A STUDY ON CASH MANAGEMENT WITH REFERENCE TO AUTOKSHI

ENGINEERS PVT LTD

Submitted in partial fulfillment of the requirements for the award of

MASTER OF BUSINESS ADMINISTRATION

by
SAI KRISHNAN K E
Register No.40410150

SCHOOL OF MANAGEMENT STUDIES

SATHYABAMA
INSTITUTE OF SCIENCE AND TECHNOLOGY
(DEEMED TO BE UNIVERSITY)
Accredited with Grade “A” by NAAC I 12B Status by UGC I Approved by AICTE
JEPPIAAR NAGAR, RAJIV GANDHI SALAI, CHENNAI - 600 119

APRIL 2022
 SCHOOL OF MANAGEMENT STUDIES

BONAFIDE CERTIFICATE

This is to certify that this Project Report is the bonafide work of SAI KRISHNAN K.E. 40410150
who carried out the project entitled “A STUDY ON CASH MANAGEMENT WITH
REFERENCE TO AUTOKSHI ENGINEERS PVT LTD ” under my supervision from
January 2022 to March 2022.

Dr.M. THINESH KUMAR

Internal guide External Guide

Dr. BHUVANESWARI .G
Dean – School of Management Studies

Submitted for Viva voce Examination held on_____________________

Internal Examiner External Examiner

 DECLARATION

I SAI KRISHNAN K E (40410150) hereby declare that the Project Report entitled “A
Study ON CASH MANAGEMENT WITH REFERENCE TO AUTOKSHI ENGINEERS
PVT LTD ” done by me under the guidance of DR.S.THINESH KUMAR is submitted in
partial fulfillment of the requirements for the award of Master of Business
Administration degree.

DATE:

PLACE: SAI KRISHNAN K E

 ACKNOWLEDGEMENT

I am pleased to acknowledge my sincere thanks to Board of Management of

SATHYABAMA for their kind encouragement in doing this project and for completing it
successfully. I am grateful to them.

I convey my sincere thanks to Dr. G. Bhuvaneswari, Dean - School of Management

Studies and Dr. A. Palani, Head - School of Management Studies for providing me
necessary support and details at the right time during the progressive reviews.

I would like to express my sincere and deep sense of gratitude to my Project Guide
DR.S.THINESH KUMAR for her valuable guidance, suggestions and constant
encouragement paved way for the successful completion of my project work.

I wish to express my thanks to all Teaching and Non-teaching staff members of the School
of Management Studies who were helpful in many ways for the completion of the project.

SAI KRISHNAN K E
 TABLE OF CONTENTS

CHAPTER NO. CONTENTS PAGE NO.

I INTRODUCTION 1-7

II COMPANY PROFILE 8-18

2.1 Industry Profile 8-9

III REVIEW OF LITERATURE 19-20

IV RESEARCH METHODOLOGY 21-27

4.1 Statement of the problem 21

4.2 Objectives of the study 21-22

4.3 Scope of the study 22

4.4 Limitation of the study 22

4.5 Working procedure for the Cash management 24-27

V DATA ANALYSIS AND INTERPRETATION 28-55

VI SUGESTIONS 56-57

VII CONCLUSION 58-59

BIBLIOGRAPHY 61

BALANCESHEET 58-60

VIII ANNEXURE
 CHART CONTENTS

SLNO CONTENTS PAGE NO.

1 CURRENT RATIO 28-30

2 CASH POSITION RATIO 30-31

3 QUICK RATIO 32-33

4 ABSOLUTE LIQUID RATIO 34-35

5 FIXED ASSET RATIO 35-36

6 CAPITAL TURNOVER RATIO 37-38

7 WORKING CAPITAL RATIO 39-40

8 EXPENSES RATIO 40-41

9 NET PROFIT RATIO 41-43

10 DEBTORS TURNOVER RATIO 43-45

11 DEBTORS COLLECTION PERIOD 45-47

12 CASH FLOW STATEMENT FOR THE YEAR 2017 47-49

13 CASH FLOW STATEMENT FOR THE YEAR 2018 49-51

14 CASH FLOW STATEMENT FOR THE YEAR 2019 51-55

 TABLE CONTENTS

SLNO CONTENTS PAGE NO.

1 CURRENT RATIO CHART 29

2 CASH POSITION RATIO CHART 31

3 QUICK RATIO CHART 33

4 ABSOLUTE LIQUID RATIO CHART 34

5 FIXED ASSET RATIO CHART 36

6 CAPITAL TURNOVER RATIO CHART 38

7 WORKING CAPITAL RATIO CHART 39

8 EXPENSES RATIO CHART 41

9 NET PROFIT RATIO CHART 43

10 DEBTORS TURNOVER RATIO CHART 44

11 DEBTORS COLLECTION PERIOD CHART 52

 ABSTRACT

The project titled “A Study on cash management for Autokshi Engineers Pvt Ltd” deals with the
movement of money into or out of a business, project, or financial product. It is usually measured during
a specified, finite period of time. The need for Cash to run the day-to-day business activities cannot be
overemphasized. One can hardly find a business firm, which does not require any amount of Cash.
Indeed, firms differ in their requirements of the Cash.

A firm should aim at maximizing the wealth of its shareholders. In its endeavor to do so, a firm
should earn sufficient return from its operation. Earning a steady amount of profit requires successful
sales activity. The firm has to invest enough funds in current asset for generating sales. Current asset are
needed because sales do not convert into cash instantaneously. There is always an operating cycle
involved in the conversion of sales into cash.

The objectives are to analyze the Cash management and to determine efficiency in cash,
inventories, debtors and creditors. Further, to understand the liquidity and profitability position
of the firm.
These objectives are achieved by using ratio analysis and then arriving at conclusions,
which are important to understand the efficiency / inefficiency of Cash.
It was noticed in the study that the company had utilized its Cash efficiently and can also
try to get more effective values by working on it. The cash required to meet out the current
liabilities is maintained at a normal level that shows the company follows an average policy.

CHAPTER 1 – INTRODUCTION
Introduction:
Cash management is the corporate process of collecting and managing cash, as well as
using it for short-term investing. It is a key component of a company's financial stability
and solvency. Corporate treasurers or business managers are frequently responsible for overall
cash management and related responsibilities to remain solvent.
Cash flow is the movement of money in to and out of a business. Inflows–moneys coming in–
typically arrive in the form of customer payments; bank loans are also inflows. Outflows-moneys leaving
the business–are generally expenses, including payments on purchases, overhead, and loan payments.

To manage cash flow means to take an active approach in determining how this process of
money moving in and out of the business plays out. The purpose of this project is to provide an overview
of the cash-flow management process. Future articles will discuss specific aspects in greater detail.

A cash flow statement provides information about the changes in cash and cash
equivalents of a business by classifying cash flows into operating, investing and financing
activities. It is a key report to be prepared for each accounting period for which financial
statements are presented by an enterprise.
Monitoring the cash situation of any business is the key. The income statement would
reflect the profits but does not give any indication of the cash components. The important
information of what the business has been doing with the cash is provided by the cash flow
statement. Like the other financial statements, the cash flow statement is also usually drawn up
annually, but can be drawn up more often. It is noteworthy that cash flow statement covers the
flows of cash over a period of time (unlike the balance sheet that provides a snapshot of the
business at a particular date). Also, the cash flow statement can be drawn up in a budget form
and later compared to actual figures.

Objectives of preparing Cash Flow Statement

➢ Cash flow statement shows inflow and outflow of cash and cash equivalents from
various activities of a company during a specific period under the main heads i.e.,
operating activities, investing activities and financing activities.
➢ Information through the Cash Flow statement is useful in assessing the ability of any
enterprise to generate cash and cash equivalents and the needs of the enterprise to utilize
those cash flows.
➢ Taking economic decisions requires an evaluation of the ability of an enterprise to
generate cash and cash equivalents, which is provided by the cash flow statement
Cash and cash equivalents generally consist of the following:
• Cash in hand
• Cash at bank
• Short term investments that are highly liquid.
• Bank overdrafts comprise an integral element of the organization’s treasury
management.

