PROJECT 1wtwet

FUNDS FLOW ANALYSIS
CHENNAI CUTTING DIES
SCOPE OF STUDY
Funds flow statement is a analysis by which his study the change in the financial position
beginning and ending of financials statement dates of the CCD. The funds flow statement is
prepared by comparing two balance sheets and with help of such other information derived from
the account as may be needed.
1. Statement changes in working capital of CCD.

2. Statement of source and application of CCD.
The causes of changes in cash position between dates of two balance sheet of the CCD. This
statement is very much similar to the statement of changes in financial position prepared on
working capital.
OBJECTIVE OF STUDY
1.
2.
3.
4.
To study the different sources and applications of the funds of CCD.

To study the different working capital of CCD.
To analysis the changes of financial position of CCD between two balance sheet.
To find out the source from which additional funds were derived and the use to which
their source were put.
VCR Institute of Management Studies Page 1
FUNDS FLOW ANALYSIS
LIMITATION OF STUDY
1. Time has been a limited factor and it has been difficult to analyze the various aspect of
finance within the prescribed time.
2. Financial statements are prepared on the basis of certain accounting concepts and
conventions.
FUNDS FLOW ANALYSIS
3. Any change in the methods or procedures of accounting system limits the utility of
financial statements. The analysis is based on the secondary data that is financial reports
of 5 years.
RESEARCH METHODOLOGY
SOURCES OF DATA
FUNDS FLOW ANALYSIS
There are two types of sources are there for data collection. They are
1. Primary source
2. Secondary source
1. Primary source:
Primary data is the data which are collected originally or at first time the researcher. it
does not exist already in records and publications. the primary data useful to gather the present
working conditions of the employees. it is collected by the technique of interview method with
the officials of the organization. the data thus collected is about the history and accounting
policies of the organization and financial statements like profit & loss account and balance sheet.
2. Secondary source:
The data which is collected from the published sources that is for the first time is called
secondary data.
The secondary data for the study is collected from the annual reports of CHENNAI
CUTTING DIES from 2006-07 to 2010-11.
REVIEW OF LITERATURE
Finance is the life blood and nerve system of any business organization.
Just as
Circulation of blood is necessary in the human body to maintain life finance is very essential to
the business organization for smooth running of the business.
Financial management involves Managerial activities concerned with the acquisition of
Fund for the business purpose. The Finance Function does with procurement of money taking in
to consideration of today as well as future need and finance is required to purchase need a
machinery and raw materials, to pay salaries and wages and also for day to day expenses.
FUNDS FLOW ANALYSIS
Financial Management is an appendage to the Finance function. With the Creation of

complex industry structure, the finance function has grown to very great heights. One cannot
think of any business activity in isolation from its financial implication.
Financial Management:
Meaning:Financial Management refers to that part of Management activity, which is concerned
with planning and controlling of firms financial resources, Financial Management is applicable
to every type of organization, irrespective of size, kind of nature.
Objectives of Financial Management:
Financial Management evaluates how funds are produced and used. In all cases, it
involves a sound judgment combined with logical approach of decision making. Financial
management provides a framework for selecting a course of action and deciding an economically
viable strategy
FUNDS FLOW ANALYSIS
The Main objective of a business is to maximize the owners welfare. This objective can
be achieved by
(1) PROFIT MAXIMIZATION
(2) WEALTH MAXIMIZATION
PROFIT MAXIMIZATION:
Profit earning is the primary of every economic activity. Business can service only it
earns profit; profit is the measure of the efficiency of a business enterprise. It is remuneration for
innovation.
The survival of the firm depends upon it ability to earn profit but from the
experience it is learn that concept of maximization is a myth.

