INDEX

CHAPTER

TOPICS COVERERD

CHAPTER 1.

INTRODUCTION

CHAPTER 2.

COMPANY PROFILE AND ABOUT THE PROJECT

CHAPTER 3.

REVIEW OF LITERATURE

CHAPTER 4.

OBJECTIVES

CHAPTER 5.

RESEARCH METHODOLOGY

CHAPTER 6.

DATA ANALYSIS

CHAPTER 7.

FINDING

CHAPTER 8.

CONCLUSION

CHAPTER 9.

RECOMMENDATION

CHAPTER 10.

QUESTION

CHAPTER11.

BIBLIOGRAPHY

PAGE NO.

1.

INTRODUCTION

Funds constitute prime importance in starting and operating any business Enterprise the
most significant of all financial activities is the raising and management of funds financial
decisions are those which concern the generation and flow of funds various sources and the use
of these funds.
The accounting standards state that in many countries the approach to provide a
statement of changes in financial position as a part of audited accounts is the trend in India
companies are under no legal obligation to publish a statement of changes in financial position
statements along with financial statements especially in the case of companies listed on the stock
exchanges and other large commercial industrial and business enterprise in public and private
sectors.
The funds flow statement which shows the movement of funds and is the part of
financial operation of the business under taking. It indicates various means by which funds.
Where obtained during a particular period and the ways in which there funds where employed in
simple words. It is a statement of sources and application of funds.
Funds flow analysis refers to the process of determining the financial strengths and
weakness of the by establishing relationship between the items of balance sheet and profit and
loss account. Funds flow statement serves as a handy tool in financial analysis making financial
planning preparation of budget through this analysis firm group the change in the allocation
resources between the two balance sheets.
The Funds flow statement expresses the changes in working capital and assesses
the impact upon liquidity position of the undertaking with the help of this statement. The
financial management can plan the intermediate and long term financial of the concern repayment
of loans, expansions of business and distribution of resources. It is helpful in the crucial decision
making process incase of expansion. Diversification of conservation of more funds for profitable

1.

COMPANY PROFILE

COMPANYS PRODUCTS

It provides 13 brands of cars ranging over 150

variants. Suzuki Motor Corporation, the parent
company, is a global leader in mini and compact cars
for three decades. Suzukis technical superiority lies
in its ability to pack power and performance into a
compact, lightweight engine that is clean and fuel
efficient.

1.

LATEST LAUNCHES
RITZ

GRAND
VITARA

NEW ZEN
ESTILO

MARUTI FINANCE

1.

 Maruti launched Maruti Finance in January

2002.

Prior to the start of this service Maruti had

started two joint ventures Citicorp Maruti
and Maruti Countrywide with Citi Group
and GE Countrywide respectively to assist
its client in securing loan.

Maruti tied up with ABN Amro Bank, HDFC

Bank, ICICI Limited, Kotak Mahindra,
Standard Chartered Bank, and Sundaram to
start this venture including its strategic
partners in car finance.

Again the company entered into a strategic

partnership with SBI in March 2003 Since
March 2003, Maruti has sold over 12,000
vehicles through SBI-Maruti Finance.

Maruti

insurance

It is launched in 2002 Maruti provides vehicle insurance

to its customers with the help of the National Insurance
Company, Bajaj Allianz, New India Assurance and .
Sundaram. The service was set up the company with the
inception of two subsidiaries Maruti Insurance Distributors
Services Pvt. Ltd and Maruti Insurance Brokers Pvt.
Limited.
This service started as a benefit or value addition to customers and
was able to ramp up easily. By December 2005 they were able to sell
more than two million insurance policies since its inception.

Maruti True Value

Maruti True service offered by Maruti Udyog to its customers.
It is a market place for used Maruti Vehicles. One can
buy, sell or exchange used Maruti vehicles with the help
of this service in India

1.

FINANCIAL PERFORMANCE OF EVERY

COMPANY DEPENDS UPON ITS SALES AND
PROFIT VOLUMES.

SALES VOLUMES OF A COMPANY

PROFIT VOLUMES OF A
ACHIEVEMENTS
COMPANY. OF A
COMPANY

1.

OBJECTIVES

OBJECTIVES OF THE STUDY

To identify the source of funds of the Maruti Suzukis Limited.

To identify the application funds of the Maruti Suzukis Limited.