CLASSIFICATION OF ACTIVITIES:
Cash flow activities are to be classified into three categories :
This is done to show separately the cash flows generated / used by these activities, thereby
helping to assess the impact of these activities on the financial position and cash and cash
equivalents of an enterprise.
• Operating activities
• Investing activities
• Financing activities

Cash from Operating Activities:

Operating activities are the activities that comprise of the primary / main activities of an
enterprise during an accounting period. For example, for a garment manufacturing company,
operating activities include procurement of raw material, sale of garments, incurrence of
manufacturing expenses, etc. These are the principal revenue generating activities of the
enterprise.
Profit before tax as presented in the income statement could be used as a starting point to
calculate the cash flows from operating activities.
Cash Inflows from operating activities:
➢ Cash receipts from sale of goods and rendering services.
➢ Cash receipts from fees, royalties, commissions and other revenues.
Cash Outflows from operating activities:
➢ Cash payments to suppliers for goods and services.
➢ Cash payments of income taxes unless they can be specifically identified with
financing and investing activities.
Following adjustments are required to be made to the profit before tax to arrive at the cash flow
from operations:
➢ Elimination of non cash expenses (e.g. depreciation, amortization, impairment
losses, bad debts written off, etc)
➢ Removal of expenses to be classified elsewhere in the cash flow statement (e.g.
interest expense should be classified under financing activities)
➢ Removal of income to be presented elsewhere in the cash flow statement (e.g.
dividend income and interest income should be classified under investing activities
unless in case of for example an investment bank)
➢ Elimination of non cash income (e.g. gain on revaluation of investments)
➢ The amount of cash from operations indicates the internal solvency level of the company.
It is a key indicator of the extent to which the operations of the enterprise have generated
sufficient cash flows to maintain its operating potential.

Cash from Investing Activities:

Cash flow from investing activities includes the movement in cash flows owing to the
purchase and sale of assets. It relates to purchase and sale of long-term assets or fixed assets such
as machinery, furniture, land and building, etc.
Cash Outflows from investing activities
➢ Cash payments to acquire fixed assets including intangibles and capitalized R&D.
➢ Cash advances and loans made to third party (other than advances and loans made by
a financial enterprise wherein it is operating activities).
➢ Cash payments to acquire shares, warrants or debt instruments of other enterprises
other than the instruments those held for trading purposes.

Cash Inflows from investing activities

➢ Cash receipt from disposal of fixed assets including intangibles.
➢ Cash receipt from the repayment of advances or loans made to third parties (except
in case of financial enterprise).
➢ Dividend received from investments in other enterprises.
➢ Cash receipt from disposal of shares, warrants or debt instruments of other
enterprises except those held for trading purposes.

Cash from Financing Activities:

It includes financing activities related to long-term funds or capital of an enterprise.
Financing activities are activities that result in changes in the size and composition of the
owners’ capital and borrowings of the enterprise.
e.g., cash proceeds from issue of equity shares, debentures, raising long-term loans,
repayment of bank loans, etc.
Cash Inflows from financing activities
➢ Cash proceeds from issuing shares (equity / preference).
➢ Cash proceeds from issuing debentures, loans, bonds and other short/ long-term
borrowings.
Cash Outflows from financing activities:
➢ Cash repayments of amounts borrowed.
➢ Interest paid on debentures and long-term loans and advances.
➢ Dividends paid on equity and preference capital.
 Methods of preparing the Cash Flow Statements
➢ Operating activities are the main source of revenues and expenditures, thereby cash flow
from the same needs to be ascertained. The cash flow can be reported through two ways:
➢ Direct method that discloses the major classes of gross cash receipts and cash payments
and
➢ Indirect method that has the net profit or loss adjusted for effects of
(1) transactions of a non-cash nature,
(2) any deferrals or accruals of past/future operating cash receipts and
(3) items of income or expenses associated with investing or financing cash flows.

DIRECT METHOD:
In the direct method, the major heads of cash inflows and outflows (such as cash received
from trade receivables, employee benefits, expenses paid, etc.) are to be considered. As the
different line items are recorded on accrual basis in statement of profit and loss, certain
adjustments are to be made to convert them into cash basis such as the following:
1. Cash receipts from customers = Revenue from operations + Trade receivables in the beginning
– Trade receivables in the end.
2. Cash payments to suppliers = Purchases + Trade Payables in the beginning – Trade Payables
in the end.
3. Purchases = Cost of Revenue from Operations – Opening Inventory + Closing Inventory.
4. Cash expenses = Expenses on accrual basis + Prepaid expenses in the beginning and
Outstanding expenses in the end – Prepaid expenses in the end and Outstanding expenses in the
beginning.

INDIRECT METHOD:
Indirect method of ascertaining cash flow from operating activities begins with the
amount of net profit/loss. This is so because statement of profit and loss incorporates the effects
of all operating activities of an enterprise. However, Statement of Profit and Loss is prepared on
accrual basis (and not on cash basis). Moreover, it also includes certain non-operating items such
as interest paid, profit/loss on sale of fixed assets, etc.) and non-cash items (such as depreciation,
goodwill to be written-off, etc. Therefore, it becomes necessary to adjust the amount of net
profit/loss as shown by Statement of Profit and Loss for arriving at cash flows from operating
activities.
Purpose & Importance of Cash Flow Statements:
➢ Statement of cash flows provides important insights about the liquidity and solvency
of a company which are vital for survival and growth of any organization.
➢ It enables analysts to use the information about historic cash flows for projections of
future cash flows of an entity on which to base their economic decisions.
➢ By summarizing key changes in financial position during a period, cash flow
statement serves to highlight priorities of management.
➢ Comparison of cash flows of different entities helps reveal the relative quality of
their earnings since cash flow information is more objective as opposed to the
financial performance reflected in income statement.
Advantages of Cash Flow Statement
➢ Cash Flow Statements help in knowing the liquidity / actual cash position of the
company which funds flow and P&L are unable to specify.
➢ As the liquidity position is known, any shortfalls can be arranged for or excess can
be used for the growth of the business
➢ Any discrepancy in the financial reporting can be gauged through the cash flow
statement by comparing the cash position of both.
➢ Cash is the basis of all financial operations. Therefore, a projected cash flow
statement will enable the management to plan and control the financial operations
properly.
➢ Cash Flow analysis together with the ratio analysis helps measure the profitability
and financial position of business.
➢ Cash flow statement helps in internal financial management as it is useful in
formulation of financial plans.
Disadvantages of Cash Flow Statement:
➢ Through the cash flow statement alone, it is not possible to arrive at actual P&L of
the company as it shows only the cash position. It has limited usage and in isolation
 it is of no use and requires BL, P&L for its projections. Cash flow statement does not
disclose net income from operations. Therefore, it cannot be a substitute for income
statement
➢ The cash balance as shown by the cash flow statement may not represent the real
liquidity position of the business because it can be easily influenced by postponing
the purchases and other payments
➢ Cash flow statement cannot replace the funds flow statement. Each of the two has a
separate function to perform.

