STATEMENT OF THE PROBLEM

Cash is the important current asset for the operations of the business. Cash
is the basic input needed to keep the business running as a continuous basis. It is
also the ultimate output expected to be realized by selling the product or service
manufactured by firm. The firm should keep sufficient cash neither more or less.
Cash shortage will disturb the firms manufacturing operations while excessive
cash will remain idle, without contributing anything towards the firms
profitability. This is a maor function of the financial manager is to maintain a
sound cash position.
Trade credit arises when a firm sells its products or services on credit and
does not receivable immediately. It is an essential marketing tool, acting as a
bridge for the movement of goods that the production and distribution stages to
customers. Credit creates !"eceivables or #ook $ebts% which the firm is expected
to collect in the near future book debts or receivable arising out of credit
receivable constitutes a substantial portion of current assets of the firm.
&n attempt is made in this proect work to analyze the efficiency of cash
and receivable management of the sample unit.

CASH AND RECEIVABLES MANAGEMENT
Introduction

'inance is aptly described as the lifeblood and nerve center of any business. It
is ust as the circulation of blood, an essential system in the human body to keep and
alive. 'inance is vital input for the smooth functioning of the business. (very business
enterprise irrespective of its size and nature needs finance to carry on its operations and
achieve its target.
)orking Capital refers to a firms investment in short*term assets viz, cash,
short*term securities.
Cash Manag!nt
Cash management is one of the key areas of working capital management, apart
from the fact that it is the most li+uid current asset, cash is the common denominator to
which all current assets can be reduced because the other maor li+uid assets, that is,
receivables and inventory get eventually converted into cash.

The term ,Cash with reference to cash management is used in two senses. In a
narrow sense, it is used broadly to cover currency and generally accepted e+uivalents of
cash, such as che+ues, drafts and demand deposits in banks.
Cash -anagement is concerned with the managing of.
/. Cash flows into and out of the firm
0. Cash flows within the firm, and
1. Cash balance held by the firm at a point of time by financing deficit of
investing surplus cash.
It can be represented by a cash management cycle. The surplus cash to be
invested while deficit has to be borrowed. Cash management seeks to accomplish
this cycle at a minimum cost. &t the same time, it also seeks to achieve li+uidity
and control.
In order to resolve the uncertainty about cash flow prediction and lack of
synchronization between cash receipts and payments, the firm should develop
appropriate strategies regarding the following four facts of cash management.
Cash P"anning

Cash inflows and outflows should be planned to proect cash surplus or
deficit for each period of the planning period. Cash budget should be planned to
proect cash surplus or deficit.
Managing th Cash F"o#s

The flow of cash should be properly the cash flows should be
accelerated while, as far as possible, the cash outflows should be decelerated.
O$ti!u! Cash L%"
The firm should decide about the appropriate level of cash balance. The cost of
excess cash and danger deficiency should be matched to determine the optimum level
of cash balances.
In%sting Sur$"us Cash
The surplus cash balance should be properly invested to earn profits. The firm
should decide about the division of such cash balances between alternative short term
investment opportunities such as bank deposits, marketable securities or inter
corporate lending.
Th &' E"!nts o( Cash Manag!nt
2ood cash management can have a maor impact of overall working capital
management. The key elements of cash management are.
Cash 'orecasting
#alance -anagement
&dministration
Internal Control
Moti% (or ho"ding cash
The firms need to hold cash may be attributed to the following three motives.
)* Th Transaction Moti%+
The transaction motive re+uires 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 and other operating expenses, taxes, dividend etc.,. The need to
hold cash would not arise here were perfect synchronization between cash receipts
and cash payments.
,* Prcautionar' Moti%+
The precautionary motive is the need to hold cash to meet contingencies in
the future. It provides a cushion or buffer to withstand some unexpected emergencies.
The precautionary amount of cash depends upon the predictability of cash flows.
-* Cash Forcasting+
2ood cash management re+uires regular forecasts. In order for these to be
materially accurate, they must be based on information provided by those managers
responsible for the amounts and timing of expenditure. Capital expenditure and
operating expenditure must be taken into account.
Ad!inistration
Cash receipts should be processed and banked as +uickly as possible because.
*They cannot earn interest or reduce overdraft until they are banked
*Information about the existence and amounts of cash receipts is usually not available
until they are processed.
Intrna" Contro"

Cash and Cash management is part of a departments overall internal control
system. The main internal cash control is invariably the bank reconciliation. This
provides assurance that the cash balance recorded in the accounting systems are
consistent with the actual bank balance.
S$cu"ati% Moti%

The speculative motive related to the holding of cash for investing in profit
making opportunities as and when it arises. The opportunity to make profit may arise
when the security prices changes.
RECEIVABLES MANAGEMENT
The receivables represent an important component of the current assets of a firm.
The term receivable is defined as ,debt owed to the firm by customers arising from
sale of goods or services in the ordinary course of business. "eceivables
management is also called trade credit management. Thus, accounts receivable
represent an extension of credit to customers, allowing them a reasonable period of
time in which to pay for the goods received.
The company in practice feels the necessity of granting credit for several
reasons.
Competition
Companys bargaining power
#uyer re+uirements
"elationship with dealers
-arketing tool
Industry practice
Transit delays.
Crdit Po"ic'
In the preceeding, the credit policy of a firm provides the framework to determine
whether or not to extend credit to a customer and how much credit to extend. The credit
policy decision of a firm has two broad dimensions.
Crdit tr!s ha% thr co!$onnts
)* Crdit Priod
In terms of the duration of time for which trade credit is extended during this
period the overdue amount must be paid by the customer. & firms credit period may
be governed by the industry norms. #ut depending on its obective, the firm can
lengthen the credit period.
,* Crdit Discount
If any, which the customer can take advantage of, that is, the overdue amount
will be reduced by this amount. The firm uses cash discount as a increase in sales and
accelerate collections from customers.
-* Crdit Discount Priod