To identify the changes in fund

Helpful in planning.

Helpful in organizing.

Helpful in interpreting financial information.

Helpful in making decision

Report to management.

SCOPE OF THE STUDY

Only the FUNDS FLOW has been taking to measure the financial performance.

The study confines to the funds management at Maruti Suzukis Limited, only.

This study can not reflect the Overall Industrys funds management system

1.

The present study focuses as sources funds and application of funds for a period
of time. The study is confirmed to find out the changes in the financial position of
The Maruti Suzuki Financial Services Limited between the beginning and ending
financial Year. It is a technical device designed to analyze the changes in the
financial condition of the business enterprises between two dates.

This funds flow statement is a statement which indicates various means by which
the funds have been obtained during a certain period and the ways to which these
funds have been used during the period.

ABOUT THE PROJECT

FINANCIAL STATEMENTS
INTRODUCTION
The basis for financial planning, analysis and decision-making is the
financial information. Financial information is needed to project, compare
and evaluate the firms earning ability. It is also required to aid in economic

1.

decision-making investment and financial decision-making. The financial

information of an enterprise is contained in the financial statements or
accounting reports. Three basic financial statements of great significance to
owners, management and investors are balance sheet, profit and loss account
and Cash Flow Management.
BALANCE SHEET
Balance sheet is the most significant financial statement. It
indicates the financial condition or the state of affairs of a business at a
particular moment of time.

More specially, balance sheet contains

information about resources and obligations of a business entity and about its
owners interest in the business at a particular point of time. Thus, the
balance sheet communicates information about assets, liabilities and owners
equity for a business firm as on a specific date. It provides a snapshot of the
financial position of the firm at the close of the firms accounting period.
Assets are valuable economic resources owned by the firm. They
embody future benefits and are measured in monetary terms.

Assets

represent: (a) stored purchasing power (e.g., cash), (b) money claims (e.g.,
receivables stock ) and (c) tangible and intangible items that can be sold or
used in business to generate earning.

Tangible items that include land,

building, plant, equipment or stocks of materials and finished goods and all

such other items do not have any physical existence, but they have value to a
firm. They include patents, copyrights, trade name or goodwill.
Assets are classified as: (1) current assets and (2) fixed (long term) assets.
Current assets sometimes called liquid assets are those of a firm
which are either held in the form of cash within the accounting period are of
one-year duration.

Current assets include cash, tradable (marketable)

securities, and debtors (accounts receivables) and stock of raw material,

work-in process and finished goods.
Fixed assets are long-term in nature; they are held for periods longer
than the accounting period. They include tangible fixed assets like land,
building, machinery, equipment, furniture etc.

Intangible fixed assets

represent the firms rights and include patents, copyrights franchises,

trademarks, trade names and goodwill.
Firms obligations are called liabilities. Liabilities represent debts
payable in future by the firm to its lenders and creditors. They represent
economic obligations to pay cash or pay cash or to provide goods services in
some future period.

Examples of liabilities are creditors, bills payable,

wages, salaries payable, taxes payable, bonds, debentures, borrowings from

banks and financial institutions, public deposits etc
Liabilities are of two types: (1) current liabilities; and (2) long-term (fixed)

1.

Liabilities. Current liabilities are debts payable within an accounting period.

Current assets are converted into cash to pay current liabilities. Long-term
liabilities are the obligations or debts payable in a period of time greater than
the accounting period. Long-term liabilities include debentures, bonds, and
secured long-term loans from financial institutions.
The financial interest of the owners are called owners equity or simply
Equity. The owners interest is residual in nature, reflecting the excess of the
firms assets over its liabilities. As liabilities are the claims of outside parties,
equity represents owners equity has two parts (a) paid-up share capital and
(b) reserves and surplus. Paid-up share capital is the amount of funds directly
contributed by the shareholders through purchase of shares. Reserves and
surplus or obtained earning are undistributed profits. Paid up share capital
and reserves and surplus together are called net worth.