CHAPTER 2 – COMPANY PROFILE

1.1 INDUSTRY PROFILE

 The Indian auto-components industry has experienced healthy growth over the last few years.
Some of the factors attributable to this include: a buoyant end-user market, improved consumer
sentiment and return of adequate liquidity in the financial system.
The auto-components industry accounts for almost seven per cent of India’s Gross Domestic
Product (GDP) and employs as many as 19 million people, both directly and indirectly. A stable
government framework, increased purchasing power, large domestic market, and an ever
increasing development in infrastructure have made India a favourable destination for
investment.
Market Size
The Indian auto-components industry can be broadly classified into the organised and
unorganised sectors. The organised sector caters to the Original Equipment Manufacturers
(OEMs) and consists of high-value precision instruments while the unorganised sector comprises
low-valued products and caters mostly to the aftermarket category.
Over the last decade, the automotive components industry has scaled three times to US$ 39
billion in 2015-16 while exports have grown even faster to US$ 10.8 billion. This has been
driven by strong growth in the domestic market and increasing globalisation (including exports)
of several Indian suppliers.
The Indian Auto Component industry is expected to grow by 8-10 per cent in FY 2017-
18, based on higher localisation by Original Equipment Manufacturers (OEM), higher
component content per vehicle, and rising exports from India, as per ICRA Limited.
According to the Automotive Component Manufacturers Association of India (ACMA), the
Indian auto-components industry is expected to register a turnover of US$ 100 billion by 2020
backed by strong exports ranging between US$ 80- US$ 100 billion by 2026, from the current
US$ 11.2 billion.
Investments
The cumulative Foreign Direct Investment (FDI) inflows into the Indian automobile
industry during the period April 2000 – September 2016 were recorded at US$ 15.80 billion, as
per data by the Department of Industrial Policy and Promotion (DIPP).
Some of the major investments made into the Indian auto components sector are as follows:
➢ Gestamp, a Spanish automobile component manufacturing company, has invested Rs 260
crore (US$ 38.63 million) in a new hot stamping plant in Pune, in order to cater to the
increasing demand for lighter vehicles in India.
➢ Exide Industries, India’s biggest automotive battery maker, plans to invest around Rs 300
crore (US$ 45 million) in West Bengal to expand its capacity for advanced motorcycle
batteries over a period of 18 months.
➢ Motherson Sumi Systems Ltd, an automobile components manufacturer, has acquired
Finland-based truck wire maker PKC Group Pic for € 571 million (US$ 609.57 million),
which will help the company expand its presence in the global wiring harness business
for commercial vehicles.
➢ Sundaram Clayton, part of the TVS group, plans to invest US$ 50 million in US and Rs
400 crore (US$ 59.76 million) in India over the next three years.
➢ Mercedes Benz India Private Limited has set up India’s largest spare parts warehouse in
Pune, with an area of 16,500 square meters which can stock up to 44,000 parts. It will
also include a vehicle preparation centre that can stock up to 5,700 cars to customise
them before delivery.
➢ JK Tyre and Industries Ltd, India's leading tyre manufacturer, has acquired Cavendish
Industries Ltd (CIL) for Rs 2,200 crore (US$ 329.2 million), which will enable JK’s entry
into the fast-growing two-wheeler and three-wheeler tyre market.
➢ Japanese auto major Honda is planning to step up supply and target exporting of auto
components worth Rs 1,500 crore (US$ 224.45 million) from India to it various
international operations.
➢ Auto components maker Bharat Forge Ltd (BFL), the flagship company of the US$ 3
billion Kalyani Group, has formalised agreement with Rolls-Royce Plc which will supply
BFL with critical and high integrity forged and machined components
➢ Canada’s Magna International Incorporated has started production at two facilities in
Gujarat’s Sanand, which will supply auto parts to Ford Motor Co in India
➢ Everstone Capital, a Singapore-based private equity (PE) firm, has purchased 51 per cent
in Indian auto components maker SJS Enterprises for an estimated Rs 350 crore (US$
51.35 million).
 ➢ ArcelorMittal signed a joint venture agreement with Steel Authority of India Ltd (SAIL)
to establish an automotive steel manufacturing facility in India.
➢ German auto components maker Bosch Ltd opened its new factory at Bidadi, near
Bengaluru, which is its fifth manufacturing plant in Karnataka. The company has also
signed a memorandum of understanding (MoU) with Indian Institute of Science (IISc),
Bengaluru with a view to strengthen Bosch’s research and development in areas
including mobility and healthcare thereby driving innovation for India-centric
requirements.
➢ French tyre manufacturer Michelin announced plans to produce 16,000 tonnes of truck
and bus tyres from its Indian facility this year, a 45 per cent rise from last year.
➢ Amtek Auto Ltd acquired Germany-based Scholz Edelstahl GmbH through its 100 per
cent Singapore-based subsidiary Amtek Precision Engineering Pte Ltd.
➢ MRF Ltd plans to invest Rs 4,500 crore (US$ 660.231 million) in its two factories in
Tamil Nadu as part of its expansion plan.
➢ Hero MotoCorp is investing Rs 5,000 crore (US$ 733.59 million) in five manufacturing
facilities across India, Colombia and Bangladesh, to increase its annual production
capacity to 12 million units by 2020.

Government Initiatives
The Government of India’s Automotive Mission Plan (AMP) 2006–2016 has come a long way in
ensuring growth for the sector. It is expected that this sector's contribution to the GDP will reach
US$ 145 billion in 2016 due to the government’s special focus on exports of small cars, multi-
utility vehicles (MUVs), two and three-wheelers and auto components. Separately, the
deregulation of FDI in this sector has also helped foreign companies to make large investments
in India. The Government of India’s Automotive Mission Plan (AMP) 2016–2026 envisages
creation of an additional 50 million jobs along with an ambitious target of increasing the value of
the output of the sector to up to Rs 1,889,000 crore (US$ 282.65 billion).
Road Ahead
The rapidly globalising world is opening up newer avenues for the transportation industry,
especially while it makes a shift towards electric, electronic and hybrid cars, which are deemed
more efficient, safe and reliable modes of transportation. Over the next decade, this will lead to
newer verticals and opportunities for auto-component manufacturers, who would need to adapt
to the change via systematic research and development.
The Indian auto-components industry is set to become the third largest in the world by 2025.
Indian auto-component makers are well positioned to benefit from the globalisation of the sector
as exports potential could be increased by up to four times to US$ 40 billion by 2022.

2.2 COMPANY PROFILE

Established in the 1997, Autokshi Engineers Pvt Ltd is into the manufacturing of auto parts for
two wheeler and other commercial vehicles in India. India being the one among the low cost
countries, yet which is fast developing, benefits the clients through minimum investment and
maximum output. The wide range of our products includes commercial vehicle components,
main stand and side stand, backing plates, gear shift lever, heavy duty stamp and tubular
components and more. All the product developments are done using latest technology and high
quality materials.

Being ISO/TS 16949-2009 certified company, Autokshi Engineers Pvt Ltd follows the latest and
advanced technology that helps in the faster product development while also providing better
support for our clients. A combination over 2 decades of experience and expertise in the industry
enables us to deliver superior quality customized products as per the customer requirements.

We have the state of the art infrastructure and cutting edge technology with which the product
development is made faster and accurate. We have manufacturing unit in Tamilnadu that
comprise of separate design office for offering customized designing of components for the
clients, with a separate lab where all the products are tested. The team follows the next
generation technology and techniques for testing the manufactured products; with this we ensure
superior quality of all our products.

Most of our product development processes and even the administration processes are automated
to ensure maximum accuracy, perfection and productivity. We have implemented SAP for the
administration process. For the successful and accurate completion of product development
process, we have implemented the well-known TPM. This concept ensures maximum
productivity through cost saving and time saving throughout the production line. Our
implementation of robotic line for various manufacturing processes assures faster and perfect
product outputs. Robotic lines are used for pick and place of sheets, so that there is only a
minimum human interference in such difficult processes which avoids accidents and human
errors. Through automation of product development, we can ascertain predictable quality as well
as quantity of products.

Autokshi Engineers Pvt Ltd not only concentrates on its own growth, but also contributes to
developing the capabilities of the region. With the association of various organisations, we strive
in creating a better development of the company as well as the region and with this motto in
mind contribute towards the cause continuously.

With the cutting edge infrastructure and manufacturing capacity, we can cater to the needs and
requirements of larger companies as well as smaller companies. Our components are supplied to
various companies. We take pride in our association with these leading auto manufacturers and
look towards associating with more esteemed names from all over the world.
Development Capabilities
The ISO/TS 16949:2009 certified company, Autokshi Engineers Pvt Ltd is one of the foremost
sheet metal & fabricated auto parts and press tools manufacturers in India. The stringent methods
used in the quality assurance and production of various auto parts for two wheelers and three
wheeler commercial vehicles, ensures that they are of the best quality.
We deploy the cutting edge technology for the product development and designing process;
internationally acclaimed machinery is deployed for the manufacturing purposes. A constant
enhancement of the technology and processes is the part of our work-culture as a leading sheet
metal parts & tools manufacturer in India. Our team attends periodic and adequate training
programs so as to keep themselves well-conversant with the new technologies and skills.
We have robotic lines for welding and pick & place mechanism of steel sheets and other heavy
works and thereby reducing errors for such tasks. We process more than 80 tons of steel per day
and have automated most of the processes to minimize the mistakes caused. We have sharp focus
on TPM which reduces wastage of resources and reduces cost of production. Additionally, our
business processes are automated with the implementation of SAP enterprise business solutions
for faster business.
Autokshi Engineers Pvt Ltd manufactures and supplies auto parts for various companies
including small, medium and big scale organizations; our forte is not restricted just to auto parts.
Our specialty as a press tools manufacturer and sheet metal parts manufacturing in India lies in
our futuristic approach towards technology and overall business which enables creation of
flawless auto parts for three wheeler commercial vehicles and motorcycles.
Our development activities are monitored through Team Centre software.