)hich refers to the duration during which the discount can be available of
these terms are usually.
Co""ction Po"icis
The third area involved in the account receivables management is collection
policies. They refer to the procedures followed to collect account receivables when,
after the expiry of the credit period, they become due. These policies cover two
aspects.
)* Crdit Standard

The term ,credit standards represents the basic criteria for the extension
of credit of customers. 3ur aim is to show what happens to the trade*off when
standards are relaxed or, alternatively, tightened. The tradeoff with reference to credit
standards are.
The collection costs
The average collection period
4evel of bad debt losses
4evel of sales
,* Crdit Ana"'sis
#esides establishing credit standards a firm should develop procedures for
evaluating credit applicants. The second aspect of credit policies of a credit analysis
and investigation. The two basic steps are involved in the credit investigation
process.
3btaining credit information
&nalysis of credit information
Crdit Tr!s
The second decisions are in accounts receivables management is the credit
terms. &fter the credit standards have been established and the credit worthiness of the
customers has been assessed, the management of a firm must determine the terms and
conditions of which trade credit will be made available. The stipulations under which
goods are sold on credit are referred to as credit terms.

)* Dgr o( Co""ction E((ort

To illustrate the effect of the collection effort, the credit policies of a
firm may be categorized into
5trict64ight
4enient

The collection policy would be tight if very rigorous procedures are
followed a tight collection policy has implications which involve benefits as well as
costs.
,* T'$ o( Co""ction E((orts
The second aspect of collection policies related to the steps that should be
taken to collect over dues from the customers. The steps usually taken are
4etters, including reminders, to expedite payment
Telephone calls for personal contact
7ersonal visits
8elp of collection agencies and fully
4egal action
* The aim should be to collect as early as possible9 genuine
difficulties of the customers should be given due consideration.
* The management of receivables involves crucial decision in 1
areas credit policies, credit terms, collection policies.
* The obective of receivables management therefore is to have a
trade*off between the benefits and costs associated with the
extension of credit.
* The extension of credit involves risk and cost. The benefits are
increased sales and anticipated increased profits6incremental
contribution.
RESEARCH DESIGN AND METHODOLOG.
"esearch -ethodology is way to systematically solve the research problems. It guides us
how research is done scientifically.
Rsarch Dsign
"esearch design is the plan, structure to answer whom, when, where and how of the
subect under investigation conceived so as to obtain answer to research +uestions and to
control variance.
Data Co""ction
The re+uired data are collected from two sources that are primary data and
secondary sources of information. This information has been gathered from% "eliance
Communications Infrastructure 4imited% through personal interview and personal
verification of the reports and financial statements.


OB/ECTIVES
The study is being undertaken with the following obectives.
/. To study the maintenance of Cash 'low of !"(4I&:C( C3--;:IC&TI3:5
I:'"&5T";CT;"( 4I-IT($% to meet its day to day re+uirements.
0. To analyze funds committed to cash balances.
1. To know Cash inflow and outflow of the !"(4I&:C( C3--;:IC&TI3:5
I:'"&5T";CT;"( 4I-IT($%.
<. To know the companys policy allowing credit to customers.
SCOPE OF THE ST0D.
The current study is undertaken for the purpose of analyzing cash and receivables
management of "eliance Communications Infrastructure 4imited, which is situated at
#angalore, =arnataka.
The study concentrates on various techni+ues involved in maintaining an optimal
level of cash in the firm to reduce the loss occurred due to cash budget.
LIMITATIONS
The study is limited to only a particular company i.e, "eliance
communications infrastructure limited.
It is difficult to analyze the cash and receivables information regarding the
analysis based for a specified period.
It is not possible to calculate the performance of the company in the total
environment because we are calculating the performance of this company.
PLAN OF ANAL.SIS
The entire process of cash and receivables management in !"eliance communications
infrastructure limited% has been analyzed in detail and the various techni+ues
involved in the above two concepts are studied comprehensively. It is a +uantitative
analysis of the working capital management. The study has been used to generate
some of the recommendations to the company at times of crisis.
The following is the approximate chapterization of main topics.
/. introduction and theoretical background
0. research design and methodology
1. company profile
<. 5tudy of cash and receivables management in "eliance communications
infrastructure limited.
>. suggestions and recommendations
DECLARATION
I here by declare that the synopsis report entitled !& 5T;$? 3' C&58 &:$
"(C(I@&#4(5 -&:&2(-(:T 3' "(4I&:C( C3--;:IC&TI3:5
I:'"&5T";CT;"( 4T$, #&:2&43"(% is a genuine work carried out by me, in
partial fulfillment of the re+uirement for the award of -aster of #usiness
&dministration A-.#.&.B C:T;, 8yderabad under the supervision of my guide -iss
T.8I-& #I:$;, -.'.-. of 5IT&-5, Chittoor.
This synopsis work was not submitted by me in any form previously for the
&ward of $egree, $iploma or other titles at any other Institute.
7lace. A2.5&#&"((58 =;-&"B
$ate. "egno. DEF>/(DD1G
AC&NO1LEDGEMENT
It gives a great pleasure to reveal my deep*expressible gratitude and appreciation to
$r. T. 5ai "ama, 7rincipal, 5IT&-5, Chittoor for giving me the opportunity to do the
5?:375I5 "(73"T.
(ndeavor to express my heart full thanks to the 8ead of $epartment $r. 5. (.
@. 5ubramanyam, -.#.&., 7h.$ who provided all the necessary facilities to carry out
the synopsis program effectively and efficiently.
I wish to express my deep sense of gratitude to miss T.8I-& #I:$;, for
inspiring guidance illuminating insights and above all for her enormous patience in
putting up in a right way to accomplish in the completion of the report.
4ast but not the least a very special thanks to all the -.#.&. staff members and
my friends and the following -#& staff members for their cooperation in the
accomplishment of the synopsis report.
7h. ADH>F0B 0<E0GH, 0<E0GG
'ax. ADH>F0B 0<E0GF
SREENIVASA INSTIT0TE OF TECHNOLOG. AND
MANAGEMENT ST0DIES
$r. @ishweswariah "oad,
A#angalore I Tirupati bye pass roadB
-urakambattu, Chittoor I >/F/0F.
A&pproved by &ICT(, :ew $elhi and affiliated to C. :. T. ;., 8yderabadB
CERTIFICATE
This is to certify that this synopsis report is a bonafide record of proect work entitled
on !& 5T;$? 3' C&58 &:$ "(C(I@&#4(5 -&:&2(-(:T 3' "(4I&:C(
C3--;:IC&TI3:5 I:'"&5T";CT;"( 4T$ #&:2&43"(% submitted by -r. 2.
5&#&"((58 =;-&" in partial fulfillment of the re+uirements for the award of the
degree in -&5T(" 3' #;5I:(55 &$-I:I5T"&TI3: ;:$(" C&)&8&"4&4
:(8"; T(C8:3432IC&4 ;:I@("5IT?, 8?$("&#&$.
8ead of the $epartment 2uide
$r 5.(.@.5;#"&8-&:?&-, -s.T. 8ima bindu
-.#.&.7h.$. -.'.-.
83$, @ice*principal. &ssistant 7rofessor.
A ST0D. OF CASH AND RECEIVABLES MANAGEMENT OF RELIANCE
COMM0NICATIONS INFRASTR0CT0RE LTD2 BANGALORE*