PROFITS AND LOSS ACCOUNTS

Balance sheet is considered as a very significant statement by bankers
and other lender because it indicates the firms financial solvency and

liquidity, as measured by its resources and obligations. However, creditors,

particularly bankers and financial analysis in India have recently started
paying more attention to the firms earning capacity as a measure of its
financial strength. The earning capacity and potential of a firm are reflected
by its profit and loss account. The profit and loss account is a score-board
of the firms performance during a period of time.
Profit and loss account presents the summary of revenues, expenses,
net income or net loss of a firm. It serves as measure of firms profitability.
Revenues are amounts that the customers. The cost of the firm for providing
them goods and services to customers. The cost of the economic resources
used to earn revenues during a period of time is called Expenses.
Revenues and expenses are sometimes categorized as operating and
non-operating business of the firm are called operating revenues (operating
expenses). Revenues (expenses) which are incidental or indirect to the main
operations of the firm are called non-operating revenues (expenses).

MEANING OF FINANCIAL STATEMENTS

Financial statements at least refer to the two statements which are
prepared by a business concern at the end of the year. These are
1.

1)

Income statement or trading and profit and loss account which

is prepared by business concern in order to know the profit earned and

loss sustained during a specified period.
2)

Position statement or Balance sheet which is prepared by a

business concern on a particular date in order to know its financial

position.
Concern on a particular dare in order to know its financial position.
To these statements are added the statement of Retained
Earnings and some other statements such as (Funds flow statement,
Cash Flow Management etc) and schedules of fixed assets,
investments, current assets etc to give a full the package of financial
statements.
Statement of Retained Earnings (When prepared separately )
or profit and loss appropriation account shows the utilization of profits
of the company i.e., dividend declared, amount transferred to general
reserve or any other reserve as shows in this account.
Funds flow statement summarizes the changes in working
capital in a specified period and indicates the various sources and
applications of funds.

Cash Flow Management gives the various items of inflow and outflow of
cash.
Various schedules of fixed assets, investments, current
assets etc, are prepared by companies to show as to how the figures
shown in the balance sheet have been arrived at.
NATURE OF FINANCIAL STATEMENTS
Financial statements are prepared for the purpose of presenting a
periodical review or report by the management and deal with the state of
investment in business and result achieved during the period under
review.

They reflect a combination of recorded facts, accounting

conventions and personal judgments. From this it is clear that financial

statements are affected by three things i.e. recorded facts, accounting
conventions and personal judgments.

IMPORTANCE OF FINANCIAL STATEMENTS

The information given in the financial statement is very
useful to a number of parties as given below:

1.

1. OWNERS: Owners provide funds for the operation of business and

they want to know whether their funds are being properly utilized or
not. The financial statement prepared from time to time to satisfy their
curiosity.
2. CREDITORS: Creditors (i.e. suppliers of goods and services on
credit, bankers and other lenders of money) want to know the financial
position of a concern before giving loans or granting credit. The
financial statements help them in judging such positions.
3. INVESTORS: Prospective investors, who want to invest money in
a firm, would like to make an analysis of the financial statements of
that firm to know how safe proposed investment would be.
4. EMPLOYEES: Employees are interested in the financial position
of a concern they serve, particularly when payment of bonus depends
upon the size of the profit earned. They would like to know that the
bonus being paid to them is correct; so they became interested in the
preparation of correct profit and loss account.
5. GOVERNMENT: Central and State Governments are interest in
the financial statements because they reflect the earnings for a
particular period for purpose of taxation. Moreover, these financial

statements are used for compiling statistics concerning business which

in turn, help in compiling national accounts.
6. RESEARCH SCHOLARS:

The financial statements being a

mirror of the financial position of a financial position of a firm are of

immense value to the research scholars who wants to make a study into
financial operations of a particular firm.
7.

CONSUMERS: Consumers are interested in the establishment of

good accounting control so that cost of production may be reduced with

the resultant of the prices of goods they buy.
8.

MANAGERS:

Management is the art of getting things done

through others. This requires that the subordinates are doing work
properly. Financial statements are an aid in this respect because they
serve manager in appraising the performance of the subordinates by
comparing the actual results with the standards established and
identifying the deviations, if any and taking remedial measures to
remove deviations.

MEANING OG ANALYSIS OF FINANCIAL STATEMENTS

1.

Analysis is the process of critically examining in details accounting

information given in the financial statements. For the purpose of analysis,
individual items are studied their interrelationship with other related figures
established, the data is sometimes rearranged to have better understanding
of the information with the help different techniques or tools for the
purpose. In the words of MYNR, financial statement analysis is largely a
study of relationship among the various financial factors in a business as
disclosed by a single set of statements and a study of the trend of these
factors as shown in a series of statements.
MEANING OF INTERPRETATION
Analysis and interpretation are closely related. Interpretation is not
possible without analysis and with interpretation analysis has no value.
In the words KENNDY AND MEMULLAR,The analysis and
interpretation of financial statements data so that a forecast may be made of
the prospects for future earning, ability to pay interest and debt maturities
(both current and long-term) and profitability of a sound dividend policy.

