for development started in 1950 since than

irrigation was recognized as key factor for agriculture Education and research were also

taken as a major initiative

In over six decades of the inception Escorts has been much

more than just being one of Indias largest engineering companies It has been a prime

mover on the industrial front introducing products and technologies and taking the

country forward in key areas

All these developments made mechanization mandatory for agriculture and

imports of tractors began Acceptance of mechanization was slow in fiftyrsquos the use of

tractor was very low Green Revolution was the result of tractor was barely 10000 in

1970 The industry was producing around 25000 to 30000 tractors Today India is the

largest tractor market estimating 2185000 tractors per annum with the annual growth of

123 Today the tractor industry is of about 5000 crores

With the 12 of arable land today India has 47 of the worldrsquos tractor India splits

tractors largely into four categories ie 20-30hp 31-40hp 41-50hp 51amp above 21-30hp

and 31-40hp ranges into together are nearly 76

SEGMENT OF TRACTORS ACCORDING TO HP WISE

Tractor Range 1965-97 1997-98 1998-99 1999-2000

20-30 HP 24 22 17 10

31-40 HP 51 50 54 55

41-50 HP 19 20 22 25

50ampabove 6 8 7 10

Demand for big hp segment is increasing as per the table shown In the budget of 1995-

96 the central government has given subsidy of Rs 30000 per tractor The subsidy was

for the user of low up segment tractors (for small farmers) The government wants to

increase the usage of tractor for higher agriculture production In the budget of

year1998-99 the finance minister Mr Yashwant Sinha has levied 8 excise duty on the

imports This was to save the Indian tractor industry form the slow down of economy

and the East Asian Crises According to economic survey of 1997-98 the production of

agriculture has dropped by 205 Until 1993-94 small tractor (below 25hp) were

exempted fro the excise in bid to encourage small farmers Because in India almost

65 of farmers has less than 4 acres of arable land

According to business India due to the Mahindra amp Mahindra and Swaraj tractors

would be benefited about Rs 10000 to Rs12000 per tractor as compared to others

which imports parts from abroad The compound average growth rate during last six

years has been around 15 The level of tractorization is high in Punjab amp Haryana at

around 95amp74 tractors per thousand hectares respectively The tractor demand is driven

by agriculture Products Interest Rates Total

Agricultural Credit Total Irrigation Facilities and Crop Pattern Among them credit is

strongly correlated with the tractor sale Nearly 80 of the tractorrsquos sale is through

credit

Financial Pattern

As stated above that 80 of the tractor is financed through credit rates essentially

through commercial banks regional banks rural banks and state level land development

banks The credit worthiness of the farmer is ascertained to have minimum holding of 6

areas of cultivated land to be eligible for loan However bank can provide a loan on

smaller landholding subject to farmer establishing his credit worthiness The credit

inflow since financial year 1996 is increasing support from NSBARD This has already

allocated 2000 crores from current year

HISTORICAL BACKGROUND

Indian agricultural in the fifties followed age bound tradition and was considered

backward The country did not produce enough food grain to feed its 36 crores

population and famines were recurrent features Import of food grains became necessary

to meet the short fall in domestic production there by causing a drain on scare foreign

exchange resources It therefore became imperative to high priority to the development

of agriculture

First phase of development (1960-1967)

Farm mechanism made a small beginning in the first five year PLAN Tractors were

imported for introduction is isolated pockets However acceptance of mechanization was

a slow process due to lack of awareness about its economic usefulness and versatility

The decade 1960 saw green revolution both increase in production and productivity with

the parallel emphasis on industry The birth of Indian tractor industry took place in

1959-60 when

import was restricted amp five manufacturing units were set up in private sector all with

collaboration It was in this background that production of tractors in the country in

1960

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS EICHER TRACTORS

LTD

WEST GERMANY 1959

MS HINDUSTAN

TRACTORS LTD

CZECHOSLOVAKIA 1963

MS TRACTORS amp

FARM EQUIPMENT

LTD(TAFE)

UK 1963

MS ESCORTS LTD POLAND 1964

MS INTERNATIONAL

TTACTORS CO OF

INDIA LTS LATER

RENAMED AS

MAHINDRA amp

MAHINDRA

UK 1965

The total indigenous production of tractors by 1965 was just 6000 The real spurt in

mechanization of agriculture came in the introduction of high yielding variety (HYV) of

seeds in 1966-67 and their enthusiastic adoption by farmers particularly in the wheat

growing northern region With the successful introduction and acceptance these high

quality seeds there was a upspring in the demand of tractors in 1967 and demand started

multiplying at an annual rate of almost 50 (19671800-197033000)A natural

consequent of sharp upsurge and consequent shortage was heavy price premium on

tractors Recognizing the situation imports of tractors were liberalized and over and

above the domestic production of 20000 in 1970 3000 tractors were imported

Second phase of development (1968-1980)

Since the pace of indigenous five tractors manufacturing units already set up far below

expectation the Government decided to provide diligence to the tractor industry in 1968

and invites new entrepreneurs Benefiting from this forward-loo

king policy six more units came in during 1971-1974 These were

NAME COLLABORTION YEAR OF

COMMENCEMENT

MS ESCORTS

TRACTORS LTD

UK 1971

MS HMT LTD CZECHOSLIVAKIA 1971

MS KIRLOSKAR

TRACTORS LTD

WEST GERMANY 1974

MS PUNJAB

TRACTORS LTD

INDIGENOUS 1974

MS HARSHA

TARCTORS LTD

USSR 1975

Not withstanding the above progress on the setting up to new units Tractor industry ran

into difficulties from 1969 onwards and by 1972 domestic tractor production stagnated

at a level of 20000units primarily due to continuing of imports of tractors Problem was

further compounded by the oil crisis in 1973-74 and the resultant economic crisis and

inflationary pressures which persisted till middle of 1975

The tractor market started slowly pocking up from 1975 (31000tractors) because of

relative price stability govt directives of the commercial banks increase rural lending

expansion of rural branches of commercial banks good monsoons which resulted in

bumper harvests and accelerated pace of extension of irrigation facilities This trend

continued throughout the late seventies and by 1979-80 yearly market off take had risen

to a level of 62000tractors

Third phase of development (1980-86) The buoyancy in the tractor market experienced in the late seventies continued tell 1981-82 when 78000

tractors were sold The encouraging trend led to the setting up of more for the manufacture of tractors

during 1981-86 These units were

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS AUTO TRACTORS

LTD

UK 1981

MS PRATAP STEEL

ROLLING MILL LTD

INDIGENOUS 1983

MS VST TRACTORS

LTD

JAPAN 1986

However the sale of tractors plummeted to a low level of 66000 tractors in the year

1982-83 in the wake of severe credit squeeze imposed by reserve bank of India

The demand for tractors again picked up when the credit squeeze was eased and a sale

of 80000units was recorded in the year 1984-85 for next year Tractor industry stagnated

causing closure of five manufacturing units as detailed below

NAME YEAR OF CLOSURE

PINE TRACTORS LTD 1983

HARSHA TRACTORS LTD 1987

AUTO TRACTORS LTD 1987

KISLOSKAR TRACTOR LTD 1991

PRALAP STEEL ROLLING MILLS

(HARYANA TRACTORS LTD)

1996

Fourth phase of development( 1987 onwards)

In the year 1987-88 the country saw a severe drought situation This was a difficult

period and it widely anticipated that crop yield would be severely affected Under such a

situation it was necessary to have provisions for supply of power to perform farm

operation at proper time in order to fully exploit the limited moisture content left in soil

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88)Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms

except for a 2 year slack period due to general economic slowdown and political

turmoil In fiscal 1997-98 tractors sales refaced an all time high record of 250000This

impressive growth has influenced 3 more players as listed below to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT

INTERNATIONAL

TRACTORS LTD

INDIGENOUS 1997

BAJAJ TEMPO LTD INDIGENOUS 1997

NEW HALLAND

TRACTORS (INDIA)

PVT LTD

ITALY 1998

JOHN DHEER

TRACTORLTD

POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their familyrsquos prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

manual work Before independence Indian agriculture was in very bad situation But

since 1947 when India became independent the farmers also became independent

They had seen many ups and downs in their income After independence in five-year

plans first priority was assigned to agriculture government tried best to improve the

industry but a systematic planned approach for development started in 1950 since than

irrigation was recognized as key factor for agriculture Education and research were also

taken as a major initiative

In over six decades of the inception Escorts has been much

more than just being one of Indias largest engineering companies It has been a prime

mover on the industrial front introducing products and technologies and taking the

country forward in key areas

All these developments made mechanization mandatory for agriculture and

imports of tractors began Acceptance of mechanization was slow in fiftyrsquos the use of

tractor was very low Green Revolution was the result of tractor was barely 10000 in

1970 The industry was producing around 25000 to 30000 tractors Today India is the

largest tractor market estimating 2185000 tractors per annum with the annual growth of

123 Today the tractor industry is of about 5000 crores

With the 12 of arable land today India has 47 of the worldrsquos tractor India splits

tractors largely into four categories ie 20-30hp 31-40hp 41-50hp 51amp above 21-30hp

and 31-40hp ranges into together are nearly 76

SEGMENT OF TRACTORS ACCORDING TO HP WISE

Tractor Range 1965-97 1997-98 1998-99 1999-2000

20-30 HP 24 22 17 10

31-40 HP 51 50 54 55

41-50 HP 19 20 22 25

50ampabove 6 8 7 10

Demand for big hp segment is increasing as per the table shown In the budget of 1995-

96 the central government has given subsidy of Rs 30000 per tractor The subsidy was

for the user of low up segment tractors (for small farmers) The government wants to

increase the usage of tractor for higher agriculture production In the budget of

year1998-99 the finance minister Mr Yashwant Sinha has levied 8 excise duty on the

imports This was to save the Indian tractor industry form the slow down of economy

and the East Asian Crises According to economic survey of 1997-98 the production of

agriculture has dropped by 205 Until 1993-94 small tractor (below 25hp) were

exempted fro the excise in bid to encourage small farmers Because in India almost

65 of farmers has less than 4 acres of arable land

According to business India due to the Mahindra amp Mahindra and Swaraj tractors

would be benefited about Rs 10000 to Rs12000 per tractor as compared to others

which imports parts from abroad The compound average growth rate during last six

years has been around 15 The level of tractorization is high in Punjab amp Haryana at

around 95amp74 tractors per thousand hectares respectively The tractor demand is driven

by agriculture Products Interest Rates Total

Agricultural Credit Total Irrigation Facilities and Crop Pattern Among them credit is

strongly correlated with the tractor sale Nearly 80 of the tractorrsquos sale is through

credit

Financial Pattern

As stated above that 80 of the tractor is financed through credit rates essentially

through commercial banks regional banks rural banks and state level land development

banks The credit worthiness of the farmer is ascertained to have minimum holding of 6

areas of cultivated land to be eligible for loan However bank can provide a loan on

smaller landholding subject to farmer establishing his credit worthiness The credit

inflow since financial year 1996 is increasing support from NSBARD This has already

allocated 2000 crores from current year

HISTORICAL BACKGROUND

Indian agricultural in the fifties followed age bound tradition and was considered

backward The country did not produce enough food grain to feed its 36 crores

population and famines were recurrent features Import of food grains became necessary

to meet the short fall in domestic production there by causing a drain on scare foreign

exchange resources It therefore became imperative to high priority to the development

of agriculture

First phase of development (1960-1967)

Farm mechanism made a small beginning in the first five year PLAN Tractors were

imported for introduction is isolated pockets However acceptance of mechanization was

a slow process due to lack of awareness about its economic usefulness and versatility

The decade 1960 saw green revolution both increase in production and productivity with

the parallel emphasis on industry The birth of Indian tractor industry took place in

1959-60 when

import was restricted amp five manufacturing units were set up in private sector all with

collaboration It was in this background that production of tractors in the country in

1960

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS EICHER TRACTORS

LTD

WEST GERMANY 1959

MS HINDUSTAN

TRACTORS LTD

CZECHOSLOVAKIA 1963

MS TRACTORS amp

FARM EQUIPMENT

LTD(TAFE)

UK 1963

MS ESCORTS LTD POLAND 1964

MS INTERNATIONAL

TTACTORS CO OF

INDIA LTS LATER

RENAMED AS

MAHINDRA amp

MAHINDRA

UK 1965

The total indigenous production of tractors by 1965 was just 6000 The real spurt in

mechanization of agriculture came in the introduction of high yielding variety (HYV) of

seeds in 1966-67 and their enthusiastic adoption by farmers particularly in the wheat

growing northern region With the successful introduction and acceptance these high

quality seeds there was a upspring in the demand of tractors in 1967 and demand started

multiplying at an annual rate of almost 50 (19671800-197033000)A natural

consequent of sharp upsurge and consequent shortage was heavy price premium on

tractors Recognizing the situation imports of tractors were liberalized and over and

above the domestic production of 20000 in 1970 3000 tractors were imported

Second phase of development (1968-1980)

Since the pace of indigenous five tractors manufacturing units already set up far below

expectation the Government decided to provide diligence to the tractor industry in 1968

and invites new entrepreneurs Benefiting from this forward-loo

king policy six more units came in during 1971-1974 These were

NAME COLLABORTION YEAR OF

COMMENCEMENT

MS ESCORTS

TRACTORS LTD

UK 1971

MS HMT LTD CZECHOSLIVAKIA 1971

MS KIRLOSKAR

TRACTORS LTD

WEST GERMANY 1974

MS PUNJAB

TRACTORS LTD

INDIGENOUS 1974

MS HARSHA

TARCTORS LTD

USSR 1975

Not withstanding the above progress on the setting up to new units Tractor industry ran

into difficulties from 1969 onwards and by 1972 domestic tractor production stagnated

at a level of 20000units primarily due to continuing of imports of tractors Problem was

further compounded by the oil crisis in 1973-74 and the resultant economic crisis and

inflationary pressures which persisted till middle of 1975

The tractor market started slowly pocking up from 1975 (31000tractors) because of

relative price stability govt directives of the commercial banks increase rural lending

expansion of rural branches of commercial banks good monsoons which resulted in

bumper harvests and accelerated pace of extension of irrigation facilities This trend

continued throughout the late seventies and by 1979-80 yearly market off take had risen

to a level of 62000tractors

Third phase of development (1980-86) The buoyancy in the tractor market experienced in the late seventies continued tell 1981-82 when 78000

tractors were sold The encouraging trend led to the setting up of more for the manufacture of tractors

during 1981-86 These units were

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS AUTO TRACTORS

LTD

UK 1981

MS PRATAP STEEL

ROLLING MILL LTD

INDIGENOUS 1983

MS VST TRACTORS

LTD

JAPAN 1986

However the sale of tractors plummeted to a low level of 66000 tractors in the year

1982-83 in the wake of severe credit squeeze imposed by reserve bank of India

The demand for tractors again picked up when the credit squeeze was eased and a sale

of 80000units was recorded in the year 1984-85 for next year Tractor industry stagnated

causing closure of five manufacturing units as detailed below

NAME YEAR OF CLOSURE

PINE TRACTORS LTD 1983

HARSHA TRACTORS LTD 1987

AUTO TRACTORS LTD 1987

KISLOSKAR TRACTOR LTD 1991

PRALAP STEEL ROLLING MILLS

(HARYANA TRACTORS LTD)