& 7"3C(CT "(73"T
5ubmitted in partial fulfillment of the
"e+uirement for the award of the degree of
MASTER OF B0SINESS ADMINISTRATION
AC&)&8&"4&4 :(8"; T(C8:3432IC&4 ;:I@("5IT?, 8?$("&#&$B
#y
Mr* G* SABAREEESH &0MAR
3REG NO+ 4567)E44-89
;nder the guidance of
Ms* T*HIMA BIND0
-.'.-. &ssistant 7rofessor.
DEPARTMENT OF MANAGEMENT ST0DIES
SREENIVASA INSTIT0TE OF TECHNOLOG. AND MANAGEMENT
ST0DIES
6:2 THIMMASAM0DRAM2 BANGALORE;TIR0PATHI B.;PASS
ROCHITTOOR;7)6),6
ANAL.SIS FRAME 1OR&
Classifications of collection operations
/. 7reparation of aging schedules.
0. Credit sales to account receivables statement.
1. Collection to accounts receivable statement.
The whole calculation part data has provided by the employees of
finance department as secondary source of data and was no scope has
given me to look into original statements.
ANAL.SIS OF AGEING SCHED0LES
The company prefers monthly ageing schedule to monitor its book*debts.
The debts outstanding are broken down into branch wise entries. The ageing
schedules for the past three years have been thoroughly analyzed to come out with
average outstanding days of the book debts of the company. 3n an average the
outstanding days of the book debts in the company is as follows overdue less than 1D
days, 1D to ED days, and GD to /HD days, /HD to 1DD days and above 1ED days
respectively.
These reports are prepared especially for the extended overdue accounts. The
basic reason is to develop a file of customer who re+uire special attention either in the
form of statement, letters or the collection activity.
ACCO0NTS RECEIVABLE T0RN OVER RATIO
/. Credit sales divided by ending accounts receivables and
0. &ccounts receivables divided by credit*sales time
1E> days the first formula gives the number of times the correct balance of
receivable is collected during the year, while the second formula gives the
average number of days the current balance is expected to remain outstanding
before it is collected.
COLLECTION RATIO
This is the ratio of monthly to the account receivables outstanding at the first of
the month to raise sales to receivables and collection to receivables is closely related.
&ccounts receivables are the second most li+uid form of assets of the firm. The
receivables come into being as credit*sales and constitute as one of the largest asset. 5kill
full administration of the receivables management is therefore of prime importance to the
business. The very reason of credit sales is to expand sales volume and if too debit is
maintained by the company in the approval of the customer credit purchases many sales
may be last that would otherwise contribute to the profits of the firm. #efore going to
+uote the credit at "eliance communication infrastructure limited.
1hat actua""' crdit #i"" crdit<
/. Company position
0. 7rotection from competition
1. #uyers states and re+uirements
<. $ealer relationship.
>. Transit delays.
E. Individual practice.
Crdit $o"ic' and $ractics at R"ianc in(rastructur $ri%at "i!itd*
The sales of the company, "eliance communications infrastructure ltd go on cash as
well as credit terms. The trading division of "eliance pvt ltd sells its product, which
receives from the factories on a credit period of <> days to >> days, through the branches
of the company located all over the country.
Cash discounts
& cash discount is a reduction in payment offered to the customers to induce them to
reply credit obligations within a specified period of time, which will be less than the
normal credit period. It is usually expressed as a percentage of sales. Cash discounts term
indicates the rate of discount and the period for which it is available.
The cash discount terms of the company are as follows.
7ayments $iscounts offer
3n cash /J
In F days D.F>J
In /> days D.>J
Crdit $o"ic'
The company, "eliance communications ltd, extends a credit period of 0/ days to
its customers. It waits for a period of >> days for the payments from the customers
(K. & company has daily sales or credit sales of 0D lakhs from all branches and a giving
credit period averagely 1D days. 5o the company investment on receivables is 0DL1D M
EDD lakhs.
There is one way in which the financial manager can control the volume of credit
sales and collection period and conse+uently, investment in accounts receivables it can
change through credit policies.
CREDIT POLIC.
/. Credit standard I It is careful analysis risk
0. Credit term I 5pecific of the duration
1. Collection I 4ower collection will influences lower investment in "eceivables
and vice*versa
<. Cash discount
Crdit standards
Credit standards are criteria to decide the types of customer to whom goods
could be sold on credit. If a firm has slow paying customer its investment in accounts
receivables will increase the firm will also be exposed to higher risk of default.
Crdit tr!s
5pecify duration of credit and terms of payment by customers investment in
accounts receivables will be high if customer allowed to extend time period for
making payments.
Co""ction ((orts
Collection effort determine the actual collection period. The lower the collection
the lower investment in accounts receivables and vice*versa.
Goa"s o( crdit $o"ic'
/. 5tringent credit policy I 4ess credit to customer as a result to decrease the
sales
0. 4enient credit policy I -ore credit to it leads to increase in sales
If there is any change in credit policy there will be a change in the
/. @olume of credit sales
0. $efault risk or bad debts
1. Costs
<. &verage collection period
The following technologies are used in "eliance communications
limited.
/. )ireless
0. 2lobal
1. #roadband
<. 3thers
The company looks for the character of the customer i.e., his willingness to pay the moral
factor is of considerable importance in credit position.
It looks for the ability of the customer to pay. This is evaluated by his financial position
and the bank guarantee given by him.
#ased on the above factors the company analyses the customer and determine the
credit limit to them. (very six months, the company goes for the review of the customers.
)hen a customer is found to be regular in paying the dues within 1D days the
company may go for increase in the credit for the customer. In a small way, the
customers are taken into consideration and given the credit.
Co""ction $rocdurs
The company follows a system of centralized control and decentralized collections.
The company does not employ any collection agency for its collection activities. The
division receives a statement of sales outstanding daily from all the branches in the
country, the collection is done through "eliance communications account and through
bank che+ues.
Monitoring =oo> d=ts
The company classifies its book debts based on the number of outstanding days in the
given following way
3utstanding days $ebts category
-ore than 1DD days $isputes
#etween /HD to 1DD days #ad debts
#etween GD to /HD days $oubtful debts
#etween D to GD days 2ood debts
Ana"'sis o( aging schdu" o( R"ianc co!!unications in(rastructur
"td*
The company prepares monthly ageing schedule to monitor its books debts. The debts
outstanding are broken down into companies wise entries. The ageing schedules for the
past one year have been thoroughly analyzed to come out with average outstanding dates
of the book debt of the company. 3n an average the outstanding days of the book debts in
the company is as follows.
Aging schdu" o( #ir"ss tchno"og' "td
Ta=" )
&geing schedule of "eliance communications during the year 0DD>

