A STUDY ON THE EFFECTIVENESS OF CASH MANAGEMENT

International Journal of Pure and Applied Mathematics

Volume 116 No. 19 2017, 467-471

ISSN: 1311-8080 (printed version); ISSN: 1314-3395 (on-line version)

url:

Special Issue

ijpam.eu

A STUDY ON THE EFFECTIVENESS OF CASH MANAGEMENT

1

S.Praveen Kumar, 2J.Pavithra, 3Veeramani T

Professor& Head, 2Assistant Professor, 3Second Year Student

Department of Management Studies, BIST, BIHER, Bharath University, Chennai

1

praveenkumar@bharathuniv.ac.in

1

Abstract: A study on ¡°EFFECTIVENESS OF CASH

MANAGEMENT is one of the leading port Services

companies, offering a wide range of portal services

such as cargo handling services and also provide

containers for importing and exporting the goods.

The main objective of the study is to study about the

cash management, which will prove essential for

ascertaining past and present financial position of the

study. The tool which was used for the data analysis

and interpretation is: trend analysis, ratio analysis, cash

flow statement, and method of least square.

Keywords: Cash management, working capital.

1. Introduction

The study on cash and receivables management reveals

the status of the company in the current economy.

Therefore, cash management by the company plays a

vital role in the development of the company[1-4].

2. Scope of the Study

? This study covers all the Revenues and Expenses in

the organization to evaluate its performance.

? It conveys the role of finance department in terms of

cash management.

? It takes into account the profit and loss and balance

sheet of five consecutive years

2. Objectives of the study

Primary objective: To study about the effectiveness cash

management

Secondary objectives: To analyze the trend and also

project the future cash flow in the organization.

? To find out the short term liquidity position in the

organization.

? To measure the growth of the organization in terms of

cash flow.

? To provide suggestions for improvement.

3. Research Methodology

3.1 Secondary Data

This is taken from the annual reports, websites, company

journals magazines and other sources

Research Type: The research type used for this study is

Analytical [9-15].

Table 1. Trend Analysis in (Lakhs) In Percentage

PARTICULARS

2006-07

2007-08

2008-09

2009-10

2010-11

CASH AND BANK

100

119

129

143

120

CURRENT

LIABLITIES

SUNDRY DEBTORS

100

107

116

130

131

100

149

402

407

466

98

100

106

146

121

144

156

139

LOANS

AND 100

ADVANCES

100

CURRENT ASSET

Source: Annual Reports

467

International Journal of Pure and Applied Mathematics

Special Issue

4. Interpretation

The cash and bank balance shows increasing trend of

119,128 and it reaches a high rate in 2010 as 142 and

again it decreased in the year ended 2011(16

2011(16-19).

Table 2. Least square method for projection Cash and bank balance (Amt in crores)

YEAR

2006-07

2007-08

2008-09

2009-10

2010-11

CASH

BANK

(y)

1489

1784

1931

2134

1789

¡Æy=9135

AND DEVIATION

FROM

MID

POINT (X)

-2

-1

0

1

2

¡ÆX=0

THE FORMULA = Yc = a + bX

Since ¡ÆX=0 , a = ¡Æy = 9135 = 1827

N

5

b =¡ÆXy = 934 = 93.4

¡ÆX2

10

Substituting in Yc = A + B X

Therefore substituting x = 2012, 2013,2014,2015,2016 in

X = (x -2009)

Y = 1827 + 93.4 (x- 2009)

Projected cash and bank balances for year ended 2012

201216(amt in crores)

YEAR

2011-12

2012-13

2013-14

2014-15

2015-16

Xy

X2

-2994

-1784

0

2134

3578

¡ÆXy=934

4

1

0

1

4

¡ÆX

¡Æ 2=10

4.1 Interpretation

The above projection of cash and bank balance in the

organization shows a continuous growth which is

necessary for the organization and it is Rs.2201 ( in

crores) in the year ended 2013 and it increases year by

year and reaches high for the future year ending 2016 as

Rs. 2481 (in crores)[16]. This shows a good position of

the organization in the future[28-30].

future[28

5. Findings

¡ñ The trend for the cash and bank balance is growing

rapidly and reaches high in the year ended 2010 (142)

and again decreased to (119) in 2011.