1996

Fourth phase of development( 1987 onwards)

In the year 1987-88 the country saw a severe drought situation This was a difficult

period and it widely anticipated that crop yield would be severely affected Under such a

situation it was necessary to have provisions for supply of power to perform farm

operation at proper time in order to fully exploit the limited moisture content left in soil

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88)Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms

except for a 2 year slack period due to general economic slowdown and political

turmoil In fiscal 1997-98 tractors sales refaced an all time high record of 250000This

impressive growth has influenced 3 more players as listed below to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT

INTERNATIONAL

TRACTORS LTD

INDIGENOUS 1997

BAJAJ TEMPO LTD INDIGENOUS 1997

NEW HALLAND

TRACTORS (INDIA)

PVT LTD

ITALY 1998

JOHN DHEER

TRACTORLTD

POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their familyrsquos prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

and the East Asian Crises According to economic survey of 1997-98 the production of

agriculture has dropped by 205 Until 1993-94 small tractor (below 25hp) were

exempted fro the excise in bid to encourage small farmers Because in India almost

65 of farmers has less than 4 acres of arable land

According to business India due to the Mahindra amp Mahindra and Swaraj tractors

would be benefited about Rs 10000 to Rs12000 per tractor as compared to others

which imports parts from abroad The compound average growth rate during last six

years has been around 15 The level of tractorization is high in Punjab amp Haryana at

around 95amp74 tractors per thousand hectares respectively The tractor demand is driven

by agriculture Products Interest Rates Total

Agricultural Credit Total Irrigation Facilities and Crop Pattern Among them credit is

strongly correlated with the tractor sale Nearly 80 of the tractorrsquos sale is through

credit

Financial Pattern

As stated above that 80 of the tractor is financed through credit rates essentially

through commercial banks regional banks rural banks and state level land development

banks The credit worthiness of the farmer is ascertained to have minimum holding of 6

areas of cultivated land to be eligible for loan However bank can provide a loan on

smaller landholding subject to farmer establishing his credit worthiness The credit

inflow since financial year 1996 is increasing support from NSBARD This has already

allocated 2000 crores from current year

HISTORICAL BACKGROUND

Indian agricultural in the fifties followed age bound tradition and was considered

backward The country did not produce enough food grain to feed its 36 crores

population and famines were recurrent features Import of food grains became necessary

to meet the short fall in domestic production there by causing a drain on scare foreign

exchange resources It therefore became imperative to high priority to the development

of agriculture

First phase of development (1960-1967)

Farm mechanism made a small beginning in the first five year PLAN Tractors were

imported for introduction is isolated pockets However acceptance of mechanization was

a slow process due to lack of awareness about its economic usefulness and versatility

The decade 1960 saw green revolution both increase in production and productivity with

the parallel emphasis on industry The birth of Indian tractor industry took place in

1959-60 when

import was restricted amp five manufacturing units were set up in private sector all with

collaboration It was in this background that production of tractors in the country in

1960

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS EICHER TRACTORS

LTD

WEST GERMANY 1959

MS HINDUSTAN

TRACTORS LTD

CZECHOSLOVAKIA 1963

MS TRACTORS amp

FARM EQUIPMENT

LTD(TAFE)

UK 1963

MS ESCORTS LTD POLAND 1964

MS INTERNATIONAL

TTACTORS CO OF

INDIA LTS LATER

RENAMED AS

MAHINDRA amp

MAHINDRA

UK 1965

The total indigenous production of tractors by 1965 was just 6000 The real spurt in

mechanization of agriculture came in the introduction of high yielding variety (HYV) of

seeds in 1966-67 and their enthusiastic adoption by farmers particularly in the wheat

growing northern region With the successful introduction and acceptance these high

quality seeds there was a upspring in the demand of tractors in 1967 and demand started

multiplying at an annual rate of almost 50 (19671800-197033000)A natural

consequent of sharp upsurge and consequent shortage was heavy price premium on

tractors Recognizing the situation imports of tractors were liberalized and over and

above the domestic production of 20000 in 1970 3000 tractors were imported

Second phase of development (1968-1980)

Since the pace of indigenous five tractors manufacturing units already set up far below

expectation the Government decided to provide diligence to the tractor industry in 1968

and invites new entrepreneurs Benefiting from this forward-loo

king policy six more units came in during 1971-1974 These were

NAME COLLABORTION YEAR OF

COMMENCEMENT

MS ESCORTS

TRACTORS LTD

UK 1971

MS HMT LTD CZECHOSLIVAKIA 1971

MS KIRLOSKAR

TRACTORS LTD

WEST GERMANY 1974

MS PUNJAB

TRACTORS LTD

INDIGENOUS 1974

MS HARSHA

TARCTORS LTD

USSR 1975

Not withstanding the above progress on the setting up to new units Tractor industry ran

into difficulties from 1969 onwards and by 1972 domestic tractor production stagnated

at a level of 20000units primarily due to continuing of imports of tractors Problem was

further compounded by the oil crisis in 1973-74 and the resultant economic crisis and

inflationary pressures which persisted till middle of 1975

The tractor market started slowly pocking up from 1975 (31000tractors) because of

relative price stability govt directives of the commercial banks increase rural lending

expansion of rural branches of commercial banks good monsoons which resulted in

bumper harvests and accelerated pace of extension of irrigation facilities This trend

continued throughout the late seventies and by 1979-80 yearly market off take had risen

to a level of 62000tractors

Third phase of development (1980-86) The buoyancy in the tractor market experienced in the late seventies continued tell 1981-82 when 78000

tractors were sold The encouraging trend led to the setting up of more for the manufacture of tractors

during 1981-86 These units were

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS AUTO TRACTORS

LTD

UK 1981

MS PRATAP STEEL

ROLLING MILL LTD

INDIGENOUS 1983

MS VST TRACTORS

LTD

JAPAN 1986

However the sale of tractors plummeted to a low level of 66000 tractors in the year

1982-83 in the wake of severe credit squeeze imposed by reserve bank of India

The demand for tractors again picked up when the credit squeeze was eased and a sale

of 80000units was recorded in the year 1984-85 for next year Tractor industry stagnated

causing closure of five manufacturing units as detailed below

NAME YEAR OF CLOSURE

PINE TRACTORS LTD 1983

HARSHA TRACTORS LTD 1987

AUTO TRACTORS LTD 1987

KISLOSKAR TRACTOR LTD 1991

PRALAP STEEL ROLLING MILLS

(HARYANA TRACTORS LTD)

1996

Fourth phase of development( 1987 onwards)

In the year 1987-88 the country saw a severe drought situation This was a difficult

period and it widely anticipated that crop yield would be severely affected Under such a

situation it was necessary to have provisions for supply of power to perform farm

operation at proper time in order to fully exploit the limited moisture content left in soil

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88)Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms

except for a 2 year slack period due to general economic slowdown and political

turmoil In fiscal 1997-98 tractors sales refaced an all time high record of 250000This

impressive growth has influenced 3 more players as listed below to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT

INTERNATIONAL

TRACTORS LTD

INDIGENOUS 1997

BAJAJ TEMPO LTD INDIGENOUS 1997

NEW HALLAND

TRACTORS (INDIA)

PVT LTD

ITALY 1998

JOHN DHEER

TRACTORLTD

POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their familyrsquos prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

the parallel emphasis on industry The birth of Indian tractor industry took place in

1959-60 when

import was restricted amp five manufacturing units were set up in private sector all with

collaboration It was in this background that production of tractors in the country in

1960

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS EICHER TRACTORS

LTD

WEST GERMANY 1959

MS HINDUSTAN

TRACTORS LTD

CZECHOSLOVAKIA 1963

MS TRACTORS amp

FARM EQUIPMENT

LTD(TAFE)

UK 1963

MS ESCORTS LTD POLAND 1964

MS INTERNATIONAL

TTACTORS CO OF

INDIA LTS LATER

RENAMED AS

MAHINDRA amp

MAHINDRA

UK 1965

The total indigenous production of tractors by 1965 was just 6000 The real spurt in

mechanization of agriculture came in the introduction of high yielding variety (HYV) of

seeds in 1966-67 and their enthusiastic adoption by farmers particularly in the wheat

growing northern region With the successful introduction and acceptance these high

quality seeds there was a upspring in the demand of tractors in 1967 and demand started

multiplying at an annual rate of almost 50 (19671800-197033000)A natural

consequent of sharp upsurge and consequent shortage was heavy price premium on

tractors Recognizing the situation imports of tractors were liberalized and over and

above the domestic production of 20000 in 1970 3000 tractors were imported

Second phase of development (1968-1980)

Since the pace of indigenous five tractors manufacturing units already set up far below

expectation the Government decided to provide diligence to the tractor industry in 1968

and invites new entrepreneurs Benefiting from this forward-loo

king policy six more units came in during 1971-1974 These were

NAME COLLABORTION YEAR OF

COMMENCEMENT

MS ESCORTS

TRACTORS LTD

UK 1971

MS HMT LTD CZECHOSLIVAKIA 1971

MS KIRLOSKAR

TRACTORS LTD

WEST GERMANY 1974

MS PUNJAB

TRACTORS LTD

INDIGENOUS 1974

MS HARSHA

TARCTORS LTD

USSR 1975

Not withstanding the above progress on the setting up to new units Tractor industry ran

into difficulties from 1969 onwards and by 1972 domestic tractor production stagnated

at a level of 20000units primarily due to continuing of imports of tractors Problem was

further compounded by the oil crisis in 1973-74 and the resultant economic crisis and

inflationary pressures which persisted till middle of 1975

The tractor market started slowly pocking up from 1975 (31000tractors) because of

relative price stability govt directives of the commercial banks increase rural lending

expansion of rural branches of commercial banks good monsoons which resulted in

bumper harvests and accelerated pace of extension of irrigation facilities This trend

continued throughout the late seventies and by 1979-80 yearly market off take had risen

to a level of 62000tractors

Third phase of development (1980-86) The buoyancy in the tractor market experienced in the late seventies continued tell 1981-82 when 78000

tractors were sold The encouraging trend led to the setting up of more for the manufacture of tractors

during 1981-86 These units were

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS AUTO TRACTORS

LTD

UK 1981

MS PRATAP STEEL

ROLLING MILL LTD

INDIGENOUS 1983

MS VST TRACTORS

LTD

JAPAN 1986

However the sale of tractors plummeted to a low level of 66000 tractors in the year

1982-83 in the wake of severe credit squeeze imposed by reserve bank of India

The demand for tractors again picked up when the credit squeeze was eased and a sale

of 80000units was recorded in the year 1984-85 for next year Tractor industry stagnated

causing closure of five manufacturing units as detailed below

NAME YEAR OF CLOSURE

PINE TRACTORS LTD 1983

HARSHA TRACTORS LTD 1987

AUTO TRACTORS LTD 1987

KISLOSKAR TRACTOR LTD 1991

PRALAP STEEL ROLLING MILLS

(HARYANA TRACTORS LTD)

1996

Fourth phase of development( 1987 onwards)

In the year 1987-88 the country saw a severe drought situation This was a difficult

period and it widely anticipated that crop yield would be severely affected Under such a

situation it was necessary to have provisions for supply of power to perform farm

operation at proper time in order to fully exploit the limited moisture content left in soil

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88)Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms

except for a 2 year slack period due to general economic slowdown and political

turmoil In fiscal 1997-98 tractors sales refaced an all time high record of 250000This

impressive growth has influenced 3 more players as listed below to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT

INTERNATIONAL

TRACTORS LTD

INDIGENOUS 1997

BAJAJ TEMPO LTD INDIGENOUS 1997

NEW HALLAND

TRACTORS (INDIA)

PVT LTD

ITALY 1998

JOHN DHEER

TRACTORLTD

POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their familyrsquos prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

multiplying at an annual rate of almost 50 (19671800-197033000)A natural

consequent of sharp upsurge and consequent shortage was heavy price premium on

tractors Recognizing the situation imports of tractors were liberalized and over and

above the domestic production of 20000 in 1970 3000 tractors were imported

Second phase of development (1968-1980)

Since the pace of indigenous five tractors manufacturing units already set up far below

expectation the Government decided to provide diligence to the tractor industry in 1968

and invites new entrepreneurs Benefiting from this forward-loo

king policy six more units came in during 1971-1974 These were

NAME COLLABORTION YEAR OF

COMMENCEMENT

MS ESCORTS

TRACTORS LTD

UK 1971

MS HMT LTD CZECHOSLIVAKIA 1971

MS KIRLOSKAR

TRACTORS LTD

WEST GERMANY 1974

MS PUNJAB

TRACTORS LTD

INDIGENOUS 1974

MS HARSHA

TARCTORS LTD

USSR 1975

Not withstanding the above progress on the setting up to new units Tractor industry ran

into difficulties from 1969 onwards and by 1972 domestic tractor production stagnated

at a level of 20000units primarily due to continuing of imports of tractors Problem was

further compounded by the oil crisis in 1973-74 and the resultant economic crisis and

inflationary pressures which persisted till middle of 1975

The tractor market started slowly pocking up from 1975 (31000tractors) because of

relative price stability govt directives of the commercial banks increase rural lending

expansion of rural branches of commercial banks good monsoons which resulted in

bumper harvests and accelerated pace of extension of irrigation facilities This trend

continued throughout the late seventies and by 1979-80 yearly market off take had risen

to a level of 62000tractors

Third phase of development (1980-86) The buoyancy in the tractor market experienced in the late seventies continued tell 1981-82 when 78000

tractors were sold The encouraging trend led to the setting up of more for the manufacture of tractors

during 1981-86 These units were

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS AUTO TRACTORS

LTD

UK 1981

MS PRATAP STEEL

ROLLING MILL LTD

INDIGENOUS 1983

MS VST TRACTORS

LTD

JAPAN 1986

However the sale of tractors plummeted to a low level of 66000 tractors in the year

1982-83 in the wake of severe credit squeeze imposed by reserve bank of India

The demand for tractors again picked up when the credit squeeze was eased and a sale

of 80000units was recorded in the year 1984-85 for next year Tractor industry stagnated

causing closure of five manufacturing units as detailed below

NAME YEAR OF CLOSURE

PINE TRACTORS LTD 1983

HARSHA TRACTORS LTD 1987

AUTO TRACTORS LTD 1987

KISLOSKAR TRACTOR LTD 1991

PRALAP STEEL ROLLING MILLS

(HARYANA TRACTORS LTD)

1996

Fourth phase of development( 1987 onwards)

In the year 1987-88 the country saw a severe drought situation This was a difficult

period and it widely anticipated that crop yield would be severely affected Under such a

situation it was necessary to have provisions for supply of power to perform farm

operation at proper time in order to fully exploit the limited moisture content left in soil

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88)Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms

except for a 2 year slack period due to general economic slowdown and political

turmoil In fiscal 1997-98 tractors sales refaced an all time high record of 250000This

impressive growth has influenced 3 more players as listed below to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT

