A STUDY ON FUNDS FLOW STATEMENT IN ZUARI CEMENT

                                                                                                                      ABSTRACT

A STUDY ON FUNDS FLOW STATEMENT ON ZUARI CEMENT AT YERRAGUNTLA

                               UNDER THE GUIDANCE OF     By

             Associate professor Prof. Mr. M.Vankataramanaiah                

                                          Azgar Ali.p   Reg231298062   

                                                                                                                                                                                                 

1. INTRODUTION:

            The funds flow statement is a statement measuring the inflow and outflow of the net working capital that result from any type of business activity between two dates. An income statement in a statement measuring the inflow & out flow of the net assets of revenue nature that result from rendering goods or services to customers between two dates  

            The funds flow statement is useful tool in the hands of financial analyst. That is because the financial statements, i.e., income statement measures the flows restricted to transaction relating to rendering of goods and series to customers.  

 Funds flow statement termed as a “statement of sources and application of funds”

1.1 INDUSTRY PROFILE

            The south India industries limited producer cement for the first time in our country in the year 1904 near madras. The company has installed capacity of 30 tons per day. By 1913 however three other units started their operations and had an installed capacity of 75000 tones\annum. However boom time is expected in the future primary due to the reason that in India per capita income is increasing but; the per capita consumption of the cement is very low only 7kgs per as compared to the world average of 200kg. The reason for the potential cement boom will be due; to infrastructure development.

1.2 COMPANY PROFILE

            The Zuari agro chemicals limited (ZACL)was conceptualized on 12^th may, 1967, with main object of manufacturing, distribution and marketing of fertilizer and other agriculture input. Zuari cement is a division of Zuari industries limited. A company promoted by the Birla’s and U S multinational giant USX, having its registered office at jai kiss an bhavan, Zuari nagar, Goa. The company is a part of the 4500crores K.K. Birla’s group, having primary interests in fertilizers, Agro inputs, cement, RTA furniture, engineering services, home furniture, etc. It is (Ital cement) 8^th largest cement production group in the world.

1.3 NEED FOR STUDY

A study of funds flow analysis is a major importance to internal and external analysis because it reflects the position of the company in term of finance. Excess or inadequate working capital and funds can result in the loss of the company or reduce the profit of the company, which it could earn otherwise. Each both excessive and inadequate fund is dangerous from the firm’s point of view.

1.4 SCOPE OF STUDY

            Funds flow statement is useful for long term analysis. Such an analysis is of great help to management, shareholders, creditors, brokers etc.

            The fund flow statement help in answering the following question:

·         Where have profits gone

·         Why there is an imbalance existing between liquidity position and profitability position of the enterprises

1.5Objectives of the study

·         To know the financial position of the Zuari cement

·         To know the exact movement of funds from the sources to applications.

·         To analyze the changes in firms resources.

·         To analyze the changes in firms working capital position

1.6  Limitation of the study

-         The study based on the data gives by the official and report of the company, the confidentially of some facts and figures are also one limitation.

-         Financial statement analysis is based on balance sheet, profit & loss account prepared as per accounting practice in some cases may lead to window dressing to cover up bad financial position.

2. Research methodology

·         SECONDARY DATA

The secondary data was collected from already published sources such as annual report, returns and internal records:

           Data collected from annual report of ZUARI CEMENT (Ital cement group).

          Reference from text books related to financial management.

RESEARCH TOOLS: profit and loss Adjustment Account Fund flow statement

            3. FINDINGS

ü  The net working capital increase in the year 2006 & 2009, but in the year 2008 & 2009, but in the year 2008 & 2010 the net working capital is decrease.

ü  The company maintains reserves & surplus in the year 2006 nil, because the organization is losses. But in the year 2007 sales will be increase; it is causes to increase the reserves & surplus till 2010.

ü  The organization sales were decrease in the year 2009 & 2010. It affects on the organization profit 7 reserves and surplus.

3.1 PERIOD OF STUDY

The project duration time 01-06-2012 to 31-0-2012

4. SUGGESTIONS

   Net working capital is very low it is suggested to maintain ideal working capital, ultimately it reduces interest burden of organization and it will help to improve profitability of get more returns.

   Sales should be increase to get more returns.

   Trading activity should be operated effectively to generate more funds.

  5. CONCLUSION

After study with respect to five years financial statement concluded that initial stage the company financial performance is growing in the year 2009 & 2010. Because sales was decrease due to increase in operating expenses. In the year 2008 & 2010 net working capital was decrease, because current assets are less than the current liabilities. It is suggested that should concentrate on raising funds and utilize them in proper manner ensure better returns, and also concentrate on the sales.

             The financial performance of the company were satisfied and also profitability performance of organization is satisfied