TYPES OF FINANCIAL STATEMENT ANALYSIS

Different types of financial statements analysis can be made on

the basis of
1. The nature of the analysis and the material used by him.
2. The objectives of the analysis.
3. The Modus operandi of the analysis.
These are discussed one by one.
ON THE BASIS OF NATURE OF THE ANALYST AND THE
MATERIAL USED BY HIM:
EXTERNAL ANALYSIS: It is made by those persons who are not
connected with the enterprise.

They do not have access to the

enterprise. They do not have access to the detailed record of the

company and have to depend mostly on published statements. Such
type of analysis is made by investors, credit agencies, governmental
agencies and research scholars.
INTERNAL ANALYSIS: The internal analysis is made by those
persons who have access to the books of accounts. They are members
of the organization. Analysis of financial statements or other financial
data for managerial purpose is the internal type of analysis. The
internal analysis can give more reliable result than the external
analysis.
1.

ON THE BASIS OF OBJECTIVE OF THE ANALYSIS:

On the basis the analysis can be long-term and short-term analysis.
LONG-TERM ANALYSIS: This analysis is made in order to study
the long-term earning capacity of a business concern. The purpose of
making such type of analysis is to know whether in the long-run the
concern will be able to earn a minimum amount which will be
sufficient to maintain a reasonable rate of return on the investment so
as to provide the funds required for modernization, growth and
development of the business and to meet its costs of capital.
SHORT-TERM ANALYSIS: This is made to determine the short
term solvency, stability and liquidity as well as earning capacity of
the business. The purpose of this analysis is to know whether in the
short run a business concern will have adequate funds readily
available to meet its
Short-term requirements and sufficient borrowing capacity to meet
contingencies in the near future.

ON THE BASIS OF MODUS OPERANDI OF ANALYSIS:

On this basis, the analysis may be horizontal and vertical analysis.

 HORIZONTAL (OR DYNAMIC) ANALYSIS: This analysis is

made to review and analyze financial statements of a number or
years and therefore based on financial data year from several years.
This is very useful for long-term trend analysis and planning. It is
also termed as dynamic analysis.
VERTICAL (OR STATIC) ANALYSIS: This analysis is made to
review and analyze the financial statement of one particular year
only. Ratio analysis of the financial year relating to a particular year
is an example of this type of analysis.
TECHINIQUES (TOOLS OR METHODS) OF ANALYSIS AND
INTERPRETATION:
The following techniques can be used in connection with
analysis and interpretation of financial statements:
1. Comparative financial statements (or Analysis).
2. Common measurement statements (or Analysis).
3. Trend percentages (or Analysis).
4. Funds flow statements (or Analysis).
5. Net working capital (or Analysis).
6. Cash Flow Managements.
7. Ratio Analysis.

FUNDS FLOW STATEMENTS

1.

INTRODUCTION
The basis financial statement i.e. the balance sheet and profit & loss
account or income statements of business reveal the net effect of the various
transactions on the sssoperational 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; it reveals status of the company.
The asset side of a balance sheet shows the deployment of resources
of an under taking while the liabilities side indicates its obligation financial
activities of a business for a period of time and financial activities if a
business but their usefulness is limited for analysis and planning purpose.
But they are many transactions that take place in an under taking and which
do not operate though profit & loss account. Another statement has to be
prepared to show the change in the assets & 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 of a fund flow statement.

MEANING & CONCEPT OF FUND

The term fund has been defined in a number of ways.

IN A NARROW SENCE: It means cash only and funds flow
statement prepared on this basic is called a Cash Flow Management.
Such statement enumerates net effects of the various business
transactions on cash and takes into account receipts and
disbursement of cash.
IN A BORDER SENCE: The term funds refers to money values in
whatever from in may exits, here funds means all financial
resources, used in business whether in the form of men, material,
money, machinery and others.
IN A POPULOAR SENCE:

The term funds means working

capital, i.e. the excess of current over current liabilities.