INTERNATIONAL

TRACTORS LTD

INDIGENOUS 1997

BAJAJ TEMPO LTD INDIGENOUS 1997

NEW HALLAND

TRACTORS (INDIA)

PVT LTD

ITALY 1998

JOHN DHEER

TRACTORLTD

POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their familyrsquos prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

to a level of 62000tractors

Third phase of development (1980-86) The buoyancy in the tractor market experienced in the late seventies continued tell 1981-82 when 78000

tractors were sold The encouraging trend led to the setting up of more for the manufacture of tractors

during 1981-86 These units were

NAME COLLABORATION YEAR OF

COMMENCEMENT

MS AUTO TRACTORS

LTD

UK 1981

MS PRATAP STEEL

ROLLING MILL LTD

INDIGENOUS 1983

MS VST TRACTORS

LTD

JAPAN 1986

However the sale of tractors plummeted to a low level of 66000 tractors in the year

1982-83 in the wake of severe credit squeeze imposed by reserve bank of India

The demand for tractors again picked up when the credit squeeze was eased and a sale

of 80000units was recorded in the year 1984-85 for next year Tractor industry stagnated

causing closure of five manufacturing units as detailed below

NAME YEAR OF CLOSURE

PINE TRACTORS LTD 1983

HARSHA TRACTORS LTD 1987

AUTO TRACTORS LTD 1987

KISLOSKAR TRACTOR LTD 1991

PRALAP STEEL ROLLING MILLS

(HARYANA TRACTORS LTD)

1996

Fourth phase of development( 1987 onwards)

In the year 1987-88 the country saw a severe drought situation This was a difficult

period and it widely anticipated that crop yield would be severely affected Under such a

situation it was necessary to have provisions for supply of power to perform farm

operation at proper time in order to fully exploit the limited moisture content left in soil

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88)Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms

except for a 2 year slack period due to general economic slowdown and political

turmoil In fiscal 1997-98 tractors sales refaced an all time high record of 250000This

impressive growth has influenced 3 more players as listed below to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT

INTERNATIONAL

TRACTORS LTD

INDIGENOUS 1997

BAJAJ TEMPO LTD INDIGENOUS 1997

NEW HALLAND

TRACTORS (INDIA)

PVT LTD

ITALY 1998

JOHN DHEER

TRACTORLTD

POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their familyrsquos prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88)Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms

except for a 2 year slack period due to general economic slowdown and political

turmoil In fiscal 1997-98 tractors sales refaced an all time high record of 250000This

impressive growth has influenced 3 more players as listed below to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT

INTERNATIONAL

TRACTORS LTD

INDIGENOUS 1997

BAJAJ TEMPO LTD INDIGENOUS 1997

NEW HALLAND

TRACTORS (INDIA)

PVT LTD

ITALY 1998

JOHN DHEER

TRACTORLTD

POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their familyrsquos prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman

After the owing to opportunity lying in the Indian village Escorts (Agricultural

Machinery) Ltd was launched in 1948 with Yudi Nanda as Director Tragically Yudi

Nanda died in an accident in 1952 Then Escorts agent Ltd And Escorts (Agricultural

Machine) Ltd Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES

1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd

With a franchise from a US based MINNEAPOLIS MOLINE WISCONCIN for marketing

tractors implements engines and other equipments

1958 Started importing MF tractor from Yugoslavia for marketing the same in India

1960 A manufacturing plant was set up at Faridabad

1965 Got industrial license to manufacture URSUS ESCORT tractors

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

tractors Escorts Institute of Farm Mechanization (EIFM) was established at Bangalore This

training Institute is one of its kind

1971 1st February the first tractor FORD 3000 rolled out of the factory The same year the turnover

touched the Rs53 million mark

1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs4725 million

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such

equipment

1975 Turnover crossed the Rs 200 million mark for ETL Profit After Tax Rs 87 million Maiden

dividend of 10 declared

1976

1976 FORD 3600 advancement in Farm Mechanization was launched with fanfare to a

tremendous reception Trial production of in-plant manufacturing of engine parts (Block amp

Head)

1977

1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own

Engines for E-27 and E-37 Due to constant technology absorption indigenization level

touched 72 for FORD tractors which was a result of relentless effort in that direction

1979 Turnover crossed the Rs 50 crores mark In plant facility for machining centre housing and

case transmission on built-in line concept installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre

to spearhead newer breakthroughs in Farm Mechanization and to maintain industry

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

leadership Line concept introduced for engine block machining

1984 75000th tractor rolled out A great occasion for the large family that worked for ETL Newer

challenges and frontiers were set

1985 In keeping with the stupendous financial success Escorts Tractors Limited (ETL) offered its

first Bonus Issue (11)

1987 50hp FORD 3610 was launched another leap for the Indian Farm Mechanization Industry the

farmers and the people of the land

1988

1988 ETLrsquos annualized turnover crossed Rs 100 crores Dividend 45 for 15 months

1989 A MOU with CLAAS was signed for manufacturing amp

1990-

91

First Public Issue (Februaryrsquo91) over-subscribed four times Shares listed on Delhi and Bombay

Stock Exchanges

1991-

92

The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd

1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC

Tractor

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India

for manufacturing and marketing of transmission and axles

COLLABORATIONS

Collaboration with international Organization of technological excellence constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in Indiarsquos New Industrial Culture Escorts have merged as fraternity

of above 50000 shareholders 22000 employees 4000 ancillary suppliers and 1 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to

meet the ever widening market horizons of technological competence appropriate to

Indiarsquos unique changing needs

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are

IN GERMANY

GOETZE AG Piston rings and cylinder liners

MAHLE GmbH Piston

CLASS OHG Harvesters Combines

KNORR BREMSE AG Railway Brake System

AUGUST BILSTEIN GmbH Absorbers Hydraulic products

Pressure and temperature switches

IN JAPAN

KAYABA INDUSTRY CO LTD Telescopic Front Forks Car

MIKUNI SHOKO CO Carburetors for BI-Wheelers

IN UK

JCBAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders Telescopic handlers

IN USA

HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat amp Law

Escorts Ltd

11 Scindia House

Connaught Circus

New Delhi-110 001

Tel No 011-23310145

Fax No 011-23311715

Escorts Ltd

155 Mathura Road

Faridabad - 121 003

Tel No ( 0129 ) 2250222

Fax ( 0129 ) 2250060

Email Address corpsectndbvsnlnetin

Web Site wwwescortsgroupcom

LEADERSHIP TEAM

Mr Rajan Nanda

Chairman

Mr Nikhil Nanda

Joint Managing Director

Mr Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr Manoj Jha

Executive Vice President of Engineering Division

Mr Kamal Bali

CEO ndash Escorts Construction Equipment Limited (ECEL)

Mr GB Mathur

Vice President - Law amp Company Secretary

Mr Rakesh Kumar Budhiraja

Group Chief Financial Officer

Mr Partha Dasgupta

Group Vice President Human Resources and Employee Relations

LEVELS OF MANAGEMENT

MANAGEMENT

TOP

MANAGEMENT

SENIOR

MANAGEMENT

MIDDLE

MANAGEMENT

JUNIOR

MANAGEMENT

MANAGING

DIRECTOR amp

CEO(G-11)

CHIEF GENERAL

MANGER(G-8)

CHIEF

MANAGER

(G-5)

ASSISTANT

MANAGER(G-2)

VICE PRESIDENT

(G-10)

GENERAL

MANAGER(G-7)

SENIOR

MANAGER(G-4)

EXECUTIVE(G-

1)

ASSOCIATE

VICE PRESIDENT

(G-9)

DEPUTY

GENERAL

MANAGER(G-6)

MANAGER(G-3)

MISSION

WE WILL ACHIEVE LEADERSHIP IN MARKET SHARE amp PROFITABILITY IN

THE DOMESTIC TRACTOR MARKET BY THE YEAR 2004-2006 AND SHALL BE

THE WORLSrsquoS LARGEST SUPPLIER OF SUB 100 HP TRACTORS WE SHALL

PROACTIVELY CONTRIBUTE TO THE PROSPERITY OF THE RURAL

ECONOMY BY DEFINING A LARGER ROLE FOR OURSELVES IN THE FOOD

AND AGRICULTURE SECTOR

THE VISION

WE SHALL STRIVE TO BE THE NUMERO UNO IN THE INDIAN TRACTOR

INDUSTRY AND TOP FIVE TRACTOR MANUFACTURERS IN THE WORLD

WE SHALL CONTINUOUSLY STRIVE TO MEET THE EVER RISING

EXPECTATIONS OF OUR VALUED CUSTOMERS AT THE LOWEST

INTERNAL COST

WE SHALL AIM TO OFFER THE FARMING COMMUNITY A RANGE OF

INNOVATIVE PRODUCTS AND SERVICES WHICH SHALL ENABLE THEM

TO IMPROVE THEIR PRODUCTIVITY AND COMPETITIVNESS

WE SHALL ACHIEVE A TURNOVER OF RS 2 BILLION BY THE YEAR

2006TRANSCENDING NATIONAL BOUNDARIES WE SHALL STRIVE TO

ATTAIN EXPORTS OF ONE TENTH OF OUR TOTAL TRACTOR PRODUCTION

BY THE YEAR 2

REVIEW OF LITERATURE

INTRODUCTION

MEANING OF FINANCIAL STATEMENTS

The financial statements are nothing but the financial information presented in concise and

capsule form and are the financial information is the information relating to the financial

position of any firm The firm prepares the financial statements

bull To communicate with different parties about the financial position of the firm

(Shareholders creditors banks financial institution financial analysts investors

etc And

bull To analyze the operations and performance of the firm for the further

planning

The basic source which provides the financial information is the Annual report of the

company which is presented by the company to its shareholders at the Annual General

Meeting

Though the presentation of annual report is a statutory requirement under the

Companies Act 1956 however it is also a medium of communication with the present as well

as prospective investors and creditors of the company

Clause 43 A of the Listing Agreement (with the stock exchange) requires every

listed company to publish unaudited quarterly results But it does not mean the non-corporate

firms do not prepare the financial statements Every firm big or small prepare the following

financial statements

The Balance Sheet (BS)

1 The Income Statement (IS)

Two other key financial statements which are usually prepared by corporate firms are

1 Statement of appropriation of profit and

2 Statement of Change in financial position

ANALYSIS OF FINANCIAL STATEMENTS (AFS)

Analysis of financial statements refers to the process of the critical examination of the

financial information contained in the financial statements in order to understand and

make decisions regarding the operations of the firm The AFS is basically a study of the

relationship among various financial fact and figures as given in a set of financial

statements AFS is the process of establishment and identifying the financial weakness

and strength of the firm It is indicative of two aspects of a firm ie the profitability

and the financial position

OBJECTIVES OF AFS

The objectives of the AFS is to understand the information contained in financial

statements with a view to know the weakness and strength of the firm and to make a

forecast about the future prospects of the firm and thereby enabling the financial

analyst to take different decisions regarding the operation of the firm The objectives

are as follows

bull To assess the present profitability and operating efficiency of the fir

COMMON-SIZE STATEMENTS (CSS)

The CSS represents the relationship of different items of financial statements with some

Common items by expressing each item as a percentage of the common item In common size

Balance Sheet each item of the balance sheet is stated as a percentage of the total balance

sheet The percentages for different items are computed by dividing the absolute amount of

that item by the Common Base and then multiply by 100 The percentage so calculated can

be easily compared with the corresponding percentage in some other period Thus the CSS is

useful not only in intra-firm comparison for the same year or free several years

TREND PERCENTAGE ANALYSYS(TPA)

The TPA is a technique of studying several financial statements over a series of years In

TPA the trend percentages are calculated for each item by taking the figure of that item for

some base year as 100 So the trend percentage is the percentage relationship which

Each item of different years bears to the same item in the base year Any year may be Taken

as the base year but generally the starting initial year is taken as the base year So each

item for base year is taken as 100 and then the same item for other years is Expressed as a

percentage of the base year

RATIO ANALYSIS (RA)

The RA has emerged as the principle technique of the AFS A ratio is a relationship

Expressed in mathematical terms between two individual or groups of figures connected with

other in some logical manner The RA is based in the premise that a single accounting figure

by itself may not communicate any meaningful information but when expressed as a relative

to some other figure it may definitely give some significant information The relationship

between two or more accounting figuresgroups is called a Financial Ratio

A financial ratio helps to summarize a large mass of financial data into a concise form

and to make meaningful interpretations and conclusions about the performance of a firm

For example a firm has net sales Rs 5 00000

Gross Profit Rs 100000

Ratio of Gross Profit to net sales is 20

ie (Rsl 00000 Rs5 00000)

Forms of Ratios

Since a ratio is a mathematical relationship between two or more variables accounting

figures such relationship can be expressed in different ways as follows

bull As a Pure Ratio

bull As a Rate of Times

bull As a Percentage

Ratio can be classified into

bull The Liquidity Ratio

bull The Activity Ratio

bull The Leverage Ratio

bull The Profitability Ratio

STATEMENT OF CHANGES IN FINANCIAL POSITION

(SCFP)

Since the BS amp IS of a firm are two basic depicting the financial position of a firm at the end

of the year These two financial statements are called the traditional statements Both these

statements fail to throw light on changes in assets liabilities and shareholders wealth during

this year

BS deals with the financial position gives only the static view of the year- end financial

position and fails to indicate the movement and causes in assets and liabilities during the

year Similarly IS show the profit or loss resulting out of the operations of the firm during

the year This profit or loss in fact to ascertain the sufficiency of resources to declare the

dividend etc thus there is a need to prepare another statement (together with the BS amp IS)

which may identify the changes in assets liabilities and the shareholders funds over a given

period

The SCFP is essentially an explanation of the changes in financial position of a Firm

occasioned by the firm in between two successive BSs The SCFP draws basic Information

from the BS and IS helps in understanding the change in assets liabilities and shareholders

worth The SCFP deals with the flow of funds during the year ie the funds coming in and

going out of the firm It summarizes the sources from where the funds might have been

arranged procured by the firm and the uses for which the funs might have been used by

the firm during the year

The SCFP can be prepared as follows

bull SCFP (Cash Basis) also known as a Cash F low Statement

bull SCFP (Net Working Capital Basis) Fund Flow Statement

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year ie it shows the

Sources and uses of working capital between two balance sheet dates The FFS

attempts to explain the changes in financial position from one BS to the subsequent BS

in terms of the change in the funds or the working capital position of the firm

The term Working capital (WC) is generally defined as the excess of total

current assets over the total current liabilities The current Assets (CA) of a firm may

include cash in hand and at bank stock debtors bills advances etc and the Current

