sibar funds flow state

A Study on Funds Flow Analysis

1.1 Introduction

Finance is one the basic foundations of all kinds of economic activities. It is the master key, which provides access to all the sources for being employed in manufacturing. Hence it is rightly said that finance is lifeblood of any enterprise, besides being the scarcest elements, it is also the most indispensable requirement. Without finance neither any business can be started nor successfully run. Provision of sufficient funds at the required time is the key to success of concern. As matter of fact finance may be said to be the circulatory system of economic body, making possible the needed co-operation among many units of the activity.

FINANCIAL MANAGEMENT:

Financial management emerged as a distinct field of study at the turn of this Century. Many eminent persons defined it in the following ways.

DEFINITIONS:

According to GUTHMANN AND DOUGHAL: Business finance can broadly be defined as the activity concerned with planning, rising, controlling and administering of funds used in the business.

According to BONNEVILE AND DEWEY: Financing consists in the rising, providing and managing of all the money, capital or funds of any kind to be used in connection with the business.

According to Prof. EZRA SOLOMAN: Financial management is concerned with the efficient use of any important economic resource, namely capital funds.

FINANCIAL FUNCTIONS:The finance functions of raising funds, investing them in assets and distributing returns earned from assets to shareholders are respectively known as financing, investment and dividend decisions. While performing these functions, a firm attempts to balance cash inflows and outflows. This is called as liquidity decision.

The finance functions can be divided into four broad categories.

1. Investment or long-term asset mix decision

2. Financing or capital mix decision

3. Dividend or profit allocation decision

4. Liquidity or short-term asset mix decision

INVESTMENT DECISION:

Investment or capital budgeting involves the decisions of allocation of cash or commitment of funds to long-term assets, which would yield benefits in future. It involves measurement of future profitability, which involves risk, because of uncertain future. Investment proposal should therefore be evaluated in terms of both expected return and risk. Other major aspect of investment decision is the measurement of standard or hurdle rate against which the expected return of new investment can be compared.

FINANCING DECISIONS:

Financing decision is the second important function to be performed by the fir. Broadly, he must decide when, where, and how to acquire funds to meet the firms investment needs. He has to determine the proportion of debt and equity. This mix of debt and equity is known as the firms capital structure. The financial manager must strive to obtain the least financing mix or the optimum capital structure where the market value of share is maximized.

DIVIDEND DECISIONS: It is the third major financial decision. The financial manager decides whether the firm should distribute all profits, or return them, or distribute a portion and return the balance. The optimum dividend policy should be determined where is maximizes the markets value of the share.

LIQUIDITY DECISIONS:

Current assets management, which affects firms liquidity, is yet another finance function in addition to the management of long-term assets. Current assets should be managed effectively safeguarding the firm against the dangers of liquidity and insolvency.

Investment in current assets affects the profitability, liquidity, and risk. A conflict exists between profitability and liquidity while managing current assets. If the firm doesnt invest sufficient funds in current assets it may. Become illiquid. But it could loose profitability, as idle CA would not earn anything. Thus a proper takeoff must be achieved between profitability and liquidity. In order to ensure that neither insufficient nor unnecessary funds are invested in current assets.

GOALS OF FINANCIAL MANAGEMENT: Maximize the value of the firm to its equity shareholders. This means that the Goals of the firm should be to maximize the market value of its equity shares (Which represent the value of the firm to its equity shareholders)

Maximization of profit.

Maximization of earnings per share.

Maximization of return on equity (defined as equity earnings/net worth).

Maintenance of liquid assets in the firm.

Ensuring maximum operational efficiency through planning, directing and Controlling of the utilization of the funds i.e., through the effective employment of funds.

Enforcing financial discipline in the use of financial resources through the coordination of the operation of the various divisions in the organization.

Building up of adequate reserves for financing growth and expansion.

Ensuring a fair return to the shareholders on their investment.

1.2 INDUSTRY PROFILE The present automobiles are most sophisticate combining luxury, safety economy in utilizing the energy resource with great speed and least environment. Pollution using various field of science likes aerodynamics, mechanical expertise and electrical engineering. Every day improvement in the existing models holding the price line in reasonable range involving high become necessity. Present day consumer satisfaction involves great skill in marketing, advertising and positioning the product line whim and Cashion advances with increased performance and reduce size. Business minded people started selling them top the society.

The automotive components and ancillary industry I Indian has made big strides in last couple of year following of the phased manufacturing programmer for his main product. With the launching of a major modernization scheme by the manufactures, substantial progress has been made towards indigenization of the auto components and spare parts.

Commercial vehiclesTATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force motors, Eicher Motors

Passenger vehicleTATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra & Mahindra, Daimler Chrysler, Hindustan Motors

Two WheelerHero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors

Three WheelerBajaj Auto, Piaggio India

RAW MATERIALS

Most of the raw materials to manufacture cylinder blocks are available from Hyderabad, Chennai and Calcutta. The following are some of the raw materials used for the production: Aluminum Alloy

Caustic Soda

Shell Sand

LDO oil

Chromic Acid

Diamond Honing sticks

Nickel Carbonate

1.3 COMPANY PROFILE

M/S SIBAR AUTOPARTS Ltd. Was originally incorporated as private limited company by name M/s SIBAR AUTOPARTS (PVT) Limited in the year 1983, located at industrial estate, TIRUPATHI. It was converted into public limited company in the year 1994. The company is presently engaged in manufacturing and marketing of aluminum hard chrome plated cylinder kits mainly for the two wheelers up to engine capacity 150cc.

The company had started o aluminum foundry with a small capital of Rs.3.00 lacks to manufacture aluminum alloy casting. The castings were supplied to reputed establishments viz., TVS, SHKNEY PARIS ROHME LTD etc. In the year 1987, the company expanded its activity to achieve the original conceived idea of manufacturing aluminum hard chrome plated cylinders blocks for two wheelers applications. The entire technology development was started by in-house R&D skills and in the course of time the technology was developed with the in-house R&Ds network, the quality of the product was found very good land it was accepted in the European market immediately. The company was reached about 272 lacks worth of exports and the company also received MERIT AWARD FRO EXPORT PROMOTION COUNCIL for EXCELLENCE in exports during the year 1994-95 and in the same year the company had come out with a public issue and it was over subscribed by 18 times which only shows the companys credibility among the investors. The company has become public since then and company started developing the cylinders for domestic ORIGINAL EQUOPMENT (OE) manufactories. In the process the company has developed various modals of Asias biggest two wheeler manufacture like M/S BAJAJ AUTO Ltd, M/S HERO MOTORS Ltd, and M/S ENFIELD INDIA Ltd, etc. from a turnover of approximately Rs.190 lacks in the year 1993-94 the company achieved Rs.843 lacks turnover in the year 1996-97. Besides serving these OEMS in India, the company is still in the over seas market with a very good network. The technology developed by the company is UNIQUE.1.4 PRODUCT PROFILEIn India automobile engine cylinders are predominantly of cast iron or of aluminum with cast iron sleeves whereas world wide there is a growing shift to aluminum allay cylinders and engine blocks.