WEALTH MAXIMIZATION:
Wealth maximization is the appropriate objective for an enterprise.
The concepts of wealth maximization tell value of assets in terms of benefits it can
produce. The concept of wealth maximization universally accepted in financial decision-making.
FINANCIAL DECISIONS:
Investment decisions
financing decisions
Dividend decisions
INVESTMENT DECISIONS:
The decisions relates to the determination of the total amount of assets to be held by the
firm, their composition, the business risk and the image of the firms perceived by the investors.
FUNDS FLOW ANALYSIS
FINANCING DECISION:
After taking the Investment decision, the firm commits itself to the new investment, and
hence it must decide upon the best means of Financing these commitments. The cost of raising
funds for investing is very crucial in making the financial decisions.
DIVIDEND DECISIONS:
This refers to the reimbursement of profit to the investors who have supplied funds.
FUNDS FLOW INTROUDUCTION
Significant technique of financial analysis is Funds Flow Analysis. It is designed to
highlight changes in the financial condition of a business concern between two points of time
which generally conform to beginning and ending financial statement dates. Funds Flow
statement is also termed as a Statement of Sources and Applications of Funds , Statement of
Changes in working Capital, Statement of Changes in Financial Position, Statement of Funds
Supplied and applied, Statement of Funds Generated and Expended,, Where Got and Where
Gone Statement, Funds statement.
Although financial statements supply useful information to the management and describe
the nature of changes in ownership as a result of the periods productive and commercial
activities, these statement fail to mirror the funds changes that have taken place over a given time
span. They do not spell out the movement of funds. Taken place over a given time span. The do
not spell out the movement of funds. It is more important to describe the sources from which
additional funds were derived and the uses to which these funds were put, because the ultimate
success of a business enterprise depends on where got a where gone situations. The funds flow
statement is, therefore, prepared to uncover the information which the financial statements fail to
describe clearly.
Funds Flow ANALYSIS:
The following are the definitions of Funds Flow Analysis.
R.N.Anthony: The Funds Flow Statement describes the sources from which additional
funds were derived and the uses to which these funds were put.
FUNDS FLOW ANALYSIS
R.A.Foulk: 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.
Bierman: It is a statement which highlights the underlying financial movements and
explains the changes of working capital form one point of time to another.
Thus, funds flow statement is a report which summarizes the events taking place between
the two accounting periods. It spells out the sources from which funds were derived and the uses
to which these funds were put. This statement is essentially derived from an analysis of the
changes that have occurred in assets and liabilities items between two balance sheet dates. In this
statement, only the net changes are shown s that they become of a transaction or of a series of
transactions upon the financial condition of a business enterprise, is reflected more sharply.
Concept of Fund:
The term Funds has a variety of meanings. Some people take funds synonymous to
cash, and to them there is no difference between a Cash Flow Statement prepared on this basis
and a Funds Flow Statement. While others include marketable securities and cash to constitute
business funds. However, the most common definition of the term funds is Working Capital or
Net Current Assets. Thus the difference between Current Assets and Current Liabilities is called
Funds.
Significance of Funds flow Statement
Funds Flows Statement is an important tool of financial analysis. The utility of the funds
flow statement stems from the fact that it enables management, shareholders, investors, creditors
and other interested in the enterprise to evaluate the uses of funds by the enterprise and to
determine how these uses are financed.
Useful in Decision Making to the Management:
The funds Flow Statement serves as valuable tool of financial analysis to the finance
manger. It helps in understanding the financial stability and efficiency of financial policies of the
management.
Decisions relation to financing:
FUNDS FLOW ANALYSIS
With the help of the funds flow statement, the analyst can evaluate the financing pattern
of the enterprise. An analysis of the major sources of funds in the past reveals what portion of the
growth was financed internally ands what portion externally. The statement is also meaningful in
judging whether the company has grown at too fast a rate, credit has increased out of proportion
to expansion in current assets and sales. If trade credit has increased at relatively higher rate, one
would wish to evaluate the consequences of slowness in trade payments on the credit standing of
the company and its ability to finance in future.
Decisions on Capitalization:
The funds flow statement serves as handmaid to the finance manager in deciding the
make-up of capitalization. Estimated uses of funds for new fixed assets, working capital,
dividends and repayment of debt are made for each of several future years. Estimates are made
of the funds to be provided by operations, and the balance must be obtained by borrowing or
issuance of new securities. If the indicated amount of new funds required is greater than what the
finance manager thinks possible to raise, then plans for new fixed asset acquisition and the
dividend policies are re-examined so that the uses of funds can be brought into balance with the
anticipated sources of financing them. In particulars, funds statements are very useful in planning
intermediate and long-term financing.
Reveals the reasons for financial difficulties: The funds flow statement reveals clearly the
causes for the financial difficulties of the company. The difficulties may be due to improper mix
of short and long terms sources, unnecessary accumulation of inventory of fixed assets, etc.
These can be found out by a careful study of the funds flow statement.
Other uses:
Funds Flow Statement is useful to the management in the following cases.
Estimating the amount of funds needed for growth;
Improving the rate of income on assets;
Planning the temporary investment of idle funds;
FUNDS FLOW ANALYSIS
Securing additional working capital when needed;