Liabilities (CL) includes creditors bills payable outstanding expenses provision for

tax short term liabilities etc the term WC is a single figure representing the net effect

of a transaction is to increase or decrease the Working Capital by affecting any of the

elements of Current Assets or Current Liabilities Therefore the FFS in its standard

form incorporates only those transactions which affect the Working Capital i e those

transactions where in only one of the affected accounted is a current account

Now a flow of working capital arises when one of the affected accounts is a current

account From the point of view of current account the effected on working capital

can examined in the light of the definitions of the term working capital ie the excess

of current assets over current liabilities ie

Impliedly change in any of the CA or CL will affect the WC Simple observation

equation tells that

bull Increase in any of the CA or decrease in any of the CLs will result in increase

in the WC

bull Decrease in any of the CA or increase in any of the CLs will result in decrease

in the WC

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

WE SHALL CONTINUOUSLY STRIVE TO MEET THE EVER RISING

EXPECTATIONS OF OUR VALUED CUSTOMERS AT THE LOWEST

INTERNAL COST

WE SHALL AIM TO OFFER THE FARMING COMMUNITY A RANGE OF

INNOVATIVE PRODUCTS AND SERVICES WHICH SHALL ENABLE THEM

TO IMPROVE THEIR PRODUCTIVITY AND COMPETITIVNESS

WE SHALL ACHIEVE A TURNOVER OF RS 2 BILLION BY THE YEAR

2006TRANSCENDING NATIONAL BOUNDARIES WE SHALL STRIVE TO

ATTAIN EXPORTS OF ONE TENTH OF OUR TOTAL TRACTOR PRODUCTION

BY THE YEAR 2

REVIEW OF LITERATURE

INTRODUCTION

MEANING OF FINANCIAL STATEMENTS

The financial statements are nothing but the financial information presented in concise and

capsule form and are the financial information is the information relating to the financial

position of any firm The firm prepares the financial statements

bull To communicate with different parties about the financial position of the firm

(Shareholders creditors banks financial institution financial analysts investors

etc And

bull To analyze the operations and performance of the firm for the further

planning

The basic source which provides the financial information is the Annual report of the

company which is presented by the company to its shareholders at the Annual General

Meeting

Though the presentation of annual report is a statutory requirement under the

Companies Act 1956 however it is also a medium of communication with the present as well

as prospective investors and creditors of the company

Clause 43 A of the Listing Agreement (with the stock exchange) requires every

listed company to publish unaudited quarterly results But it does not mean the non-corporate

firms do not prepare the financial statements Every firm big or small prepare the following

financial statements

The Balance Sheet (BS)

1 The Income Statement (IS)

Two other key financial statements which are usually prepared by corporate firms are

1 Statement of appropriation of profit and

2 Statement of Change in financial position

ANALYSIS OF FINANCIAL STATEMENTS (AFS)

Analysis of financial statements refers to the process of the critical examination of the

financial information contained in the financial statements in order to understand and

make decisions regarding the operations of the firm The AFS is basically a study of the

relationship among various financial fact and figures as given in a set of financial

statements AFS is the process of establishment and identifying the financial weakness

and strength of the firm It is indicative of two aspects of a firm ie the profitability

and the financial position

OBJECTIVES OF AFS

The objectives of the AFS is to understand the information contained in financial

statements with a view to know the weakness and strength of the firm and to make a

forecast about the future prospects of the firm and thereby enabling the financial

analyst to take different decisions regarding the operation of the firm The objectives

are as follows

bull To assess the present profitability and operating efficiency of the fir

COMMON-SIZE STATEMENTS (CSS)

The CSS represents the relationship of different items of financial statements with some

Common items by expressing each item as a percentage of the common item In common size

Balance Sheet each item of the balance sheet is stated as a percentage of the total balance

sheet The percentages for different items are computed by dividing the absolute amount of

that item by the Common Base and then multiply by 100 The percentage so calculated can

be easily compared with the corresponding percentage in some other period Thus the CSS is

useful not only in intra-firm comparison for the same year or free several years

TREND PERCENTAGE ANALYSYS(TPA)

The TPA is a technique of studying several financial statements over a series of years In

TPA the trend percentages are calculated for each item by taking the figure of that item for

some base year as 100 So the trend percentage is the percentage relationship which

Each item of different years bears to the same item in the base year Any year may be Taken

as the base year but generally the starting initial year is taken as the base year So each

item for base year is taken as 100 and then the same item for other years is Expressed as a

percentage of the base year

RATIO ANALYSIS (RA)

The RA has emerged as the principle technique of the AFS A ratio is a relationship

Expressed in mathematical terms between two individual or groups of figures connected with

other in some logical manner The RA is based in the premise that a single accounting figure

by itself may not communicate any meaningful information but when expressed as a relative

to some other figure it may definitely give some significant information The relationship

between two or more accounting figuresgroups is called a Financial Ratio

A financial ratio helps to summarize a large mass of financial data into a concise form

and to make meaningful interpretations and conclusions about the performance of a firm

For example a firm has net sales Rs 5 00000

Gross Profit Rs 100000

Ratio of Gross Profit to net sales is 20

ie (Rsl 00000 Rs5 00000)

Forms of Ratios

Since a ratio is a mathematical relationship between two or more variables accounting

figures such relationship can be expressed in different ways as follows

bull As a Pure Ratio

bull As a Rate of Times

bull As a Percentage

Ratio can be classified into

bull The Liquidity Ratio

bull The Activity Ratio

bull The Leverage Ratio

bull The Profitability Ratio

STATEMENT OF CHANGES IN FINANCIAL POSITION

(SCFP)

Since the BS amp IS of a firm are two basic depicting the financial position of a firm at the end

of the year These two financial statements are called the traditional statements Both these

statements fail to throw light on changes in assets liabilities and shareholders wealth during

this year

BS deals with the financial position gives only the static view of the year- end financial

position and fails to indicate the movement and causes in assets and liabilities during the

year Similarly IS show the profit or loss resulting out of the operations of the firm during

the year This profit or loss in fact to ascertain the sufficiency of resources to declare the

dividend etc thus there is a need to prepare another statement (together with the BS amp IS)

which may identify the changes in assets liabilities and the shareholders funds over a given

period

The SCFP is essentially an explanation of the changes in financial position of a Firm

occasioned by the firm in between two successive BSs The SCFP draws basic Information

from the BS and IS helps in understanding the change in assets liabilities and shareholders

worth The SCFP deals with the flow of funds during the year ie the funds coming in and

going out of the firm It summarizes the sources from where the funds might have been

arranged procured by the firm and the uses for which the funs might have been used by

the firm during the year

The SCFP can be prepared as follows

bull SCFP (Cash Basis) also known as a Cash F low Statement

bull SCFP (Net Working Capital Basis) Fund Flow Statement

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year ie it shows the

Sources and uses of working capital between two balance sheet dates The FFS

attempts to explain the changes in financial position from one BS to the subsequent BS

in terms of the change in the funds or the working capital position of the firm

The term Working capital (WC) is generally defined as the excess of total

current assets over the total current liabilities The current Assets (CA) of a firm may

include cash in hand and at bank stock debtors bills advances etc and the Current

Liabilities (CL) includes creditors bills payable outstanding expenses provision for

tax short term liabilities etc the term WC is a single figure representing the net effect

of a transaction is to increase or decrease the Working Capital by affecting any of the

elements of Current Assets or Current Liabilities Therefore the FFS in its standard

form incorporates only those transactions which affect the Working Capital i e those

transactions where in only one of the affected accounted is a current account

Now a flow of working capital arises when one of the affected accounts is a current

account From the point of view of current account the effected on working capital

can examined in the light of the definitions of the term working capital ie the excess

of current assets over current liabilities ie

Impliedly change in any of the CA or CL will affect the WC Simple observation

equation tells that

bull Increase in any of the CA or decrease in any of the CLs will result in increase

in the WC

bull Decrease in any of the CA or increase in any of the CLs will result in decrease

in the WC

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Though the presentation of annual report is a statutory requirement under the

Companies Act 1956 however it is also a medium of communication with the present as well

as prospective investors and creditors of the company

Clause 43 A of the Listing Agreement (with the stock exchange) requires every

listed company to publish unaudited quarterly results But it does not mean the non-corporate

firms do not prepare the financial statements Every firm big or small prepare the following

financial statements

The Balance Sheet (BS)

1 The Income Statement (IS)

Two other key financial statements which are usually prepared by corporate firms are

1 Statement of appropriation of profit and

2 Statement of Change in financial position

ANALYSIS OF FINANCIAL STATEMENTS (AFS)

Analysis of financial statements refers to the process of the critical examination of the

financial information contained in the financial statements in order to understand and

make decisions regarding the operations of the firm The AFS is basically a study of the

relationship among various financial fact and figures as given in a set of financial

statements AFS is the process of establishment and identifying the financial weakness

and strength of the firm It is indicative of two aspects of a firm ie the profitability

and the financial position

OBJECTIVES OF AFS

The objectives of the AFS is to understand the information contained in financial

statements with a view to know the weakness and strength of the firm and to make a

forecast about the future prospects of the firm and thereby enabling the financial

analyst to take different decisions regarding the operation of the firm The objectives

are as follows

bull To assess the present profitability and operating efficiency of the fir

COMMON-SIZE STATEMENTS (CSS)

The CSS represents the relationship of different items of financial statements with some

Common items by expressing each item as a percentage of the common item In common size

Balance Sheet each item of the balance sheet is stated as a percentage of the total balance

sheet The percentages for different items are computed by dividing the absolute amount of

that item by the Common Base and then multiply by 100 The percentage so calculated can

be easily compared with the corresponding percentage in some other period Thus the CSS is

useful not only in intra-firm comparison for the same year or free several years

TREND PERCENTAGE ANALYSYS(TPA)

The TPA is a technique of studying several financial statements over a series of years In

TPA the trend percentages are calculated for each item by taking the figure of that item for

some base year as 100 So the trend percentage is the percentage relationship which

Each item of different years bears to the same item in the base year Any year may be Taken

as the base year but generally the starting initial year is taken as the base year So each

item for base year is taken as 100 and then the same item for other years is Expressed as a

percentage of the base year

RATIO ANALYSIS (RA)

The RA has emerged as the principle technique of the AFS A ratio is a relationship

Expressed in mathematical terms between two individual or groups of figures connected with

other in some logical manner The RA is based in the premise that a single accounting figure

by itself may not communicate any meaningful information but when expressed as a relative

to some other figure it may definitely give some significant information The relationship

between two or more accounting figuresgroups is called a Financial Ratio

A financial ratio helps to summarize a large mass of financial data into a concise form

and to make meaningful interpretations and conclusions about the performance of a firm

For example a firm has net sales Rs 5 00000

Gross Profit Rs 100000

Ratio of Gross Profit to net sales is 20

ie (Rsl 00000 Rs5 00000)

Forms of Ratios

Since a ratio is a mathematical relationship between two or more variables accounting

figures such relationship can be expressed in different ways as follows

bull As a Pure Ratio

bull As a Rate of Times

bull As a Percentage

Ratio can be classified into

bull The Liquidity Ratio

bull The Activity Ratio

bull The Leverage Ratio

bull The Profitability Ratio

STATEMENT OF CHANGES IN FINANCIAL POSITION

(SCFP)

Since the BS amp IS of a firm are two basic depicting the financial position of a firm at the end

of the year These two financial statements are called the traditional statements Both these

statements fail to throw light on changes in assets liabilities and shareholders wealth during

this year

BS deals with the financial position gives only the static view of the year- end financial

position and fails to indicate the movement and causes in assets and liabilities during the

year Similarly IS show the profit or loss resulting out of the operations of the firm during

the year This profit or loss in fact to ascertain the sufficiency of resources to declare the

dividend etc thus there is a need to prepare another statement (together with the BS amp IS)

which may identify the changes in assets liabilities and the shareholders funds over a given

period

The SCFP is essentially an explanation of the changes in financial position of a Firm

occasioned by the firm in between two successive BSs The SCFP draws basic Information

from the BS and IS helps in understanding the change in assets liabilities and shareholders

worth The SCFP deals with the flow of funds during the year ie the funds coming in and

going out of the firm It summarizes the sources from where the funds might have been

arranged procured by the firm and the uses for which the funs might have been used by

the firm during the year

The SCFP can be prepared as follows

bull SCFP (Cash Basis) also known as a Cash F low Statement

bull SCFP (Net Working Capital Basis) Fund Flow Statement

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year ie it shows the

Sources and uses of working capital between two balance sheet dates The FFS

attempts to explain the changes in financial position from one BS to the subsequent BS

in terms of the change in the funds or the working capital position of the firm

The term Working capital (WC) is generally defined as the excess of total

current assets over the total current liabilities The current Assets (CA) of a firm may

include cash in hand and at bank stock debtors bills advances etc and the Current

Liabilities (CL) includes creditors bills payable outstanding expenses provision for

tax short term liabilities etc the term WC is a single figure representing the net effect

of a transaction is to increase or decrease the Working Capital by affecting any of the

elements of Current Assets or Current Liabilities Therefore the FFS in its standard

form incorporates only those transactions which affect the Working Capital i e those

transactions where in only one of the affected accounted is a current account

Now a flow of working capital arises when one of the affected accounts is a current

account From the point of view of current account the effected on working capital

can examined in the light of the definitions of the term working capital ie the excess

of current assets over current liabilities ie

Impliedly change in any of the CA or CL will affect the WC Simple observation

equation tells that

bull Increase in any of the CA or decrease in any of the CLs will result in increase

in the WC

bull Decrease in any of the CA or increase in any of the CLs will result in decrease

in the WC

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

The Balance Sheet (BS)

1 The Income Statement (IS)

Two other key financial statements which are usually prepared by corporate firms are

1 Statement of appropriation of profit and

2 Statement of Change in financial position

ANALYSIS OF FINANCIAL STATEMENTS (AFS)

Analysis of financial statements refers to the process of the critical examination of the

financial information contained in the financial statements in order to understand and

make decisions regarding the operations of the firm The AFS is basically a study of the

relationship among various financial fact and figures as given in a set of financial

statements AFS is the process of establishment and identifying the financial weakness

and strength of the firm It is indicative of two aspects of a firm ie the profitability

and the financial position

OBJECTIVES OF AFS

The objectives of the AFS is to understand the information contained in financial

statements with a view to know the weakness and strength of the firm and to make a

forecast about the future prospects of the firm and thereby enabling the financial

analyst to take different decisions regarding the operation of the firm The objectives

are as follows

bull To assess the present profitability and operating efficiency of the fir

COMMON-SIZE STATEMENTS (CSS)

The CSS represents the relationship of different items of financial statements with some

Common items by expressing each item as a percentage of the common item In common size

Balance Sheet each item of the balance sheet is stated as a percentage of the total balance

sheet The percentages for different items are computed by dividing the absolute amount of

that item by the Common Base and then multiply by 100 The percentage so calculated can

be easily compared with the corresponding percentage in some other period Thus the CSS is

useful not only in intra-firm comparison for the same year or free several years

TREND PERCENTAGE ANALYSYS(TPA)

The TPA is a technique of studying several financial statements over a series of years In

TPA the trend percentages are calculated for each item by taking the figure of that item for

some base year as 100 So the trend percentage is the percentage relationship which

Each item of different years bears to the same item in the base year Any year may be Taken

as the base year but generally the starting initial year is taken as the base year So each

item for base year is taken as 100 and then the same item for other years is Expressed as a

percentage of the base year

RATIO ANALYSIS (RA)

The RA has emerged as the principle technique of the AFS A ratio is a relationship

