Sibar Funds Flow State

A Study on Funds Flow Analysis
1.1 INTRODUCTION
Finance is one the basic foundations of all kinds of economic activities. It is
the master key, which provides access to all the sources for being employed in
manufacturing. Hence it is rightly said that finance is lifeblood of any enterprise,
besides being the scarcest elements, it is also the most indispensable requirement.
Without finance neither any business can be started nor successfully run. Provision of
sufficient funds at the required time is the key to success of concern. As matter of fact
finance may be said to be the circulatory system of economic body, making possible
the needed co-operation among many units of the activity.
FINANCIAL MANAGEMENT:
Financial management emerged as a distinct field of study at the turn of this
Century. Many eminent persons defined it in the following ways.
DEFINITIONS:
According to GUTHMANN AND DOUGHAL: Business finance can broadly
be defined as the activity concerned with planning, rising, controlling and
administering of funds used in the business.
According to BONNEVILE AND DEWEY: Financing consists in the rising,
providing and managing of all the money, capital or funds of any kind to be used in
connection with the business.
According to Prof. EZRA SOLOMAN: Financial management is concerned
with the efficient use of any important economic resource, namely capital funds.
BES Group of Institutions (GVIC)Angallu
FINANCIAL FUNCTIONS:
The finance functions of raising funds, investing them in assets and
distributing returns earned from assets to shareholders are respectively known as
financing, investment and dividend decisions. While performing these functions, a
firm attempts to balance cash inflows and outflows. This is called as liquidity
decision.
The finance functions can be divided into four broad categories.
1. Investment or long-term asset mix decision
2. Financing or capital mix decision
3. Dividend or profit allocation decision
4. Liquidity or short-term asset mix decision
INVESTMENT DECISION:
Investment or capital budgeting involves the decisions of allocation of cash or
commitment of funds to long-term assets, which would yield benefits in future. It
involves measurement of future profitability, which involves risk, because of
uncertain future. Investment proposal should therefore be evaluated in terms of both
expected return and risk. Other major aspect of investment decision is the
measurement of standard or hurdle rate against which the expected return of new
investment can be compared.
FINANCING DECISIONS:
Financing decision is the second important function to be performed by the fir.
Broadly, he must decide when, where, and how to acquire funds to meet the firms
investment needs. He has to determine the proportion of debt and equity. This mix of
debt and equity is known as the firms capital structure. The financial manager must
strive to obtain the least financing mix or the optimum capital structure where the
market value of share is maximized.
DIVIDEND DECISIONS:
It is the third major financial decision. The financial manager decides whether
the firm should distribute all profits, or return them, or distribute a portion and return
the balance. The optimum dividend policy should be determined where is maximizes
the markets value of the share.
LIQUIDITY DECISIONS:
Current assets management, which affects firms liquidity, is yet another
finance function in addition to the management of long-term assets. Current assets
should be managed effectively safeguarding the firm against the dangers of liquidity
and insolvency.
Investment in current assets affects the profitability, liquidity, and risk. A
conflict exists between profitability and liquidity while managing current assets. If the
firm doesnt invest sufficient funds in current assets it may. Become illiquid. But it
could loose profitability, as idle CA would not earn anything. Thus a proper takeoff
must be achieved between profitability and liquidity. In order to ensure that neither
insufficient nor unnecessary funds are invested in current assets.
GOALS OF FINANCIAL MANAGEMENT:

Maximize the value of the firm to its equity shareholders. This means that
the Goals of the firm should be to maximize the market value of its
equity shares (Which represent the value of the firm to its equity
shareholders)
Maximization of profit.
Maximization of earnings per share.
Maximization of return on equity (defined as equity earnings/net worth).
Maintenance of liquid assets in the firm.
Ensuring maximum operational efficiency through planning,
directing and Controlling of the utilization of the funds i.e., through the
effective employment of funds.
Enforcing financial discipline in the use of financial resources
through the coordination of the operation of the various divisions in the

organization.
Building up of adequate reserves for financing growth and
expansion.
Ensuring a fair return to the shareholders on their investment.
1.2 INDUSTRY PROFILE

The present automobiles are most sophisticate combining luxury, safety
economy in utilizing the energy resource with great speed and least environment.
Pollution
using various field of science likes aerodynamics, mechanical expertise
and electrical engineering. Every day improvement in the existing models holding the
price line in reasonable range involving high become necessity.
Present day
consumer satisfaction involves great skill in marketing, advertising and positioning

the product line whim and Cashion advances with increased performance and reduce
size. Business minded people started selling them top the society.
The automotive components and ancillary industry I Indian has made big
strides in last couple of year following of the phased manufacturing programmer for
his main product. With the launching of a major modernization scheme by the
manufactures, substantial progress has been made towards indigenization of the auto
components and spare parts.
AUTOMOBILE
2 WHEELER
3 WHEELER
I.C.V.
MOTORCYCLE
SCOOTERS
PASSENGER
VEHICLE
M.C.V.
SCOOTERETTES
COMMERCIAL
VEHICLE
H.C.V.
MOPEDS
COMMERCIAL
TATA MOTORS, ASHOK LEYLAND, SWARAJ
VEHICLES
MAZDA,MAHINDRA & MAHINDRA ,FORCE MOTORS,
PASSENGER
EICHER MOTORS
TATA MOTORS, MARUTI UDYOG, HONDA MOTORS, TOYATA,
VEHICLE
SKODA, MAHINDRA & MAHINDRA, DAIMLER CHRYSLER,
TWO WHEELER
HINDUSTAN MOTORS
HERO HONDA, BAJAJ AUTO, HONDA MOTORS, TVS
THREE WHEELER
MOTORS, YAMAHA , KINETIC MOTORS

BAJAJ AUTO, PIAGGIO INDIA
RAW MATERIALS
Most of the raw materials to manufacture cylinder blocks are available from
Hyderabad, Chennai and Calcutta. The following are some of the raw materials used
for the production:
Aluminum Alloy
Caustic Soda
Shell Sand
LDO oil
Chromic Acid
Diamond Honing sticks
Nickel Carbonate
1.3 COMPANY PROFILE

M/S SIBAR AUTOPARTS Ltd. Was originally incorporated as private limited
company by name M/s SIBAR AUTOPARTS (PVT) Limited in the year 1983,
located at industrial estate, TIRUPATHI.
It was converted into public limited

6

company in the year 1994. The company is presently engaged in manufacturing and
marketing of aluminum hard chrome plated cylinder kits mainly for the two wheelers
up to engine capacity 150cc.
The company had started o aluminum foundry with a small capital of Rs.3.00
lacks to manufacture aluminum alloy casting. The castings were supplied to reputed
establishments viz., TVS, SHKNEY PARIS ROHME LTD etc. In the year 1987, the
company expanded its activity to achieve the original conceived idea of
manufacturing aluminum hard chrome plated cylinders blocks for two wheelers
applications. The entire technology development was started by in-house R&D skills
and in the course of time the technology was developed with the in-house R&Ds
network, the quality of the product was found very good land it was accepted in the
European market immediately. The company was reached about 272 lacks worth of
exports and the company also received MERIT AWARD FRO EXPORT
PROMOTION COUNCIL for EXCELLENCE in exports during the year 1994-95
and in the same year the company had come out with a public issue and it was over
subscribed by 18 times which only shows the companys credibility among the
investors. The company has become public since then and company started
developing
the
cylinders
for
domestic
ORIGINAL
EQUOPMENT
(OE)
manufactories. In the process the company has developed various modals of Asias
biggest two wheeler manufacture like M/S BAJAJ AUTO Ltd, M/S HERO MOTORS
Ltd, and M/S ENFIELD INDIA Ltd, etc. from a turnover of approximately Rs.190
lacks in the year 1993-94 the company achieved Rs.843 lacks turnover in the year
1996-97. Besides serving these OEMS in India, the company is still in the over seas
market with a very good network. The technology developed by the company is
UNIQUE.
1.4 PRODUCT PROFILE