Securing economies in the centralized management of cash in organization whose
management is decentralized;
Planning the payment of divided to shareholders and interest to creditors; and
Easting the effects of insufficient cash balance.
Useful as a control Device:
The funds flow statement also serves as a control device in that the statement compared
with the budgeted figures will show to what extent the funds were put to use according to plan.
This enables the finance manager to find out deviation form the planned course of action and
take remedial steps to correct the deviations.
Useful to the external parties:

The outside parties can have a clear knowledge about the financial policies that the
company has pursued. In the light of the information so supplied by the statement, the outsiders
can decide whether or not to invest in the enterprise and on what terms funds have to be invested.
The funds statement provides an insight into the financial operations of a business enterprise-an
insight immensely valuable to the finance manager in analyzing the past and future expansion
plans of the enterprise and the impact of these plans on its liquidity. He can detect imbalances in
the uses of funds and undertake remedial actions.
Thus, the funds statement draws the attention of the finance manager to problems which
call for detailed analysis and immediate action. In view of these, funds flow statement is
becoming more popular which management. Even some bank managers make it obligatory for
the borrowers to furnish a funds statement along with their annual balance sheet. Now a days
many Indian companies are publishing this statement in their annual reports although they are
not obliged to do so under the companies Act.
Financial Statements and Funds flow statement
FUNDS FLOW ANALYSIS
Financial statement means the profit and loss account and the balance sheet. All the
organizations more particularly, the company form of organizations are required to present the
annual financial statement every year. The financial statement differ with the funds flow
statement in many ways.
A Funds Flow Statement is statement measuring the inflows and outflows of net working
capital that result from any type of business activity between two dates. An Income Statement in
a statement measuring the inflows and outflows of net assets of revenue nature that result from
rendering goods or services to customers between two dates.
A funds flow statements has become a useful tool in the hands of financial analyst. That
is because the financial statements, i.e., Income Statement measures the flows restricted to
transition relation to rendering of goods and services to customers. It is not capable of any
accurate information of the resources operating unless the income data is converted into founds
data. The Balance Sheet is merely a static statement of assets and liabilities as on a particular
date. It does not depict the major financial transactions which have resulted in changes in
Balance Sheet.
Preparation of funds flow statement:
In order to prepare a Funds Flow Statement, it is necessary to find out the sources and
applications of funds.
Sources of Funds:
Funds from Operations: Funds from operations is the only internal source of funds. Some
adjustments are to be made in calculating funds operations to the net profit given in the financial
statement.
Calculation of funds from operations:
The following procedure is to be followed in the calculation of funds from
operations.Start with the Net Profit given in the profit and loss account.
Add the following items to the Net Profit as they do not result in out flow of funds.
Depreciation on fixed assets.
FUNDS FLOW ANALYSIS
Preliminary expenses or goodwill etc., written of.