Expressed in mathematical terms between two individual or groups of figures connected with

other in some logical manner The RA is based in the premise that a single accounting figure

by itself may not communicate any meaningful information but when expressed as a relative

to some other figure it may definitely give some significant information The relationship

between two or more accounting figuresgroups is called a Financial Ratio

A financial ratio helps to summarize a large mass of financial data into a concise form

and to make meaningful interpretations and conclusions about the performance of a firm

For example a firm has net sales Rs 5 00000

Gross Profit Rs 100000

Ratio of Gross Profit to net sales is 20

ie (Rsl 00000 Rs5 00000)

Forms of Ratios

Since a ratio is a mathematical relationship between two or more variables accounting

figures such relationship can be expressed in different ways as follows

bull As a Pure Ratio

bull As a Rate of Times

bull As a Percentage

Ratio can be classified into

bull The Liquidity Ratio

bull The Activity Ratio

bull The Leverage Ratio

bull The Profitability Ratio

STATEMENT OF CHANGES IN FINANCIAL POSITION

(SCFP)

Since the BS amp IS of a firm are two basic depicting the financial position of a firm at the end

of the year These two financial statements are called the traditional statements Both these

statements fail to throw light on changes in assets liabilities and shareholders wealth during

this year

BS deals with the financial position gives only the static view of the year- end financial

position and fails to indicate the movement and causes in assets and liabilities during the

year Similarly IS show the profit or loss resulting out of the operations of the firm during

the year This profit or loss in fact to ascertain the sufficiency of resources to declare the

dividend etc thus there is a need to prepare another statement (together with the BS amp IS)

which may identify the changes in assets liabilities and the shareholders funds over a given

period

The SCFP is essentially an explanation of the changes in financial position of a Firm

occasioned by the firm in between two successive BSs The SCFP draws basic Information

from the BS and IS helps in understanding the change in assets liabilities and shareholders

worth The SCFP deals with the flow of funds during the year ie the funds coming in and

going out of the firm It summarizes the sources from where the funds might have been

arranged procured by the firm and the uses for which the funs might have been used by

the firm during the year

The SCFP can be prepared as follows

bull SCFP (Cash Basis) also known as a Cash F low Statement

bull SCFP (Net Working Capital Basis) Fund Flow Statement

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year ie it shows the

Sources and uses of working capital between two balance sheet dates The FFS

attempts to explain the changes in financial position from one BS to the subsequent BS

in terms of the change in the funds or the working capital position of the firm

The term Working capital (WC) is generally defined as the excess of total

current assets over the total current liabilities The current Assets (CA) of a firm may

include cash in hand and at bank stock debtors bills advances etc and the Current

Liabilities (CL) includes creditors bills payable outstanding expenses provision for

tax short term liabilities etc the term WC is a single figure representing the net effect

of a transaction is to increase or decrease the Working Capital by affecting any of the

elements of Current Assets or Current Liabilities Therefore the FFS in its standard

form incorporates only those transactions which affect the Working Capital i e those

transactions where in only one of the affected accounted is a current account

Now a flow of working capital arises when one of the affected accounts is a current

account From the point of view of current account the effected on working capital

can examined in the light of the definitions of the term working capital ie the excess

of current assets over current liabilities ie

Impliedly change in any of the CA or CL will affect the WC Simple observation

equation tells that

bull Increase in any of the CA or decrease in any of the CLs will result in increase

in the WC

bull Decrease in any of the CA or increase in any of the CLs will result in decrease

in the WC

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

COMMON-SIZE STATEMENTS (CSS)

The CSS represents the relationship of different items of financial statements with some

Common items by expressing each item as a percentage of the common item In common size

Balance Sheet each item of the balance sheet is stated as a percentage of the total balance

sheet The percentages for different items are computed by dividing the absolute amount of

that item by the Common Base and then multiply by 100 The percentage so calculated can

be easily compared with the corresponding percentage in some other period Thus the CSS is

useful not only in intra-firm comparison for the same year or free several years

TREND PERCENTAGE ANALYSYS(TPA)

The TPA is a technique of studying several financial statements over a series of years In

TPA the trend percentages are calculated for each item by taking the figure of that item for

some base year as 100 So the trend percentage is the percentage relationship which

Each item of different years bears to the same item in the base year Any year may be Taken

as the base year but generally the starting initial year is taken as the base year So each

item for base year is taken as 100 and then the same item for other years is Expressed as a

percentage of the base year

RATIO ANALYSIS (RA)

The RA has emerged as the principle technique of the AFS A ratio is a relationship

Expressed in mathematical terms between two individual or groups of figures connected with

other in some logical manner The RA is based in the premise that a single accounting figure

by itself may not communicate any meaningful information but when expressed as a relative

to some other figure it may definitely give some significant information The relationship

between two or more accounting figuresgroups is called a Financial Ratio

A financial ratio helps to summarize a large mass of financial data into a concise form

and to make meaningful interpretations and conclusions about the performance of a firm

For example a firm has net sales Rs 5 00000

Gross Profit Rs 100000

Ratio of Gross Profit to net sales is 20

ie (Rsl 00000 Rs5 00000)

Forms of Ratios

Since a ratio is a mathematical relationship between two or more variables accounting

figures such relationship can be expressed in different ways as follows

bull As a Pure Ratio

bull As a Rate of Times

bull As a Percentage

Ratio can be classified into

bull The Liquidity Ratio

bull The Activity Ratio

bull The Leverage Ratio

bull The Profitability Ratio

STATEMENT OF CHANGES IN FINANCIAL POSITION

(SCFP)

Since the BS amp IS of a firm are two basic depicting the financial position of a firm at the end

of the year These two financial statements are called the traditional statements Both these

statements fail to throw light on changes in assets liabilities and shareholders wealth during

this year

BS deals with the financial position gives only the static view of the year- end financial

position and fails to indicate the movement and causes in assets and liabilities during the

year Similarly IS show the profit or loss resulting out of the operations of the firm during

the year This profit or loss in fact to ascertain the sufficiency of resources to declare the

dividend etc thus there is a need to prepare another statement (together with the BS amp IS)

which may identify the changes in assets liabilities and the shareholders funds over a given

period

The SCFP is essentially an explanation of the changes in financial position of a Firm

occasioned by the firm in between two successive BSs The SCFP draws basic Information

from the BS and IS helps in understanding the change in assets liabilities and shareholders

worth The SCFP deals with the flow of funds during the year ie the funds coming in and

going out of the firm It summarizes the sources from where the funds might have been

arranged procured by the firm and the uses for which the funs might have been used by

the firm during the year

The SCFP can be prepared as follows

bull SCFP (Cash Basis) also known as a Cash F low Statement

bull SCFP (Net Working Capital Basis) Fund Flow Statement

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year ie it shows the

Sources and uses of working capital between two balance sheet dates The FFS

attempts to explain the changes in financial position from one BS to the subsequent BS

in terms of the change in the funds or the working capital position of the firm

The term Working capital (WC) is generally defined as the excess of total

current assets over the total current liabilities The current Assets (CA) of a firm may

include cash in hand and at bank stock debtors bills advances etc and the Current

Liabilities (CL) includes creditors bills payable outstanding expenses provision for

tax short term liabilities etc the term WC is a single figure representing the net effect

of a transaction is to increase or decrease the Working Capital by affecting any of the

elements of Current Assets or Current Liabilities Therefore the FFS in its standard

form incorporates only those transactions which affect the Working Capital i e those

transactions where in only one of the affected accounted is a current account

Now a flow of working capital arises when one of the affected accounts is a current

account From the point of view of current account the effected on working capital

can examined in the light of the definitions of the term working capital ie the excess

of current assets over current liabilities ie

Impliedly change in any of the CA or CL will affect the WC Simple observation

equation tells that

bull Increase in any of the CA or decrease in any of the CLs will result in increase

in the WC

bull Decrease in any of the CA or increase in any of the CLs will result in decrease

in the WC

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

RATIO ANALYSIS (RA)

The RA has emerged as the principle technique of the AFS A ratio is a relationship

Expressed in mathematical terms between two individual or groups of figures connected with

other in some logical manner The RA is based in the premise that a single accounting figure

by itself may not communicate any meaningful information but when expressed as a relative

to some other figure it may definitely give some significant information The relationship

between two or more accounting figuresgroups is called a Financial Ratio

A financial ratio helps to summarize a large mass of financial data into a concise form

and to make meaningful interpretations and conclusions about the performance of a firm

For example a firm has net sales Rs 5 00000

Gross Profit Rs 100000

Ratio of Gross Profit to net sales is 20

ie (Rsl 00000 Rs5 00000)

Forms of Ratios

Since a ratio is a mathematical relationship between two or more variables accounting

figures such relationship can be expressed in different ways as follows

bull As a Pure Ratio

bull As a Rate of Times

bull As a Percentage

Ratio can be classified into

bull The Liquidity Ratio

bull The Activity Ratio

bull The Leverage Ratio

bull The Profitability Ratio

STATEMENT OF CHANGES IN FINANCIAL POSITION

(SCFP)

Since the BS amp IS of a firm are two basic depicting the financial position of a firm at the end

of the year These two financial statements are called the traditional statements Both these

statements fail to throw light on changes in assets liabilities and shareholders wealth during

this year

BS deals with the financial position gives only the static view of the year- end financial

position and fails to indicate the movement and causes in assets and liabilities during the

year Similarly IS show the profit or loss resulting out of the operations of the firm during

the year This profit or loss in fact to ascertain the sufficiency of resources to declare the

dividend etc thus there is a need to prepare another statement (together with the BS amp IS)

which may identify the changes in assets liabilities and the shareholders funds over a given

period

The SCFP is essentially an explanation of the changes in financial position of a Firm

occasioned by the firm in between two successive BSs The SCFP draws basic Information

from the BS and IS helps in understanding the change in assets liabilities and shareholders

worth The SCFP deals with the flow of funds during the year ie the funds coming in and

going out of the firm It summarizes the sources from where the funds might have been

arranged procured by the firm and the uses for which the funs might have been used by

the firm during the year

The SCFP can be prepared as follows

bull SCFP (Cash Basis) also known as a Cash F low Statement

bull SCFP (Net Working Capital Basis) Fund Flow Statement

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year ie it shows the

Sources and uses of working capital between two balance sheet dates The FFS

attempts to explain the changes in financial position from one BS to the subsequent BS

in terms of the change in the funds or the working capital position of the firm

The term Working capital (WC) is generally defined as the excess of total

current assets over the total current liabilities The current Assets (CA) of a firm may

include cash in hand and at bank stock debtors bills advances etc and the Current

Liabilities (CL) includes creditors bills payable outstanding expenses provision for

tax short term liabilities etc the term WC is a single figure representing the net effect

of a transaction is to increase or decrease the Working Capital by affecting any of the

elements of Current Assets or Current Liabilities Therefore the FFS in its standard

form incorporates only those transactions which affect the Working Capital i e those

transactions where in only one of the affected accounted is a current account

Now a flow of working capital arises when one of the affected accounts is a current

account From the point of view of current account the effected on working capital

can examined in the light of the definitions of the term working capital ie the excess

of current assets over current liabilities ie

Impliedly change in any of the CA or CL will affect the WC Simple observation

equation tells that

bull Increase in any of the CA or decrease in any of the CLs will result in increase

in the WC

bull Decrease in any of the CA or increase in any of the CLs will result in decrease

in the WC

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

STATEMENT OF CHANGES IN FINANCIAL POSITION

(SCFP)

Since the BS amp IS of a firm are two basic depicting the financial position of a firm at the end

of the year These two financial statements are called the traditional statements Both these

statements fail to throw light on changes in assets liabilities and shareholders wealth during

this year

BS deals with the financial position gives only the static view of the year- end financial

position and fails to indicate the movement and causes in assets and liabilities during the

year Similarly IS show the profit or loss resulting out of the operations of the firm during

the year This profit or loss in fact to ascertain the sufficiency of resources to declare the

dividend etc thus there is a need to prepare another statement (together with the BS amp IS)

which may identify the changes in assets liabilities and the shareholders funds over a given

period

The SCFP is essentially an explanation of the changes in financial position of a Firm

occasioned by the firm in between two successive BSs The SCFP draws basic Information

from the BS and IS helps in understanding the change in assets liabilities and shareholders

worth The SCFP deals with the flow of funds during the year ie the funds coming in and

going out of the firm It summarizes the sources from where the funds might have been

arranged procured by the firm and the uses for which the funs might have been used by

the firm during the year

The SCFP can be prepared as follows

bull SCFP (Cash Basis) also known as a Cash F low Statement

bull SCFP (Net Working Capital Basis) Fund Flow Statement

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year ie it shows the

Sources and uses of working capital between two balance sheet dates The FFS

attempts to explain the changes in financial position from one BS to the subsequent BS

in terms of the change in the funds or the working capital position of the firm

The term Working capital (WC) is generally defined as the excess of total

current assets over the total current liabilities The current Assets (CA) of a firm may

include cash in hand and at bank stock debtors bills advances etc and the Current

Liabilities (CL) includes creditors bills payable outstanding expenses provision for

tax short term liabilities etc the term WC is a single figure representing the net effect

of a transaction is to increase or decrease the Working Capital by affecting any of the

elements of Current Assets or Current Liabilities Therefore the FFS in its standard

form incorporates only those transactions which affect the Working Capital i e those

transactions where in only one of the affected accounted is a current account

Now a flow of working capital arises when one of the affected accounts is a current

account From the point of view of current account the effected on working capital

can examined in the light of the definitions of the term working capital ie the excess

of current assets over current liabilities ie

Impliedly change in any of the CA or CL will affect the WC Simple observation

equation tells that

bull Increase in any of the CA or decrease in any of the CLs will result in increase

in the WC

bull Decrease in any of the CA or increase in any of the CLs will result in decrease

in the WC

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

SCFP (WORKING CAPITAL BASIS)

FUND FLOW STATEMENT

The FFS reports the flows of funds through the firm during the year ie it shows the

Sources and uses of working capital between two balance sheet dates The FFS

attempts to explain the changes in financial position from one BS to the subsequent BS

in terms of the change in the funds or the working capital position of the firm

The term Working capital (WC) is generally defined as the excess of total

current assets over the total current liabilities The current Assets (CA) of a firm may

include cash in hand and at bank stock debtors bills advances etc and the Current