Stamping Capabilities
With more than 4 manufacturing units in Tamilnadu, Autokshi Engineers Pvt Ltd is one of the
foremost companies who specialize in precision stamping. With our high quality and efficient
precision metal stamping, we have set a benchmark among the companies offering precision
stamping. We employ the latest cutting edge technology for the designing and manufacturing of
all our precision metal stampings.
At Autokshi Engineers Pvt Ltd, we have a stamping facility of over 10,000 square metres with
facilities for hydraulic shearing and bending. We offer precision stamping in various ranges. Our
precision metal stamping in mechanical press ranges from 10 ton to 500 ton with a bed size of
2500X 1500 mm. The hydraulic press ranges from 30 ton to 500 tons with a maximum bed size
of 3200 X 2000 mm.
Autokshi Engineers Pvt Ltd is preferred by most of the automotive manufacturers for our
expertise and years of experience in precision metal stamping; we process 80 tons of steel per
day. We have transfer press at our 6 stations and produce up to 1250 tons. We make use of
technologies like Tandem line, Auto blanking and Pneumatic pick and place for precision
stamping process. Prompt and customized services and support are offered by our team as per the
client’s requirements.
With the vast experience and expertise in the field of precision stamping, we are capable of
offering superior quality products and futuristic designs for our customers. We also use advanced
technologies and concepts to maintain perfection and accurateness in precision metal stamping.
Welding Capabilities
Autokshi Engineers Pvt Ltd has been offering auto parts manufacturing facility for commercial
vehicles and two wheeler vehicles since year 1997. integrated welding assembly systems have
been implemented all 4 manufacturing plants. Specially designed robotic lines have been placed
targeting maximum accuracy and augmented productivity. Our welding capabilities include
robotic welding assemblies, mig welding assembly so as to ensure enhanced accuracy and
productivity.
At Autokshi Engineers Pvt Ltd, we believe in delivering predictable quality and quantity which
can be achieved if optimum automation is used in these processes. Therefore to avoid
complexity, reduce manual error and accidents caused due to manual interference mig welding
assembly and robotic welding assemblies are used.
Our robotic lines are capable of taking care of the spot weld assembly. We use pick and place
arrangements for sheet metal pressing. It minimizes manual intervention. Additionally,
automation assists in accelerating the manufacturing processes remarkably.
We are the OEM manufacturer of Body-in-white for 3 wheeler automotives. Spot welding is
used in the manufacturing of tray for goods carrier vehicles. The robotic welding used for faster
production of passenger body component required for commercial vehicles.
With the help of spot welding, we manufacture deep drawn front mud guards and also dashboard
metal skeleton. Almost 50 goods carriers tray are delivered by our manufacturing capacity on
daily basis. The entire repair procedures are seamlessly completed using mig welding assembly.

Quality & Systems

The leading manufacturer of auto parts for commercial vehicles and two wheelers, Autokshi
Engineers Pvt Ltd, has a meticulously designed set of policies and systems in place to check the
quality of products developed. We have a strong engineering and development team along well-
equipped tool room and lab.

We received ISO 9001:2000 certification in 2001 and ISO/TS 16949:2009 in 2007. Various
internationally approved systems are in place at Autokshi Engineers Pvt Ltd for enhancing
quality and quantity of products developed. A successful implementation of TPM for superior
quality product development is also effectively supported by the implementation of SAP
enterprise software solution for various business processes. Our cost-efficient and energy saving
robotic lines help us in reducing errors caused by human interference while boosting qualitative
and increased product development.

With robotic assembly and robotic welding lines, we ensure that all the manufactured products
are perfect and of predictable quality as well as quantity.

Content is not available

Commercial Vehicle Components/ parts
Autokshi Engineers Pvt Ltd offers customized three wheeler commercial vehicle parts to India's
top most commercial vehicle manufacturers. We have been in the field since 1997 and supply
more than 200 three wheeler commercial vehicle and two wheelers components per day.
Autokshi Engineers Pvt Ltd is an ISO/TS 16949:2009 certified company; we design, develop and
manufacture the complete range of two & thee wheeler commercial vehicle parts as per the
different requirements of the customers.
We ensure that all the three wheelers commercial vehicle components developed comply with
the needs and requirements of the modern commercial vehicles. Excellent safety, finest quality
and highest efficiency are the qualities of the commercial vehicles parts produced at our units.
We are the OEM manufacturer of Body in White (BIW) for three wheeler commercial vehicles.
We manufacture up to 900 units of commercial vehicle passenger body per day and also 120
units of large commercial vehicle passenger bodies per day. We are also the manufacturer of
superior quality deep drawn mud guard which we manufacture and supply up to 2500 quantity
per day. All commercial vehicle components developed by us are done using advanced
technology and robotic lines for better and accurate designs and products. Our years of
experience and expertise in developing commercial vehicle parts help in the timely delivery and
perfection of products developed.

CHAPTER 3 – REVIEW OF LITERATURE

3.1 REVIEW OF LITERATURE

In intention to discover the relationship between efficient capital management and firm’s
profitability(Shin & Soenen, 2004) used net-trade cycle (NTC) as a measure of working capital
management. NTC is basically equal to the CCC whereby all three components are expressed as
a percentage of sales. The reason by using NTC because it can be an easy device to estimate for
additional financing needs with regard to working capital expressed as a function of the projected
sales growth. This relationship is examined using correlation and regression analysis, by industry
and working capital intensity. Using a Commutate sample of 58,985 firm years covering the
period 1994-2016, in all cash, they found, a strong negative relation between the length of the
firm's net-trade cycle and its profitability. In addition, shorter NTC are associated with higher
risk-adjusted stock returns. In other word, (Shin & Soenen, 2004) suggest that one possible way
the firm to create shareholder value is by reducing firm’s NTC.
The study of (Shin & Soenen, 2004) consistent with later study on the same objective that
done by (Deloof, 2004) by using sample of 1009 large Belgian non-financial firms for the period
of 2003-2007. However, (Deloof, 2004) used trade credit policy and inventory policy are
measured by number of days accounts receivable, accounts payable and inventories, and the cash
conversion cycle as a comprehensive measure of working capital management. He founds a
significant negative relation between gross operating income and the number of days accounts
receivable, inventories and accounts payable. Thus, he suggests that managers can create value
for their shareholders by reducing the number of day’s accounts receivable and inventories to a
reasonable minimum. He also suggests that less profitable firms wait longer to pay their bills.
In other study, (Lyroudi & Lazaridis, 2011) use food industry Greek to examined the cash
conversion cycle (CCC) as a liquidity indicator of the firms and tries to determine its relationship
with the current and the quick ratios, with its component variables, and investigates the
implications of the CCC in terms of profitability, indebtness and firm size. The results of their
study indicate that there is a significant positive relationship between the cash conversion cycle
and the traditional liquidity measures of current and quick ratios. The cash conversion cycle also
positively related to the return on assets and the net profit margin but had no linear relationship
with the leverage ratios. Conversely, the current and quick ratios had negative relationship with
the debt to equity ratio, and a positive one with the times interest earned ratio. Finally, there is no
difference between the liquidity ratios of large and small firms.
Working capital policy refers to the firm's policies regarding 1) target levels for each
category of current operating assets and liabilities, and 2) how current assets will be financed.
Generally good working capital policy (i.e. under conditions of certainty) is considered to be one
in which holdings of cash, securities, inventories, fixed assets, and accounts payables are
minimized. The level of accounts receivables should be used as a means of stimulating sales and
other income. Previous literature on working capital management has found a negative
association, overall, between level of working capital and operating performance as measured by
operating returns and operating margins (Peterson and Rajan, 2005). Under conditions of
certainty (i.e. sales, costs, lead times, payment periods, and so on, are known), firms have little
reason to hold more working capital than a minimum level. Larger amounts would increase the
level of operating assets, increase the need for external funding, resulting in lower return on
assets and a lower return on equity, without any increase in profit.
However the picture changes when uncertainty (i.e. uncertain growth) is introduced
(Brigham and Houston, 2001). Larger amounts of cash, securities, accounts receivables,
marketable securities, inventories, and fixed assets will be needed to support increased sales
Required levels will be based on expected sales levels and expected order lead times. Additional
holdings may be needed to enable the firm to deal with departures from the expected values.
Further, firms will also attempt to increase their accounts payable balances as a means of
financing increased levels of current operating assets. Firms which are in high growth stages will
face the challenge of maintaining the necessary level of operating assets to support subsequent
growth, while at the same time attempting to maintain adequate performance indicators.
This study focuses on understanding how IPO companies manage their working capital
and other balance sheet items to support subsequent growth. This study supports the existing
literature on working capital and contributes to the existing literature by examining a sample of
firms (i.e. recent IPO firms) which have a wider range of growth levels than non-IPO firms. Our
study examines the impact of working capital management on the operating performance and
growth of new public companies. The study also examines these relationships under three
categories of growth (i.e. negative growth, moderate growth, and high growth). The study also
examines other selected firm characteristics in light of working capital management: firm
operating and financial risk, amount of debt, firm size, and industry.