The

working capital concept of funds has emerged due to the fact that
total resources are invested partly in fixed assets in the form of
capital and kept in form of liquid or near liquid form as working
capital.

1.

MEANING & CONCEPT OF FLOW OF FUNDS

The term FLOW means movement and 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 the amount
of funds available before happening of the transaction.

Effect on

transaction resulted in the FLOW OF FUNDS.

According to the working capital concept of funds the term
FLOW OF FUNDS refers to the movements of funds in the working capital,
it is said to be an application or out of funds.
RULE: The flow of funds occurs when a transaction on the one hand a noncurrent and on the other a current account and vice-versa.
When a change in a non-current account
E.g. Fixed assets, long term liabilities, reserve and surplus, fictitious assets
etc is followed by a change in another non-current account, it does not
amount to flow of funds. This is because of the fact that in such cases
neither the working capital increases nor decreases. Similarly, when a change
in one current account results in change in another current. It does not affect
funds.
Funds move from non-current transactions or vice-versa only. In
simple language funds move when a transaction affects.

1. A current assets and fixed assets.

2. A fixed liabilities and current liabilities.
3. A current asset and a fixed asset.
4. A fixed liabilities and current liabilities.
And funds do not move when the transaction affects fixed assets and fixed
liabilities or current assets and current liabilities.

CURRENT AND NON-CURRENT ASSETS

1.

To understand flow of funds, it is essential to classify various accounts and

balance sheet items into current and non current categories.
Current accounts can either be current assets or current liabilities.
Current assets are those assets which in the ordinary course of
business can be or will be converted into cash in a short period of
normally one accounting year.
Current liabilities which are intended to be paid in the ordinary
courses of business with in a short period of normally one accounting
year out of the current assets or the income of the business.

The following is list of current working capital accounts

List of current or working capital accounts
Current liabilities
Current assets

1. Bills payable.

1. Cash in hand.

2. Sundry creditors (or) account

2. Cash at bank.

payable.
3. Accrued (or) outstanding
expenses.
4. Dividends payable.

3. Bills Receivable.
4. Short tern (or) Account
Receivable.

5. Bank over drafts.

5. Short term loans & Advances.

6. Short term loans advances &

deposits.

6. Temporary (or) Marketable

investment.

7. Provision against current assets.

7. Inventories or stock such as

a) Raw material.
b) Working process
c) Stores and pares.
d) Finished goods.

8. Provision for taxation, if it

does not amount to
Appropriation of profit.

8. Prepaid expenses.

9. Proposed dividend (may be a

current (or)non current
Liabilities).

9. Accord income.

Procedure for knowing a transaction resulting in the flow of funds

Analysis the transaction and find out the two accounts in valued

1.

 Makin journal entry of the transaction

Determine whether the account in valued in the transaction are current
or non-current
If the both account in valued are non current i.e. either permanent
assets or permanent liabilities, it does not result in the flow of funds.
If both the account invalid are non-current.

If he accounts in valued are such that one is a current account while

the other is a non-current account i.e. current assets and permanent and
fixed assets or current liabilities and fixed assets or current liability and
permanent liability & fixed assets or current liability & permanent
liability then it result in the flow of funds.

DIAGRAMS DEPICTING FLOW OF FUNDS

Flow of Funds

No

Yes

When Both
current
(or) Non
current a/c
Are in valued

When One
current and
other non
current A/c isin
valued

FLOW OF FUNDS

Current Assets

No

Current
Liabilities

Yes
Yes

Yes
Current
Assets

Current Assets
No

FUNDS FLOW statement, Income statement & Balance sheet

Funds flow statement is not a substitute an income, i.e. a profit and
loss account and balance sheet. The profit and loss account is a document
which indicates the extent of success achieved b y a business in earning
profits. It reports the result of business activities and indicates the reasons for

1.

the profitability of a business. It does not reveal the inflow and outflow of
funds in business during a particular period.
Hence funds flow statement is not competitor to financial
statements. The funds statement provides additional information as regards
changes in working capital, derived from financial statements at two point of
time. It is a tool of management for financial analysis and helps in making
decisions

Difference between funds flow statement and income statement

Funds flow statement

Income statement

1. It highlights the changes in the

1. It does not reveal the inflow and

financial position of a business and

outflows of fund but depicts the

indicates the various mean by which

items of expenses and incomes

funds were obtained during a

arrive at the figure of profit or loss.

particular period and the ways to be

which these funds were employed.
2. It is complementary to income
statement income statement helps the
preparation of funds flow statement.