In India automobile engine cylinders are predominantly of cast iron or of
aluminum with cast iron sleeves whereas world wide there is a growing shift to
aluminum allay cylinders and engine blocks.
Aluminum cylinders with hard chrome plating reduce engine weight
significantly. Also the wear and tear the piston bore is reduced drastically because
cylinders have about 900 Vickers hardness, consequently giving better mileage and
fuel efficiency.
Unlike aluminum with cast iron sleeves hard chrome plated aluminum
cylinders are of uniform material and provides excellent heat dissipation. Further
very close clearance is possible between bore and piston for optimal engine power out
put without fear of seizure at higher temperature. Aluminum chrome plated cylinders
also consume less oil than cast iron cylinders and hence are less polluting and cheaper
to maintain.
PROMOTERS:
The founder of this company is Mr. P.V.NARAYANA who is now as vice
chairman and managing director. He completed his company diploma in Mechanical
Engineering and completed his Training tool and Die making from NTTF, Dharwada.
After attaining 8 years of experience in reputed companies like M/s Suvega Moped
Ltd, M/s HERO Megistic Ltd, And And etc and setup this unit.
Now this company is also supported with to young men who are the sons of
vice chairman and managing director. Mr.Madhu Pratap, now as the directorTechnical completed his graduation in Mechanical Engineering, and Post graduation
in Industrial.
Engineering and Management. Mr.Ravichandra, now as Executive director,
completed his graduation in chemical Engineering.
TECHNOLOGY:
The company started hard-chrome plating technology with in house research
and development efforts. The company also developed NI-SI plating. In 1998 the
company had entered technical collaboration with Italian company to refine its
technology. Ours is the first company in India to this technology.
MANUFACTURING PROCESS:
The manufacturing process broadly consists of shell molding, die casting
machining heat treatment, chrome platting, inspecting, packing and dispatch. The
sand shell core and first made using shell core shooting machine, having a capacity of
making 500nos. Modules/shift. The shells are then housed in the dies. Aluminum
LM-13 grade alloy, melted in bate-out titling furnace, are then transferred to an
electrical holding furnace, where the melt is and treated with necessary chemicals.
The molten metal held in the holding furnace for around 4 hrs is cast is then used for
making casting by using permanent would gravity dies or low pressure die- casting.
After atmospheric cooling (times 3 hours) the casting is sawed. Fettling of the
casting is then done to remove the flashes. The casting is then heat treated in a pit
furnace (temp 510 c for 3 hours) quenched in the water (temp 60 c ) and aged for 2
hours in oven at 200 c _250 c for stabilization of the micro structural properties of the
casting. The rough casting is then machine and made ready for hard chrome platting.
The casting is then degreased using tri-chloreothylene and then chromo- plated. The
hard chrome plated cylinder are further machine is sophisticated machine and tested
with measuring instruments. These operations are very critical and having very close
tolerance those are subsequently sent to AC room plated kit there in Ac room and
bore measurement is recorded are a temperature of 20c.
ADVANTAGES OF SIBER ALUMINUM HARD CHROME

CYLINDERS:
1.
The life of the aluminum cylinder block is much longer than conventional
cast iron cylinder blocks. This is due to higher hardness in aluminum
cylinder block because the bore is plated with hard chrome/nickel. Since
the hardness much higher, the wear pattern of the bore is also much less.
2.
Since the aluminum is a light metal, the fuel efficiency is also better.
3.
Since both piton and cylinder block are of the same material, the
expansion is uniform, with will be an added advantage.
4.
Since the bore is finished with nickel, the ratio if oil is use may also be
comparatively less. This helps to maintain very low emission.
5.
Since the wear pattern of the cylinder bore is very less, the cost of
maintains is very negligible.
6.
Better eye-appeal.
7.
There is no need to see bore up to 60,000 kms.
8.
Replacing rings easy at nominal cost.
9.
60% reduction in engine weight.
10.
More economical.
11.
None to beat price.
12.
Ready availability of spares with leading two wheeler dealer through our
distributor.
CUSTOMER:
Automotive item O.E.M Customer for casting:
1.
M/S greaves cotton ltd-RANIPET.
2.
M/S Greaves cotton ltd- AURANGABAD.
3.
M/S Same Deutz- FAHRINDIA (P) LTD RANIPET
4.
ALKRAFT THERMOTECHNOLOGIES PVT.LTD. CHENNAI (Is 90012000 certified unit)
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Auto Motive Item O.E.M (INDIA) Customer For Cylinder Blocks:

1.
M/S BAJAJ AUTO LTD. PUNE.
2.
M/S HERO MOTORS LTD- GAZIABAD.
Auto Motive Item O.E.M (Exports) Customer for Cylinder Blocks:

1.
M/S Electrolux, Meculloch- TALIANA, ITALY,
2.
We have replacement market in EUROPE and we supply to ITALY,

NETHERLANDS, and DENMARK etc.
Electrical Transmission Line Item and other are casting Customer:

1.
M/S GR power switches Gear Limited HYDERABED. (ISI 9001 certified

unit)
2.
M/S KLEMMEN engineering corporation CHENNAI.
3.
M/S SEIMENS LIMITED (Hyderabad works) Hyderabad (under process)
ACHIEVEMENTS
The Company always maintained status of single source supplier with
all its customers.
Its customers by serving then quality products
delivery scheduled without interception of their production.