Contribution to debenture redemption fund, transfer to general reserve etc., if they have
been deducted before arriving at the figure of net profit.
Provision for taxation and proposed divided. These may be taken as appropriations of
profits or current liabilities for the purposes of Funds Flow Statement. Tax or dividends
actually paid are taken as applications of funds. Similarly, interim dividend paid is shown
as an application of funds. All these items will be added back to net profit if already
deducted, to find funds from operations.
Loss on sale of fixed assets.
Deduct the following items from net profit as they do not increase the funds:
Profit on sales of fixed assets, since the full sale proceeds are taken as a separate source
of funds and inclusion here will result in duplication.
Profit on revaluation of fixed assets.
Non-operating income such as dividend received or accrued rent. These items increase
funds but they are non-operating incomes. They will be shown under separate heads as
sources of funds in the Funds Flow Statement.
In case the profit and loss account shows Net Loss this should be taken as an item
which decreases the funds.
Applications of funds:
The uses to which funds are put to are called applications of funds. Following are some
of the purposes for which funds may be used:
Purchase of fixed assets:
FUNDS FLOW ANALYSIS
Purchase of fixed assets such as land, buildings, plant, machinery, long-term investments,
etc., result in decrease of current assets without any decrease in current liabilities. Hence, there
will be an outflow of funds. But in case shares or debentures are issued for acquisition of these
fixed assets. There will be no outflow of funds.
Payment of dividend:
Payment of dividends results in decrease of a fixed liability and therefore, it affects funds.
Generally, recommendation of directors regarding declaration of dividend (i.e., proposed
dividends is simply taken as an appropriation of profits and not as an item affecting the working
capital.
Payment of fixed liabilities:
Payment or redemption of redeemable preference shares results in reduction of working
capital and hence it is taken as an application of funds.
Payment of tax liability:
Provision for taxation is generally taken as an appropriation of profits and not as an
application of funds. But if the tax has been paid, it will be taken as an application of funds.
Increase in working capital:
Working capital is increased, if current assets increase and current liabilities decrease.
Funds are required in both the cases i.e., in order to acquire more current assests or paying
current liabilities and thus funds are said to have been applied or used.
Statement of changes in working capital:
The increase or decrease in working capital can be calculated by preparing the schedule
of changes in working capital. Working capital represents the excess of current assets over
FUNDS FLOW ANALYSIS
current liabilities. Several items of all current assets and current liabilities are the components of
working capital. In order to ascertain the working capital at the beginning and at the end of the
period and to measure the increase or decrease therein it is necessary to prepare a statement or
schedule of changes in working capital.
Statement of Sources and Application of Funds:
Funds from operation:
It is an internal source of funds. Funds from operations are to be calculated as per the
method stated above.
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.
Sale of fixed assets:
Sale of land, buildings, long term investments will results in generation of funds.
Funds from increase in share capital:
Issue of shares for cash or for any other current asset or in discharge of a current liability
is another source of funds. However, shares allotted in consideration of some fixed assets will
not result in funds. However, it is recommended that such purchase of fixed assets as well as
issue of securities to pay for them be revealed in Funds Flow Statement.
Decrease in Working Capital:
Decrease in working capital is the results of decrease in current asset or increase in
current liabilities. In both the cases inflow of funds takes place. Suppose stock, a current asset
reduces form Rs.15000 to Rs.12000 the decrease of Rs.3000 is assumed to be due to the disposal
of stock which undoubtedly brings funds into the business. In the same way, increase in current
liabilities means lesser payment, so retaining funds is also a source.
FUNDS FLOW ANALYSIS
Funds Flow Statement:

