CHAPTER: 5

suggestion, and conclusion

SUGGESTION AND RECOMMENDATION

1. The company is recommended to concentrate on increase in debtors. It has to modify

and improvise its terms and conditions of credit sales. As it may block the inflow of cash
in the irrecoverable bad debts. This turn can improve the company’s operating profit.
2. Interest received on investment shows continuous decline which in turn may result in
cash inflow from investing activities. Therefore, it is suggested to the company to invest amount
on purchase of such long-terms investment. These in turn guaranty highest rate of return.
3. It is also recommended to the company to maintain the proportion of current assets and
current liabilities as a result of which there will be increase of working capital.
4. The company has suggested having a proper systematic utilisation of cash for its
respective proper utilisation of cash inflow from long term sources such as issue of share
capital in rising in long term capital should be used for purchase of long term assets such
as fixed assets and investment.
5. Sale of investment within maturity period has to be avoided as long term investments
would get better benefit rather than sales proceed within short span which also affect
the regular income of interest.
6. The company should proper utilise the cash in the investing and financing activities.
7. Track accounts receivable to identify and avoid slow-paying costumer. Refusing to do
business with slow paying costumer.

CONCLUSION:

 The study on cash flow analysis of TATA POWER CORPORATION was mainly undertaken to study
the inflow & outflow of cash from various financial element in practical condition. This is an
 opportunity,which helped me in understanding cash flows and practical knowledge with
respect to a company’s performance.
 Cash inflow from operating activities in the form of operating profit before working capital
changes, cash generation from operations and net cash inflow from operation shows great
improvement in 2010 & 2011 compare to the base year. Where it shows reduction value of cash
outflow in the form of bad debts, depreciation, and loss on the sale of assets and tax paid
during the years.
 When cash flow from investing activities were analysed it shows cash outflow is due to heavy
purchase of fixed assets and investments from 2009-2012. Interest received is only inflow of the
cash from investment.
 Cash flow from financial activities shows inflow of cash in all the year from 2009-2012.
Whereas, inflow gradually decreasing in value from 2009-12. Equity share capital issued, long
term borrowings raised and receipts of unsecured loans are the reason for cash inflow in
financial activities. However payment of financial charges, dividend outflows and CDT are the
noticed in the financial activities.
 However, overall cash flow from all the activities shows good inflow of cash in the year 2009,
which has decline in 2010. And thereafter it indicates outflow of cash in the year 2011- and
2012.
 To conclude the company’s cash performance in all years seems to be satisfactory except in the
year 2012, as there is decline in the cash equivalent condition of the company in the year 2012
compare to its base year 2009.