The company was success full in giving satisfied results of VRDE
(Vehicle Research Development Estate) for their simulation air crafts
engines both hard chrome and NI-SI PLATING.
The company also satisfied NAL (National aeronautical Ltd)
Bangalore by giving them NI-SI plating on propeller shaft ring.
The company was awarded Merit of Excellence in Exports from
Promotion Council in India.The company has been awarded ISO
9001-2000 quality management system (Under clause 7 permissible
exclusion: 7.3).
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2. REVIEW OF LITERATURE
ANALYSIS OF FUNDS FLOW STATEMENT
The statement of changes in financial position, prepared to determine only the
sources and uses of working capital between dates of two balance sheets, is known as
the funds flow statement. Working capital is defined as the difference. Between
current assets and current liabilities. Working capital determines the liquidity position
of the firm.
The balance sheet presents a snapshot picture of the financial position at a given
point of the financial position at a given point of time and the income statement shows
a summary of revenues and expenses during the accounting period. The funds flow
statement, also referred to as the statement of changes in financial position or the
statement of changes in financial position or the statement of sources and uses of
funds.
Funds flow analysis provides insight into the movement of funds and helps in
understanding the changes in the structure of assets, liabilities and owners equity.
Funds-Flow statement is a widely used tool in the hands of financial executives for
analyzing the financial performance of a concern. Good concerns always prepare such
statement along with the balance sheet At the end of the year. This statement shows
how the activities of a business have been used during a particular period. The
statement of sources and application of funds serves the purpose.
FUNDS FLOW STATEMENT
INTRODUCTION
The basic financial statements i.e., the Balance Sheet and Profit & Loss A/c or
income statement of business reveals the net effect of various transactions on
operational and financial position of the company. The balance sheet gives a summary
of the assets and liabilities of an undertaking at a particular point of time.
There are many transactions that take place in an undertaking and which do
not operate Profit and Loss A/c. Thus another statement has to be prepared to show
the change in Assets and Liabilities from the end of one period of time to the end of
another period of time. The statement is called a statement of changes in financial
position or a Funds Flow statement.
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The funds flow statement is a statement which shown the movement of funds
and is a report of financial operations of business undertaking. In simple words it is a
statement of source and application of funds.
Definition of funds flow statement:
The funds flow statement is not a statement of financial position but it is
instead a report on financial operations, changes flows or movements during the
period. - S.C. Kuchhal
The funds flow statement describes the sources from which additional
funds were derived and the uses to which these were put.- R.N. Anthony
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.-R.A. Foulk
It is a statement which highlights the underlying financial
movements and explains the changes of working capital from one point of time to
another. Bierman
MEANING & CONCEPT OF FLOW OF FUNDS
The term flow means movement & includes both "inflow' & 'outflow'. The term
flow of funds means transfer of economic values from one asset of equity to another.
Flow of funds is said to have taken place when any transaction makes changes in
amount of funds available before happening of transactions. If the effect of transaction
results in increase of funds. It is called a "source of funds" and it is results in decrease
of funds, it is known as an application of funds
RULES
The flow of funds occurs when a transaction changes on one hand a noncurrent A/c and on the other a current A/c and Vice-versa. According to working
capita concept of funds the term "Flow o Funds" return to movement of funds in
working capital.
If any transaction results in increase in working capital. It is said to be a
"source" or "inflow of funds" and if it results in decrease of working capital, it is said
to be "application" or "out flow of funds".
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14
CURRENT ASSETS
Current Assets are those assets, which in the ordinary course of business can
be or will be converted into cash within a short period of normally one accounting
year.
CURRENT LIABILITIES
Current liabilities are those liabilities which are intended to be paid in ordinary
course of business with in short period of normally one accounting year out of the
current assets or the income of the business.
DIFFERENCES
BETWEEN
CURRENT
LIABILITIES
&
CURRENT ASSETS
CURRENT LIABILITIES
1. Bills Payable
2. Sundry Creditors
3. Accrued O/s Expenses
4. Dividends Payable
5. Bank Overdraft
6. Short term loans, advances &
deposits
7. Provision for taxation
8. Proposed Dividend
CURRENT ASSETS
1. Cash in Hand
2. Cash at Bank
3. Bills Receivable
4. Sundry Debtors or A/cs receivable
5. Short term loans & advances
6. Short term investment
7. Inventories or stock
8. Prepaid Expenses
9. Accrued incomes.
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DIFFERENCE BETWWEN FUNDS FLOW STATEMENT &

CASH FLOWSTATEMENT
BASIS OF
CASH FLOW STATMENT
DIFFERENCE
1. Basis of concept
It is based on a wider concept of funds,
It is based on a narrower
2. Basis of Accounting
i.e., working capital.

It is based on accrual basis of
concept of funds, i.e., cash.

It is based on cash basis of
3. Schedule on
accounting
Schedule of changes in working capital
accounting.
No such Schedule of changes
changes in Working
is prepared to show the changes in
in working
capital
4. Method of
current assets and current liabilities.

Capital is prepared.
Funds flow statement reveals the It is prepared by classifying
preparing
sources and applications of funds. The all Cash inflows and outflows
net difference between sources and in
terror
applications of funds represent net investing

increase or decrease in working capital.
of
operating,
are
financing
activities. The net different

represents time net
Increase or Decrease in Cash
5. Basis of usefulness.
and cash equivalents.

It is useful in planning intermediate and It is more useful for shortlong term financing.
term
analysis
and
planning of the business
PROCEDURE FOR PREPARING A FUNDS FLOW STATEMENT

Funds flow Statement is a method by which we study changes in financial
position of business enterprise between beginning & ending financial statement dates.
16
cash

Hence the funds flow statement is prepared by comparing two balance sheets and any
of such other information derived from the Accounts as may be needed
The preparation of funds flow statement consists of two parts.
A. Statement or schedule of changes in working capital.
B. Statement of sources & application of fund.
A.) STATEMENT OR SCHEDULE OF CHANGES IN W.C.
Working Capital means the excess of current assets over current liabilities.
Statement of changes in working capital is prepared to show the changes in

working capital between two balance sheet dates.
This statement is prepared with help of current assets and current liabilities derived
from two balance sheets
Working capital = Current Assets - Current Liabilities
An increase in current assets increases W.C.
A decrease in current assets decreases W.C.
An increase in current liabilities decreased W.C.
A decrease in current liabilities increases W.C.

As a separate activity & discipline it is of recent origin. It was a branch of
economics till 1890. Today financial management is recognized as the most important
branch of business administration.
Financial management may be defined as the part of management, which is
concerned mainly with raising funds in the most economic and suitable manner, using
these funds as possible planning future operations, and controlling current
performance and future development through financial accounting, cost accounting,
budgeting statistics and other means. It guides investment where opportunity is the
greatest production relatively uniform yard strikes judging most of the firms
operations and projects and is continually necessary for survival and attracting of new
capital.
According to Howard and Upyon, financial management involves the application
of general management principles to a particular operation.
17

N.G.Wright says finance management is intimately itself woven into the fabric
of the management itself. Its central role is concerned with the some objectives as
these of the management which the way in which the resources of the business are
employed and how the business is finance. He divides financial management into
three main areas.
1. Decision on the structures,
2. Allocation of available funds to specific uses,
3. Analysis and appraised of problems.
Financial management includes planning of finance, cash budgets and sources

of finance. EZRA Solomon and John Piglet insists that financial management must
attend to investment decision because if these decision that affects in a large measure
the future of a firm major financial management is an operational function it is
involved with financial planning, forecasting and providing of finance as well as the
formation of financial policies.
Hunt William and Donald Son have called financial management as Resources
Management because in a large Organization, the finance managers are the members
of planning, organization, performing and controlling the financial affairs of the
enterprise. The financial management is of great importance in the present day
corporate world. It is the science of money, which permits the authorities to go
further.
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STATEMENT OF SCHEDULE OF CHANGES IN WORKING

CAPITAL
Particular
Current Assets:
Previous
Current
Year
Year
Amount
Amount
Effect on Working Capital

Increase
Amount
Decrease
Amount
(A)
Stock
xx
xx
xx
Debtors
xx
xx
xx
Cash
xx
xx
xx
Bank
xx
xx
xx
Bills receivable
xx
xx
xx
xxx
xxx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xxx
xxx
xx
xx
xxx
xxx
xxx
xx
Xxx
Prepaid expenses
Total(a)
Current Liabilities:
(B)
Creditors
Bills payable
Outstanding expenses
Total(b)
Working Capital(A-B)
Increase/decrease in
working
capital
Total
(B) STATEMENT OF SOURCES & APPLICATION OF FUNDS

19

Funds flow statement is a statement, which indicates various sources from
which funds (W.C.) have been obtained during a certain period and uses or
applications to which these funds have been put during that period. Generally this
statement is prepared in two formats.
Statement of sources and application of funds:1. Funds from operations: It is an internal source of funds. Funds from
operations are to be calculated as per the method stated above.
2. 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.
3. Sale of fixed assets: Sale of land, buildings, and long term investments will
result in generation of funds.
4. Funds from increase in share of capital: Issue of shares for cash or for any
other current asset or in discharge of a current liability is another source of
funds.
5. Decrease in working capital: Decrease in working capital is the result of
decrease in current asset or increase in current liabilities. In both the cases
inflow of funds takes place.
PROFORMA OF FUNDS FLOW STATEMENT