An underlying theme of this study is that high growth certainly does not ensure high
operating performance. Consistent with prior research (Peterson and Rajan, 2002) this study
provides further evidence that good working capital management is positively associated with
better operating performance. Higher levels of accounts receivable are associated with higher
operating performance, in all three of the growth rate categories. The study also finds that
maintaining control over levels of cash, securities, inventory, fixed assets, and accounts payables
is associated with higher operating performance. We find that firms which are experiencing very
high growth will hold higher levels of cash, securities, inventory, fixed assets, and accounts
payable to support the high growth. The study suggests that these firms are sacrificing operating
performance (accepting lower operating returns) to support the high growth. This, in turn,
increases financial and operating risk for these firms. Perhaps IPO firms should stay more
focused on their operating performance, while maintaining more moderate growth levels.

CHAPTER 4 – RESEARCH METHODOLOGY

4.1 NEED FOR THE STUDY:

➢ To understand that an ongoing approach to the problem is essential and that short term

responses may have negligible effect.

➢ Data such as savings ratio, debt-to-income ratio, self-evaluation of the productivity,

performance rating, and absenteeism are difficult to gather as individuals may not know the

exact figures of each category or may not want to reveal this informatio
4.2 OBJECTIVE OF STUDY

PRIMARY OBJECTIVE

To study on Cash Management with reference to Autokshi Engineers Pvt Ltd .

SECONDARY OBJECTIVE

➢ To study the inventory and cash of Autokshi Engineers Pvt Ltd.

➢ To analysis the liquidity position of Autokshi Engineers Pvt Ltd.

➢ To analysis the inventory position of Autokshi Engineers Pvt Ltd.

➢ To give remedial measures for cash management in Autokshi Engineers Pvt Ltd.

4.3 SCOPE OF STUDY

➢ The study covers all the components of current assets and current liabilities for

the year 2016-2020

➢ The study also deals with the various ratios imparted in the organization.

➢ The working capital is one of the dynamic and vital aspects of the business

operation.

LIMITATIONS OF THE STUDY

➢ The study mainly depends on the secondary data taken from annual report and

internal records of the company.

➢ The figures taken from the financial statement for analysis were historical in

nature.

➢ The study is confined to a short period of 4 months. This would not picture the

exact position of company

➢ In depth analysis of data is not possible due to time constraint.

 ➢ Some of the data has not given by the company due to maintenance of financial
secrecy.

4.4 RESEARCH
Research is an organized, systematic, database, critical, objective, scientific, inquiry or
investigation into a specific problem, undertaken with the purpose of finding answer or solutions
to it. Emory defines research as, “any organized inquiry designed and carried out to provide
information for solving a problem”
4.4.1RESEARCH DESIGN
Research design is specification of methods and procedures for acquiring the information
needed to structure or to solve problem.
Research design is defined as, “the arrangement of condition for collection and analysis
of the data in a manner that aims to combined relevant to the research purpose with economy in
procedure”
Analytical research technique was adopted in this project. The researcher used analytical
type of research to analyze the past data based on which certain future decision can be made.
4.4.2 SOURCE OF DATA
SECONDARY DATA
These data, which have already been collected, complied and presented earlier by any agency,
may be used for the purpose of investigation The date has been collected from Autokshi
Engineers Pvt Ltd. annual report from 2016-2020.
ANNUAL REPORT
It provides all the information about the company for the accounting period. This enables
to understand the existing performance of the company.

4.4.3 TOOLS USED FOR THE STUDY

i) Ratio analysis
ii) Cash flow Statement.

RATIO ANALYSIS
The following ratios are used to calculate the liquidity.
a) Current ratio = Current assets
Current liabilities

b) Cash position ratio = Cash & bank

Current liabilities
WORKING CAPITAL
Working capital = current assets – current liabilities
Working capital refers to the cash a business requires for day-to-day operations. It is the amount
of funds necessary to cover the cost of operating the enterprise. It is also known as revolving or
circulating capital or short term capital

4.5 WORKING PROCEDURE FOR THE CASH MANAGEMENT

Cash Flow Statement deals with flow of cash which includes cash equivalents as well as cash.

This statement is additional information to the users of Financial Statements. The statement

shows the incoming and outgoing of cash. The statement assesses the capability of the enterprise

to generate cash and utilize it. Thus a Cash-Flow statement may be defined as a summary of

receipts and disbursements of cash for a particular period of time. It also explains reasons for the

changes in cash position of the firm. Cash flows are cash inflows and outflows. Transactions

which increase the cash position of the entity are called as inflows of cash and those which

decrease the cash position as outflows of cash.

PROCEDURE:

(i) Operating Activities

Cash flow from operating activities are primarily derived from the principal revenue generating

activities of the enterprise. A few items of cash flows from operating activities are :
(i) Cash receipt from the sale of goods and rendering services.

(ii) Cash receipts from royalties, fee, Commissions and other revenue.

(iii) Cash payments to suppliers for goods and services.

(iv) Cash payment to employees

(vi) Cash payment or refund of Income tax.

Determination of cash flow from operating activities

There are two stages for arriving at the cash flow from operating activities

Stage-1

Calculation of operating profit before working capital changes, It can be calculated in the

following manner.

Net profit before Tax and extra ordinary Items xxx

Add Non-cash and non operating Items which have already been

debited to profit and Loss Account i.e.

Depreciation xxx

Amortisation of intangible assets xxx

Loss on the sale of Fixed assets.

xxx

Loss on the sale of Long term Investments xxx

Provision for tax

xxx

Dividend paid xxx

Less : Non-cash and Non-operating Items which have already been credited

to Profit and Loss Account i.e.

Profit on sale of fixed assets xxx

Profit on sale of Long term investment xxx

Operating profit before working Capital changes xxx

Stage-II

After getting operating profit before working capital changes as per stage I, adjust increase or

decrease in the current assets and current liabilities.

The following general rules may be applied at the time of adjusting current assets and current

liabilities.

A. Current assets

(i) An increase in an item of current assets causes a decrease in cash inflow because cash is

blocked in current assets.

(ii) A decrease in an item of current assets causes an increase in cash inflow because cash is

released from the sale of current assets.

B. Current liabilities

(i) An increase in an item of current liability causes a decrease in cash outflow because cash is

saved.

(ii) A decrease in an item of current liability causes increase in cash out flow because of payment

of liability.

Investing Activities

Investing Activities refer to transactions that affect the purchase and sale of fixed or long term

assets and investments.

Examples of cash flow arising from Investing activities are

➢ Cash payments to acquire fixed Assets

➢ Cash receipts from disposal of fixed assets

➢ Cash payments to acquire shares, or debenture investment.

➢ Cash receipts from the repayment of advances and loans made to third parties.

Thus, Cash inflow from investing activities are

➢ Cash sale of plant and machinery, land and Building, furniture, goodwill etc.

➢ Cash sale of investments made in the shares and debentures of other companies

➢ Cash receipts from collecting the Principal amount of loans made to third parties.

Cash outflow from investing activities are :

➢ Purchase of fixed assets i.e. land, Building, furniture, machinery etc.

➢ Purchase of Intangible assets i.e. goodwill, trade mark etc.

➢ Purchase of shares and debentures

➢ Purchase of Government Bonds

➢ Loan made to third parties

Step- III

Financing Activities

The third section of the cash flow statement reports the cash paid and received from activities

with non-current or long term liabilities and shareholders Capital.