The funds flow statement is a statement, which shows the movement of funds and is
a report the financial operations of the business undertaking. It indicates various means by
which funds were obtained during a particular period and the ways in which these find were
employed.
In simple, the funds flow statement is a statement of sources and application of funds. In
short, it is a technical device designed to high light the change in the financial condition of a
business enterprise between two Balance Sheets.
According to Robert Anthony "The Funds Flow Analysis describes the sources from
which additional funds were derived and the uses to which these funds were put.
According to Fouke, "A Statement of Sources and Applications of funds is a
technical device designed to analyze the changes in the financial position of a business
enterprise between two periods.
Funds flow statement is widely used by the financial analyst and credit granting
institution and financial managers in performance of their jobs. It has become a useful tool in
their analytical kit. This is because the financial statement like income statement and balance
sheet have limited role to perform.
Financial policies to the outside world like bankers, government, etc; Income statement
measures flows restricted to transaction that pertain to rendering of goods and services to
customers. The balance sheet is merely a static statement's these statements do not sharply focus
those major financial transactions, which have behind the n\balance sheet changes.
However financial analyst must know the purpose for which the loan was unitized and
the sources from which it has rises. This will help him in making a better estimate about the
company's financial position and polices.
Uses, Significance and Importance of Funds Flow Statement:
Analysis of financial operations: A funds flow statement shows bow the resources have beer obtained and the uses to
FUNDS FLOW ANALYSIS
which they are put.

The funds flow statements determining the financial consequences of business operation.
It also useful in guiding whether the firm has expanded at too fast rate and whether financing is
strained, it also point out to the effectiveness with which the management has handled working
during the period under review.
Evaluation of the firms: This statement can consist the financial manager in planning intermediate and long-term
finance for obtaining sources in the further and determining how they are to be used. That is
analysis of the major sources of funds in the past reveals what positions of the firms growth was
financed internally and what position externally.
Comparision with the budget: The statement defines the past flow of funds and gives insight in to the evolution of the
present situation. It provides certain useful information about the firms.Funds flow statement is
becoming popular with the management because it helps to explain why in spite of earning
sizable amount of profits, the company is experiencing difficulty in making payments to
creditors, the rate of dividend on equity; shares cannot be increased and the bank balance is
getting thinner. The funds flow statements has an analytical value and is an important planning
tool. It helps in guiding the destiny of the business by enabling the executives to visualize the
movements of funds that constantly takes place. This statement also helps in working capital
requirements. It highlights and future need for funds and provides sample time to work out
suitable arrangements. The funds flow statement shows what portion externally. The analysis of
funds flow statement for the future is externally available to the executive in planning.
General Rule:
The flow of funds occurs when a transaction changes on the one hand a non-current account and
vice versa.
A current asset and a fixed asset.
A fixed asset and a current liability.
FUNDS FLOW ANALYSIS
A current asset and a fixed liability.

A fixed liability and a current liability.
Uses-of Funds Flow Analysis:
It helps in the analysis of financial operations.
It throws light on many perplexing question of general interest.
It helps in the formation of a realistic dividend policy.
It helps in the proper allocation of resources.
Limitations of funds Flow Analysis:
It is essentially historic in nature and projected funds flow statement cannot be prepared
with much accuracy.
It cannot be reveal continues changes.
It is not an original statement but simply a re - arrangement of data given in the financial
statements.
Different names of funds Flow Statement:
A statement of sources and Uses of funds.
A statement of Sources and Application of funds.
Where got and where gone Statement.
Inflow and out flow of funds statement.
Main purpose of Funds Flow Statement:
To help to understand the changes in assets and which are not evident
Financial statements or I the income statement.
To inform on to how the loans to the business has been used.
FUNDS FLOW ANALYSIS
To point out the financial strengths and weakness of the business.