20

Sources
Rs.
Applications
Rs.
Funds from operations
Xx
Funds lost in operations
Xx
Issue of share capital
Xx
Redemption of preference share
Xx
Issue of Debentures
Xx
Capital
Xx
Raising of long term loans
Xx
Redemption of debentures
Xx
Sale of non current (fixed) assets
Xx
Repayment of long term loan
Xx
Non-trading receipts such as

dividends
Xx
Purchase of long term

investments
Xx
Scale of long term investments
Xx
Non-trading payments
Xx
Net decrease in working capital
Xx
Payment of Dividends
Xx
Xx
Payment of Tax
Xx
Xx
Net increase in working capital
Xx
Xxx
Xxx
IMPORTANCE OF FUNDS FLOW STATEMENT:
21

A funds statement is an essential tool for the financial analysis and primary
importance to the financial management. Nowadays, it is being widely used by the
financial analysts, credit granting institutions and financial managers. The basic
purpose of a funds flow statement is to reveal the changes in the working capital on
the two balance sheet dates. It is also describes the sources from which additional
working capital has been financed and the uses to which working capital has been
applied. Such a statement is particularly useful in assessing the growth of the firm, its
resulting financial needs and in determining the best way of financing these needs. By
making use of projected funds flow statements, the management can come to know
the adequacy or inadequacy of working capital evening advance. One can plan the
intermediate and long-term financing of the firm, repayment of long term debts,
expansion of the business, allocation of resources, etc. The significance or importance
of funds flow statement can be well followed from its various uses given below:
It helps in the analysis of financial operation:

The financial statements reveal the net effect of various transactions on the
operational and financial position of a concern. The balance sheet gives a static view
of the resources of a business and the uses to which these resources have been put at a
certain point of time. But it does not disclose the causes for changes in the assets and
liabilities between two different points of time. The funds flow statements explains
causes for such changes and also the effect of these changes on the liquidity position
of the company. Sometimes a concern may operate profitability and yet its cash
position may become more and worse. The funds flow statement gives a clear answer
to such a situation explaining what has happened to the profit of the firm.
It throws light on many perplexing questions of general interest:

22

Which otherwise may be difficult to be answered. Such as:
a) Why were the net current assets lesser in spite of higher profits and
vice versa?
b) Why more dividends could not be declared in spite of available profits?
c) How was it possible to distribute more dividends than the present earnings?
d) What happened to the net profit? Where did they go?
e) What happened to the proceeds of sale of fixed assets or issue of shares,
debentures, etc.?
f) What are the sources of repayment of debt?
g) How was the increase in working capital financed and how will it be financed
to future?
IT HELPS
IN THE
FORMULATION
OF A REALISTIC
DIVIDEND POLICY:
Sometimes a firm has sufficient profits available for distribution as dividend
but yet it may not be advisable to distribute dividend for lack of liquid or cash
resources. In such cases, a funds flow statement helps in the formation of a realistic
dividend policy.
IT HELPS IN THE PROPER ALLOCATION OF RESOURCES:

The resources of a Spares are always limited and it wants to make the best use
of these resources. A projected funds flow statement constructed for the future helps
in making managerial decisions. The firm can plan the deployment of its resources
and allocate them among various applications.
IT ACTS AS A FUTURE GUIDE:

A projected funds flow statement also acts as a guide for future to the
management. The management can come to know the various problems it is going to
face in near future for want of funds. The firms future needs of funds can be projected
well in advance and also the turning of these needs. The firm can arrange to finance
these needs more effectively and avoid future problems.
IT HELPS IN APPRAISING THE USE OF WORKING CAPITAL:

23

A funds flow statement helps in explaining how efficiently the management has
used its working capital and also suggest ways to improve working capital position of
the firm.
IT HELPS KNOWING THE OVERALL CREDITWORTHINESS

OF A FIRM:
The financial institutions and banks such as state financial institutions. Industrial
Development Corporation, industrial finance corporation of India, industrial
development bank of India, etc. all ask for funds flow statement constructed for a
number of years before granting loans to know the creditworthiness and paying
capacity of the firm. Hence, a firm seeking financial assistance from these institutions
has no alternative but to prepare funds flow statements.
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3.1 RESEARCH METHODOLOGY
Methodology is a systematic process of collecting information in order to

analyze and verifies a phenomenon. The collection of data is two principle sources.
They are discussed as
I. Primary Data
II. Secondary Data
PRIMARY DATA:
The primary data needed for the study is gathered through interview with
concerned officers and staff, either individually or collectively, sum of the information
has been verified or supplemented with personal observation conducting personal
interviews with concerned officers of finance department of SIBAR AUTOPARTS
LTD.,
SECONDARY DATA:
The secondary data needed for the study was collected from published sources
such as, pamphlets of annual reports, returns and internal records, reference from
Advance management text books and journal management.
25
3.2 OBJECTIVES OF THE STUDY
To identify the sources and application of funds a study on Funds Flow

Statements at SIBAR AUTOPARTS LTD.,
To analyze the trend of net working capital that is being maintained by the firm
for period of 5 years.
To know and analyze the financial position of the SIBAR AUTOPARTS LTD.,
To know and analyze the Liquidity position of the SIBAR AUTOPARTS LTD.,
26
3.3 SCOPE OF THE STUDY
In this study the financial performance of the spares under the study is done
from the angles Calculating funds from operation, maintaining of working
capital, sources and applications of the funds.
Financial analysis consists of funds flow analysis. To know funds flow from
one to one, as the time available is very limited and study is continued to over
all financial condition of a firm.
The study to know working capital increase or decrease, funds from operation,
source and application of funds
27
3.4 LIMITATIONS OF THE STUDY
The present reported is based on the secondary data provided by the SIBAR
AUTOPARTS LTD.,
The source of the study is limited to 5 years from 2009-10 to 2013-14.
The analysis is based on the annual reports.
The liquidity position of Spares is very low.
28
4. DATA ANALYSIS & INTERPRETATION

1. WORKING CAPITAL RATIO:
Effective working capital management depends on the systematic management
of the components of working capital .i.e., inventory, debtors, cash etc.
Working
capital ratio is the tool of the working capital management. It reflects the ability of
the Spares to pay the current obligations .
It calculated as
Working capital ratio = current assets/current liabilities
TABLE: 4.1
CURREN
C
YEAR
2009-10
2010-11
2011-12
2012-13
2013-14
CURRENT ASSETS
8,167.50
10,725.94
9,427.74
24,288.00
36,866
CURRENT
WORKING
LIABILITIES
3,509.59
3,922.4
5,388.52
22479.86
19,445.18
CAPITAL RATIO
2.32
2.73
1.74
1.08
1.89
Factors:
YEAR
2009-10
2010-11
2011-12
2012-13
2013-14
2.32
2.73
1.74
1.08
1.89
working capital
ratio
29
CHART: 4.1
INTERPRETATION:
The working capital ratio it was gradually increased the years 2009-10 is ,
2.32, 2.73 and it was in the year 2010-11 is very fall down as 1.74 In 2011-2012 it
was 1.08 . It and it was increase a little bit in 2012-13, 1.89 it indicates working
capital is not maintaining proper management in the year 2014. It is decrease to the
working capital ratio.
2. CASH RATIO:
30