3utstanding period 3utstanding receivables 3utstanding receivables as
J of total outstanding
receivables
D*1D 1<>E.G>F 1DJ
1/*ED HE1>.<>E 1HJ
E/*GD 1H<E.GE< 10J
Total />G1G.1FF /DDJ
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The outstanding debts of "C4 during the period 0DD> &pril to 0DDE $ec was
collected within 1D days from 1DJ of the outstanding debts. 'rom 1/ days to ED days the
debts collected were 1HJ of the total outstanding debts. 'rom E/ days to GD days the debt
collected were 10J of the total outstanding debts.
Aging schdu" o( G"o=a" tchno"og' "td
Ta=" ,
&geing schedule of "eliance communications during the year 0DD>

3utstanding period 3utstanding receivables 3utstanding receivables as
J of total outstanding
receivables
D*1D <E1<.F01 00J
1/*ED F<<1.1E< 1HJ
E/*GD 1<1>.H>E <DJ
Total />>/1.G<1 /DDJ
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The outstanding debts of "C4 during the period 0DD> &pril to 0DDE $ec was
collected within 1D days from 00J of the outstanding debts. 'rom 1/ days to ED days the
debts collected were 1HJ of the total outstanding debts. 'rom E/ days to GD days the debt
collected were <DJ of the total outstanding debts.
Aging schdu" o( Broad=and tchno"og' "td
Ta=" -
&geing schedule of "eliance communications during the year 0DD>