Aluminum cylinders with hard chrome plating reduce engine weight significantly. Also the wear and tear the piston bore is reduced drastically because cylinders have about 900 Vickers hardness, consequently giving better mileage and fuel efficiency.

Unlike aluminum with cast iron sleeves hard chrome plated aluminum cylinders are of uniform material and provides excellent heat dissipation. Further very close clearance is possible between bore and piston for optimal engine power out put without fear of seizure at higher temperature. Aluminum chrome plated cylinders also consume less oil than cast iron cylinders and hence are less polluting and cheaper to maintain.

PROMOTERS: The founder of this company is Mr. P.V.NARAYANA who is now as vice chairman and managing director. He completed his company diploma in Mechanical Engineering and completed his Training tool and Die making from NTTF, Dharwada. After attaining 8 years of experience in reputed companies like M/s Suvega Moped Ltd, M/s HERO Megistic Ltd, And And etc and setup this unit.

Now this company is also supported with to young men who are the sons of vice chairman and managing director. Mr.Madhu Pratap, now as the director-Technical completed his graduation in Mechanical Engineering, and Post graduation in Industrial.

Engineering and Management. Mr.Ravichandra, now as Executive director, completed his graduation in chemical Engineering.

TECHNOLOGY:

The company started hard-chrome plating technology with in house research and development efforts. The company also developed NI-SI plating. In 1998 the company had entered technical collaboration with Italian company to refine its technology. Ours is the first company in India to this technology.

MANUFACTURING PROCESS:

The manufacturing process broadly consists of shell molding, die casting machining heat treatment, chrome platting, inspecting, packing and dispatch. The sand shell core and first made using shell core shooting machine, having a capacity of making 500nos. Modules/shift. The shells are then housed in the dies. Aluminum LM-13 grade alloy, melted in bate-out titling furnace, are then transferred to an electrical holding furnace, where the melt is and treated with necessary chemicals. The molten metal held in the holding furnace for around 4 hrs is cast is then used for making casting by using permanent would gravity dies or low pressure die- casting. After atmospheric cooling (times 3 hours) the casting is sawed. Fettling of the casting is then done to remove the flashes. The casting is then heat treated in a pit furnace (temp 510 c for 3 hours) quenched in the water (temp 60 c ) and aged for 2 hours in oven at 200 c _250 c for stabilization of the micro structural properties of the casting. The rough casting is then machine and made ready for hard chrome platting. The casting is then degreased using tri-chloreothylene and then chromo- plated. The hard chrome plated cylinder are further machine is sophisticated machine and tested with measuring instruments. These operations are very critical and having very close tolerance those are subsequently sent to AC room plated kit there in Ac room and bore measurement is recorded are a temperature of 20c.

ADVANTAGES OF SIBER ALUMINUM HARD CHROME CYLINDERS:

1. The life of the aluminum cylinder block is much longer than conventional cast iron cylinder blocks. This is due to higher hardness in aluminum cylinder block because the bore is plated with hard chrome/nickel. Since the hardness much higher, the wear pattern of the bore is also much less.

2. Since the aluminum is a light metal, the fuel efficiency is also better.

3. Since both piton and cylinder block are of the same material, the expansion is uniform, with will be an added advantage.

4. Since the bore is finished with nickel, the ratio if oil is use may also be comparatively less. This helps to maintain very low emission.

5. Since the wear pattern of the cylinder bore is very less, the cost of maintains is very negligible.

6. Better eye-appeal.

7. There is no need to see bore up to 60,000 kms.

8. Replacing rings easy at nominal cost.

9. 60% reduction in engine weight.

10. More economical.

11. None to beat price.

12. Ready availability of spares with leading two wheeler dealer through our distributor.

CUSTOMER:

Automotive item O.E.M Customer for casting:

1. M/S greaves cotton ltd-RANIPET.

2. M/S Greaves cotton ltd- AURANGABAD.

3. M/S Same Deutz- FAHRINDIA (P) LTD RANIPET

4. ALKRAFT THERMOTECHNOLOGIES PVT.LTD. CHENNAI (Is 9001-2000 certified unit)

Auto Motive Item O.E.M (INDIA) Customer For Cylinder Blocks:

1. M/S BAJAJ AUTO LTD. PUNE.

2. M/S HERO MOTORS LTD- GAZIABAD.

Auto Motive Item O.E.M (Exports) Customer for Cylinder Blocks:

1. M/S Electrolux, Meculloch- TALIANA, ITALY,

2. We have replacement market in EUROPE and we supply to ITALY, NETHERLANDS, and DENMARK etc.

Electrical Transmission Line Item and other are casting Customer:

1. M/S GR power switches Gear Limited HYDERABED. (ISI 9001 certified unit)

2. M/S KLEMMEN engineering corporation CHENNAI.

3. M/S SEIMENS LIMITED (Hyderabad works) Hyderabad (under process)

ACHIEVEMENTS

The Company always maintained status of single source supplier with all its customers. Its customers by serving then quality products delivery scheduled without interception of their production.

The company was success full in giving satisfied results of VRDE (Vehicle Research Development Estate) for their simulation air crafts engines both hard chrome and NI-SI PLATING.

The company also satisfied NAL (National aeronautical Ltd) Bangalore by giving them NI-SI plating on propeller shaft ring.

The company was awarded Merit of Excellence in Exports from Promotion Council in India.The company has been awarded ISO 9001-2000 quality management system (Under clause 7 permissible exclusion: 7.3).2. REVIEW OF LITERATURE

ANALYSIS OF FUNDS FLOW STATEMENT The statement of changes in financial position, prepared to determine only the sources and uses of working capital between dates of two balance sheets, is known as the funds flow statement. Working capital is defined as the difference. Between current assets and current liabilities. Working capital determines the liquidity position of the firm.

The balance sheet presents a snapshot picture of the financial position at a given point of the financial position at a given point of time and the income statement shows a summary of revenues and expenses during the accounting period. The funds flow statement, also referred to as the statement of changes in financial position or the statement of changes in financial position or the statement of sources and uses of funds.

Funds flow analysis provides insight into the movement of funds and helps in understanding the changes in the structure of assets, liabilities and owners equity. Funds-Flow statement is a widely used tool in the hands of financial executives for analyzing the financial performance of a concern. Good concerns always prepare such statement along with the balance sheet At the end of the year. This statement shows how the activities of a business have been used during a particular period. The statement of sources and application of funds serves the purpose.