Cash is the most liquid asset. A financial analyst may examine cash ratio and
its Equivalent to current liabilities. Trade investment or marketable securities are
Equivalent of cash. The standard ratio is 0.5:1or 50:100(%).
RATIO= (Cash+ Marketable Securities)/Current Liabilities
TABLE: 4.2
YEAR
CASH
CURRENT LAIBILITIES
CASH RATIO
2009-10
1290.71
3509.59
0.36
2010-11
1383.35
3922.48
0.35
2011-12
12012.16
14506.15
0.83
2012-13
4,773.47
22479.86
0.21
2013-14
21,081.89
19,445.18
1.08
FACTORS:
YEAR
2009-10
2010-11
2011-12
2012-13
2013-14
Cash ratio
0.36
0.35
0.83
0.21
1.08
31
CHART: 4.2
INTERPRETATION:
The standard cash ratio is 0.5. It represents the satisfactory level in the years
2009-10 to 2013-14 the cash ratio is 0.36, 0.35, 0.83, 0.21 and 1.08 however it has
heavily increased to 1.08 in the year 2012 the ratio 1.08. It represents Spares is
maintaining standard level of cash in the Spares
3. QUICK RATIO (or) ACID TEST RATIO:

32

It establishes the relationship between quick or liquid, Assets and liabilities.
An asset is a Liquid if it can be converted into cash immediately. Inventories are
considered to be less liquid. The quick ratio is found out by dividing quick assets by
current liabilities. A quick ratio of 1to1 is considered to represent a satisfactory
current financial condition.
Quick Ratio= (Current Assets-Inventories) / Current Liabilities
TABLE: 4.3
YEAR
CURRENT
QUICK
QUICK RATIO
LIABLITIES
ASSETS
2009-10
5664.30
3509.59
1.61
2010-11
7611.37
3922.48
1.94
2011-12
23365.09
14506.15
1.61
2012-13
18216.65
25214.04
0.72
2013-14
32487.57
24366.35
1.33
FACTOR:
YEAR
2009-10
2010-11
2011-12
2012-13
2013-14
Quick ratio
1.61
1.94
1.61
0.72
1.33
33
CHART: 4.3
INTERPRETATION:
The standard ratio of current ratio is 2:1. The higher the current ratio the grater
the margin of safety. In the year 2009-2010. Current ratio is 2.32 and 2010-11, 2.73
from 2011. The current ratio is gradually increased. In 2014 the current ratio is 1.51
lower than the safety margin.
4. INVENTORY TURNOVER RATIO (or) STOCK TURNOVER

RATIO:
34
Inventory turnover ratio is a measure of liquidity. It indicates the speed at

which the inventory is sold out. A high turnover ratio indicates that the inventory is
out Fast and a low turnover ratio show a sale of inventory. This ratio indicates the
efficiency of the firm in selling its products.
Stock turnover ratio=Cost of goods sold / average investment
The high stock turnover ratio is indicating of good inventory management.
TABLE: 4.4
COST OF GOODS
AVG
INVENTORY
SOLD
INVENTORY
TURNOVER RATIO
2009-10
27153.59
2392.56
11.34
2010-11
29725.95
2808.88
10.58
2011-12
36172.58
3430.26
10.54
2012-13
46374.89
6071.35
7.63
2013-14
40613.42
4378.43
9.27
YEAR
FACTORS:
YEAR
Inventory turnover
2009-10
2010-11
2011-12
2012-13
2013-14
ratio
11.34
10.58
10.54
7.63
9.27
35
CHART: 4.4
INTERPRETATION:
A high stock turnover indicated that the stocks are fast moving and get
converted into sales very quickly .the year 2009-10 to 2014. The company inventory
turnover ratio is 11.34, 10.58, 10.54, 7.63 and 9.27 respectively. Overall five years the
ratio is increased.
STATEMENT OF THE CHANGES IN FINANCIAL POSITION OF SIBAR

AUTOPARTS LTD., WORKING CAPITAL BASIS IN THE YEAR
2009-2010
STATEMENT OF CHANGE IN WORKING CAPITAL 2009-2010
36

Change In Working
Particulars
2009
2010
A) current assets:a) Inventories

B) Sundry Debtors
C) Cash & Bank Balance
E) Loans and Advances
Total Current Assets
2503.2
2467.39
1290.71
1906.2
8167.5
3114.57
943.79
1383.35
5284.23
10725.94
B) Current Liabilities:A) Liabilities

B) Provision
Total Current Liabilities
3381.69
127.9
3509.59
3758.62
163.86
3922.48
Working Capital
(A-B)
Increase in Working Capital
TOTAL
4657.91
2145.55
6803.46
6803.46
Capital
Increase
Decrease
6803.46
611.37
1523.6
92.64
3378.03
376.93
35.96
4082.04
2145.55
4082.04
INTERPRETATION:
From the above table it is observed that the networking capital of the Spares
shows increased i.e. Lakhs 2145.55.

Sources
Rs
Issue unsecured loans
101.14 Increase in work in progress
Decrease in miscellaneous expenses
Applications
Rs
149.2
102 Purchase of investment
166.03
Sale of fixed assets
2093.49 Payment secured loans
2100.96
2265.11
2145.55
4561.74
Increase in working capital
4561.74
37
INTERPRETATION:
From the above table it is observed that the Funds flow of the Spares shows fund
i.e. from operation is Lakhs 2265.11.

AUTOPARTS LTD.,WORKING CAPITAL BASIS IN THE YEAR 2010-2011

Change in working
Particulars
2010
2011
capital
Increase
A) current assets:a) inventories

b) sundry debtors
3114.57
943.79
3971.01
2531
Decrease
856.44
1587.21
38

c) cash & bank balance
e) loans and advances
Total current assets
1383.35
5284.23
10725.94
12012.16
8821.93
27336.1
B) current liabilities:a) liabilities

b) provision
Total current liabilities
3758.62
163.86
3922.48
13132.52
1373.63
14506.15
6803.46
6026.49
12829.95
12829.95
12829.95
working capital
(A-B)
TOTAL
10628.81
3537.7
9373.9
1209.77
6026.49
16610.16
16610.16
INTERPRETATION

Sources
Decrease in miscellaneous expenses
Rs
Applications
Rs
19957.4
67.1 Purchase of fixed assets
28163.9
Sale of investment
26672.5 Payment secured loans
11161.6
Reserve and surplus
16148.5
6026.49
25662.8 Deferred tax liabilities
5659.36
70968.9
70968.9
39
INTERPRETATION:
From the above table it is observed that the Funds flow of the Spares shows fund
i.e. from operation is Lakhs 25662.8.

AUTOPARTS LTD.,WORKING CAPITAL BASIS IN THE YEAR 2011-2012

Change in working
Particulars
A) Current Assets:A) Inventories
B) Sundry Debtors
C) Cash & Bank Balance
E) Loans and Advances
2011
2012
3971.01
2531
12012.16
8821.93
27336.1
6071.35
2640.09
4773.47
10803.09
24288
capital
Increase
Decrease
2100.34
109.09
7238.69
1981.16
40

B) Current Liabilities:A) Liabilities
B) Provision
Total current liabilities
Working Capital
(A-B)
Decrease in Working Capital
TOTAL
13132.52
1373.63
14506.15
22479.86
2734.18
25214.04
12829.95
-926.04
13755.99
13755.99
12829.95
17946.58
12829.95
9347.34
1360.55
17946.58
INTERPRETATION:
shows decreased i.e. Lakhs 13755.9

Sources
Rs
Applications
Issue secured loans
Sale of fixed assets
4646.01
Reserve and surplus
19772.72
Sale of investment
Decrease in working capital
Rs
51100.89
518.2
4951.06
13755.99
51619.09
51619.09
41
INTERPRETATION:
From the above table it is observed that the Funds flow of the Spares shows
sources and applications are same.