¡ñ The cash from operation had been increased in the

year ended 2011 Rs.52871.9 (in lakhs) when compared to

the year ended 2010 Rs.25746.85( in lakhs) The

application of cash is more through the purchase of asset

in the year ended 2008 and 2009 as Rs.1095.43(in lakhs)

and Rs.4532.82 ( in lakhs ) respectively. This

Thi shows the

growth of the organization.

¡ñ The application of cash through the investment

purchase is also high in the year ended 2011 Rs.77115.47

(in lakhs) which shows the company is more investing.

¡ñ The projected current assets show an net increase

year by year and the values are Rs 2276 ¨C Rs.3527 that is

from 2012-2016 respectively.

¡ñ The debtors value of projection also increases year

by year and reached a high in the year 2016 (Rs.859) in

crores.

PROJECTED VALUES

2107

2201

2294

2387

2481

468

International Journal of Pure and Applied Mathematics

¡ñ The current liabilitiesis also in a increasing trend

from the year 2012 -2016 (Rs.2377 -2946) in crores.

6. Suggestions Recommended for the Study

The current ratio in the organization is poor and it could

be improved by improving cash balance by issuing many

short tern money market instruments such as treasury

bills, commercial paper, term deposit, certified deposit,

and deposit with financial institutions. And also this

could maintain a good current ratio.

? The trend of debtor is moving in an increasing trend

and this increase indicates that there is poor management

of debtor is concern. Hence the company could adopt a

better credit policy for the customers and can have a

credit limit and also provide some terms and conditions

for the customer which shows good cash management in

the organization [20-24].

? The working capital in the organization is very low

particularly in the year ended 2010-12. Hence it could be

overcome by accelerating cash inflow by way of various

collection methods like lock- box system, electronic fund

transfer and slow down payment and debtor collection

centre¡¯s etc., This would increase the working capital in

the organization [25-27].

7. Conclusion

This project was very useful to show the financial status

of the company from the management point of view and

this evaluation provided a great deal to the management

to make decision on the regulation of the funds to

increase the business activities and also to bring profit to

the company. The future projections show a growth in all

aspects of the company.

References

[1].

Arun Kumar N., Srinivasan V., Krishna Kumar

P., Analysing the strength of unidirectional fibre

orientations under transverse static load, International

Journal of Applied Engineering Research, v-9, i-22, pp7749-7754, 2014.

[2].

Srinivasan V., Analysis of static and dynamic

load on hydrostatic bearing with variable viscosity and

pressure, Indian Journal of Science and Technology, v-6,

i-SUPPL.6, pp-4777-4782, 2013.

[3].

Srinivasan V., Optimizing air traffic conflict and

congestion using genetic algorithm, Middle - East Journal

of Scientific Research, v-20, i-4, pp-456-461, 2014.

[4].

Praveen R., Achudhan M., Optimization of jute

composite as a noise retardant material, International

Journal of Applied Engineering Research, v-9, i-22, pp7627-7632, 2014.

469

Special Issue

[5].

Raja Kumar G., Achudhan M., Srinivasa Rao G.,

Studies on corrosion behaviour of borated stainless steel

(304B) welds, International Journal of Applied

Engineering Research, v-9, i-22, pp-7767-7772, 2014.

[6].

Ganeshram V., Achudhan M., Design and

moldflow analysis of piston cooling nozzle in

automobiles, Indian Journal of Science and Technology,

v-6, i-SUPPL.6, pp-4808-4813, 2013.

[7].

Ganeshram V., Achudhan M., Synthesis and

characterization of phenol formaldehyde resin as a binder

used for coated abrasives, Indian Journal of Science and

Technology, v-6, i-SUPPL.6, pp-4814-4823, 2013.

[8].

Achudhan

M.,

Prem

Jayakumar

M.,

Mathematical modeling and control of an electricallyheated catalyst, International Journal of Applied

Engineering Research, v-9, i-23, pp-23013-, 2014.

[9].

Anbazhagan R., Satheesh B., Gopalakrishnan K.,

Mathematical modeling and simulation of modern cars in

the role of stability analysis, Indian Journal of Science

and Technology, v-6, i-SUPPL5, pp-4633-4641, 2013.

[10]. Udayakumar R., Kaliyamurthie K.P., Khanaa,

Thooyamani K.P., Data mining a boon: Predictive system

for university topper women in academia, World Applied

Sciences Journal, v-29, i-14, pp-86-90, 2014.