FUNDS FLOW STATEMENT

INTRODUCTION

The basic financial statements i.e., the Balance Sheet and Profit & Loss A/c or income statement of business reveals the net effect of various transactions on operational and financial position of the company. The balance sheet gives a summary of the assets and liabilities of an undertaking at a particular point of time.

There are many transactions that take place in an undertaking and which do not operate Profit and Loss A/c. Thus another statement has to be prepared to show the change in Assets and Liabilities from the end of one period of time to the end of another period of time. The statement is called a statement of changes in financial position or a Funds Flow statement.

The funds flow statement is a statement which shown the movement of funds and is a report of financial operations of business undertaking. In simple words it is a statement of source and application of funds.

Definition of funds flow statement:

The funds flow statement is not a statement of financial position but it is instead a report on financial operations, changes flows or movements during the period. - S.C. Kuchhal

The funds flow statement describes the sources from which additional funds were derived and the uses to which these were put.- R.N. Anthony A statement of sources and Applications of funds is a Technical device designed to analyze the changes in the financial condition of a business between two dates.-R.A. Foulk It is a statement which highlights the underlying financial movements and explains the changes of working capital from one point of time to another. Bierman

MEANING & CONCEPT OF FLOW OF FUNDS

The term flow means movement & includes both "inflow' & 'outflow'. The term flow of funds means transfer of economic values from one asset of equity to another. Flow of funds is said to have taken place when any transaction makes changes in amount of funds available before happening of transactions. If the effect of transaction results in increase of funds. It is called a "source of funds" and it is results in decrease of funds, it is known as an application of funds

RULES

The flow of funds occurs when a transaction changes on one hand a non-current A/c and on the other a current A/c and Vice-versa. According to working capita concept of funds the term "Flow o Funds" return to movement of funds in working capital.

If any transaction results in increase in working capital. It is said to be a "source" or "inflow of funds" and if it results in decrease of working capital, it is said to be "application" or "out flow of funds".

CURRENT ASSETSCurrent Assets are those assets, which in the ordinary course of business can be or will be converted into cash within a short period of normally one accounting year.

CURRENT LIABILITIESCurrent liabilities are those liabilities which are intended to be paid in ordinary course of business with in short period of normally one accounting year out of the current assets or the income of the business.

DIFFERENCES BETWEEN CURRENT LIABILITIES & CURRENT ASSETS

CURRENT LIABILITIESCURRENT ASSETS

1. Bills Payable 2. Sundry Creditors 3. Accrued O/s Expenses4. Dividends Payable5. Bank Overdraft6. Short term loans, advances & deposits7. Provision for taxation8. Proposed Dividend

1. Cash in Hand

2. Cash at Bank

3. Bills Receivable

4. Sundry Debtors or A/cs receivable

5. Short term loans & advances

6. Short term investment

7. Inventories or stock

8. Prepaid Expenses

9. Accrued incomes.

DIFFERENCE BETWWEN FUNDS FLOW STATEMENT & CASH FLOWSTATEMENT

BASIS OF DIFFERENCEFUNDS FLOW STATEMENTCASH FLOW STATMENT

1. Basis of concept It is based on a wider concept of funds, i.e., working capital.It is based on a narrower concept of funds, i.e., cash.

2. Basis of AccountingIt is based on accrual basis of accountingIt is based on cash basis of accounting.

3. Schedule on changes in Working capitalSchedule of changes in working capital is prepared to show the changes in current assets and current liabilities.No such Schedule of changes in working

Capital is prepared.

4. Method of preparingFunds flow statement reveals the sources and applications of funds. The net difference between sources and applications of funds represent net increase or decrease in working capital.It is prepared by classifying all Cash inflows and outflows in terror of operating, investing are financing activities. The net different represents time net

Increase or Decrease in Cash and cash equivalents.

5. Basis of usefulness.It is useful in planning intermediate and long term financing.It is more useful for short-term analysis and cash planning of the business

PROCEDURE FOR PREPARING A FUNDS FLOW STATEMENT

Funds flow Statement is a method by which we study changes in financial position of business enterprise between beginning & ending financial statement dates. Hence the funds flow statement is prepared by comparing two balance sheets and any of such other information derived from the Accounts as may be needed

The preparation of funds flow statement consists of two parts.A. Statement or schedule of changes in working capital.

B. Statement of sources & application of fund.

A.) STATEMENT OR SCHEDULE OF CHANGES IN W.C.

Working Capital means the excess of current assets over current liabilities.

Statement of changes in working capital is prepared to show the changes in working capital between two balance sheet dates.

This statement is prepared with help of current assets and current liabilities derived from two balance sheetsWorking capital = Current Assets - Current Liabilities An increase in current assets increases W.C.

A decrease in current assets decreases W.C.

An increase in current liabilities decreased W.C.

A decrease in current liabilities increases W.C.

As a separate activity & discipline it is of recent origin. It was a branch of economics till 1890. Today financial management is recognized as the most important branch of business administration. Financial management may be defined as the part of management, which is concerned mainly with raising funds in the most economic and suitable manner, using these funds as possible planning future operations, and controlling current performance and future development through financial accounting, cost accounting, budgeting statistics and other means. It guides investment where opportunity is the greatest production relatively uniform yard strikes judging most of the firms operations and projects and is continually necessary for survival and attracting of new capital. According to Howard and Upyon, financial management involves the application of general management principles to a particular operation. N.G.Wright says finance management is intimately itself woven into the fabric of the management itself. Its central role is concerned with the some objectives as these of the management which the way in which the resources of the business are employed and how the business is finance. He divides financial management into three main areas.1. Decision on the structures,2. Allocation of available funds to specific uses,3. Analysis and appraised of problems. Financial management includes planning of finance, cash budgets and sources of finance. EZRA Solomon and John Piglet insists that financial management must attend to investment decision because if these decision that affects in a large measure the future of a firm major financial management is an operational function it is involved with financial planning, forecasting and providing of finance as well as the formation of financial policies. Hunt William and Donald Son have called financial management as Resources Management because in a large Organization, the finance managers are the members of planning, organization, performing and controlling the financial affairs of the enterprise. The financial management is of great importance in the present day corporate world. It is the science of money, which permits the authorities to go further.STATEMENT OF SCHEDULE OF CHANGES IN WORKING CAPITAL

ParticularPrevious

Year Current

Year Effect on Working Capital

IncreaseDecrease

AmountAmountAmountAmount

Current Assets: (A)

Stock

Debtors

Cash

Bank

Bills receivable

Prepaid expenses

Total(a)

Current Liabilities: (B)

Creditors

Bills payable

Outstanding expenses

Total(b)

Working Capital(A-B)

Increase/decrease in working capital

Totalxx

xx

xx

xx

xx

xx

xx

xx

xx

xxxx

-

xx

xx

-

xx

-

xx-

xx

-

-

xx

-

xx

xx

xx

xxxxxx

xx

xx

xx

xx

xx

xx

xxxxxx

xxxx

xxxxxxxxxXxx

(B) STATEMENT OF SOURCES & APPLICATION OF FUNDS

Funds flow statement is a statement, which indicates various sources from which funds (W.C.) have been obtained during a certain period and uses or applications to which these funds have been put during that period. Generally this statement is prepared in two formats.