AUTOPARTS LTD.WORKING CAPITAL BASIS IN THE YEAR 2012-2013

Change in working
Particulars
A) current assets:a) Inventories
b) Sundry Debtors
c) Cash & Bank Balance
e) Loans and Advances
2012
2013
6071.35
2640.09
4773.47
10803.09
24288
4378.43
3922.79
21081.89
7482.89
36866
capital
Increase
Decrease
1692.92
1282.7
16308.42
3320.2
42
B) Current Liabilities:a) Liabilities

b) Provision
Working Capital
(A-B)
TOTAL
22479.86
2734.18
25214.04
19445.18
4921.17
24366.35
-926.04
13425.69
12499.65
12499.65
12499.65
3034.68
2186.99
13425.69
20625.8
20625.8
INTERPRETATION:

Sources
Rs
Applications
Rs
29942.71
issue secured loans
781.16
sale of fixed assets
4355.69 purchase of investment
11664.09
Reserve and surplus
16963.95 Increase in working capital
13425.69
55813.65
55813.65
INTERPRETATION:
43

AUTOPARTS LTD., WORKING CAPITAL BASIS IN THE YEAR 2013-2014

Change in working
Particulars
2013
2014
A) Current Assets:a) Inventories

b) Sundry Debtors
c) Cash & Bank Balance
e) Loans and Advances
9071.35
3640.09
4773.47
10803.09
34288
6378.43
4922.79
21081.89
7482.89
26866
B) Current Liabilities:a) Liabilities

b) Provision
44479.86
4734.18
28214.04
19445.18
8921.17
44366.35
capital
Increase
Decrease
2692.62
1282.7
15308.42
3220.2
32034.18
2586.45
44

Working Capital
(A-B)
TOTAL
-926.04
16422.67
15499.63
15499.63
15499.63
16422.67
25625.2
25625.2
INTERPRETATION:

Sources
Rs
Applications
2563.24 Increase in Work in Progress
Rs
4725.05
Issue Secured Loans
58123.25 Deferred Tax Liabilities
5523.33
Sale of Fixed Assets
8563.56 Purchase of Investment
5813.05
Reserve and Surplus
8756.45 Increase in Working Capital

78006.50
16422.67
78006.50
INTERPRETATION:
45
5.1 FINDINGS
The networking capital of the Spares shows increased in 2009-10 i.e. Lakhs
2145.55. Funds flow of the Spares shows fund i.e. from operation is Lakhs
2265.11.
25662.8.
The networking capital of the Spares shows decreased in 2011-12 i.e. Lakhs
13755.99. Funds flow of the Spares shows sources and applications are
same.
13425.69. Funds flow of the Spares shows sources and applications are
same.
The working capital ratio it was gradually increased the years 2009-10 is ,
2.32, 2.73 and it was in the year 2010-11 is very fall down as 1.74 In 20112012
it was 1.08 . It and it was increase a little bit in 2012-13, 1.89 it
indicates working capital is not maintaining proper management in the year

2013. It is decrease to the working capital ratio.
46

The higher working capital turnover ratio indicated the better management of
working capital in the years 2009-10 to 2014 the ratio is 8.5 and 5.9, 11.7,
14.8, 9.6 respectively. In the year 2013 working capital turnover will be
decreased that is 9.6over. Previous year will not refer the better management
of working capital of the firm. All the five years better management of
working capital of the Spares.
5.2 SUGGESTIONS
The Spares should have maintained working capital turnover without
fluctuations for better management of working capital.
The Spares must have maintained the cash ratio for better circulation of money
for in the Spares for the management of working capital.
The Spares maintains standard level of current ratio 0.5. So the Spares should
have maintained above standard level of current ratio for better management of
working capital.
The Spares should have increase stock turnover for the moving of stock in to
sales very immediately for the better management of working capital.
For the relations to creditors, it helps to. The Spares is ability to efficient in the
management of credit
The Spares must have maintained debtors turn over
ratios for the better liquidity fast the debtors are converted into cash in year. It
leads to higher the turnover ratio and lower the collection period.
The financial year 2012 to 2013 can increase the sources.
47
5.3 CONCLUSION
The Spares being mostly depends on working capital facilities it is
maintaining very good relationship with their banks and their working capital
management is balanced.
The Spares is performing exceptionally well due to up wising in the Global
market followed by the domestic market it is up coming on with good and innovative
ideas and believe in improving all the area of its operations. The Spares has a good
quality position and does not delay commitment in case of but its creditors and
debtors.
Finally I conclude that the performance of the Spares is satisfactory there was
increasing the activities.
48
ANNEXURES
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MAR, 2009-2010
Rs in lakhs
Particulars
2010
2009
Income
Sales (Gross)
47,306.18
40,166.84
7,616.56
7,284.19
39,689.62
32,882.65
457.41
412.55
40,147.03
33,295.20
3,288.27
1,574.49
29,552.25
28,359.17
Depreciation
2,859.77
2,839.05
Interest and other finance charges
2,234.88
2,333.38
Less : Excise Duty

Sales (Net)
Other Income
Expenditure
Purchase of finished goods for resale
Manufacturing and other expenses
(Increase)/Decrease in stocks of work-inprocess

a and finished goods
86.54
49

37,690.57
35,192.63
2,456.46
(1,897.43)
--
--
65.00
--
2,265.11
(2,104.92)
(16,609.18)
(14,504.26)
14,344.07
16,609.18
Profit / (Loss) for the year

Povision for Tax
Current Tax
Fringe Benefit Tax
Profit / (Loss) for the year
Debit balance brought forward from previous
year
Debit balance carried to balance sheet
BALANCE SHEET AS ON 31ST MAR, 2009-2010

Rs in lakhs
Particulars
1. Sources of Funds :
Share Capital
2010
2009
42,796.14
42,796.14
21,901.93
21,901.93
64,698.07
64,698.07
Secured Loans / Funds
1,533.07
17,431.03
Unsecured Funds
9,868.55
9,767.41
25,198.68
27,198.44
89,896.69
91,896.51
Goss Block
54,205.96
53,550.07
(-) Dep.
22,537.12
19,787.74
Net Block
Capital work in progress
31,668.84
289.62
33,762.33
140.42
31,958.46
33,902.75
Reserve & Surplus

Loans Funds :
Total
2 . Application of Funds :
Fixed Assets
50

Investments
Current assets, loans & advances :
36,723.60
36,557.57
3,114.57
2,503.20
934.79
2,467.39
Cash & Bank Balances
1,383.35
1,290.71
Loans & Advances
5,284.23
1,906.20
10,725.94
8,167.50
3,758.62
3,38169
289.62
127.90
3,922.48
6,803.46
3,509.59
4,657.91
67.10
169.10
14,344.07
16,609.18
89,896.69
91,896.51
Inventories
Sundry Debtors
Current Liabilities & Provisions :

Current Liabilities
Provisions
Net Current Assets
Miscellaneous Expenditure
Profit and Loss Account
Total
Rs. in lakhs
Particulars
2011
2010
Income
Sale of manufactured goods
1,16,900.24
47,905.48
17,521.32
6,388.76
99,378.92
41,516.72
2,404.44
1,832.29
432.61
1,01,211.21
44,353.77
36,172.58
16,825.32
Personnel cost
3,604.81
1,777.200
Other expenses
25,119.28
9,234.53
Depreciation
5,204.23
2,200.41
Amortisation of goodwill
1,7,99.20
--
Less : Excise Duty
Sale of traded goods