3utstanding period 3utstanding receivables 3utstanding receivables as
J of total outstanding
receivables
D*1D 01D.FE< EJ
1/*ED <F>1.1<1 HD.11J
E/*GD 1<E<.<1< /1.EFJ
Total H<<H.></ /DDJ
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The outstanding debts of "C4 during the period 0DD> &pril to 0DDE $ec was
collected within 1D days from EJ of the outstanding debts. 'rom 1/ days to ED days the
debts collected were HD.11Jof the total outstanding debts. 'rom E/ days to GD days the
debt collected were /1.EFJ of the total outstanding debts. The total outstanding
receivables are H<<H.></ considered as /DDJ within a period of 1E> days the debt
amounts were collected in the above pattern.
FRAME 1OR& OF COLLECTION MATRI?
They can convert the table to a C344(CTI3: (K7("I(:C( -&T"IK by dividing
the outstanding receivables in each column by sales amount in that column. The
following table is the second scheduled analysis frame work statements. The following
table contains information of the percentage of receivables to the credit sales from which
those receivables are originated. If the percentages increase as we move it implies that the
firm is unable to collect its receivables faster. #ut they are wholly separated from the past
data.
COLLECTION MATRI?
& collection matrix is a statement which is prepared with reference to credit sales and
collections. This statement confines how the debt amounts are collected with were in
respective tenure of months with cash values. :ow we have various respective years
collection statements which play maor role in analysis work. )e can interpret this table
in percentages.
Accounts rci%a="s co""ction !atri@ o( RCL (or ,447
Ta=" : A"s. In croreB
-onth -ar Cune 5ep $ec
Credit sales 0GFD 00H1 0HHD 0GG/
Collections
-ar 0H0D
Cune />D 00/1
5ep FD 0HHD
$ec 0H/0
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The credit sale of -ar 0DD> amounts to "s.0GFD crores. "upees 0H0D was
collected in the same month and the remaining "s./>D crores were collected in Cune.
The credit sale of Cune 0DD> amounts to "s.00H1 crores. "s.00/1 was
collected in the same month and the remaining "s.FD crores were collected in 5ep.
The credit sale of 5ep amounts to "s.0HHD crores and the same is collected
during the same month.
The credit sale of $ec amounts to "s.0GG/ crores. "s.0H/0 crores was collected
in the particular month.
Accounts rci%a="s in $rcntag o( co""ction !atri@ o( RCL (or ,447
Ta=" 7 A"s. In croreB
-onth -ar Cune 5ep $ec
Credit sales
Collections
-ar G>J
Cune >J GFJ
5ep 1J /DDJ
$ec G<J
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The credit sale of -ar 0DD> amounts to "s.0GFD crores. "upees 0H0D was
collected in the same month and the remaining "s./>D crores were collected in Cune.
G>J was collected in the month of -ar 0DD> and the remaining >J was
collected in the month of Cune.
The credit sale of Cune 0DD> amounts to "s.00H1 crores. "s.00/1 was
collected in the same month and the remaining "s.FD crores were collected in 5ep.
GFJ was collected in the month of Cune0DD> and the remaining 1J was collected
in the month of 5ep.
The credit sale of 5ep amounts to "s.0HHD crores and the same is collected
during the same month.
/DDJ was collected in the month of 5ep 0DD>.
The credit sale of $ec amounts to "s.0GG/ crores. "s.0H/0 crores was collected
in the particular month.
G<J was collected in the month of $ec. "eliance much concentrate on the
receivables for every two months as mentioned above.
Accounts rci%a="s co""ction !atri@ o( RCL (or ,445
Ta=" 5 A"s. In croreB
-onth -ar Cune 5ep $ec
Credit sales 0GFD 10>D./
0
1<>E.1
G
1F>>.1D
Collections
-ar 0H0D
Cune />D 100/./
0
5ep 0G 1<>E.1
G
$ec 1>E1.01
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The credit sale of -ar 0DD> amounts to "s.0GFD crores. "upees 0H0D crores
was collected in the same month and the remaining "s./>D crores were collected in Cune.
The credit sale of Cune 0DD> amounts to "s.10>D./0 crores. "s.100/./0 crores
was collected in the same month and the remaining "s.0G crores were collected in 5ep.
The credit sale of 5ep amounts to "s.1<>E.1G crores and the same is collected
during the same month.
The credit sale of $ec amounts to "s.1F>>.1D crores. "s.1>E1.01 crores were
collected in the particular month.
Accounts rci%a="s in $rcntag o( co""ction !atri@ o( RCL (or ,445
Ta=" 6 A"s. In croreB
-onth -ar Cune 5ep $ec
Credit sales
Collections
-ar G>J
Cune >J GGJ
5ep /J /DDJ
$ec G>J
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The credit sale of -ar 0DD> amounts to "s.0GFD crores. "upees 0H0D was
collected in the same month and the remaining "s./>D crores were collected in Cune.
G>J was collected in the month of -ar 0DD> and the remaining >J was
collected in the month of Cune.
The credit sale of Cune 0DD> amounts to "s.10>D./0crores. "s.100/./0
crores was collected in the same month and the remaining "s.0G crores were collected in
5ep.
GGJ was collected in the month of Cune0DD> and the remaining /J was collected
in the month of 5ep.
The credit sale of 5ep amounts to "s.1<>E.1G crores and the same is collected
during the same month.
/DDJ was collected in the month of 5ep 0DD>.
The credit sale of $ec amounts to "s.1F>>.1D crores. "s.1>E1.01 crores were
collected in the particular month.
G>J was collected in the month of $ec.
Accounts rci%a="s co""ction !atri@ o( RCL (or ,446
Ta=" A A"s. In croreB
-onth -ar Cune 5ep $ec
Credit sales /F<<D.0
>
<1D1.F
D
<>FH.>
1
<HF<.0D
Collections
-ar /E<>D.>
>
Cune GGD 0<>E.>
<
5ep /H<F./
E
<>FH.>
1
$ec <0>D.DE
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The credit sale of -ar 0DD> amounts to "s./F<<D.0> crores. "upees
/E<>D.>> was collected in the same month and the remaining "sGGD crores were
collected in Cune.
The credit sale of Cune 0DD> amounts to "s.<1D1.FD crores. "s.0<>E.>< crores
was collected in the same month and the remaining "s./H<F./Ecrores were collected in
5ep.
The credit sale of 5ep amounts to "s.<>FH.>1 crores and the same is collected
during the same month.
The credit sale of $ec amounts to "s.<HF<.0D crores. "s.<0>D.DE crores was