Statement of sources and application of funds:-

1. Funds from operations: It is an internal source of funds. Funds from operations are to be calculated as per the method stated above.

2. Funds from long term loans: Long term loans such as debentures, borrowings from financial institutions will increase the working capital and therefore, there will be inflow of funds. However, if the debentures have been issued in consideration of some fixed assets, there will be no inflow of funds.

3. Sale of fixed assets: Sale of land, buildings, and long term investments will result in generation of funds.

4. Funds from increase in share of capital: Issue of shares for cash or for any other current asset or in discharge of a current liability is another source of funds.

5. Decrease in working capital: Decrease in working capital is the result of decrease in current asset or increase in current liabilities. In both the cases inflow of funds takes place.

PROFORMA OF FUNDS FLOW STATEMENTSources

Rs.

Applications

Rs.

Funds from operations

Xx

Funds lost in operations

Xx

Issue of share capital

Xx

Redemption of preference share

Xx

Issue of Debentures

Xx

Capital

Xx

Raising of long term loans

Xx

Redemption of debentures

Xx

Sale of non current (fixed) assets

Xx

Repayment of long term loan

Xx

Non-trading receipts such as dividends

Xx

Purchase of long term investments

Xx

Scale of long term investments

Xx

Non-trading payments

Xx

Net decrease in working capital

Xx

Payment of Dividends

Xx

Xx

Payment of Tax

Xx

Xx

Net increase in working capital

Xx

Xxx

Xxx

IMPORTANCE OF FUNDS FLOW STATEMENT:

A funds statement is an essential tool for the financial analysis and primary importance to the financial management. Nowadays, it is being widely used by the financial analysts, credit granting institutions and financial managers. The basic purpose of a funds flow statement is to reveal the changes in the working capital on the two balance sheet dates. It is also describes the sources from which additional working capital has been financed and the uses to which working capital has been applied. Such a statement is particularly useful in assessing the growth of the firm, its resulting financial needs and in determining the best way of financing these needs. By making use of projected funds flow statements, the management can come to know the adequacy or inadequacy of working capital evening advance. One can plan the intermediate and long-term financing of the firm, repayment of long term debts, expansion of the business, allocation of resources, etc. The significance or importance of funds flow statement can be well followed from its various uses given below:

It helps in the analysis of financial operation:

The financial statements reveal the net effect of various transactions on the operational and financial position of a concern. The balance sheet gives a static view of the resources of a business and the uses to which these resources have been put at a certain point of time. But it does not disclose the causes for changes in the assets and liabilities between two different points of time. The funds flow statements explains causes for such changes and also the effect of these changes on the liquidity position of the company. Sometimes a concern may operate profitability and yet its cash position may become more and worse. The funds flow statement gives a clear answer to such a situation explaining what has happened to the profit of the firm.

It throws light on many perplexing questions of general interest: Which otherwise may be difficult to be answered. Such as:a) Why were the net current assets lesser in spite of higher profits and vice versa?

b) Why more dividends could not be declared in spite of available profits?

c) How was it possible to distribute more dividends than the present earnings?

d) What happened to the net profit? Where did they go?

e) What happened to the proceeds of sale of fixed assets or issue of shares, debentures, etc.?

f) What are the sources of repayment of debt?

g) How was the increase in working capital financed and how will it be financed to future?

IT HELPS IN THE FORMULATION OF A REALISTIC DIVIDEND POLICY:

Sometimes a firm has sufficient profits available for distribution as dividend but yet it may not be advisable to distribute dividend for lack of liquid or cash resources. In such cases, a funds flow statement helps in the formation of a realistic dividend policy.

IT HELPS IN THE PROPER ALLOCATION OF RESOURCES:

The resources of a Spares are always limited and it wants to make the best use of these resources. A projected funds flow statement constructed for the future helps in making managerial decisions. The firm can plan the deployment of its resources and allocate them among various applications.

IT ACTS AS A FUTURE GUIDE:

A projected funds flow statement also acts as a guide for future to the management. The management can come to know the various problems it is going to face in near future for want of funds. The firms future needs of funds can be projected well in advance and also the turning of these needs. The firm can arrange to finance these needs more effectively and avoid future problems.

IT HELPS IN APPRAISING THE USE OF WORKING CAPITAL:

A funds flow statement helps in explaining how efficiently the management has used its working capital and also suggest ways to improve working capital position of the firm.

IT HELPS KNOWING THE OVERALL CREDITWORTHINESS OF A FIRM:

The financial institutions and banks such as state financial institutions. Industrial Development Corporation, industrial finance corporation of India, industrial development bank of India, etc. all ask for funds flow statement constructed for a number of years before granting loans to know the creditworthiness and paying capacity of the firm. Hence, a firm seeking financial assistance from these institutions has no alternative but to prepare funds flow statements.

3.1 RESEARCH METHODOLOGY Methodology is a systematic process of collecting information in order to analyze and verifies a phenomenon. The collection of data is two principle sources. They are discussed as

I. Primary Data

II. Secondary Data

PRIMARY DATA:

The primary data needed for the study is gathered through interview with concerned officers and staff, either individually or collectively, sum of the information has been verified or supplemented with personal observation conducting personal interviews with concerned officers of finance department of SIBAR AUTOPARTS LTD.,SECONDARY DATA:

The secondary data needed for the study was collected from published sources such as, pamphlets of annual reports, returns and internal records, reference from Advance management text books and journal management.

3.2 OBJECTIVES OF THE STUDY

To identify the sources and application of funds a study on Funds Flow Statements at SIBAR AUTOPARTS LTD., To analyze the trend of net working capital that is being maintained by the firm for period of 5 years.

To know and analyze the financial position of the SIBAR AUTOPARTS LTD., To know and analyze the Liquidity position of the SIBAR AUTOPARTS LTD.,3.3 SCOPE OF THE STUDY In this study the financial performance of the spares under the study is done from the angles Calculating funds from operation, maintaining of working capital, sources and applications of the funds.

Financial analysis consists of funds flow analysis. To know funds flow from one to one, as the time available is very limited and study is continued to over all financial condition of a firm.