Liabilities (CL) includes creditors bills payable outstanding expenses provision for

tax short term liabilities etc the term WC is a single figure representing the net effect

of a transaction is to increase or decrease the Working Capital by affecting any of the

elements of Current Assets or Current Liabilities Therefore the FFS in its standard

form incorporates only those transactions which affect the Working Capital i e those

transactions where in only one of the affected accounted is a current account

Now a flow of working capital arises when one of the affected accounts is a current

account From the point of view of current account the effected on working capital

can examined in the light of the definitions of the term working capital ie the excess

of current assets over current liabilities ie

Impliedly change in any of the CA or CL will affect the WC Simple observation

equation tells that

bull Increase in any of the CA or decrease in any of the CLs will result in increase

in the WC

bull Decrease in any of the CA or increase in any of the CLs will result in decrease

in the WC

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

To find out the relative importance of different components of the financial position

of the firm

bull To identify the reasons for change in the profitability financial position of the

firm and

bull To assess the short term as well as the long term liquidity position of the

firm

TECHNIQUES TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes therefore the

methodology adopted for the AFS may be carrying from one situation to another However

the following are some of the common techniques of the AFS

bull Comparative financial statements

bull Common-size financial statements

bull Trend percentage analysis and

bull Ratio Analysis

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

COMPARATIVE FINANCIAL STATEMENTS

In CFS two or more BS andor the IS of a firm are presented simultaneously in columnar

form The Financial data for two or more tears are placed and presented in adjacent columns

and thereby the financial data is provided at times perspective in order to facilitate periodic

comparison In CFS the BS and the IS for number of years are presented in condensed

form for year to year comparison and to exhibit the magnitude and direction of changes

The CFS helps a financial analyst of the firm and in establishing operating and

positional trend of the firm The CFS may be prepared to show

1 The absolute amount of different items in monetary terms

2 The amount of periodic changes in monetary terms

1 The percentages of periodic changes to reveal the proportionate changes

The CFS can be prepared for both the BS and the IS

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CORE COMPETENCE OF ESCORTS

Customer 1

We put customers first in everything we do We take decisions keeping the customer in

mind

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods amp services we

provide We work hard to achieve what we commit amp achieve results faster than our

competitors and we never give up

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust respect

understanding amp mutual co-operation Everyones contribution is equally important for

our success

Frank amp Fair Organization

We are honest sincere open minded fair amp transparent in our dealings We actively

listen to others and participate in healthy amp frank discussions to achieve the

organizations

A firm undertakes numerous during a year and most of these transactions during a year and

most of these transactions may affect one or the other current account ie most of these

transactions May results in the flow of the WC Neither is it necessary nor practical to

identify the effect of each and every transaction on the WC These transactions instead are

considered and analyzed in a collective form and then their effect on the WC is identified

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash ie the transactions

generating cash and using cash The focus in the CFS is on cash rather than on WC The

sources of cash may be the cash profits earned by the firm issue of capital for cash issue of

other securities for cash borrowings sale of assets investment redemption of debenture or

preference share repayment of loan payment of tax dividend distribution etc Thus the

CFS summarizes the cash inflows and outflows

An analysis of cash flows is useful for short-run planning A firm needs sufficient cash to

debts maturing in the near future to pay interest and other expenses and to pay dividends to

shareholders The firm can make projections of cash flows and outflows for the near future to

determine the availability of cash This cash balance can be matched with the firms need for

cash during the period and accordingly arrangements can be made the deficit or invest the

surplus cash temporarily A historical analysis of cash flows provides insight to prepare

reliable cash flow projections for the immediate future

A statement of changes in financial position on cash basis commonly known as cash flow

statement summarizes the causes of changes in cash position between dates of two balance

sheets It indicates the sources amp uses of cash The cash flow statement is similar to the fund

flow statement except that it focuses attentions on cash instead of working capital (funds)

Thus this statement analyses change in non-current accounts as well as current accounts

(other than cash) to determine the flow of cash

The CFS is based on the concept on the WC Where as the CFS is based in cash which is only

the element of WC Thus the CFS provides details of cash movements whereas the FFS

provides the details of funds movements

The CFS considers only the actual movement of cash whereas the FFS considers the

movements of the funds as defined in terms of net working capital

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period In other words it is a summary of sources and applications of

Cash during a particular span of time It analyses the reason for changes in balance of cash

between the two balance sheet dates The term Cash here stands for cash and cash

equivalents

A cash-flow statement includes only those items which affect cash As such the cash-flow

statement is called a statement of changes in financial position - cash basis

A cash - flow statement can be for the past or can be projected for a future period

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under-

bull USEFUL FOR SHORT-TERM FINANCIAL PLANNING-

A cash-flow statement provides information for planning the short-term financial needs of the

firm Since it provides information regarding the sources and utilization of cash during a period

it become easier for the management to assess whether it will have Adequate cash to meet day-

to-day expenses and pay the long - term loans and interest Thereon and whether it has enough

cash to pay for the purchase of fixed assets or not

USEFUL FOR PREARING THE CASH BUDGET-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget It

informs the management about the future period is helpful in preparing a cash budget It informs

the management about the surplus or deficit periods of cash ie in which months the payments

will be in excess of receipts It helps in planning the investment of surplus cash in short-term

investment and to plan short-term credit in advance of deficit periods

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

bull COMPARISON WITH CASH BUDGET-

A cash budget is prepared at the commencement of the year whereas a cash flow Statement is

prepared at the end of the year A comparison between the two helps in ascertaining the extent

to which the financial resources of the firm have been generated and used according to the plan

Causes of variances between the figures of two statements can be analyzed and proper

corrective measures may be takes

bull STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS-

A cash-flow statement reveals the speed at which the cash is being generated from debtors stock

and other current assets the speed at which the current liabilities are being paid It enables the

management to assess the true position of the cash in future

bull IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may

still have plenty of cash A cash flow statement explains the reasons for it

HELPFUL IN ASCERTAINING CASH-FLOW FROM VARIOUS

ACTIBITIES SEPARATELY-

A cash-flow statement aims at highlighting the cash flow from operating investing and

financing activities separately It includes how much cash has been generated or used in these

activities

bull HELPFUL IN MAKING DIVIDEND DECISIONS-

Dividend must be paid within 42 days of its declaration Hence the management takes the help of

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

cash-flow statement to ascertain the position of cash generated from operating activities which

can be used for payment of dividend

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions

which are taken in the light of the cash availability or cash position of the firm

For example declaration of dividend by the company requires cash disbursement and

Therefore the Board of Directors must consider the cash position before proposing a dividend

The CFS also provides information for the short term financial planning and in particular the

short term cash needs of the firm

In view of increasing importance and relevance of the CFS the clause 32 of the Listing

agreement (between a Company and the Stock Exchange where the shares proposed to be listed)

has been amended by the SEBI As a result the listed companies in India are now required to

supply a copy of the CFS to each shareholder as a part of Annual Report As a result the listed

companies have started a practice of sending a CFS for which the BS has been prepared as

apart of the Annual Report of the company

DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND

CASH BUDGET

There is not much difference between cash flow statement and a cash budget The

only difference is that a cash flow statement is prepared for a past period where as cash

budget is prepared for a future period Hence it is of limited use as far as the future

periods are concerned A cash budget is therefore prepared showing how much cash is

likely to be received and what will be the disbursements during a future period of time

Thus a cash budget indicates in which months there will be surplus cash and in which

moths there will be deficiency of cash resources The management can then take suitable

decision to invest the surplus cash or make arrangement for the deficiency of cash at the

required time

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does

not depend upon cash alone Liquidity also depends upon those assets

which can be converted into cash easily

bull Exclusion of these assets obstructs the true reporting of the ability of the firm to

meet its liabilities when they become due for payment

bull The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm

bull The cash balance can be easily maneuvered by postponing purchases and other

payments and by rapidly collecting cash from debtors before the balance sheet date

Hence a fund - flow statement presents a more realistic picture than a cash flow

statement

bull Cash flow statement ignores non- cash charges Hence the true position of the

enterprise cannot be judged by cash flow statement

bull It is prepared on cash basis and hence ignores one of the basic concept of accounting

namely accrual concept

PROCEDURE OF PREPARING CASH FLOW STATEMENT-

The institute of charted accountants of India has issued accounting standards (as)-3 revised for

preparing a cash flow statement This accounting standard has been made mandatory in respect

of accounting periods commencing on or after 1st April 2001 for certain enterprises These

enterprises are-

bull Enterprises whose equity or debt securities are listed on a recognized stock exchange in

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

India And enterprise that are in the process of issuing equity or debt securities that will

be listed on a recognized stock exchange in India

bull All other commercial industrial and business enterprises whose turnover for accounting

period Rs 50 crores

As such the cash flow statement has been prepared according to as -3 revised in this project

According to as-3 revised the cash flow statement summarizes the cash inflows and cash

outflows and the net changes (increase or decrease) in cash and cash equipment resulting from

operating investing and financing activities of a firm during a period The following terms are

used for preparing a cash flow statement

CASH-

It compares cash in hand and demands with banks

CASH EQUIVALENTS-

There are short - term highly liquid investments that are readily into known amounts of cash

and which present insignificant risk of changes in their values Normally an investment will be

termed as cash equivalent only if it has a short maturity period say three months or less from the

date of its acquisition Examples of cash equivalent are treasury bills commercial papers etc

Which are purchased with cash that is in excess of immediate needs investment in shares are

excluded from cash equivalents unless they are cash equivalent in reality For example the

preference shares of the company which are purchased shortly before their redemption date will

be included in cash equivalents provided there is only an insignificant risk of failure of the

company in repaying the amount at the date of the maturity

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CLASSIFICATION OF CASH FLOW-

According to as -3 (revised) cash flow statement should be presented in a manner that it reports

inflows of cash by classifying them into three categories namely operating investing and

financing activities Classification of all activities into these activities on the cash and cash

equivalents of the enterprise such information will be helpful in evaluating the relationships

among these three activities are explained as below

CASH FLOW FROM OPERATING ACTIVITIES-

Operating activities are the main revenue generating activities of an enterprise As such they

include cash flows from those transactions and events which enter into the ascertainment of

net profit or loss of the enterprise Examples of cash flows arising operating activities are

bull Cash receipts from the sale of goods and rendering of services

bull Cash receipts from royalties fees commissions and other revenue

bull Cash payments to suppliers for goods and services

bull Cash payments to and on behalf of employees

bull Cash receipts and cash payments of an insurance enterprise for premiums and claims

annuities and other policy benefits

bull Cash receipts and payments relating to future contracts forward contracts option

contracts and swap contracts when the contracts are held for dealing or trade purpose and

bull Cash payments of refunds of income taxes unless they can be specifically identified with

financing and investing activities

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CASH FLOW FROM INVESTING ACTIVITIES-

Investing activities include the purchase and sale of long term assets such as land building plant

and machinery etc not held for resale These activities also include the purchase and sale of such

investment which are not including in cash equipments Cash flow from investing activities

discloses the expenditures incurred for resources intended to generate future income and cash

flows

Examples cash flow arising from investing activities are

bull Cash payments to acquire fixed assets (including intangible)

bull Cash receipts from sale of fixed assets (including intangibles)

bull Cash payments to acquire shares warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents)

bull Cash receipts from sale of shares warrants or debt instruments of other enterprises (other

than receipts for those instruments considered to be cash equivalents)

bull Cash advances and loans made to third parties In case of financial enterprises these will

be treated as cash flow from operating activities

bull Cash receipts from the repayment of advances and loans made to third parties In case of

financial enterprises these will be treated as cash flow from operating activities

bull Cash receipts of insurance claim for property involved in accident and

bull Cash receipts of interest and dividend In case of financial enterprise these will be treated

cash flow from operating activities

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CASH FLOW FROM FIANCING ACTIVITIES-

Financing activities are the activities that result in change in capital and borrowing of the

enterprise

Examples of cash flows arising from financing activities are

bull Cash receipts from issuing shares or other similar instruments

bull Cash receipts from issuing debentures loans bonds and other short term or long term

borrowing

bull Cash repayment of amounts borrowed buy back of equity shares redemption of

preference shares debentures loans bonds etc

bull Cash payment of interest and dividend

IMPORTANT NOTE

In case of financial enterprise such as bank or mutual fund company cash Outflow

and cash inflow arising from the purchase and sale of securities will Be treated as

flows from operating activities This is because purchase and sale of securities is a

part of operating activity in case of financial enterprise In addition interest paid

and interest received as well as dividends received will also be treated as cash flow

from operating activities in case of financial Enterprises

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CASH FLOW STATEMENT

(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers

Cash paid to suppliers and employers ()

Cash generated from operations

Income tax paid ()

Cash flows from extraordinary item

plusmn Extra ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES-

Purchase of fixed assets

Proceed from sale equipment ()

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from insurance of share capital

Proceeds from long- term borrowings ()

Repayment of from long-term borrowings

Interest paid

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

SOME SPECIAL TERMS-

i) INTERSET AND DIVIDEND-

Cash inflow from interest and dividends and cash outflow on account of interest and

dividends should be disclosed separately Cash inflow arising from interest and dividends

received should be shown as cash flow from investing activities where as cash outflow

disclosed outflow on account of interest and dividend paid should be shown as cash flow

from financing activity

ii) TAXES ON INCOME-

Tax paid on income is a part of cash flow from operating activity Hence taxes paid are

shown as a deduction under cash flow from operating activity

iii) EXTRA ORDINARY ITEMS-

Cash flow relating to extra ordinary items such as bad debts recovered Claims received from

insurance companies winning of a lottery or a law etc Should be disclosed separately as

arising from operating investing or financing activities For example the amount received

for insurance company on account of loss of stock by fire Earthquake and floods etc Should

be reported as cash flow from operating activities

iv) SIGNIFICANT NON - CASH TRANSACTION-

There are some investing and financing activities which do not require the use of cash or

cash equivalents Such non cash activities should be excluded from the cash flow statement

Examples are the acquisition of assets by issue of debentures or shares conversion of

shares into debentures etc Such significant on non cash transaction should be disclosed

outside the cash flow statement

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CASH FLOW STATEMENT

(INDIRECT METHOD)

CASH FLOW FROM OPERARATTNG ACTIVITIES

Net profit before taxation and extraordinary item

Adjustment for

Depreciation

Foreign exchange loss

Interest income

Dividend income

Interest expense

Operating profit before working capital changes

Increase in sundry debtors

Decrease in inventories

Decrease in sundry creditors

Cash generated from operations

Income tax paid ()

Cash flow before extraordinary item

plusmn Extra - ordinary items

Net cash from operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets ()

Proceeds from sale of equipment

Interest received

Dividend received ()

Net cash from investing activities

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CASH FLOW FROM FINANCING ACTIVITIES-

Proceeds from insurance of share capital

Proceeds from long - term borrowings

Repayments of from long - term borrowings ()

Interest paid ()

Dividend paid ()

Net cash from financing activities

Net increase in cash and cash equivalent

Cash and cash equivalents at beginning of period

CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following

1 Net profit will increase the cash flows these cash flows will be

increased further if there are any non-cash changes (such as depreciation

and amortization)

2 Any payment of dividends will decrease the cash flows as will the

repayment of debt an issue of share or debt will also increase the

cash flows

3 An increase in non-cash assets will decrease cash flows increase in

current assets and fixed assets will result in drain on cash flows

Thus a statement of changes in cash flows ie the cash flow statement

classifies all Changes into one of three categories - operating investing or

financing activities Therefore the preparation of a statement of changes in cash

flows requires classification of changes in liabilities shareholders equity and

non-cash assets into one of these categories although some items will not fit

easily onto one other

h equivalent at end of period

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

STEP- BY-STEP PROCEDURE TO PREPARE CFS

1 Calculate the net increase or decrease in cash and cash equivalents-

For this purpose the opening balance of total cash and cash equivalents is compared with the

closing balance of cash and equivalents

Increasedecrease in cash and equivalents

Opening balance Closing Balance

Cash in hand

Cash in bank

Short-term Investment

Total

The difference between the total of opening and closing balance will be increased or