collected in the particular month.
Accounts rci%a="s in $rcntag o( co""ction !atri@ o( RCL (or ,446
Ta=" 8 A"s. In croreB
-onth -ar Cune 5ep $ec
Credit sales
Collections
-ar G<
Cune EJ >FJ
5ep <1J /DDJ
$ec HFJ
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ The credit sale of -ar 0DD> amounts to "s./F<<D.0> crores. "upees
/E<>D.>> crores were collected in the same month and the remaining "s.GGD crores were
collected in Cune.
G<J was collected in the month of -ar 0DD> and the remaining EJ was collected
in the month of Cune.
The credit sale of Cune 0DD> amounts to "s.<1D1.FD crores.
"s.0<>E.>< crores was collected in the same month and the remaining "s./H<F./E crores
were collected in 5ep.
>FJ was collected in the month of Cune0DD> and the remaining <1J was collected
in the month of 5ep.
The credit sale of 5ep amounts to "s.<>FH.>1 crores and the same is collected
during the same month.
/DDJ was collected in the month of 5ep 0DD>.
The credit sale of $ec amounts to "s.<HF<.0D crores. "s.<0>D.DE crores was
collected in the particular month.
HFJ was collected in the month of $ec.
A STATEMENT OF SALES B RECEIVABLES DATA
The last and final state in analysis frame work is preparation of sales and
receivables data sheet9 this gives us an elaborative framework towards the company
performance towards collection vitae. This statement will throw a light up on.
&verage collection period and as well as debtors turnover ratio.
In preparation of sales and receivables data we will come across with various terms
like &verage collection period and $ebtors turnover ratio.
$ebtors turnover ratio is the ratio between sales or credit sales with respect to average
debtors.
$ebtors turnover ratio M Credit sales6 &verage debtors.
&verage debtors M Collection periodL Creditsales61ED.
&verage collection period is the ratio between &verage debtors and sales of credit sales
with respect to the period of 1ED days.
&verage collection period M &verage debtors6Credit salesL1ED.
A STATEMENT OF SALES B RECEIVABLES DATA FROM THE
MONTH OF MARCH TO DECEMBER ,447
Ta=" )4
Credit salesA"s.
In croresB
$ebtors A"s. In
croresB
$T"Ain timesB &C7Ain daysB
-ar 0GFD /1 /.> 01
Cune 00H1 FF 0.G 1D
5ep 0HHD EF /.E 0<
$ec 0GG/ 1< /.H 01
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ In the month of -arch 0DD> &C7 is 01 days, increased to 1D days in the
month of Cune and decreased to 0< days in the month of 5ep and again decreased to 01
days in the month of $ec.
A STATEMENT OF SALES B RECEIVABLES DATA FROM THE
MONTH OF MARCH TO DECEMBER ,445
Ta=" ))
Credit salesA"s.
In croresB
$ebtors A"s. In
croresB
$T"Ain timesB &C7Ain daysB
-ar 0GFD 1G >.< 0E
Cune 10>D./0 FF F.1 0<
5ep 1<>E.1G >E <.1 00
$ec 1F>>.1D <1 >.E 0D
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ In the month of -arch 0DD> &C7 is 0E days, decreased to 0< days in the
month of Cune and decreased to 00 days in the month of 5ep and again decreased to 0D
days in the month of $ec.
A STATEMENT OF SALES B RECEIVABLES DATA FROM THE
MONTH OF MARCH TO DECEMBER ,446
/F<<D.0
>
<1D1.F
D
<>FH.>
1
<HF<.0D
Ta=" ),
Credit salesA"s.
In croresB
$ebtors A"s. In
croresB
$T"Ain timesB &C7Ain daysB
-ar /F<<D.0> /D< /0.> //
Cune <1D1.FD F> /F <1
5ep <>FH.>1 0FE >.H <D
$ec <HF<.0D >< >.E 1H
Sourc+ $ata collected from the internal reports of 'inance $epartment of "C4.
Ana"'sis+ In the month of -arch 0DD> &C7 is // days, increased to <1days in the
month of Cune and decreased to <D days in the month of 5ep and again decreased to 1H
days in the month of $ec respectively.
RATIO ANAL.SIS AND INTERPRETATION FOR CASH
"atio analysis is a powerful tool of financial analysis. & ratio is defined as !the
indicated +uotient of two mathematical expressions% and as the !relationship between
two or more things%. In financial analysis a ratio is used as a bench mark for evaluating
the financial position and performance of a firm. The absolute accounting figures
reported in the financial statement do not provide a meaningful understand of the
performance and financial position of a firm, an accounting figure conveys meaning
when it is related to some other relevant information.
(very enterprise maintains cash balances to meet its different business
obligations. $ifferent ratios can be calculated and analyzed to asses the use of cash for
the business operations. 'inancial ratios like cash to current assets, cash to total assets
and cash turnover of business units can be made to asses their efficiency in the
management of cash.
CASH TO C0RRENT ASSETS RATIO+
In order to measure the short term li+uidity of solvency of a concern, comparison of
current liabilities is inevitable. Current ratio indicates the ability of a concern to meet its
current obligations as and when they are due for payment.
Currnt ratio C 3Currnt asstsD Currnt "ia=i"itis9
CASH TO C0RRENT ASSETS RATIO IN RCL
Ta=" )-
?ear C;""(:T
&55(T5
C;""(:T
4I&#I4ITI(5
"&TI3
0DD>*DE /E<F />FG /.D<
0DDE*DF 1DDF /E<> /.H0
0DDF*DH 0GF0 /EDF /.H<
INFERENCE
&n ideal ratio is 0./. The ratios from 0DD>*DE to 0DDF*DH are /.D<, /.H0, /.H<
which are lesser than the standard norm, which indicates a downward trend.
CASH TO TOTAL ASSETS RATIO+
This ratio indicates the proportion of cash balances maintained by the company. It
assumes prominence as the level of cash balance indicates the profitability and li+uidity
position of the concern. The cash to total assets ratio indicates the importance of current
assets in the total worth of any business concern. The components of current assets are
inventory, cash, debtors and other.
In%ntoris tota" assts ratio C 3in%ntorisD Tota" assts9
CASH TO TOTAL ASSETS RATIO IN RCL
Ta=" ):
?ear InventoriesA"s. In
croresB
Total assetsA"s. In
croresB
ratio
0DD>*DE /DE/ 1GDF D.0F
0DDE*DF >E/1 /E<F 1.<D
0DDF*DH GE/1 1>H0 0.EH
INFERENCE
The ratios from 0DD>*DE to 0DDF*DH are D.0F, 1.<D, 0.EH respectively. It is
increasing year by year and so it is satisfactory.
Cash to currnt "ia=i"it' ratio+
This ratio reveals the ability of company to meet the current obligations as and