The study to know working capital increase or decrease, funds from operation, source and application of funds

3.4 LIMITATIONS OF THE STUDY

The present reported is based on the secondary data provided by the SIBAR AUTOPARTS LTD., The source of the study is limited to 5 years from 2009-10 to 2013-14. The analysis is based on the annual reports. The liquidity position of Spares is very low.4. DATA ANALYSIS & INTERPRETATION1. WORKING CAPITAL RATIO:

Effective working capital management depends on the systematic management of the components of working capital .i.e., inventory, debtors, cash etc. Working capital ratio is the tool of the working capital management. It reflects the ability of the Spares to pay the current obligations .

It calculated as

Working capital ratio = current assets/current liabilities

TABLE: 4.1 YEARCURREN C CURRENT ASSETSCURRENT LIABILITIESWORKING CAPITAL RATIO

2009-108,167.503,509.592.32

2010-1110,725.943,922.42.73

2011-129,427.745,388.521.74

2012-1324,288.0022479.861.08

2013-1436,86619,445.181.89

Factors:

YEAR2009-102010-112011-122012-132013-14

working capital ratio2.322.731.741.081.89

CHART: 4.1

INTERPRETATION: The working capital ratio it was gradually increased the years 2009-10 is , 2.32, 2.73 and it was in the year 2010-11 is very fall down as 1.74 In 2011-2012 it was 1.08 . It and it was increase a little bit in 2012-13, 1.89 it indicates working capital is not maintaining proper management in the year 2014. It is decrease to the working capital ratio.

2. CASH RATIO:

Cash is the most liquid asset. A financial analyst may examine cash ratio and its Equivalent to current liabilities. Trade investment or marketable securities are Equivalent of cash. The standard ratio is 0.5:1or 50:100(%).

RATIO= (Cash+ Marketable Securities)/Current Liabilities

TABLE: 4.2

YEARCASHCURRENT LAIBILITIESCASH RATIO

2009-101290.713509.590.36

2010-111383.353922.480.35

2011-1212012.1614506.150.83

2012-134,773.4722479.860.21

2013-1421,081.8919,445.181.08

FACTORS:

YEAR2009-102010-112011-122012-132013-14

Cash ratio0.360.350.830.211.08

CHART: 4.2 INTERPRETATION:

The standard cash ratio is 0.5. It represents the satisfactory level in the years 2009-10 to 2013-14 the cash ratio is 0.36, 0.35, 0.83, 0.21 and 1.08 however it has heavily increased to 1.08 in the year 2012 the ratio 1.08. It represents Spares is maintaining standard level of cash in the Spares3. QUICK RATIO (or) ACID TEST RATIO:

It establishes the relationship between quick or liquid, Assets and liabilities. An asset is a Liquid if it can be converted into cash immediately. Inventories are considered to be less liquid. The quick ratio is found out by dividing quick assets by current liabilities. A quick ratio of 1to1 is considered to represent a satisfactory current financial condition.

Quick Ratio= (Current Assets-Inventories) / Current LiabilitiesTABLE: 4.3

YEARQUICK ASSETSCURRENT LIABLITIESQUICK RATIO

2009-105664.303509.591.61

2010-117611.373922.481.94

2011-1223365.0914506.151.61

2012-1318216.6525214.040.72

2013-1432487.5724366.351.33

FACTOR:

YEAR 2009-102010-112011-122012-132013-14

Quick ratio1.611.941.610.721.33

CHART: 4.3 INTERPRETATION:The standard ratio of current ratio is 2:1. The higher the current ratio the grater the margin of safety. In the year 2009-2010. Current ratio is 2.32 and 2010-11, 2.73 from 2011. The current ratio is gradually increased. In 2014 the current ratio is 1.51 lower than the safety margin.

4. INVENTORY TURNOVER RATIO (or) STOCK TURNOVER RATIO:

Inventory turnover ratio is a measure of liquidity. It indicates the speed at which the inventory is sold out. A high turnover ratio indicates that the inventory is out Fast and a low turnover ratio show a sale of inventory. This ratio indicates the efficiency of the firm in selling its products.

Stock turnover ratio=Cost of goods sold / average investment The high stock turnover ratio is indicating of good inventory management. TABLE: 4.4 YEARCOST OF GOODS SOLDAVG INVENTORYINVENTORY TURNOVER RATIO

2009-1027153.592392.5611.34

2010-1129725.952808.8810.58

2011-1236172.583430.2610.54

2012-1346374.896071.357.63

2013-1440613.424378.439.27

FACTORS:

YEAR2009-102010-112011-122012-132013-14

Inventory turnover ratio11.3410.5810.547.639.27

CHART: 4.4

INTERPRETATION:A high stock turnover indicated that the stocks are fast moving and get converted into sales very quickly .the year 2009-10 to 2014. The company inventory turnover ratio is 11.34, 10.58, 10.54, 7.63 and 9.27 respectively. Overall five years the ratio is increased.

STATEMENT OF THE CHANGES IN FINANCIAL POSITION OF SIBAR AUTOPARTS LTD., WORKING CAPITAL BASIS IN THE YEAR

2009-2010STATEMENT OF CHANGE IN WORKING CAPITAL 2009-2010

Particulars20092010Change In Working Capital

IncreaseDecrease

A) current assets:-

a) Inventories2503.23114.57611.37

B) Sundry Debtors2467.39943.791523.6

C) Cash & Bank Balance1290.711383.3592.64

E) Loans and Advances1906.25284.233378.03

Total Current Assets8167.510725.94

B) Current Liabilities:-

A) Liabilities3381.693758.62376.93

B) Provision127.9163.8635.96

Total Current Liabilities3509.593922.48

Working Capital (A-B)4657.916803.46

Increase in Working Capital2145.552145.55

TOTAL6803.466803.464082.044082.04

INTERPRETATION:

From the above table it is observed that the networking capital of the Spares shows increased i.e. Lakhs 2145.55.


SourcesRsApplicationsRs

Issue unsecured loans101.14Increase in work in progress149.2

Decrease in miscellaneous expenses102Purchase of investment166.03

Sale of fixed assets2093.49Payment secured loans2100.96

Funds from operations2265.11 Increase in working capital2145.55

4561.744561.74

INTERPRETATION:

From the above table it is observed that the Funds flow of the Spares shows fund i.e. from operation is Lakhs 2265.11.