To help in planning sound dividend policy.
Procedure for preparing a Funds Flow Statement:
The preparation of funds flow statement consists of some parts:
Statement or schedule of changes in working capital.
Statement of sources of funds.
Statement of application of funds.
Finding out the hidden transactions or changes in non-current assets and non-current
liabilities.
Statement or Schedule of Changes in Working Capital:
The increase or decrease in working capital can be calculated by preparing the schedule
of changes in working capital. Working capital means the excess of current assets over current
liabilities. Statement of changes in working capital is purpose to show the changes in the
working capital between two balance sheets data. This statement is prepared with the help of
current assets and current liabilities derived from two balance sheets.
While preparing a schedule of Changes in Working Capital, it should be note that:
Increase in Current Assets, Increases the Working Capital.
Decrease in Current assets, Decreases the Working Capital.
Increase in Current Liabilities, Decreases the working capital.
Decrease in Current Liabilities, Increases the Working Capital.
An increase in current assets and increase in current liabilities does not affect working
capital.
FUNDS FLOW ANALYSIS
A decrease in current assets and decrease in current liabilities does not affect working
capital.
Changes in fixed (non-current) assets and fixed (non-current) liabilities affect working
capital.
The changes in all current assets and current liabilities are merged into one figure only
either an increase of decrease in working capital over the period for which funds statements has
been prepared.
If the working capital at the end of the period is more than the working capital at the
beginning the difference is expresses as Increase in Working Capital. On the other hand, if
the working capital at the end of the period is less than at the commencement, the difference is
called Decrease in Working Capital.
Working Capital = Current Assets Current Liabilities
Current Assets:The expression Current Assets denotes those assets, which are continually on
the move. Since they are constantly in motion, they are known as the circulating capital of the
business. These assets can or will be converted into cash during a complete operating cycle of the
business.
Current assets include:
Stock-in-trade or inventories,
Debtors,
Payments in advance or prepaid expenses,
Stores,
Bills receivable,
Cash at bank,
FUNDS FLOW ANALYSIS
Cash in hand and

Work-in-progress etc.
Current Liabilities:
Current Liabilities are those liabilities, which are to be paid in the near future, i.e.,
during a complete operating cycle of the business.
Current liabilities include: Trade creditors,
Accrued or outstanding expenses,
Bills payable,
Income tax payable,
Dividends declared and
Bank overdraft.
Note: - according to the experts opinion bank overdraft has a tendency to become more or less
permanent source of financing and hence it need not be included among current liabilities
FUNDS FLOW ANALYSIS
PROFORMA OF STATEMENT OF CHANGES IN

WORKING CAPITAL
Particulars
Beginning Ending
Changes in working capital
Increase
Decrease
Current assts (CA):

Inventories:
XXX
XXX
Raw material
XXX
XXX
Consumable stores
XXX
XXX
Finished goods
XXX
XXX
Sundry debtors
XXX
XXX
Cash in hand
XXX
XXX
Balance with bank
XXX
XXX
Other current assets:
XXX
XXX
Deposits
XXX
XXX
Income tax (advance tax)
XXX
XXX
Sales tax
XXX
XXX
Total Current assets
XXXXX
XXXXX
Current liabilities:
Trade creditors
XXX
XXX
Dealers deposits
XXX
XXX
Expenses payable
XXX
XXX
Total current liabilities
XXXXX
Working Capital (CA-CL)

Net Increase /
working capital
decrease
XXXXX
XXXXX
XXXXX
Statement of Sources and Application of Funds:
XXXXX
FUNDS FLOW ANALYSIS
Funds flow statement is a statement, which indicates various sources for which
funds have been obtained during a chain period and the uses or applications to which these funds
have been put during that period.
Sources of funds
Application of Funds.
Statement of Sources and Applications
Sources of funds
Amount
Application of funds
Amount
Funds from Operating ( profit)
XXXX
Funds in operations (loss)
XXXX
Issue of shares and debentures
XXXX
Repayment of debentures
XXXX
Receipts of dividend and Interest
XXXX
Reduction in share Capital
XXXX
Sales Proceeds of Non-current
XXXX
Interest and dividend paid
XXXX
Payment
XXXX
asset
Long term Borrowings
XXXX
Decrease in working Capital
of
Long-term
loans.
XXXX
XXXX
Increase in working capital
XXXX
XXXX
DATA ANALYSIS AND INTERPRETATION
FUNDS FLOW STATEMENT ANALYSIS FOR THE YEAR ENDED 31ST 2007-2008
statement of changes in working capital 2007-2008
(Rs in crores)
FUNDS FLOW ANALYSIS
particulars
2007
2008
Increase
Decrease
current assets
cash in hand
10801657
11582492
cash at bank
2165179
475225
deposits & advance
5130000
car loan
15022309
closing stock
8476200
780835
5130000
52000000
1689954
36977691
3212000
5264200
Total current assets(A) 41595345 72399717
Current liabilities
Sundry creditors
Over drafts
136840102 89743795
100900450 96536531
Total current liabilities 237740552 186280326 37758526