when they matured. The cash position in the company study area is presented in the table
that follows.
Cash to currnt "ia=i"it' ratio C 3CashD Currnt "ia=i"itis9E)44
Ta=" )7
?ear CashA"s. In croresB Current
liabilitiesA"s. In
croresB
"atio
0DD>*0DDE //H1 />FG F<.G0
0DDE*0DDF 01H /E<> /<.<E
0DDF*0DDH <0D /EDF 0E./1
In(rnc+
Current liabilities in the year 0DD>*0DDE was more increased, and as well as
0DDF*0DDH was satisfactory. The company tries to take care about the liabilities.
Cash turno%r ratio+
This ratio indicates the proportion of cash balances held in relation to sales
volume. This is used as a controlling device. Increases in sales are associated with larger
cash balances. 8igher cash turnover in sales indicates efficient utilization of cash
resources.
Cash turno%r ratio C Nt sa"sD cash
Cash to sa"s ratio in RCL
Ta=" )5
?ear :et sales A"s. In
croresB
Cash A"s. In croresB "atio
0DD>*0DDE E1F/ //H1 >.1H
0DDE*0DDF F1E> 01H 1D.G<
0DDF*0DDH GFHH <0D 01.1D
In(rnc+
The ratio in the year 0DD>*DE is no satisfactory for getting profits. &nd the
remaining years could get good results of the sales.
Ana"'sis (or rci%a="s+
The management of any business holdings credit balances involves cost, which at
the same time affects profitability. The management has to decide how much to be
invested in debtors to strike best balance between cost and benefits. -oreover, the level
of investment in accounts receivables depends upon the volume of sales, credit terms and
conditions, riskiness of individuals and customers to whom credit is given and so on.
8owever the decision may be taken by comparing its performance of the debtors
management functions with to its performance in the past. & useful basic for such
comparison may be percentage of debtors to total assets, percentage of receivables to
current assets and debtors turnover ratio.
D=tors to tota" assts ratio+
This ratio expresses the percentage of investment made in total assets of a concern.
It is important in the view of management to have lesser amount of debtors for the
efficient functioning of the business units.
D=tors to tota" assts ratio C 3D=torsD Tota" assts9E)44
Ratio o( d=tors to tota" assts in RCL
Ta=" )6
?ear $ebtors A"s. In Total assets A"s. In "atio
croresB croresB
0DD>*0DDE >/GD EH/ FE0.//
0DDE*0DDF /F>/ 00E0 FF.<D
0DDF*0DDH 0EE1 1>/D F>.HE
In(rnc+
Total assets ratio in the year 0DD>*DE is huge with FE0.// is not satisfactory.
D=tors to currnt assts ratio+
The percentage of debtors to current assets is an important tool in udging the
practice of maintaining receivables balance by the company. This ratio is used to analyze
the share of working capital block in debtors. The debtors to current assets ratio is
computed in the company furnished below.
D=tors to currnt assts ratio C 3D=torsD Currnt assts9E)44
Ratio o( d=tors to currnt assts in RCL
Ta=" )A
?ear $ebtors A"s. In
croresB
Current assets A"s.
In croresB
"atio
0DD>*0DDE >/GD /E<F 1/>.//
0DDE*0DDF /F>/ 1DDF >H.01
0DDF*0DDH 0EE1 0GF0 HG.ED
In(rnc+
Current assets ratio in the year 0DD>*DE is huge with 1/>.// is satisfactory. The
remaining years are also satisfactory.
D=torsF turno%r ratio+
$ebtors turnover ratio indicates what the number of times is the turnover for debtors
is each year. 2enerally, the higher the value of the debtors turnover, the more efficient is
the management of credit. The obective of this ratio is to measure the li+uidity of
receivables is uncollected.
D=tor turno%r ratio C 3Sa"sDa%rag accounts rci%a="s9
D=tor turno%r ratio
Ta=" )8
?ear 5ales A"s. In lakhsB &verage a6c
receivables A"s. In
lakhsB
"atio
0DD>*0DDE <1F/ >E/ F.G/
0DDE*0DDF F1DF 01/ H.EF
0DDF*0DDH GFHH 1FH 0>.HG
In(rnc+
The ratios are showing an increasing trend, this gradual increase shows that
better is the li+uidity of the debtors.
FINDINGS
/. The sales of the company are made on both cash and credit terms. 3ut of the sales
generated GDJ are of credit and /DJ of cash basis. #ut, "C4 sales were done on
!Cash and Carry down% basis.
0. The company extends credit for period of <> days to its customers. It waits for a
period of >> days to get the payments from the customers. The company does not
offer cash discounts to reduce their debt crisis.
1. The credit worthiness and credit limit to customer is determined by the character
and financial position of a customer and period of presence in the business.
<. The transactions with the new customers will be on the cash terms, with due
course of time, credit will be given to them.
>. The company follows the classification of debts into three categories namely
debts outstanding for less than 1D*GD days are considered to be !233$%, for GD*
/HD days are considered to be !$3;#T';4% andN/H/ days are considered to be
!$I57;T(5%.
E. The company employs% &2(I:2 5C8($;4(% in order to monitor its book
debts. It provides more information about the past collection experience and helps
to spot out the slow paying debtor. )ith the ageing schedule, the company is not
able to trace out the over dues from the customers, which results in poor debt
management.
S0GGESTIONS
/. It is suggested that the company employs the !&geing 5chedule% to monitor its
debts, which suffers from the problem of aggregation and does not relate book
debts to sales of the same period. This problem can be eliminated by using dis*
aggregated data for analyzing collection experience.
0. It is recommended that the company adopt structured frame work for bank
guarantee limits must be done by the company that extend the company to give
credit limit to its customer.
1. Implementation of a special package of !("7%, that is to be made to improve the
cash and credit management procedures in a better manner regarding to%C&58
&:$ "(C(I@&#4(%.
<. It is suggested that the company has to take guarantee from a scheduled bank
must be taken.
>. #efore investigating whether the payments from the debtors are collected in time
or not, it would be necessary that should be improved,
aB The existing billing system.
bB Is the billing mechanism efficient to introduceO A'or periodical paymentsB.