Examples of cash flow arising from financing activities are

➢ Cash proceeds from issue of shares or other similar instruments.

➢ Cash proceeds from issue of debentures, loans, notes, bonds, and other short-term

borrowings
 ➢ Cash repayment of amount borrowed Cash Inflow from financing activities are

➢ Issue of Equity and preference share capital for cash only.

➢ Issue of Debentures, Bonds and long-term note for cash only

Cash outflow from financing activities are :

➢ Payment of dividends to shareholders

➢ Redemption or repayment of loans i.e. debentures and bonds

➢ Redemption of preference share capital

➢ Buy back of equity shares.

CHAPTER 5– DATA ANALYSIS AND INTERPRETATION

1. CURRENT RATIO:
Current ratio is defined as the relationship between current asset and current liabilities.
This is most widely used ratio. The standard ratio is 2:1; the current asset is twice than the
current liabilities. If the ratio is less than 2 then difficulty may be experienced in payment of
current liability and day-to-day operations of the business may suffer. If the ratio is higher than
2, it is very comfortable for creditors but for the concern, the funds would be locked up in this,
which may be unproductive or idle.

FORMULA:-
Current Assets
 Current Ratio = ------------------------------------
Current Liabilities
TABLE 5.1
CURRENT CURRENT CURRENT RATIO
S.NO YEAR ASSET LIABILITY
1 2016 19,89,000 8,11,000 2.45
2 2017 18,81,000 10,40,000 1.81
3 2018 23,39,000 11,63,000 1.62
4 2019 25,50,000 10,84,000 2.35
5 2020 32,54,000 16,48,000 1.97

CHART 5.1:

2.45
2.5 2.35

1.97
2 1.81
1.62

1.5

0.5

0
2015 2016 2017 2018 2019

INTERPRETATIONS:

➢ The ideal current ratio is 2:1.here the current ratio declining over a period of time
according to time series analysis. Since the healthy current ratio is 2:1 AUTOKSHI
ENGINEERS PVT LTD reaches the healthy ratio in the year 2016 and 2019. Higher
 the current ratio, higher the short term liquidity. Here the position of the company is
good when compared to previous year. This shows the positive position of the
company.

2. CASH POSITION RATIO:

This ratio is also called ‘absolute liquidity ratio’ or ‘super quick ratio’. This is a
variation of quick ratio. This ratio is calculated when liquidity is highly restricted in terms of
cash and cash equivalents. This ratio measures liquidity in terms of cash and near cash items and
short – term current liabilities. Cash position ratio is calculated with the help of the following
formula.
Formula:
Cash and bank balance + marketable securities
Cash position ratio = -----------------------------------------------------------------
Current Liabilities
TABLE 5.2
CASH BALANCE CURRENT CASH POSITION
S.NO YEAR +SECURITIES LIABILITIES RATIO

1 2016 2,92,000 8,11,000 0.36

2 2017 4,99,000 10,40,000 0.47
3 2018 4,79,000 11,63,000 0.41
4 2019 2,80,000 10,84,000 0.26
5 2020 3,05,000 16,48,000 0.19

CHART 5.2:
 0.5
0.47
0.45
0.41
0.4
0.36
0.35

0.3
0.26
0.25
0.19
0.2

0.15

0.1

0.05

0
2015 2016 2017 2018 2019

INTERPRETATION:

Since the cash position ratio shows that the organization’s financial position is

at the moderate stage. The result that I got is the type of oscillating manner which implies that

the company should more concentrate on its cash position.

3. ABSOLUTE LIQUID RATIO:

Therefore, absolute liquidity ratio relates cash, bank and marketable securities to

the current liabilities.

= (ABSOLUTE LIQUID ASSET/CURRENT LIABILITIES)

TABLE 5.3:

ABSOLUTE LIQUID CURRENT ABSOLUTE

S.NO YEAR ASSET LIABILITIES LIQUID RATIO

1 2016 53,000 8,11,000 0.07

2 2017 52,000 10,40,000 0.05
3 2018 2,02,000 11,63,000 0.17
4 2019 21,000 10,84,000 0.02
5 2020 74,000 16,48,000 0.05

CHART 5.3:

0.18 0.17

0.16

0.14

0.12

0.1

0.08 0.07

0.06 0.05 0.05

0.04
0.02
0.02

0
2015 2016 2017 2018 2019
INTERPRETATION:

From the above chart it is clearly seen that the company has a very low liquid assets

when compared with the liabilities. The company has to take a corrective measure to overcome

this situation.

4. FIXED ASSETS RATIO:

This ratio establishes the relationship between fixed assets and long term

funds. The objective of calculating this ratio is to ascertain the proportion of long term funds

invested in fixed assets. The ratio is calculated as given below.

FORMULA:
FIXED ASSE RATIO = FIXED ASSET
LONG TERM FUND
TABLE 5.4:
Sl. No. Year Fixed assets Long term Fixed assets
funds ratio
1 2016 6,13,000 7,51,000 0.82
2 2017 6,13,000 6,83,000 0.90
3 2018 5,69,000 5,84,000 0.97
4 2019 5,33,000 11,22,000 0.47
5 2020 4,48,000 8,63,000 0.52
CHART 5.4:
1.2

1 0.97
0.9
0.82
0.8

0.6
0.52
0.47

0.4

0.2

0
2015 2016 2017Series 1 2018 2019

INTERPRETATION:
The study clears that the concern has started employing leverages for better
profitability. The raising percentage of this ratio shows that the company has made a good
proportion of long term funds in fixed assets.

5. CAPITAL TURNOVER RATIO:

Managerial efficiency is also calculated by establishing the relationship between

cost of sales or sales with the amount of capital invested in the business. Capital turnover ratio is

calculated with the help of the following formula.

FORMULA:
COST OF SALES
 CAPITAL TURNOVER RATIO =
CAPITAL EMPLOYED
TABLE 5.5

COST OF CAPITAL CAPITAL

S.NO YEAR SALES EMPLOYED TURNOVER RATIO
CS/CE
1 2016 27,72,200 17,91,000 1.55
2 2017 36,98,000 14,54,000 2.54
3 2018 35,93,000 17,45,000 2.06
4 2019 32,10,000 19,99,000 1.61
5 2020 4,56,500 20,54,000 0.22

CHART 5.5:

2.54
2.5

2.06
2

1.55 1.61
1.5

0.5
0.22

0
2015 2016 2017Series 1 2018 2019

INTERPRETATION:
The percentage of this ratio is in the increasing position this shows a positive sign for the
company. Since the cost of sales has increased the company is on the safe position.
6. WORKING CAPITAL TURNOVER RATIO:
Working capital ratio measures the effective utilization of working Capital .It also

measures the smooth running of business .The ratio establishes relationship between sales/cost of

sales and working capital.

FORMULA
Sales
Working capital turnover ratio =
Net working capital

TABLE 5.6

NET WORKING CAPITAL

S.NO YEAR SALES WORKING TURNOVER RATIO
CAPITAL
1 2016 27,72,200 5,78,000 4.80
2 2017 36,98,000 8,41,000 4.40
3 2018 35,93,000 11,76,000 3.06
4 2019 32,10,000 14,66,000 2.19
5 2020 4,56,500 16,06,000 0.28

CHART 5.6:
 6

5 4.8
4.4

3.06
3

2.19
2

1
0.28

0
2015 2016 2017 Series 1 2018 2019

INTERPRETATION
The working capital ratio is decreasing every year, this shows that the company

has not used the working capital effectively. Therefore it shows that the company is at the unsafe

zone. Therefore the company should take corrective actions to get into the safer zone.

7. NET PROFIT RATIO:

This ratio is called net profit to sales ratio. It is a measure of management’s efficiency

in operating the business successfully from the owner point of view. In indicates the return on

shareholders investments.

FORMULA
 NET PROFIT AFTER TAX *100
NET PROFIT RATIO = NET SALES

TABLE 5.7

NET PROFIT NET SALES NET PROFIT RATIO

S.NO YEAR AFTER TAX =NPAT/NS

1 2016 27,72,200 0.36

9,86,600
2 2017 3,53,000 36,98,000 0.10
3 2018 1,20,600 35,93,000 0.03
4 2019 11,09,900 32,10,000 0.35
5 2020 7,03,800 4,56,500 1.54

CHART 5.7:

1.8

1.6 1.54

1.4

1.2

0.8

0.6

0.36 0.35
0.4

0.2 0.1
0.03
0
2015 2016 2017Series 1 2018 2019

INTERPRETATION:
This chart shows that the management’s efficiency for the year 2020 has been

increased in a higher extend when compared to the previous years.