(B)
Working capital (A-B)
196145207 113880609
47096307
4363919
97684380
FUNDS FLOW ANALYSIS
STATEMENT OF CHANGING IN WORKING CAPITAL 2008-2009 (Rs in crores)

FUNDS FLOW ANALYSIS
Particular
2008
2009
Increase
Decrease
Current assets
Sundry debtors
72356202
143949008
Cash in hand
11582492
1233628
Cash at bank
475225
Deposits & advance
Closing stock
Total current assets
5130000
10348864
475225
5130000
3212000
92755919
71592806
5321200
2109200
155633836
(A)
Current liabilities
Sundry creditors
Sundry creditors for
13986855
120149585 30405790
12529900
12529900
expenses
bank over draft
96536531
91889023
4647508
FUNDS FLOW ANALYSIS
DATA ANALYSIS A DAT

FUNDS FLOW ANALYSIS
Particular
2009
2010
Increase
Decrease
Current assets
Sundry debtors
Cash in hand
Deposits & advance
Closing stock
143949008
1233628
5130000
53212000
155633836
30157122
24709831
5130000
4153000
13791886
23476203
0
49059000
64149953
(A)
Current liabilities
Sundry creditors
120149585
88918122
31231463
FUNDS FLOW ANALYSIS
Sundry creditors
12529900
12529900
expenses
bank over draft
91889023 80524209
11364814
Total current
Liabilities (B)
Working capital(A-B)
224568508
68934672
169442331 23476203
217977063
105292378
Increases in working
36357706
Capital

FUNDS FLOW ANALYSIS
Particular
2010
2011
Increase
Decrease
Current assets
Sundry debtors
Cash in hand
Deposits & advance
30157122
24709831
5130000
Closing stock
4153000
Cash in bank
64149953
188587375
158430253
27872382
3162551
9441187
4311187
5621500
49610151
1468500
49610151
281132595
(A)
Current liabilities
Sundry creditors
88918122
210157910
679030212
FUNDS FLOW ANALYSIS
Sundry creditors
12529900
12529900
expenses
bank over draft
80524209
80524209
Total current
Liabilities (B)
Working capital(A-B)
169442331
210157910 167372491
105292378
772084321
70974685
Increases in working
Capital
FUNDS FLOW STATEMENT 2007-2008

34317693
FUNDS FLOW ANALYSIS
source
AMOUNT
Application AMOUNT
SHARE CAPITAL
176570556
CAR LOAN
67022309
Fund from operation
202663276
DECREASE OF WORKING
FIXED ASSETS
DEPOSISTS
82264598
CAPITAL
528520739
528520739
INFERENCE:
The above statement shows that decrease in working capital of Rs 8.2crores.
528418139
102600
FUNDS FLOW ANALYSIS
source
AMOUNT
Application AMOUNT
SHARE CAPITAL
266865662
FIXED ASSETS
CAR LOAN
960556
DEPOSISTS
609367196
102600
Funds from
operation
380220168
INCREASE IN WORKING
CAPITAL
648046384
648046384
INFERENCE:
The above statement shows that Increase in working capital of Rs 3.8crores.
38576590
FUNDS FLOW ANALYSIS
INFERENCE:
The above statement shows that Increase in working capital of Rs 3.6crores.
FUNDS FLOW ANALYSIS
source
AMOUNT
Application AMOUNT
SHARE CAPITAL
388178576
FIXED ASSETS
CAR LOAN
790617
DEPOSISTS
HOUSING LOAN
587076OO
INCREASE IN WORKING
74017926
102600
36357706
CAPITAL
Funds from operation
337198561
447676793
447676793
source
AMOUNT
Application AMOUNT
SHARE CAPITAL
577801165
CAR LOAN
581613
HOUSING LOAN
1435013
FIXED ASSETS
DEPOSISTS
INCREASE IN WORKING
CAPITAL
853781458
14571187
34317693
FUNDS FLOW ANALYSIS
Funds from
322852547
operation
902670338
902670338
INFERENCE:
The above statement shows that Increase in working capital of Rs 9crores.
FUNDS FLOW ANALYSIS
SUGGESTIONS
As the company is paying huge amount as interest to bank and financial institute, it is better for
the company to concentrate on moderating net worth.
The company should take proper care in financing the assets. As far as possible working capital
should be used for long term.
The company must reduce the operating expenses.
The company should decrease its current liabilities to increase its working capital.
FUNDS FLOW ANALYSIS
CONCLUSION
Except of the first year the study period it is observed that the fund for operations is on profit.
Except of the first year of the study of period, funds were utility for financing the working capital
requirements.
The study revealed a mixed trend of application and source of funds in respect of secured and
unsecured loans.
FUNDS FLOW ANALYSIS
FINDINGS
O The company assets decrease RS3.3crores and 7.2crores.