STATEMENT OF THE CHANGES IN FINANCIAL POSITION OF SIBAR AUTOPARTS LTD.,WORKING CAPITAL BASIS IN THE YEAR 2010-2011STATEMENT OF CHANGE IN WORKING CAPITAL 2010-2011

Particulars20102011Change in working capital

Increase Decrease

A) current assets:-

a) inventories3114.573971.01856.44

b) sundry debtors943.7925311587.21

c) cash & bank balance1383.3512012.1610628.81

e) loans and advances5284.238821.933537.7

Total current assets10725.9427336.1

B) current liabilities:-

a) liabilities3758.6213132.529373.9

b) provision163.861373.631209.77

Total current liabilities3922.4814506.15

working capital (A-B)6803.4612829.95

Increase in working capital6026.496026.49

TOTAL12829.9512829.9516610.1616610.16

INTERPRETATION





Decrease in miscellaneous expenses67.1Purchase of fixed assets28163.9

Sale of investment26672.5Payment secured loans11161.6

Reserve and surplus16148.5 Increase in working capital6026.49

Funds from operations25662.8Deferred tax liabilities5659.36

70968.970968.9

INTERPRETATION:

From the above table it is observed that the Funds flow of the Spares shows fund i.e. from operation is Lakhs 25662.8.

STATEMENT OF THE CHANGES IN FINANCIAL POSITION OF SIBAR AUTOPARTS LTD.,WORKING CAPITAL BASIS IN THE YEAR 2011-2012STATEMENT OF CHANGE IN WORKING CAPITAL 2011-2012


Increase Decrease

A) Current Assets:-

A) Inventories3971.016071.352100.34

B) Sundry Debtors25312640.09109.09

C) Cash & Bank Balance12012.164773.477238.69

E) Loans and Advances8821.9310803.091981.16

Total Current Assets27336.124288


A) Liabilities13132.5222479.869347.34

B) Provision1373.632734.181360.55

Total current liabilities14506.1525214.04

Working Capital (A-B)12829.95-926.04

Decrease in Working Capital13755.9913755.99

TOTAL12829.9512829.9517946.5817946.58

INTERPRETATION:

From the above table it is observed that the networking capital of the Spares shows decreased i.e. Lakhs 13755.9




Issue secured loans6173.86Deferred tax liabilities518.2

Sale of fixed assets4646.01

Reserve and surplus19772.72

Sale of investment4951.06

Decrease in working capital13755.99

51619.0951619.09

INTERPRETATION:

From the above table it is observed that the Funds flow of the Spares shows sources and applications are same. STATEMENT OF THE CHANGES IN FINANCIAL POSITION OF SIBAR AUTOPARTS LTD.WORKING CAPITAL BASIS IN THE YEAR 2012-2013STATEMENT OF CHANGE IN WORKING CAPITAL 2012-2013


Increase Decrease

A) current assets:-

a) Inventories6071.354378.431692.92

b) Sundry Debtors2640.093922.791282.7

c) Cash & Bank Balance4773.4721081.8916308.42

e) Loans and Advances10803.097482.893320.2

Total Current Assets2428836866


a) Liabilities22479.8619445.183034.68

b) Provision2734.184921.172186.99


Working Capital (A-B)-926.0412499.65


TOTAL12499.6512499.6520625.820625.8

INTERPRETATION:





issue secured loans32848.64Deferred tax liabilities781.16

sale of fixed assets4355.69purchase of investment11664.09

Reserve and surplus16963.95Increase in working capital13425.69

55813.6555813.65

INTERPRETATION:

From the above table it is observed that the Funds flow of the Spares shows sources and applications are same. STATEMENT OF THE CHANGES IN FINANCIAL POSITION OF SIBAR AUTOPARTS LTD., WORKING CAPITAL BASIS IN THE YEAR 2013-2014STATEMENT OF CHANGE IN WORKING CAPITAL 2013-2014


Increase Decrease

A) Current Assets:-

a) Inventories9071.356378.432692.62

b) Sundry Debtors3640.094922.791282.7

c) Cash & Bank Balance4773.4721081.8915308.42

e) Loans and Advances10803.097482.893220.2

Total Current Assets3428826866


a) Liabilities44479.8619445.1832034.18

b) Provision4734.188921.172586.45


Working Capital (A-B)-926.0415499.63


TOTAL15499.6315499.6325625.225625.2

INTERPRETATION:

From the above table it is observed that the networking capital of the Spares shows increased i.e. Lakhs 16422.67.FUNDS FLOW STATEMENT


Issue unsecured loans2563.24Increase in Work in Progress4725.05

Issue Secured Loans58123.25Deferred Tax Liabilities5523.33

Sale of Fixed Assets8563.56Purchase of Investment5813.05

Reserve and Surplus8756.45Increase in Working Capital16422.67

78006.5078006.50

INTERPRETATION:

From the above table it is observed that the Funds flow of the Spares shows sources and applications are same. 5.1 FINDINGS

The networking capital of the Spares shows increased in 2009-10 i.e. Lakhs 2145.55. Funds flow of the Spares shows fund i.e. from operation is Lakhs 2265.11.


The networking capital of the Spares shows decreased in 2011-12 i.e. Lakhs 13755.99. Funds flow of the Spares shows sources and applications are same.

The networking capital of the Spares shows increased in 2012-13 i.e. Lakhs 13425.69. Funds flow of the Spares shows sources and applications are same.

The working capital ratio it was gradually increased the years 2009-10 is , 2.32, 2.73 and it was in the year 2010-11 is very fall down as 1.74 In 2011-2012 it was 1.08 . It and it was increase a little bit in 2012-13, 1.89 it indicates working capital is not maintaining proper management in the year 2013. It is decrease to the working capital ratio.

The higher working capital turnover ratio indicated the better management of working capital in the years 2009-10 to 2014 the ratio is 8.5 and 5.9, 11.7, 14.8, 9.6 respectively. In the year 2013 working capital turnover will be decreased that is 9.6over. Previous year will not refer the better management of working capital of the firm. All the five years better management of working capital of the Spares.

5.2 SUGGESTIONS

The Spares should have maintained working capital turnover without fluctuations for better management of working capital.

The Spares must have maintained the cash ratio for better circulation of money for in the Spares for the management of working capital.

The Spares maintains standard level of current ratio 0.5. So the Spares should have maintained above standard level of current ratio for better management of working capital.

The Spares should have increase stock turnover for the moving of stock in to sales very immediately for the better management of working capital.

For the relations to creditors, it helps to. The Spares is ability to efficient in the management of credit The Spares must have maintained debtors turn over ratios for the better liquidity fast the debtors are converted into cash in year. It leads to higher the turnover ratio and lower the collection period.

The financial year 2012 to 2013 can increase the sources.

5.3 CONCLUSION

The Spares being mostly depends on working capital facilities it is maintaining very good relationship with their banks and their working capital management is balanced.

The Spares is performing exceptionally well due to up wising in the Global market followed by the domestic market it is up coming on with good and innovative ideas and believe in improving all the area of its operations. The Spares has a good quality position and does not delay commitment in case of but its creditors and debtors.

Finally I conclude that the performance of the Spares is satisfactory there was increasing the activities.