Decreased in cash equivalents during the period It may be noted that if there are only one or

two of items of cash etc

2 Net Cash flaw from operating activities-

The term operating refers to the normal purchase of goods and services On the basis of the

information contained in the comparative BS s and the IS and the additional Information the

net cash flow generated or use by the operating activities may be ascertained The IS prepared

by the firm gives the net profit figure earned by the firm On actual basis ie all items in the

IS are incorporated on the basis of earnedaccrued even

3 If not resulting in cash movements-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

SYNOPSIS

INTRODUCTION

ESCORTS PVT LTD is a private limited company not listed in a stock exchange of India

and employees 900 highly trained personnel Its manufacturing plants are strategically located

in close proximity to its customers at Faridabad (Haryana) Noida (UP)

OBJECTIVES OF THE STUDY

bull To find the movement of cash inflow and cash outflow

bull To make the comparison between cash inflow and

bull Cash outflow

bull To prepare the Cash Flow Statement

bull To analyze the Balance Sheet of the company in terms of Cash Flow Statement

bull To focus on various activities of the organization in terms of Operating

Financing Investment

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

SCOPE OF THE STUDY

Financial resources are the assets for the company and their productivity is key

factor for profitability It is necessary to know their problems their knowledge

skills abilities amp the measures that can be taken to reduce them By analyzing this

top management can build good relations with the employees

The whole study is to determine the competencies of different employees who are

working in ESCORTS PVT LTD By analyzing it the top management can

introduce the concept of competency mapping in the organization Through this

management can attempt to use more suitable strategies towards the human

resource development

The research is confined to elicit the existing gap between the standard skill

required to perform the job and the skill processed by the employees at ESCORTS

PVT LTD And to provide them suitable training program to over come those gaps

for the better utilization of human resources

RELEVANCE

The scope of the study was confined to the outside parties like creditors

shareholders government etc Who want to invest their money in the

company

The benefit of the report for the company is that through this report they can come

to know about the cash flow statements of the company

This study also unable the company that their cash is not utilizing in unnecessary

things

The benefit of the report for the researcher is that it has helped to get knowledge

about the cash inflow and cash

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

RESERRCH METHODOLOGY-

RESEARCH DESIGN

bull The study was conducted under well- structured approach

bull The project lasted for 4 weeks and the year 2009 ie from 08 July to 12

Aug2009

bull The questionnaire method amp personal interview method was used to collect

the primary data for the study

The secondary data is collected from Internet amp company training material and

many other company materials

SAMPLE DESIGN

The process of extracting a sample from a population is called sampling

procedure The selection of sampling procedure to conduct the research

depends upon the nature of the study and the objective to be accomplished

Judgment sampling technique is adopted to select the respondents in this

study The sample design included the various departments in the YAMAHA

MOTORS PVT LTD

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Methodology of date collection

bull Conducting personal interview

bull Data collection from primary and secondary sources

bull Designing questionnaire

bull Selecting sample size from the sample frame for the survey

bull Questionnaire distribution

bull Analysis of collected data with the help of statistical tools

bull Interpretation of collected data

bull Stating the conclusion based on the entire study

Sampling Technique

The sampling technique used for this research is of non-probability and convenience

sampling

Sample Unit

Employees of the company

Sample Size

For this research study the sample size is 25 respondents

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Sources of data

Primary data

Primary data is the data which is collected by the researcher for the first time

and which was not there The tools used to collect the data are-

1)Questionnaire method from the employers in different departments

2) Face to Face personal interactions

Secondary Data

The data already collected is called as secondary data The relevant information

for this study has been collected from secondary source such as

Books

Journal

Reports

Publication by the organizational circulation

Company records

Business bulletins

Internet

Secondary data is also collected from various of the internet and intranet Some

of the website trough which information was gathered was through

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

HYPOTHESIS

The report is analyzed under the presumption that cash flow position of

YAMAHA MOTORS PVTLTD It can be improved and made effective in

terms of cash flows

In testing the above hypothesis the following aspects will be considered

1 Balance sheet comparisons

2 Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

LIMITATIONS

The study though conducted to the best of the ability suffers from some

certain limitations There are

The data is secondary one and as such its reliability may be

questioned upon

The time availability for the study is less and as such it hinders thee

progress of the study

Senior officials were rarely approachable

Websites were not giving comprehensive data

Not having face-to-face interaction to get more relevant

information

Analysis and interpretation of data was done on the assumption that

the respondentsrsquo information was online

Information collected was totally subjective

The interviews are done during office hours but could not be done

for the other employees of other

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

DATA ANALYSIS

ESCORTS PVT LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30092009 30092008

Rs Crores Rs

Crores

A Cash Flow from Operating Activities

Net profit before tax (1733) 3444

Adjustment for

Loss on sale Provision for diminution in value of Long Term

Investments amp loans to Group Companies 189 4018

Gain on sale of Long Term Investments (122) (9492)

Gain on sale of Asset (013) -

Depreciation 4497 3955

Misc Exp Assets Write off Provisions 808 750

Interest Expense 7222 7999

Dividend Income (002) (001)

Interest Income (2082) -

Operating Profit before working capital changes 8764 10673

Adjustments for

Trade and other Receivables (8817) (12035)

Inventories 1379 (4692)

Trade Payables 6705 19046

Miscellaneous Expenditure (750) (511)

(1483) 1808

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Cash Generated from Operations 7281 12481

Direct Taxes (Paid)Refunds (1785) 3166

Net Cash Flow from operating activities 5496 15647

B Cash Flow from Investing Activities

Purchase of Fixed Assets (3095) (2794)

Proceeds from sale of Fixed Assets 086 177

Movement in Loans and Advances (1627) (1644)

Sale of Investments 3233 11452

Short Term Deposits with schedule Banks (231) (1048)

Interest Received 2070 -

Dividend Received 002 001

Net Cash Flow from Investing activities 438 6144

Proceeds from Share Capital amp Securities Premium 11444 -

Proceeds from Long Term Borrowings 8660 -

Less Repayment of Long Term Borrowings (054) (7896)

Proceeds (Repayment) from short term borrowings (net) (22726) -

Interest Paid (7740) (8223)

Net Cash used in financing activities (10416) (16119)

Net Increase(Decrease) in Cash and Cash equivalents (4482) 5672

Cash and Cash equivalents as at 01102008 10565 4893

Cash and Cash equivalents as at 30092009 6083 1056

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

ANALYSIS OF CASH FLOW

From the cash flow statements of the ESCORT PVTLTDIt can be analyzed

from the two years that the net cash balance of the company has increased

manifold in 30-09-2008 than the year 30-09-2009

The net profit in 30-09-2008 is higher than the 30-09-2009 but due to certain

changes there has been increase in the cash balance

The interest paid this year is ore of the last year which implies that thee

company has not repaid his borrowed capital due to which the interest has got

down

The depreciation has increased but it does not affect cash to an extent as it is a

non-cash item In the head of working capital there is drastic change in the cash

balance in the form of ldquoTrade and other Receivables which has affected the cash

balance

There is outflow of cash for receivables rather than the inflow in the last year

So the net effect is that the cash from operating activities has been decreased

two times from the last year

The company has no accumulated losses as at the end of the financial year ie

September 31 2008

Provision for taxation has been made in accordance with the requirement of AS-

22 issued by Institute of Charted Accountants of India

Pursuant to that current year deferred tax liability have been charged to profit amp

loss account

In opinion of the board of directors of thee company the current assets loans

and advances have a value on realization in the ordinary course of the business at

least equal to the amount stated in the balance sheet and provision for all

liabilities have been made

Balance of sundry debtors creditors loans and advances are subject to confirmation by

the concerned parties

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

METHOD OF ANALYSIS

1 Data analysis is done using the following statistical tools wherever required in

order to extract meaningful information from the collected data

o Simple percentage and averages

o Bar diagram

o Cone diagram

o Pie diagram

2 The collected data from the questionnaire has been put together in the form of

tables

3 Percentage has been calculated wherever necessary for generalization of the

data

4 Data analysis and interpretation has been done on the basis of primary and

secondary data

5 The findings researches have been recorded based on the analysis

6 The study conducted pertains only to YAMAHA MOTORS INDIA PVTLTD

All bank balances (debitcredit) have been confirmed by the concerned bank

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Identified from the available information which has been relied upon by the auditors

The names of small-scale industrial units to whom outstanding for more than

thirty days within agreed terms

The company has 9996 of shareholders in its subsidiary company named as

ESCORTS PVT LTD As at 31-03-2008

So the net effect is that the net cash from investing activities has many more

times than the last year which is negative Now the company has repaid its long

term borrowing more than the last year which has decreased the cash balance by

the little amount

Balance with the schedule banks under the head current amp collection account

amounting to represent funds in transit lying with schedule banks pending

transfer against loan liabilities under the head cash credit amp bill discounting

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

LIQUIDITY RATIO

1 CURRENT RATIO

(Amount in Rs)

Current Ratio

Year Current Assets Current Liabilities Ratio

2003 58574151 7903952 7412004 69765346 31884616 2192005 72021081 16065621 4482006 91328208 47117199 1942007 115642068 30266661 382

Interpretation

As a rule the current ratio with 21 (or) more is considered as satisfactory

position of the firm

When compared with 2006 there is an increase in the provision for tax because

the debtors are raised and for that the provision is created The current liabilities

majorly included Lanco Group of company for consultancy additional services

The sundry debtors have increased due to the increase to corporate taxes

In the year 2006 the cash and bank balance is reduced because that is used for

payment of dividends In the year 2007 the loans and advances include majorly

the advances to employees and deposits to government The loans and advances

reduced because the employees set off their claims The other current assets

include the interest attained from the deposits The deposits reduced due to the

declaration of dividends So the other current assets decreased

The huge increase in sundry debtors resulted an increase in the ratio which is

above the benchmark level of 21 which shows the comfortable position of the

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

firm

GRAPHICAL REPRESENTATION

741

219

448

194

382

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

CURRENT RATIO

Ratio

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

2 QUICK RATIO

(Amount

in Rs)

Quick Ratio

Year Quick Assets Current Liabilities Ratio

2003 58574151 7903952 741

2004 52470336 31884616 165

2005 69883268 16065620 435

2006 89433596 47117199 19

2007 115431868 30266661 381

Interpretation

Quick assets are those assets which can be converted into cash with in a short

period of time say to six months So here the sundry debtors which are with the

long period does not include in the quick assets

Compare with 2006 the Quick ratio is increased because the sundry debtors are

increased due to the increase in the corporate tax and for that the provision

created is also increased So the ratio is also increased with the 2006

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

741

165

435

190

381

000

100

200

300

400

500

600

700

800

Ratio

2003 2004 2005 2006 2007

Years

QUICK RATIO

Ratios

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

3 ABOSULTE LIQUIDITY RATIO

(Amount

in Rs)

Absolute Cash Ratio

Year Absolute Liquid Assets Current Liabilities Ratio

2003 31004027 7903952 392

2004 10859778 31884616 034

2005 39466542 16065620 246

2006 53850852 47117199 114

2007 35649070 30266661 118

Interpretation

The current assets which are ready in the form of cash are considered as absolute

liquid assets Here the cash and bank balance and the interest on fixed assts are

absolute liquid assets

In the year 2006 the cash and bank balance is decreased due to decrease in the

deposits and the current liabilities are also reduced because of the payment of

dividend That causes a slight increase in the current yearrsquos ratio

GRAPHICAL REPRESENTATION

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

392

034

246

114 118

0

05

1

15

2

25

3

35

4

Ratios

2003 2004 2005 2006 2007

Years

ABSOLUTE CASH RATIO

Ratios

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

LEVERAGE RATIOS

4 PROPRIETORY RATIO

(Amount

in Rs)

Proprietory Ratio

Year Share Holders Funds Total Assets Ratio

2003 67679219 78572171 086

2004 53301834 88438107 06

2005 70231061 89158391 079

2006 56473652 106385201 053

2007 97060013 129805102 075

Interpretation

The proprietary ratio establishes the relationship between shareholders funds to

total assets It determines the long-term solvency of the firm This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company

There is no increase in the capital from the year2004 The share holderrsquos funds

include capital and reserves and surplus The reserves and surplus is increased

due to the increase in balance in profit and loss account which is caused by the

increase of income from services

Total assets includes fixed and current assets The fixed assets are reduced

because of the depreciation and there are no major increments in the fixed assets

The current assets are increased compared with the year 2006 Total assets are

also increased than precious year which resulted an increase in the ratio than old

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

086

060

079

053

075

000

010

020

030

040

050

060

070

080

090

Ratios

2003 2004 2005 2006 2007

Years

PROPRIETORY RATIO

Ratios

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

ACTIVITY RATIOS

5 WORKING CAPITAL TURNOVER RATIO

(Amount

in Rs)

Working Capital Turnover Ratio

Year Income From Services Working Capital Ratio

2003 36309834 50670199 0722004 53899084 37880730 1422005 72728759 55355460 1312006 55550649 44211009 1262007 96654902 85375407 113

Interpretation

Income from services is greatly increased due to the extra invoice for Operations

amp Maintenance fee and the working capital is also increased greater due to the

increase in from services because the huge increase in current assets

The income from services is raised and the current assets are also raised together

resulted in the decrease of the ratio of 2007 compared with 2006

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

072

142 131126

113

000

020

040

060

080

100

120

140

160

Ratio

2003 2004 2005 2006 2007

Years

WORKING CAPITAL TURNOVER RATIO

Ratio

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

6 FIXED ASSETS TURNOVER RATIO

(Amount in Rs)

Fixed Assets Turnover Ratio

Year Income From Services Net Fixed Assets Ratio

2003 36309834 28834317 126

2004 53899084 29568279 182

2005 72728759 17137310 424

2006 55550649 15056993 369

2007 96654902 14163034 682

Interpretation

Fixed assets are used in the business for producing the goods to be sold This

ratio shows the firmrsquos ability in generating sales from all financial resources

committed to total assets The ratio indicates the account of one rupee

investment in fixed assets

The income from services is greaterly increased in the current year due to the

increase in the Operations amp Maintenance fee due to the increase in extra invoice

and the net fixed assets are reduced because of the increased charge of

depreciation Finally that effected a huge increase in the ratio compared with the

previous yearrsquos ratio

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRSENTATION

126182

424 369

682

000

100

200

300

400

500

600

700

Ratios

2003 2004 2005 2006 2007

Years

FIXED ASSETS TURNOVER RATIO

Ratios

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

7 CAPITAL TURNOVER RATIO

(Amount

in Rs)

Capital Turnover Ratio

Year Income From Services Capital Employed Ratio

2003 36309834 37175892 0982004 53899084 53301834 1012005 72728759 70231061 1042006 55550649 56473652 0982007 96654902 97060013 100