Other Income
Expenditure
Cost of goods sold
51

Interest and other finance cost
950.93
871.49
72,851.03
30,908.95
Profit before tax
28,360.18
13,444.82
Provision for tax
6,542.84
982.00
- Current tax
(982.00)
- MAT credit of earlier years
(713.59)
115.83
28.00
5,339.36
18,057.74
12,434.82
(1,909.25)
(14,344.07)
16,148.49
(1,909.25)
- fringe benefit tax

- deferred tax charge
Profit for the year
Debit balance in Profit and Loss account
b brought forward
Balance in Profit & Loss account carried
forward
BALANCE SHEET AS ON 31st MAR, 2010-2011

Particulars
2011
2010
Share Capital
42,796.14
42,796.14
Reserve & Surplus
38,050.42
21,901.93
80846.56
64,698.07
4,168.45
6,760.49
12,286.48
8,943.65
5,659.63
---------
22,114.29
15,704.14
1,02,960.85
80402.21
Gross Block
89,683.71
53,811.03
(-) Dep.
29,850,93
24,043.25
Net Block
59,832.78
29,767.78
320,247.06
3,453.60
80,079.84
33,221.38
Loans Funds :
Unsecured Funds
Deferred tax liability
Total
2. Application of Funds :
Fixed Assets
52

Investments
10,051.06
42,083.62
Inventories
3971.01
2889.51
Sundry Debtors
2531.00
1866.11
12012.16
1576.48
8821.93
27336.1
3442.81
9774.91
131132.52
6020.09
1373.63
14506.18
12,829.95
566.86
6586.95
3,187.96
-----------
1,909.25
1,02,960.85
80402.21

Loans & Advances
Current Liabilities
Provisions
Net Current Assets
Total
Particulars
2012
2011
Income
Less : Excise Duty

Other Income
137,728.95
1,16,900.24
20,207.11
17,521.32
117,521.84
99,378.92
1,807.18
1,832.29
1,19,329.02
1,01,211.21
46,374.89
36,172.58
Personnel cost
4,030.09
3,604.81
Other expenses
29,017.00
25,119.28
Depreciation
5,377.68
5,204.23
Amortization of goodwill
1,7,99.20
1,799.20
534.19
950.93
Expenditure
Cost of goods sold

53

87,133.05
72,851.03
Profit before tax
32,195.97
28,360.18
Provision for tax
12,881.45
6,542.84
- Current tax
(982.00)
(713.59)
60.00
115.83
518.20
5,339.36
19,772.72
18,057.74
(16,148.49)
(1,909.25)
(35,921.21)
(16,148.49)

Profit for the year
Debit balance in Profit and Loss
account brought forward
forward
BALANCE SHEET AS ON 31stMAR, 2011-2012

Rs. In lakhs
Particulars
Share Capital
2012
2011
42,796.14
42,796.14
Reserve & Surplus
57,823.14
38,050.42
100,619.28
80846.56
10,342.31
4,168.45
Unsecured Funds
14,605.93
12,286.48
5,141.16
5,659.63
15,704.14
22,114.29
1,30,708.68
1,02,960.85
Gross Block
91,539.87
89,683.71
(-) Dep.
36,353.10
29,850,93
Net Block
55,186.77
71,347.95
59,832.78
320,247.06
126,534.72
80,079.84
Loans Funds :

Total
Fixed Assets
54

Investments
5,100.00
10,051.06
Inventories
6,071.35
3971.01
Sundry Debtors
2,640.09
2531.00
4,773.47
12012.16
10,803.09
8821.93
24,288.00
27336.1
22,479.86
13132.52
2,734.18
1373.63
25,214.04
926.04
14506.18
12,829.95
-----------
----------
1,30,708.68
1,02,960.85
Loans & Advances

Current Liabilities
Provisions
Net Current Assets
Total
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DEC, 2012-2013
Rs. in lakh
Particulars
2013
2012
Income
Less : Excise Duty

Other Income
1,20,946.74
137,728.95
12,218.19
20,207.11
1,08,728.55
117,521.84
796.30
1,807.18
1,09,524.85
1,19,329.02
40,613.42
46,374.89
Personnel cost
4,427.88
4,030.09
Other expenses
29,052.66
29,017.00
Depreciation
5,488.32
5,377.68
1,799.20
1,799.20
Expenditure
Cost of goods sold
55

424.13
534.19
81,805.61
87,135.02
Profit before tax
27,719.24
32,195.97
Provision for tax
11,520.00
12,879.48
- Current tax
16.45
60.00
(781.16)
518.20
16,963.95
19,772.72
35,921.21
(16,148.49)
52,885.16
(35,921.21)

Profit for the year
brought forward
forward
BALANCE SHEET AS ON 31st DEC, 2012-2013

Rs. in lakhs
Particulars
Share Capital
2013
2012
42,796.14
42,796.14
Reserve & Surplus
74,787.09
57,823.14
117,619.28
100,619.28
43,190.95
10,342.31
Unsecured Funds
16,251.30
14,605.93
4,360.00
5,141.16
181,385.48
1,30,708.68
Gross Block
94,463.86
91,539.87
(-) Dep.
43,632.78
36,353.10
50,831.08
101,290.66
55,186.77
71,347.95
152,121.74
126,534.72
16,764.09
5,100.00
Loans Funds :

Total
Fixed Assets
Net Block
Investments
56

Inventories
4,378.43
6,071.35
Sundry Debtors
3,922.79
2,640.09
21,081.89
4,773.47
7,482.89
10,803.09
36,866.00
24,288.00
19,445.18
22,479.86
4,921.17
2,734.18
24,366.35
12,499.65
25,214.04
926.04
181,385.48
1,30,708.68

Loans & Advances
Current Liabilities
Provisions
Net Current Assets
Total
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DEC, 2013-2014
Rs. In lakh
Particulars
2014
2013
Income
116,737.13
1,20,946.74
Less : Excise Duty
15,059.29
101,677.84
12,218.19
1,08,728.55
1,955.93
796.30
103,633.77
1,09,524.85
45,948.33
40,613.42
Personnel cost
4,765.94
4,427.88
Other expenses
34,007.69
29,052.66
Depreciation
8,610.36
5,488.32
1,799.20
1,799.20

Other Income
Expenditure
Cost of goods sold
57

3,439.37
424.13
98,570.89
81,805.61
5,062.88 27,719.24
Profit before tax

Provision for tax
- Current tax
1,031.00
11,520.00
3,000.00
16.45
(1,031.00)
(781.16)
2,062.88
16,963.95
52,885.16
54,948.04
35,921.21

Profit for the year
brought forward
forward
52,885.16
BALANCE SHEET AS ON 31st DEC, 2013-2014

Rs. in lakhs
Particulars
Share Capital
2014
2013
42,796.14
42,796.14
76,849.97
74,787.09
119,646.11
117,583.23
42,501.93
43,190.95
Unsecured Funds
18,534.91
16,251.30
7,360.00
4,360.00
Total
Fixed Assets
188,042.95
181,385.48
Gross Block
193,075.65
94,463.86
53,870.09
43,632.78
139,205.56
44,859.34
50,831.08
101,290.66
184,064.90
152,121.74
Reserve & Surplus