ANNEXURES

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MAR, 2009-2010Rs in lakhsParticulars20102009

Income

Sales (Gross)47,306.1840,166.84

Less : Excise Duty7,616.567,284.19

Sales (Net)39,689.6232,882.65

Other Income457.41412.55

40,147.0333,295.20

Expenditure

Purchase of finished goods for resale3,288.271,574.49

Manufacturing and other expenses29,552.2528,359.17

Depreciation2,859.772,839.05

Interest and other finance charges2,234.882,333.38

(Increase)/Decrease in stocks of work-in-process a and finished goods 86.54

37,690.5735,192.63

Profit / (Loss) for the year2,456.46(1,897.43)

Povision for Tax

Current Tax----

Fringe Benefit Tax65.00--

Profit / (Loss) for the year2,265.11(2,104.92)

Debit balance brought forward from previous year(16,609.18)(14,504.26)

Debit balance carried to balance sheet14,344.0716,609.18

BALANCE SHEET AS ON 31ST MAR, 2009-2010Rs in lakhsParticulars20102009

1. Sources of Funds :

Share Capital42,796.1442,796.14

Reserve & Surplus21,901.9321,901.93

64,698.0764,698.07

Loans Funds :

Secured Loans / Funds1,533.0717,431.03

Unsecured Funds9,868.559,767.41

25,198.6827,198.44

Total89,896.6991,896.51

2 . Application of Funds :

Fixed Assets

Goss Block54,205.9653,550.07

(-) Dep.22,537.1219,787.74

Net Block31,668.8433,762.33

Capital work in progress289.62140.42

31,958.4633,902.75

Investments36,723.6036,557.57

Current assets, loans & advances :

Inventories3,114.572,503.20

Sundry Debtors934.792,467.39

Cash & Bank Balances1,383.351,290.71

Loans & Advances5,284.231,906.20

10,725.948,167.50

Current Liabilities & Provisions :

Current Liabilities3,758.623,38169

Provisions289.62127.90

3,922.483,509.59

Net Current Assets6,803.464,657.91

Miscellaneous Expenditure67.10169.10

Profit and Loss Account14,344.0716,609.18

Total89,896.6991,896.51

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MAR, 2010-2011Rs. in lakhs

Particulars20112010

Income

Sale of manufactured goods1,16,900.2447,905.48

Less : Excise Duty17,521.326,388.76

99,378.9241,516.72

Sale of traded goods-2,404.44

Other Income1,832.29432.61

1,01,211.2144,353.77

Expenditure

Cost of goods sold36,172.5816,825.32

Personnel cost3,604.811,777.200

Other expenses25,119.289,234.53


Amortisation of goodwill1,7,99.20--

Interest and other finance cost950.93871.49

72,851.0330,908.95

Profit before tax28,360.1813,444.82

Provision for tax6,542.84982.00

- Current tax(982.00)-

- MAT credit of earlier years(713.59)-

- fringe benefit tax115.8328.00

- deferred tax charge5,339.36-

Profit for the year18,057.7412,434.82

Debit balance in Profit and Loss account b brought forward(1,909.25)(14,344.07)

Balance in Profit & Loss account carried forward16,148.49(1,909.25)

BALANCE SHEET AS ON 31st MAR, 2010-2011Particulars20112010


Share Capital42,796.1442,796.14


80846.5664,698.07

Loans Funds :



Deferred tax liability5,659.63---------

22,114.2915,704.14

Total1,02,960.8580402.21

2. Application of Funds :

Fixed Assets

Gross Block89,683.7153,811.03

(-) Dep.29,850,9324,043.25

Net Block59,832.7829,767.78

Capital work in progress320,247.063,453.60

80,079.8433,221.38

Investments10,051.0642,083.62


Inventories3971.012889.51

Sundry Debtors2531.001866.11

Cash & Bank Balances12012.161576.48

Loans & Advances8821.933442.81

27336.19774.91


Current Liabilities131132.526020.09

Provisions1373.63566.86

14506.186586.95

Net Current Assets12,829.953,187.96

Profit and Loss Account-----------1,909.25

Total1,02,960.8580402.21

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MAR, 2011-2012Particulars20122011

Income

Sale of manufactured goods137,728.951,16,900.24

Less : Excise Duty20,207.1117,521.32

117,521.8499,378.92

Sale of traded goods-

Other Income1,807.181,832.29

1,19,329.021,01,211.21

Expenditure





Amortization of goodwill1,7,99.201,799.20


87,133.0572,851.03


Provision for tax12,881.456,542.84

- Current tax-(982.00)

- MAT credit of earlier years-(713.59)


- deferred tax charge518.205,339.36


Debit balance in Profit and Loss

account brought forward(16,148.49)(1,909.25)

Balance in Profit & Loss account carried forward(35,921.21)(16,148.49)

BALANCE SHEET AS ON 31stMAR, 2011-2012 Rs. In lakhs

Particulars20122011


Share Capital42,796.1442,796.14


100,619.2880846.56

Loans Funds :



Deferred tax liability5,141.165,659.63

15,704.1422,114.29

Total1,30,708.681,02,960.85


Fixed Assets

Gross Block91,539.8789,683.71

(-) Dep.36,353.1029,850,93

Net Block55,186.7759,832.78


126,534.7280,079.84

Investments5,100.0010,051.06


Inventories6,071.353971.01

Sundry Debtors2,640.092531.00

Cash & Bank Balances4,773.4712012.16

Loans & Advances10,803.098821.93

24,288.0027336.1


Current Liabilities22,479.8613132.52

Provisions2,734.181373.63

25,214.0414506.18

Net Current Assets926.0412,829.95

Profit and Loss Account---------------------

Total1,30,708.681,02,960.85

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DEC, 2012-2013 Rs. in lakh

Particulars20132012

Income

Sale of manufactured goods1,20,946.74137,728.95

Less : Excise Duty12,218.1920,207.11

1,08,728.55117,521.84

Sale of traded goods-

Other Income796.301,807.18

1,09,524.851,19,329.02

Expenditure





Amortization of goodwill1,799.201,799.20


81,805.6187,135.02


Provision for tax11,520.0012,879.48

- Current tax--

- MAT credit of earlier years--


- deferred tax charge(781.16)518.20


Debit balance in Profit and Loss account brought forward35,921.21(16,148.49)

Balance in Profit & Loss account carried forward52,885.16(35,921.21)

BALANCE SHEET AS ON 31st DEC, 2012-2013Rs. in lakhs

Particulars20132012


Share Capital42,796.1442,796.14


117,619.28100,619.28

Loans Funds :