Interpretation

This is another ratio to judge the efficiency and effectiveness of the company

like profitability ratio

The income from services is greaterly increased compared with the previous year

and the total capital employed includes capital and reserves amp surplus Due to

huge increase in the net profit the capital employed is also increased along with

income from services Both are effected in the increment of the ratio of current

year

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

098

101

104

098

100

094095096097098099100101102103104

Ratios

2003 2004 2005 2006 2007

Years

CAPITAL TURNOVER RATIO

Ratios

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

8 CURRENT ASSETS TO FIXED ASSETS RATIO

(Amount

in Rs)

Current Assets To Fixed Assets Ratio

Year Current Assets Fixed Assets Ratio

2003 58524151 19998020 2932004 69765346 18672761 3742005 72021081 17137310 4202006 91328208 15056993 6072007 115642068 14163034 817

Interpretation

Current assets are increased due to the increase in the sundry debtors and the net

fixed assets of the firm are decreased due to the charge of depreciation and there

is no major increment in the fixed assets

The increment in current assets and the decrease in fixed assets resulted an

increase in the ratio compared with the previous year

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

293374

420

607

817

000

100

200

300

400

500

600

700

800

900

Ratios

2003 2004 2005 2006 2007

Years

CURRENT ASSETS TO FIXED ASSETS RATIO

Ratios

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

PROFITABILITY RATIOS

GENERAL PROFITABILITY RATIOS

9 NET PROFIT RATIO

(Amount in Rs)

Net Profit Ratio

Year Net Profit After Tax Income from Services Ratio

2003 21123474 36039834 059

2004 16125942 53899084 030

2005 16929227 72728759 023

2006 18259580 55550649 033

2007 40586359 96654902 042

Interpretation

The net profit ratio is the overall measure of the firmrsquos ability to turn each rupee

of income from services in net profit If the net margin is inadequate the firm

will fail to achieve return on shareholderrsquos funds High net profit ratio will help

the firm service in the fall of income from services rise in cost of production or

declining demand

The net profit is increased because the income from services is increased The

increment resulted a slight increase in 2007 ratio compared with the year 2006

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

059

030

023

033

042

000

010

020

030

040

050

060

Ratios

2003 2004 2005 2006 2007

Years

NET PROFIT RATIO

Ratios

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

10 OPERATING PROFIT

(Amount in Rs)

Operating Profit

Year Operating Profit Income From Services Ratio

2003 36094877 36309834 099

2004 27576814 53899084 051

2005 29540599 72728759 041

2006 31586718 55550649 057

2007 67192677 96654902 070

Interpretation

The operating profit ratio is used to measure the relationship between net profits

and sales of a firm Depending on the concept it will decide

The operating profit ratio is increased compared with the last year The earnings

are increased due to the increase in the income from services because of

Operations amp Maintenance fee So the ratio is increased slightly compared with

the previous year

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

099

051

041

057

070

000

010

020

030

040

050060

070

080

090

100

Ratios

2003 2004 2005 2006 2007

Years

OPERATING PROFIT RATIO

Ratios

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

11 RETURN ON TOTAL ASSETS RATIO

(Amount in Rs)

Return on Total Assets Ratio

Year Net Profit After Tax Total Assets Ratio

2003 21123474 78572171 027

2004 16125942 88438107 018

2005 16929227 89158391 019

2006 18259580 106385201 017

2007 40586359 129805102 031

Interpretation

This is the ratio between net profit and total assets The ratio indicates the return

on total assets in the form of profits

The net profit is increased in the current year because of the increment in the

income from services due to the increase in Operations amp Maintenance fee The

fixed assets are reduced due to the charge of depreciation and no major

increments in fixed assets but the current assets are increased because of sundry

debtors and that effects an increase in the ratio compared with the last year ie

2006

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

027

018 019017

031

000

005

010

015

020

025

030

035

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON TOTAL ASSETS

Ratios

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

12 RESERVES amp SURPLUS TO CAPITAL RATIO

(Amount in Rs)

Reserves amp Surplus To Capital Ratio

Year Reserves amp Surplus Capital Ratio

2003 65599299 2079920 31542004 34582554 18719280 1852005 51511781 18719280 2752006 37754372 18719280 2022007 78340733 18719280 419

Interpretation

The ratio is used to reveal the policy pursued by the company a very high ratio

indicates a conservative dividend policy and vice-versa Higher the ratio better

will be the position

The reserves amp surplus is decreased in the year 2006 due to the payment of

dividends and in the year 2007 the profit is increased But the capital is

remaining constant from the year 2004 So the increase in the reserves amp surplus

caused a greater increase in the current yearrsquos ratio compared with the older

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

3154

185 275 202419

-

500

1000

1500

2000

2500

3000

3500

Ratios

2003 2004 2005 2006 2007

Years

RESERVES amp SRUPLUS TO CAPITAL RATIO

Ratios

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

OVERALL PROFITABILITY RATIOS

13 EARNINGS PER SHARE

(Amount in Rs)

Earnings Per Share

Year Net Profit After Tax No of Equity Shares Ratio

2003 21123474 207992 101562004 16125942 1871928 8612005 16929227 1871928 9042006 18259580 1871928 9752007 40586359 1871928 2168

Interpretation

Earnings per share ratio are used to find out the return that the shareholderrsquos earn

from their shares After charging depreciation and after payment of tax the

remaining amount will be distributed by all the shareholders

Net profit after tax is increased due to the huge increase in the income from

services That is the amount which is available to the shareholders to take There

are 1871928 shares of Rs10- each The share capital is constant from the year

2004 Due to the huge increase in net profit the earnings per share is greaterly

increased in 2007

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

10156

861904 975

2168

000

2000

4000

6000

8000

10000

12000

Ratios

2003 2004 2005 2006 2007

Years

EARNINGS PER SHARE

Ratios

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

14 PRICE EARNINGS (PE) RATIO

(Amount in Rs)

Price Earning (PE) Ratio

Year Market Price Per Share Earnings Per Share Ratio

2003 3254 10156 0322004 2847 861 3302005 3752 904 4152006 3017 975 3092007 5185 2168 239

Interpretation

The ratio is calculated to make an estimate of application in the value of share of

a company

The market price per share is increased due to the increase in the reserves

amp surplus The earnings per share are also increased greaterly compared

with the last year because of increase in the net profit So the ratio is

decreased compared with the previous year

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

032

330

415

309

239

000

050

100

150

200

250

300

350

400

450

Ratios

2003 2004 2005 2006 2007

Years

PE RATIO

Ratios

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

15 RETURN ON INVESTMENT

(Amount in Rs)

Return on Investment

Year Net Profit After Tax Share Holders Fund Ratio

2003 21123474 67679219 031

2004 16125942 53301834 03

2005 16929227 70231061 024

2006 18259580 56473652 032

2007 40586359 97060013 042

Interpretation

This is the ratio between net profits and shareholders funds The ratio is

generally calculated as percentage multiplying with 100

The net profit is increased due to the increase in the income from services ant

the shareholders funds are increased because of reserve amp surplus So the ratio

is increased in the current year

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

GRAPHICAL REPRESENTATION

031 030

024

032

042

000

005

010

015

020

025

030

035

040

045

Ratios

2003 2004 2005 2006 2007

Years

RETURN ON INVESTMENT RATIO

RatioS

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

DATA COLLECTION

The data can be of two types

Primary Data

Secondary Data

Primary Data

Primary data are those data which is originally collected afresh

Secondary Data

Secondary data are those data which are already collected and stored and which has

been passed through statistical research

In this project Secondary data has been collected from following sources-

Annual report

Books

MIS

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Other material and report published by company There are two methods to prepare

the Cash flow Statement

ndirect Method

I

The indirect method (or reconciliation method) starts with net income and converts it

to net cash flow from operating activities In other words the indirect method adjusts

net income for items that affected reported net income but did not affect cash To

compute net cash flow from operating activities non-cash charges in the income

statement are added ack to net income and non-cash credits are deducted

b

Direct Method

Under the direct method the statement of cash flows reports net cash flow from

operating activities as major classes of operating cash receipts (eg cash collected from

customers and cash received from interest and dividends) and cash disbursements (eg

cash paid to suppliers for goods to employees for services to creditors for interest and

to government authorities for taxes)

INDIRECT VERSUS DIRECT METHOD

The most contentious decision that the FASB faced in issuing Statement No 95 was

choosing between the direct method and the indirect method of determining net cash

flow from operating activities Companies lobbied against the direct method urging

adoption of the indirect method Commercial lending officers expressed a strong

preference to the FASB hat the direct method be required

tCF-Page 3 of 5

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

In Favor of the Direct Method

The principal advantage of the direct method is that it shows operating cash receipts and

payments That is it is more consistent with the objective of a statement of cash flows to

provide information about cash receipts and cash payments than the in-direct method

which does not report operating cash receipts and payments

Supporters of the direct method contend that knowledge of the specific sources of

operating cash receipts and the purposes for which operating cash payments were made

in past periods is useful in estimating future operating cash flows Furthermore in-

formation about amounts of major classes of operating cash receipts and payments is

more useful than information only about their arithmetic sum (the net cash flow from

operating activities) Such information is more revealing of an enterprises ability (1) to

generate sufficient cash from operating activities to pay its debts (2) to reinvest in its

operations and (3) to make distributions to its owners

Many corporate providers of financial statements say that they do not currently collect

information in a manner that allows them to determine amounts such as cash received

from customers or cash paid to suppliers directly from their accounting systems But

supporters of the direct method contend that the incremental cost of assimilating such

operating cash receipts and payments data is not significant

In Favor of the Indirect Method

The principal advantage of the indirect method is that it focuses on the differences

between net income and net cash flow from operating activities That is it provides a

useful link between the statement of cash flows and the income statement and balance

sheet

Many providers of financial statements contend that it is less costly to adjust net income

to net cash flow from operating activities (indirect) than it is to report gross operating

cash receipts and payments (direct) Supporters of the indirect method also state that the

direct method which effectively reports income statement information on a cash rather

than an accrual basis may erroneously suggest that net cash flow from operating

activities is as good as or better than net income as a measure of performance

Special Rules Applying to Direct and Indirect Methods

Companies that use the direct method are required at a

minimum to report separately the following classes of

operating cash receipts and payments

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Receipts

1048713 Cash collected from customers (including lessees licensees etc)

1048713 Interest and dividends received

1048713 Other operating cash receipts if any

Payments

1048713 Cash paid to employees and suppliers of goods or services (including

suppliers of

insurance advertising etc)

1048713 Interest paid

1048713 Income taxes paid

1048713 Other operating cash payments if any

Companies using the indirect method are required to disclose separately changes in

inventory receivables and payables to reconcile net income to net cash flow from

operating activities In addition interest paid (net of amount capitalized) and income

taxes paid must be disclosed elsewhere in the financial statements or accompanying

notes

The FASB requires these separate and additional disclosures so that users

may approximate the direct method Also an acceptable alternative presentation

of the in-direct method is to report net cash flow from operating activities as a

single line item in the statement of cash flows and to present the reconciliation

details elsewhere in the financial statements

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

FINDING OF SUDY

According to cash flow statement of the company The finding of the study are as

follows-

The company has not taken any loans secured or unsecured from companies

firms or other parties

The company has not accepted any deposit from the public during the year

The company is not a sick industrial company

The company has not granted any loan secured or unsecured to company firms

or other parties

The company has paid the entire long term and short term borrowing during the

year

The company has buy back the companyrsquos own share this year

The interest paid in 2008 is more than the

There has been a significant decline in volume over the years from 2001-02

to 2005-06 as can be seen in the graph below

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Table 43

The Net sales of Tractor has increased considerably from 2004-05 to 2007-08

This can be mainly attributed to changes in Variable and material costs and in

the price

The Net sale of Tractor has increased considerably from 2004-05 to 2007-08

that is an decrease of Rs7216 per tractor This can be mainly attributed to

changes in

Variable and material costs and in the prices

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

RECOMMENDATIONS

According to cash flow statement of the company The suggestions of the study

are as follows-

The time durations for training program have to increase

Buy regular review and consultations develop a career progression

which is sensitive to performance and ability

Create an environment where by people are trend developed to enable

The to take advantages of opportunities that arise

The jab can be redesigned where the work man stay in what is normally

the same job but has elements of it changed

The principle amount must be paid in time which can be reducing the

interest the out flow

The purchase of the fixed asset must be made only when there is extreme

requirement

In order to avoid taxes the company should go for more investment

The companyrsquos borrowings should go for more investment

o The company should try to reduce the depreciations as maximum

as possible

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

CONCLUSION

The study on competency level of employees at ESCORTS PVTLTD gave an

insight about the acceptance of competency mapping by employees

The employees at Ymi welcome the introduction of competency mapping in their

organization as they felt it was very much essential in enhancing their skills and

organizational development

The organization has provided the recourses guidance and support to facilitate the

introduction of competency level easily and develop the employees in such a way

that they can face any kind of challenge

However the level of competency in employees is found to be satisfactory

Providing proper training education and guidance to the employees can enhance

the level

This study was mainly carried out to find out whether thee competency mapping

being followed by the company is effective till date If the competency mapping

and fitment to the organization

By looking at the graphs and tables it is quite that the employees still are not up to

the level of competent pool they still have to be trained and made competent in

order to fill the gap As the organization has just applied the mapping it has to see

to that it meets all the requirements for competency mapping

Therefore the graphs make it quite clear that the potential of the employees is not

up to the mark and ie they are not competent enough to meet the competency-

mapping requirement Hence by further training and counseling this gap can be

closed

This report includes the training requirements of employees and it highlights skills

possessed by each employee and skill required All employees get training so that

skill can be improved and maintain balance between standard performance with

their actual performance to avoid gap

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

APPENDIX

QUESTIONNAIRE

Consumer Survey

Name _____________________________

Age _____________________________

Sex

Male

Female

Occupation

Businessman

Service man

Professional

Others

Monthly income brackets

Below 15000

15000- 20000

20000-30000

30000 and above

of your savings _________

Do you invest

Yes

No

If yes then where do you invest your money

Bank

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Insurance

funds

Others

Why do you made that statement

Return

Risk hedging

Tax benefits

Other reasons (specify) _______

Who influence your cash decision

Relatives and friends

Family members

Advisors experts

You yourself

If no then why

Do not know where to invest

Satisfied with your current investment return

Donrsquot want take risk

Other reasons

__________________________________________________________________

___________________

Do you know about CF statement

Yes

No

If yes then from where you have come to know about an cash statement

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

Advertisements on newspapers

Friends and relative

Agents experts

Other source

What do you think about cash statement

It means investing only in share market

Constant watch must be kept always

Return is not satisfactory

Other perception

__________________________________________________

Can you recall any cash flow of company

___________________________

Would you want to made CF of an org

Yes

No

If yes then why

_______________________________________________________

If no then why

_______________________________________________________

BIBLIOGRAPHY

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom

List of Books

1 PANDEY IM - FINANCIAL MANAGEMANT

2 KHAN MY AND JAIN PK -FINANCIAL MANAGEMANT

3 SMITH KV ndash MANAGEMANT OF WORKING CAPITAL

3 COMPANY RECORDS

4 JOURNAL

5 REPORTS

WEBLIOGRAPHY

1 wwwescortspvtltdcom

2 wwwgooglecom