CONCL0SION
It can be concluded that cash and receivables performance of the company is
reasonably satisfactory. In certain areas the company has to focus more. "eliance
communications ltd should try to overcome hurdles, especially in the area of debtors
management.
&s "eliance communications ltd has stepped into a liberalized market driven
environment, there is an urgent need for its managers to function like businessmen,
rather than 2overnment officials this not only needs change on the part of higher
officials but also re+uires wholehearted efforts of all the employees.
BIBLIOGRAPH.
I.-.7&:$(?, 'inancial -anagement
(dition. Third (dition
7ublisher. 8imalaya publications
$r. 2. 7"&5&$, $r. =.@.:.#. =;-&", &dvanced -anagement &ccountancy
(dition. 'irst (dition
7ublisher. Cai #harat
Company )ebsite. )))."C3-.C3.I:
)))."(4I&:C( C3--;:IC&TI3:5.C3-
CONTENTS
Chapter no Chapter name 7age no.
/. 5tatement of the problem
0. Introduction to the concept of cash and
receivables
1. "esearch design and methodology
*3bectives of the study
*-ethodology
*5cope of the study
*4imitations
<. Industry profile
>. Company profile
E. &nalysis of cash and receivables
management
F. 'indings
H. 5uggestions
G. Conclusions
/D. &ppendices
//. #ibliography
BALANCE SHEET OF RELIANCE COMM0NICATIONS
A"s. In croresB
7articulars 0DD>*DE 0DDE*DF 0DDF*DH
5ources of funds
Total share capital D.D/ D.D> /,D00.1/
(+uity share capital D.D/ D.D> /,D00.1/
5hare application
money
D.DD E//.>F D.DD
7reference share
capital
D.DD D.DD D.DD
"eserves D.DD /<,FH1.<1 /G,>D1.01
"evaluation
reserves
D.DD D.DD D.DD
:et worth D.D/ />,1G>.D> 0D,>0>.><
5ecured loans D.DD D.DD >,//1.>F
;nsecured loans D.DD D.DD G,<><.0F
Total debt D.DD D.DD /<,>EF.H<
Total liabilities D.D/ />,1G>.D> 1>,DG1.1H
&pplication of funds
2ross block D.DD /GH.DH 0D,E0>.H0
&ccum.
$epreciation
D.DD 1/.H> 0,>0F.1F
:et block D.DD /EE.0< /H,DGH.<>
Capital work in
progress
D.DD D.DD 0,/H>.ED
Investments D.DD /0,DF<./D >,<1<.<1
Inventories D.DD D.DD GH.>/
5undry debtors D.DD D.DD HD0.//
Cash and bank
balance
D.DD D.D> 0H.DH
Total current assets D.DD D.D> G0H.FD
4oans and advances D.D/ 1,/>H.G/ /G,/1F.GF
'ixed deposits D.DD D.DD <D.1F
Total C&, loans P
advances
D.D/ 1,/>H.GE 0D,/DF.D<
$eferred credit D.DD D.DD D.DD
Current liabilities D.DD /.EH E,1DG.11
7rovisions D.DD 0.>F <,<00.H/
Total C4P
provisions
D.DD <.0> /D,F10./<
:et current assets D.D/ 1,/><.F/ G,1F<.GD
-iscellaneous
expenses
D.DD D.DD D.DD
Total assets D.D/ />,1G>.D> 1>,DG1.1H
Contingent
liabilities
D.DD D.DD 1,FH/.1D
#ook valueA"sB /D.DD /,<FH,1<H.DD /DD.1G