Total181,385.481,30,708.68


Fixed Assets

Gross Block94,463.8691,539.87

(-) Dep.43,632.7836,353.10

Net Block50,831.0855,186.77


152,121.74126,534.72

Investments16,764.095,100.00


Inventories4,378.436,071.35

Sundry Debtors3,922.792,640.09

Cash & Bank Balances21,081.894,773.47

Loans & Advances7,482.8910,803.09

36,866.0024,288.00


Current Liabilities19,445.1822,479.86

Provisions4,921.172,734.18

24,366.3525,214.04

Net Current Assets12,499.65926.04

Total181,385.481,30,708.68

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DEC, 2013-2014Rs. In lakh

Particulars20142013

Income

Sale of manufactured goods116,737.131,20,946.74

Less : Excise Duty15,059.2912,218.19

101,677.841,08,728.55

Sale of traded goods--

Other Income1,955.93796.30

103,633.771,09,524.85

Expenditure





Amortization of goodwill1,799.201,799.20

Interest and other finance cost3,439.37424.13

98,570.8981,805.61


Provision for tax

- Current tax1,031.0011,520.00

- MAT credit of earlier years--

- fringe benefit tax3,000.0016.45

- deferred tax charge(1,031.00)(781.16)


Debit balance in Profit and Loss account brought forward52,885.1635,921.21

Balance in Profit & Loss account carried forward54,948.0452,885.16

BALANCE SHEET AS ON 31st DEC, 2013-2014Rs. in lakhs

Particulars20142013


Share Capital42,796.1442,796.14


119,646.11117,583.23

Loans Funds :




Total188,042.95181,385.48


Fixed Assets

Gross Block193,075.6594,463.86

(-) Dep.53,870.0943,632.78

Net Block139,205.5650,831.08


184,064.90152,121.74

Investments6850.2716,764.09


Inventories9061.614,378.43

Sundry Debtors4123.753,922.79

Cash & Bank Balances4550.4621,081.89

Loans & Advances11,510.127,482.89

29,245.9436,866.00


Current Liabilities29522.3619,445.18

Provisions2,595.804,921.17

32,118.1624,366.35

Net Current Assets(2,872.22)12,499.65

Total188,042.95181,385.48

BIBLIOGRAPHY

1. Author

:I.M.PANDEY

Title of the book

:Financial Management

Publisher

:Vikas Publishing House Pvt. Pvt.Ltd..,

Edition

:Ninth Edition.

2. Author

:M.Y. Khan & P.K. Jain

Title of the book


Publisher

:Tata Mc. Graw Hill Publishing Co.Pvt.Ltd..,

Edition

:Third Edition.

3. Author

:Prasanna Chandra

Title of the book


Publisher

:Tata Mc. Graw Hill Publishing Co.Pvt.Ltd..,

Edition

:Fifth Edition.

WEBSITES:

www.sibarautopartsltd.com

www.wikipedia.com

SYNOPSIS

Introduction

Finance is one the basic foundations of all kinds of economic activities. It is the master key, which provides access to all the sources for being employed in manufacturing. Hence it is rightly said that finance is lifeblood of any enterprise, besides being the scarcest elements, it is also the most indispensable requirement. Without finance neither any business can be started nor successfully run. Provision of sufficient funds at the required time is the key to success of concern. As matter of fact finance may be said to be the circulatory system of economic body, making possible the needed co-operation among many units of the activity.

INDUSTRY PROFILE The present automobiles are most sophisticate combining luxury, safety economy in utilizing the energy resource with great speed and least environment. Pollution using various field of science likes aerodynamics, mechanical expertise and electrical engineering. Every day improvement in the existing models holding the price line in reasonable range involving high become necessity. Present day consumer satisfaction involves great skill in marketing, advertising and positioning the product line whim and Cashion advances with increased performance and reduce size. Business minded people started selling them top the society.

COMPANY PROFILE

M/S SIBAR AUTOPARTS Ltd. Was originally incorporated as private limited company by name M/s SIBAR AUTOPARTS (PVT) Limited in the year 1983, located at industrial estate, TIRUPATHI. It was converted into public limited company in the year 1994. The company is presently engaged in manufacturing and marketing of aluminum hard chrome plated cylinder kits mainly for the two wheelers up to engine capacity 150cc.

RESEARCH METHODOLOGY Methodology is a systematic process of collecting information in order to analyze and verifies a phenomenon. The collection of data is two principle sources. They are discussed as

III. Primary Data

IV. Secondary Data

PRIMARY DATA:

The primary data needed for the study is gathered through interview with concerned officers and staff, either individually or collectively, sum of the information has been verified or supplemented with personal observation conducting personal interviews with concerned officers of finance department of SIBAR AUTOPARTS LTD.,SECONDARY DATA:

The secondary data needed for the study was collected from published sources such as, pamphlets of annual reports, returns and internal records, reference from Advance management text books and journal management.

OBJECTIVES OF THE STUDY

To identify the sources and application of funds a study on Funds Flow Statements at SIBAR AUTOPARTS LTD., To analyze the trend of net working capital that is being maintained by the firm for period of 5 years.

To know and analyze the financial position of the SIBAR AUTOPARTS LTD., To know and analyze the Liquidity position of the SIBAR AUTOPARTS LTD.,SCOPE OF THE STUDY In this study the financial performance of the spares under the study is done from the angles Calculating funds from operation, maintaining of working capital, sources and applications of the funds.

Financial analysis consists of funds flow analysis. To know funds flow from one to one, as the time available is very limited and study is continued to over all financial condition of a firm.

LIMITATIONS OF THE STUDY

The present reported is based on the secondary data provided by the SIBAR AUTOPARTS LTD., The source of the study is limited to 5 years from 2009-10 to 2013-14. The analysis is based on the annual reports. The liquidity position of Spares is very low.FINDINGS



The networking capital of the Spares shows decreased in 2011-12 i.e. Lakhs 13755.99. Funds flow of the Spares shows sources and applications are same.

SUGGESTIONS

The Spares should have maintained working capital turnover without fluctuations for better management of working capital.

The Spares must have maintained the cash ratio for better circulation of money for in the Spares for the management of working capital.

The Spares maintains standard level of current ratio 0.5. So the Spares should have maintained above standard level of current ratio for better management of working capital.

CONCLUSION

The Spares being mostly depends on working capital facilities it is maintaining very good relationship with their banks and their working capital management is balanced. The Spares is performing exceptionally well due to up wising in the Global market followed by the domestic market it is up coming on with good and innovative ideas and believe in improving all the area of its operations.

H.C.V.

M.C.V.

I.C.V.

MOPEDS

SCOOTERETTES

SCOOTERS

MOTORCYCLE

COMMERCIAL VEHICLE

PASSENGER VEHICLE

3 WHEELER

2 WHEELER

AUTOMOBILE

PAGE BES Group of Institutions (GVIC)Angallu

63

sibar funds flow state

Documents

capital funds

capital mix decision

major financial decision

liquidity decision

financing mix

financial functions

finance functions

business finance