8. EXPENSES RATIO

This ratio is also known as supporting ratios to Operating ratio. They indicate the
efficiency with which business as a Whole functions. It is better for the concern to know how it
is able to save or waste over expenditure in respect of different items of expenses.

FORMULA:

ADMINISTRATION EXPENSES *100

EXPENSES RATIO =
NET SALES
TABLE 5.8
ADMINISTRATION NET SALES EXPENSES RATIO
S.NO YEAR EXPENSES = AE/NS
1 2016 5,90,000 27,72,200 0.21
2 2017 6,00,000 36,98,000 0.16
3 2018 8,97,000 35,93,000 0.24
4 2019 8,48,100 32,10,000 0.26
5 2020 9,17,000 4,56,500 2.01

CHART 5.8:
 2.5

2.01
2

1.5

0.5
0.21 0.24 0.26
0.16

0
2015 2016 2017Series 1 2018 2019

INTERPRETATION
It shows that it is better for the concern to know how it is able to save or waste over

expenditure in respect of different items of expenses. The expenses of the company have been

increased in a higher rate in 2020.

RECEIVABLES MANAGEMENT

5.9. DEBTORS TURNOVER RATIO:

Debtor constitute an important constitute of current assets & their fore the quality of
debtor to great extent determines a firm liquidity of a firm use two ratio. They are debtor’s
turnover ratio & debt collection period ratio. This ratio indication the speed with which debtors
receivable are being collected there it is indicative of the efficiency of trade credit management.
The higher the turnover ratio the better the trade credit management & the better the liquidity of
debtors.
TABLE-5.9
DEBTORS TURNOVER RATIO
(In Lakhs)

Year Total Sales Account Receivables Debtors Turnover Ratio

2016 27,72,200 11,28,000 2.46

2017 11,95,000 3.09

36,98,000
2018 12,19,000 2.95
35,93,000
2019 32,10,000 11,62,000 2.76

2020 0.31
4,56,500 14,87,000
CHART-5.9
DEBTORS TURNOVER RATIO

3.5
3.09
2.95
3
2.76

2.46
2.5

1.5

0.5 0.31

0
2015 2016 2017Series 1 2018 2019

INTERPRETATION:
From the date of interpretation it in observed that both the rates & account receivable are
increased in the year2017 and the division was in a very good portion regarding the collection
but in the following year due to increase in the amount of average payables the ratio has come
down drastically.

5.10. DEBITORS COLLECTION PERIOD:

Their ratio indication the extent to which the debts have been collected in time it gives
the average debt collection period the ratio is very helpful to the lenders because it explain them
whether borrowers are collating money in a reasonable time an increase in the period reflects
grater blockage of funds in debtors a very long collection period would imply either power credit
selection or and inadequate collection effort.
TABLE-5.10
DEBTORS COLLECTION PERIOD
(In Lakhs)

Debtors Turnover Debtors Collection

Year No of Days
Ratio Period in Days

2016 364 2.46 148

2017 365 3.09 118

2018 365 2.95 124

2019 365 2.76 132

2020 365 2.05 178

CHART-5.10
DEBTORS COLLECTION PERIOD

200
178
180

160 148

140 132
124
118
120

100

80

60

40

20

0
2015 2016 2017Series 1 2018 2019

INTERPRETATION
During the year 2016-2017 the average collection period is very low which indicates the better
quality of debtors as the quick payments by them within a short period
During the year 2017-2020 the average collection period is very high as which indicate that the
inefficient performance of the debtor as by late payments.

5.11 CASH FLOW STATEMENT OF AUTOKSHI ENGINEERS PVT LTD FOR THE
YEAR 2017

PARTICULARS AMOUNT

CASH FLOW FROM OPERATING ACTIVITIES:

Profit/Loss before Taxation 10,02,600
ADD: Depreciation 85,000

ADD: Finance Cost

9,17,600
1,58,000
ADD: Decrease in inventories
LESS: Increase in Debtors

10,75,600
3,82,000
Cash generated from operations
(67,000)
LESS: Tax
NET CASH FLOW FROM OPERATING ACTIVITIES
Cash flow from investing activities: 13,90,600
22,000
LESS: Purchase of assets

13,68,600

LESS: Cash receipts from loans and advances

(1,08,000)

Cash flow from investing activities

12,60,600

CASH FLOW FROM INVESTING ACTIVITIES: (68,000)

Proceeds from issue of shares

11,92,600

NET INCREASE IN CASH

2,69,000
CASH AND CASH EQUIVALENT IN THE BEGINNING

CASH AND CASH EQUIVALENT AT THE END

9,22,600
53,000

8,69,600
5.12 CASH FLOW STATEMENT OF AUTOKSHI ENGINEERS PVT LTD FOR THE
YEAR 2018

PARTICULARS AMOUNT

CASH FLOW FROM OPERATING ACTIVITIES:

Profit/Loss before Taxation 1,50,600
71,000
ADD: Depreciation

ADD: Finance Cost

2,21,600
83,000
LESS: Increase in inventories
LESS: Increase in Debtors
3,04,600
Add: Decrease in Bank
(4,54,000)
Cash generated from operations
(24,000)
LESS: Tax
1,70,000

NET CASH FLOW FROM OPERATING ACTIVITIES

(3,400)
Cash flow from investing activities:
(13,000)
ADD: Sale of assets
LESS: Cash receipts from loans and advances (16,400)

Cash flow from investing activities 4,14,000

CASH FLOW FROM INVESTING ACTIVITIES:

Proceeds from issue of shares 3,97,600
(99,000)

NET INCREASE IN CASH 2,98,600

CASH AND CASH EQUIVALENT IN THE BEGINNING

3,90,000

CASH AND CASH EQUIVALENT AT THE END

(91,400)
1,50,000

58,600
5.13 CASH FLOW STATEMENT OF AUTOKSHI ENGINEERS PVT LTD FOR THE
YEAR 2019

PARTICULARS AMOUNT

CASH FLOW FROM OPERATING ACTIVITIES:

11,31,900
Profit/Loss before Taxation
79,000
ADD: Depreciation

ADD: Finance Cost

12,10,000
82,000
Add: Decrease in inventories
Add: Decrease in Debtors
12,92,000
Add: Decrease in cash
4,67,000
Cash generated from operations
57,000
LESS: Tax
1,81,000

NET CASH FLOW FROM OPERATING ACTIVITIES

Cash flow from investing activities:
19,97,000
(4000)
Add: Sale of assets

LESS: Cash receipts from loans and advances

19,93,000

Cash flow from investing activities

1,75,000
Proceeds from issue of shares
(5,38,000)
 (3,63,000)
2,84,000
NET INCREASE IN CASH
CASH AND CASH EQUIVALENT IN THE BEGINNING
(79,000)
CASH AND CASH EQUIVALENT AT THE END

(79,000)
1,81,000

1,02,000

CALCULATION OF ACTUAL LIABILITY AND SOLVENCY POSITION

1. NET CASH FLOW TO CURRENT LIABILITY:

NET PROFIT + NON-CASH EXP

NET CASH FLOW TO
CURRENT LIABILITIES = -----------------------------------------------------------------------
----
CURRENT LIABILITES

NET PROFIT + CURRENT NET CASH FLOW

S.NO YEAR NON- CASH EXP LIABILITIES TO CURRENT
LIABILITIES
1 2016 9,86,600 8,11,000 1.21
2 2017 3,53,000 10,40,000 0.339
 3 2018 1,20,600 11,63,000 0.104
4 2019 11,09,900 10,84,000 1.02
5 2020 7,03,800 16,48,000 0.427

1.4
1.21
1.2
1.02
1 2015
2016
0.8
2017
0.6
0.427 2018
0.4 0.339
2019
0.2 0.104

INFERENCE:
The higher the ratio, the greater the degree of liquidity and solvency of a firm and vice-versa.
The company has shown a good position in the year 2016 and start declining for the following
years. In the year 2020 the company has a lower degree of liquidity and solvency because of
decrease in net profit and non-cash expenses.