Loans Funds :
(-) Dep.
Net Block
58

Investments
6850.27
16,764.09
Inventories
9061.61
4,378.43
Sundry Debtors
4123.75
3,922.79
4550.46
21,081.89
11,510.12
7,482.89
29,245.94
36,866.00
Current Liabilities
29522.36
19,445.18
Provisions
2,595.80
4,921.17
32,118.16
(2,872.22)
24,366.35
12,499.65
188,042.95
181,385.48
Loans & Advances

Net Current Assets

Total
59
BIBLIOGRAPHY
1. Author
I.M.PANDEY
Title of the book
Financial Management
Publisher
Vikas Publishing House Pvt. Pvt.Ltd..,
Edition
Ninth Edition.
2. Author
M.Y. Khan & P.K. Jain
Title of the book
Publisher
Tata Mc. Graw Hill Publishing Co.Pvt.Ltd..,
Edition
Third Edition.
3. Author
Prasanna Chandra
Title of the book
Publisher
Tata Mc. Graw Hill Publishing Co.Pvt.Ltd..,
Edition
Fifth Edition.
WEBSITES:
www.sibarautopartsltd.com
www.wikipedia.com
60
SYNOPSIS
INTRODUCTION
Finance is one the basic foundations of all kinds of economic activities. It is
the master key, which provides access to all the sources for being employed in
manufacturing. Hence it is rightly said that finance is lifeblood of any enterprise,
besides being the scarcest elements, it is also the most indispensable requirement.
Without finance neither any business can be started nor successfully run. Provision of
sufficient funds at the required time is the key to success of concern. As matter of fact
finance may be said to be the circulatory system of economic body, making possible
the needed co-operation among many units of the activity.
INDUSTRY PROFILE
The present automobiles are most sophisticate combining luxury, safety
economy in utilizing the energy resource with great speed and least environment.
Pollution
using various field of science likes aerodynamics, mechanical expertise
and electrical engineering. Every day improvement in the existing models holding the
price line in reasonable range involving high become necessity.
Present day
consumer satisfaction involves great skill in marketing, advertising and positioning

the product line whim and Cashion advances with increased performance and reduce
size. Business minded people started selling them top the society.
COMPANY PROFILE
M/S SIBAR AUTOPARTS Ltd. Was originally incorporated as private limited
company by name M/s SIBAR AUTOPARTS (PVT) Limited in the year 1983,
located at industrial estate, TIRUPATHI.
It was converted into public limited
company in the year 1994. The company is presently engaged in manufacturing and
marketing of aluminum hard chrome plated cylinder kits mainly for the two wheelers
up to engine capacity 150cc.
61
RESEARCH METHODOLOGY
Methodology is a systematic process of collecting information in order to
analyze and verifies a phenomenon. The collection of data is two principle sources.
They are discussed as
III. Primary Data
IV. Secondary Data
PRIMARY DATA:
The primary data needed for the study is gathered through interview with
concerned officers and staff, either individually or collectively, sum of the information
has been verified or supplemented with personal observation conducting personal
interviews with concerned officers of finance department of SIBAR AUTOPARTS
LTD.,
SECONDARY DATA:
The secondary data needed for the study was collected from published sources
such as, pamphlets of annual reports, returns and internal records, reference from
Advance management text books and journal management.
OBJECTIVES OF THE STUDY
To identify the sources and application of funds a study on Funds Flow

Statements at SIBAR AUTOPARTS LTD.,
To analyze the trend of net working capital that is being maintained by the firm
for period of 5 years.
To know and analyze the financial position of the SIBAR AUTOPARTS LTD.,
To know and analyze the Liquidity position of the SIBAR AUTOPARTS LTD.,
SCOPE OF THE STUDY
In this study the financial performance of the spares under the study is done
from the angles Calculating funds from operation, maintaining of working
capital, sources and applications of the funds.
Financial analysis consists of funds flow analysis. To know funds flow from
one to one, as the time available is very limited and study is continued to over
all financial condition of a firm.
62
LIMITATIONS OF THE STUDY
The present reported is based on the secondary data provided by the SIBAR
AUTOPARTS LTD.,
The source of the study is limited to 5 years from 2009-10 to 2013-14.
The analysis is based on the annual reports.
The liquidity position of Spares is very low.
FINDINGS
2265.11.
25662.8.
The networking capital of the Spares shows decreased in 2011-12 i.e.

Lakhs 13755.99. Funds flow of the Spares shows sources and applications
are same.
SUGGESTIONS
The Spares should have maintained working capital turnover without
fluctuations for better management of working capital.
The Spares must have maintained the cash ratio for better circulation of money
for in the Spares for the management of working capital.
The Spares maintains standard level of current ratio 0.5. So the Spares should
have maintained above standard level of current ratio for better management of
working capital.
CONCLUSION
The Spares being mostly depends on working capital facilities it is
maintaining very good relationship with their banks and their working capital
management is balanced. The Spares is performing exceptionally well due to up
wising in the Global market followed by the domestic market it is up coming on with
good and innovative ideas and believe in improving all the area of its operations.
63

Sibar Funds Flow State

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A Study on Funds Flow Analysis

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

A Study on Funds Flow Analysis

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

GOALS OF FINANCIAL MANAGEMENT:

through the coordination of the operation of the various divisions in the

Ensuring a fair return to the shareholders on their investment.

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

1.2 INDUSTRY PROFILE

using various field of science likes aerodynamics, mechanical expertise

consumer satisfaction involves great skill in marketing, advertising and positioning

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

TATA MOTORS, ASHOK LEYLAND, SWARAJ

MAZDA,MAHINDRA & MAHINDRA ,FORCE MOTORS,

SKODA, MAHINDRA & MAHINDRA, DAIMLER CHRYSLER,

MOTORS, YAMAHA , KINETIC MOTORS

1.3 COMPANY PROFILE

It was converted into public limited

A Study on Funds Flow Analysis

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

1.4 PRODUCT PROFILE

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

ADVANTAGES OF SIBER ALUMINUM HARD CHROME

There is no need to see bore up to 60,000 kms.

Replacing rings easy at nominal cost.

60% reduction in engine weight.

None to beat price.

M/S greaves cotton ltd-RANIPET.

M/S Greaves cotton ltd- AURANGABAD.

M/S Same Deutz- FAHRINDIA (P) LTD RANIPET

ALKRAFT THERMOTECHNOLOGIES PVT.LTD. CHENNAI (Is 90012000 certified unit)

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

Auto Motive Item O.E.M (INDIA) Customer For Cylinder Blocks:

M/S BAJAJ AUTO LTD. PUNE.

M/S HERO MOTORS LTD- GAZIABAD.

Auto Motive Item O.E.M (Exports) Customer for Cylinder Blocks:

M/S Electrolux, Meculloch- TALIANA, ITALY,

We have replacement market in EUROPE and we supply to ITALY,

Electrical Transmission Line Item and other are casting Customer:

M/S GR power switches Gear Limited HYDERABED. (ISI 9001 certified

M/S KLEMMEN engineering corporation CHENNAI.

M/S SEIMENS LIMITED (Hyderabad works) Hyderabad (under process)

Its customers by serving then quality products

delivery scheduled without interception of their production.

A Study on Funds Flow Analysis

A Study on Funds Flow Analysis

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

BES Group of Institutions (GVIC)Angallu

A Study on Funds Flow Analysis

DIFFERENCE BETWWEN FUNDS FLOW STATEMENT &

FUNDS FLOW STATEMENT