O (2007-2011) the company has been in profit.
O To increase current liabilities from3.3crores in the year 2007 to RS6.9crores in 2011
The financial level of the company is not satisfactory.
FUNDS FLOW ANALYSIS
BALANCE SHEET OF CHENNAI CUTTING DIES (2007-2011)
2007
2008
2009
2010
2011
222614690
305803449
303563747
436611179
417170279
5130000
5130000
5130000
5130000
9441187
83853503
72356202
143949008
30157122
188587375
10801657
11582492
1233628
24709831
27872382
particular
CURRENT ASSETS:
FIXED ASSETS
DEPOSITS
&
ADVANCE
SUNDRY DEBTORS
CASH IN HAND
CASH AT BANK
FUNDS FLOW ANALYSIS
2165179
475225
49610151
3212000
5321200
4153000
5621500
333041230
398559368
459197583
500761132
698302874
80278369
96292187
170573475
217605101
360196064
136840102
89743795
120149585
88918122
210157910
13986855
12529900
96536531
91889023
80524209
50000000
20000000
20000000
20000000
CLOSING STOCK
TOTAL CURRENT 8476200

ASSET
CURRENT
LIABILITIES:
SHARE CAPITAL
SUNDRY
CREDITORS
SUNDRY
CREDITORS-EXP
BANKOVERDRAFT
RENTAL ADVANCE
100900450
CAR LOAN
HOUSINGLOAN
FUNDS FLOW ANALYSIS
TOTAL CURRENT
LIABILITIES
15022309
52000000
44055600
35006100
23155200
58707600
84793700
333041230
398559368
459197583
500761132
698302874

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FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

1. Statement changes in working capital of CCD.

To study the different sources and applications of the funds of CCD.

VCR Institute of Management Studies Page 1

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

VCR Institute of Management Studies Page 2

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

VCR Institute of Management Studies Page 3

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

VCR Institute of Management Studies Page 4

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

Financial Management is an appendage to the Finance function. With the Creation of

VCR Institute of Management Studies Page 5

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

experience it is learn that concept of maximization is a myth.

VCR Institute of Management Studies Page 6

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

R.A.Foulk: A Statement of Sources and Applications of Funds is a technical device

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

Securing additional working capital when needed;

Useful to the external parties:

VCR Institute of Management Studies Page 10

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

Preliminary expenses or goodwill etc., written of.

VCR Institute of Management Studies Page 12

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

VCR Institute of Management Studies Page 14

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

Funds Flow Statement:

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

which they are put.

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

A current asset and a fixed liability.

VCR Institute of Management Studies Page 17

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

To point out the financial strengths and weakness of the business.

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES

VCR Institute of Management Studies Page 19

FUNDS FLOW ANALYSIS

CHENNAI CUTTING DIES