2. COVERAGE OF CURRENT LIABILITIES

Coverage of current liabilities refers to the product of turnover of current liabilities and profit
margin. The following formula is used to calculate coverage of current liabilities

COVERAGE OF CURRENT LIABILITIES=

 TURNOVER
PROFIT
OF CURRENT
MARGIN
LIABILITIES

CURRENT NET
SALES
LIABILITES
SALES
PROFIT
*
CALCULATION FOR 5 YEARS:
COVERAGE OF CURRENT LIABILITIES (2016)=

3.418 3.566

2772200 811000 986600 2772200

*
INFERENCE:
Coverage of current liabilities for the year 2016 is 12.190. This ratio is refers to the product of
turnover of current liabilities and profit margin.

COVERAGE OF CURRENT LIABILITIES(2017)=

3.556 0.095

3698000 1040000 353000 3698000

*
INFERENCE:
Coverage of current liabilities for the year 2017 is 0.339
COVERAGE OF CURRENT LIABILITIES (2018)=

3.089 0.336

3593000 1163000 120600 3593000

*
INFERENCE:
Coverage of current liabilities for the year 2018 is 1.0380

COVERAGE OF CURRENT LIABILITIES (2019)=

2.961 0.345

3210000 1084000 1109900 3210000

*
INFERENCE:
Coverage of current liabilities for the year 2019 is 1.022

COVERAGE OF CURRENT LIABILITIES (2020)=

 2.77 1.542

456500 1648000 703800 456500

*

INFERENCE:
Coverage of current liabilities for the year 2020 is 4.271

1.542

703800 456500
 CHAPTER VI
SUGGESTIONS:-

➢ The manpower needs to be assessed in relation to production and sales. The excess of
employees should be removed through various measures like VRS, retirement’s and
destructing the requirement of new employees.

➢ There are various global challenges that are faced by every company in the present
competitive environment and Autokshi Engineers Pvt Ltd is not any exemption. To face
the present global challenges the human resources department should be develop to
improve various skills among the employees specially the motivational skills and having
the regular training for the employees about various developments in the market.

➢ The marketing department should be restructured on profit center and product line basis.
The new marketing strategy should also make efforts to regain the agents in Germany and
UK. They should also make efforts to regain the defiance and railways and find new
markets for expansion.

➢ There are various development taking in the industry to change it the company should
develop a full-fledged research and development department for bringing technological
change and improvement in design and process.

➢ The policy of development new market with the accreditation of ISO 9001 and C.E.
making for certain products should be continuous as it will help in development the
confidence of foreign buyers.

➢ The sundry debtors should be efficiently managed so that the outstanding are to be
cleared at short intervals. The company should appoint on different areas on a success
fees basis to collect the debtors.
➢ The cost of holding inventory is too high so the inventory holding period is to be reduced
and to build up inventory in anticipation of export orders from Russia and Germany.
➢ The company has to make new joint venture with other companies in order to reduce the
losses.

➢ The current assets should be managed more effectively so as to avoid unnecessary

blocking of capital that could be used for other purposes.

➢ The Working Capital requirement is to be assessed based on the norms circulated by RBI
for the machine tools industry.

➢ The company has maintained proper records showing full particulars, quantitative details
and solutions of fixed assets are indicated for major items in the register, the
managements during the year has conducted a random verification in respect of fixed
assets, which in our opinion is reasonable, having regard to the size of the company and
the nature of its assets.

➢ The management has physically verified the stock of finished goods and work in progress
at the end of the year.

➢ In respect of service activities there is a reasonable system for recording receipts issues
and consumption of materials and stores and collection of materials consumed to the
relative jobs, commensurate with the size and nature of its business.
 CHAPTER VII

CONCLUSION
The company is performing exceptionally well due to the up wising in the global market
followed by the domestic market. It is an upcoming one with good and innovative ideas and believed in
improving all the areas of its operations. The company has a good liquidity position and does not delay
its commitment in cash of both its creditors and debtors. The company being mostly dependent on the
working capital facilities, it is maintaining very good relationship with their banks and their working
capital management is well balanced.

CONSOLIDATED BALNCE SHEET OF AUTOKSHI ENGINEERS PVT LTD

FISCAL YEAR 2016 2017 2018 2019 2020

ASSETS
CURRENT ASSETS:

CASH 53,000 52,000 2,02,000 21,000 74,000

CASH AT BANK 2,39,000 4,47,000 2,77,000 2,59,000 2,31,000

STOCK 5,69,000 1,87,000 6,41,000 11,08,000 14,62,000

SUNDRY DEBTORS 11,28,000 11,95,000 12,19,000 11,62,000 14,87,000

TOTAL CURRENT ASSETS 19,89,000 18,81,000 23,39,000 25,50,000 32,54,000

FIXED ASSETS :

GROSS BLOCK -
DEPRECIATION 6,13,000 6,13,000 5,69,000 5,33,000 4,48,000

TOTAL FIXED ASSETS 6,13,000 6,13,000 5,69,000 5,33,000 4,48,000

TOTAL ASSETS 26,02,000 24,94,000 29,08,000 30,83,000 37,02,000

LIABILITIES

CAPITAL:

SHARE CAPITAL 1,40,000 1,40,000 1,40,000 1,40,000 9,50,000

SHARE APPLICATION AD.. 9,00,000 6,31,000 10,21,000 7,37,000 71,000

RESERVES AND SURPLUS - - - - 1,40,000

CURRENT
LIABILITIES:

CREDITORS 7,61,000 9,60,000 3,63,000 10,41,000 11,53,000

PROVISIONS 50,000 80,000 8,00,000 43,000 3,61,000

OTHERS - - - - 1,34,000

LOAN FUND:

SECURED LOAN 7,51,000 6,83,000 5,84,000 11,22,000 8,63,000

UNSECURED LOAN - - - - 30,000

TOTAL LIABILITIES 26,02,000 24,94,000 29,08,000 30,83,000 37,02,000

 PROFIT AND LOSS ACCOUNT IN AUTOKSHI ENGINEERS PVT LTD

PARTICULARS 2016 2017 2018 2019 2020

REVENUE:

GROSS RECEIPTS 46,51,000 49,54,000 45,76,000 54,51,000 45,77,300

MISCELLANEOUS
INCOME - - 400 - -
TOTAL
REVENUE 46,51,000 49,54,000 45,76,400 54,51,000 45,77,300

EXPENDITURE:

Cost of Goods Sold 27,72,200 36,98,000 35,93,000 32,10,000 40,56,500

Administrative
Expenses 5,90,000 6,00,000 8,97,000 8,48,100 9,17,000

Financial Charges 1,67,000 1,58,000 83,000 82,000 1,67,200

Selling Expenses 37,200 38,000 83,000 1,00,000 80,400

Depreciation 82,000 85,000 71,000 79,000 82,000

TOTAL
EXPENDITURE 36,48,400 45,79,000 47,27,000 43,19,100 53,03,100

PROFIT/(LOSS) 10,02,600 3,75,000 1,50,600 11,31,900 7,25,800

LESS: Provision
for Tax 11,000 7000 13,000 4000 15,000
Provision for
fringe Benefit Tax 5000 15000 17,000 18,000 7000
PROFIT AFTER
TAX 9,86,600 3,53,000 1,20,600 11,09,900 7,03,800
BIBLIOGRAPHY:

➢ www.investopedia.com/

➢ www.studyfinance.com/

➢ en.wikipedia.org/wiki/

➢ https://www.asb.co.nz/story_images/1355_GuidetoCashFlowM_s5369.pdfhttp://www.et

ekusa.com/docs/dynamics-gp-10-cash-management.pdf

BOOKS:

➢ Bolten, SE, Managerial finance – Principles and Practices, Houghton, Miffin company,

Boston 2007, p.162

➢ Financial Management(Tenth Edition), I.M. Pandey & Brealey, R. and S., Myers,

principles of Corporate Finance, McGraw Hill, 2002, p.159 – 190

➢ An introduction to Financial Management, Good year Publishing company, Santa Califf,

Solomn, Ezra and JJ Prigle, 2008, p.282 -312

➢ Brigham, E. F. and Houston, J. F. Fundamentals of Financial Management, Concise

Third Edition, Harcourt Publishers, 2002.