[11]. Kaliyamurthie

K.P.,

Parameswari

D.,

Udayakumar R., QOS aware privacy preserving location

monitoring in wireless sensor network, Indian Journal of

Science and Technology, v-6, i-SUPPL5, pp-4648-4652,

2013.

[12]. Kumar J., Sathish Kumar K., Dayakar P., Effect

of microsilica on high strength concrete, International

Journal of Applied Engineering Research, v-9, i-22, pp5427-5432, 2014.

[13]. Dayakar P., Vijay Ruthrapathi G., Prakesh J.,

Management of bio-medical waste, International Journal

of Applied Engineering Research, v-9, i-22, pp-55185526, 2014.

[14]. Iyappan L., Dayakar P., Identification of

landslide

prone

zone

for

coonoortalukusing

spatialtechnology, International Journal of Applied

Engineering Research, v-9, i-22, pp-5724-5732, 2014.

[15]. Swaminathan N., Dayakar P., Resource

optimization in construction project, International Journal

of Applied Engineering Research, v-9, i-22, pp-55465551, 2014.

[16]. Swaminathan N., Sachithanandam P., Risk

assessment in construction project, International Journal

of Applied Engineering Research, v-9, i-22, pp-55525557, 2014.

[17]. Srividya T., Kaviya B., Effect on mesh

reinforcement on the permeablity and strength of

pervious concrete, International Journal of Applied

Engineering Research, v-9, i-22, pp-5530-5532, 2014.

International Journal of Pure and Applied Mathematics

[18]. Sandhiya K., Kaviya B., Safe bus stop location in

Trichy city by using gis, International Journal of Applied

Engineering Research, v-9, i-22, pp-5686-5691, 2014.

[19]. Ajona M., Kaviya B., An environmental friendly

self-healing microbial concrete, International Journal of

Applied Engineering Research, v-9, i-22, pp-5457-5462,

2014.

[20]. Kumar J., Sachithanandam P., Experimental

investigation on concrete with partial replacement of

scrap rubber to granite stones as coarse aggregate,

International Journal of Applied Engineering Research,

v-9, i-22, pp-5733-5740, 2014.

[21]. Sachithanandam P., Meikandaan T.P., Srividya

T., Steel framed multi storey residential building analysis

and design, International Journal of Applied Engineering

Research, v-9, i-22, pp-5527-5529, 2014.

[22]. Srividya T., Saritha B., Strengthening on RC

beam elements with GFRP under flexure, International

Journal of Applied Engineering Research, v-9, i-22, pp5443-5446, 2014.

[23]. Saraswathy R., Saritha B., Planning of integrated

satellite township at Thirumazhisai, International Journal

of Applied Engineering Research, v-9, i-22, pp-55585560, 2014.

[24]. Saritha B., Rajasekhar K., Removal of malachite

green and methylene blue using low cost adsorbents from

aqueous medium-a review, Middle - East Journal of

Scientific Research, v-17, i-12, pp-1779-1784, 2013.

[25]. Saritha B., Ilayaraja K., Eqyaabal Z., Geo textiles

and geo synthetics for soil reinforcement, International

Journal of Applied Engineering Research, v-9, i-22, pp5533-5536, 2014.

[26]. Ilayaraja K., Krishnamurthy R.R., Jayaprakash

M., Velmurugan P.M., Muthuraj S., Characterization of

the 26 December 2004 tsunami deposits in Andaman

Islands (Bay of Bengal, India), Environmental Earth

Sciences, v-66, i-8, pp-2459-2476, 2012.

[27]. Ilayaraja K., Ambica A., Spatial distribution of

groundwater

quality

between

injambakkamthiruvanmyiur areas, south east coast of India, Nature

Environment and Pollution Technology, v-14, i-4, pp771-776, 2015.

[28]. Ilayaraja K., Zafar Eqyaabal M.D., Study of

ground water quality in Cooum belt, Indian Journal of

Science and Technology, v-8, i-32, pp--, 2015.

[29]. Sandhiya K., Ilayaraja K., Application of GIS for

countering nuclear disaster, International Journal of

Applied Engineering Research, v-9, i-22, pp-5561-5566,

2014.

[30]. Ambica A., Ground water quality characteristics

study by using water quality index in tambaram area,

Chennai, Tamil nadu, Middle - East Journal of Scientific

Research, v-20, i-11, pp-1396-1401, 2014.

470

Special Issue

471

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download