ANALYSIS OF

CASH MANAGEMENT
Varanlika Yadav Ravi Bisht
Bhawna Hans Akshay Hanskar
Rahul Ghosh Rahul Chaudhury

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INTRODUCTION
 OBJECTIVE

Primary Objective:
• To analyze the cash management of Standard Polymers.

Secondary Objective:
• To find out the liquidity position of the concern through ratio analysis.
• To study the growth of standard polymers in terms of cash flow statement.
• To make suggestion and recommendation to improve the cash position of standard
polymers.
METHODOLOGY
The research design used in this project is Analytical in nature the procedure using, w
hich researcher has to use facts or information already available, and analyze these to
make a critical evaluation of the performance.

DATA COLLECTION
Secondary Sources
• From the annual reports maintained by the company.
• Data are collected from the company’s website.
• Books and journals pertaining to the topic.

TOOLS USED IN THE ANALYSIS

• Cash flow statement
• Trend analysis
• Ratio analysis.
 DESCRIPTION OF FACTS

Cash managements concerned with the managing of:

• Cash flows into and out of the firm

• Cash flows within the firm, and

• Cash balances held by the firm at a point of time by financing deficit or investing sur
plus cash.
 IMPORTANCE

• It is difficult to predict cash flows accurately, particularly the inflows, and t

here is no prefect coincidence between the inflows and outflows of cash.

• Cash management is significant because cash constitutes the smallest porti

on of the total current assets, yet management’s considerable time is devoted
in managing it.

• Manage its cash affairs in such a way as to keep cash balance at a minimu
m level and to invest the surplus cash in profitable investment opportunities.
 Strategies For Cash Management
• Cash planning: Cash inflows and outflows should be planned to project cash surplus
or deficit for each period of the planning period.

• Managing the cash flows: The firm should decide about the properly managed. The
cash inflows should be accelerated while, as far as possible, the cash outflows should be
decelerated.

• Optimum cash level: the firm should decide about the appropriate level of cash bala
nces. The cost of excess cash and danger of cash deficiency should be matched to deter
mine the optimum level of cash balances.

• Investing surplus cash: The surplus cash balances should be properly invested to ea
rn profits. The firms should decide about the division of such cash balances.
 MOTIVE OF CASH MANAGEMENT
TRANSACTION MOTIVE
• The transactions motive requires a firm to hold cash to conduct its business in the ordinary course.
• The firm needs cash primarily to make payments for purchases, wages and salaries, other operating
expenses, taxes, dividends etc.

PRECAUTIONARY MOTIVE
• The precautionary motive is the need to hold cash to meet contingencies in the future.
• The precautionary amount of cash depends upon the predictability of cash flows.
• If cash flows can be predicted with accuracy, less cash will be maintained for an emergency.

SPECULATIVE MOTIVE
• The speculative motive relates to the holding of cash for investing in profit-making opportunity to
make profit may arise when the security prices change.
• The firm will hold cash, when it is expected that interest rates will rise and security prices will fall.