2. Income statement is not prepared

from funds flow statement.

3. While preparing funds flow

statement both capital and revenue
items are considered.

3. Only revenue items are considered.

4. There is no prescribed format for

preparing a funds flow statement.
4. It is preparing in prescribed format.

Difference between funds flow statement and balance sheet

Funds flow statement

Balance sheet

1.

1. It is a statement of changes in

1. It is a statement of financial

financial position and hence is

position on particular data and

dynamic nature.

hence is static in nature.

2. It shows the sources and use of

2. It depicts the assets and

funds in a particular period of

liabilities at particular point of

time.

time.

3. It is a total of management for

3. It is not of much help to

financial analysis and helps in

management in making
decisions.

decisions.
4. Usually, schedule of changes in
working capital has to be
prepared before preparing
funds flow statement.

4. No such of changes in
working capital is required.
Rather profit & loss account is
prepared.

of significant and importance of funds flow statement

A funds flow statement is an essential tool for the financial
tool for the financial analysis and is of primary importance to the financial
management. Now a days it is being widely used by the financial analysis,
credit granting institution and financial manages. The basic purpose of funds
flow statement is to reveal the changes in the working capital on the two
balance sheets data.
It 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. It resulting financial needs and in determining the best way of financial

these needs. These significance or importance of funds flow statement can be

well followed one can plan the intermediate and long term financing of the
firm.
USES OF FUNDS FLOW STATEMENT
1. Helps in analysis of financial statement.
2. Throes light or preplanning questions.
3. Helps in formulation of dividend policy.
4. Helps in the proper allocation of resources.
5. Acts as a future guide.
6. Helps appraising the use of working capital.
7. Helps knowing the credit worthless.

LIMITATIONS OF FUNDS FLOW STATEMENT

The funds flow statement has a number of users; however, it has
creation limitations also, which are listed below.

1.

1. It should be remembered that a funds flow statement is not a substitute

of an income statement or a balance sheet. It provides only some
additional information as regards changes in working capital.
2. It can not reveal continuous changes.
3. It is not an original statement but simply is arrangement of data given
in the financial statement.
4. It is essentially historical in nature and relevant for financial
management in that the working capital.
PROCEDURE FOR PREPARING A FUNDS FLOW STATEMENT
Funds flow statement is method by which we study changes in the
financial position of a business. Enterprise between beginning and ending
financial statement dates. Hence the funds flow statement is prepared by
comparing two balance sheets and with the help of such other information
derived from the accounts as may be needed.

Broadly speaking the

preparation of a funds flow statement consists of two parts.

1. Statement of schedule of changes in working capital.
2. Statement of sources and application of funds.

1. Statement of schedule of changes in working capital

Working capital means the excess of current assets over current liabilities.
Statement of changes in working capital is prepared to show the changes
in the working capital between the two balance sheet dates.

This

statement is prepared with the help of current assets & current liabilities
derived from the 2 balances.
Working capital = current assets current liabilities
Statement of schedule of changes in working capital
Particulars
Previous
Current year Effect on working capital
year
Current assets:
Increase
Decrease
Cash in hand
Cash at bank
Bills receivable
Sundry debtors
Temporary
Investment
Stock
Prepaid expenses
Accrued incomes

Total

xxx
xxx
xxx
xxx
Xxx
Xxx
Xxx
Xxx
Xxx

Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx

current Xxx

Xxx

1.

assets
Xxx
Current liabilities: Xxx
Bills payable
Xxx
Sundry creditors
Outstanding
Xxx
expenses
Xxx
Bank overdraft
Xxx
Short advantages Xxx
Dividend payable
Provision
for
Xxx
taxation

Xxx
xxx
Xxx

Xxx

Xxx

Total
current
Xxx
liabilities
Working capital
(CA-CL)
Net increase (or)
decrease
in
working capital.

Xxx
xxx
xxx
Xxx
Xxx

Xxx

Statement of sources and application of funds

Funds flow statement is a statement which indicates various
sources from which funds (working capital) have been obtained during a
certain period and the users or applications to which these funds have been
put during the period. Generally this statement prepared two formats.
a. Report form
b. T form or an account form or self balancing type.

Specification of reports form of funds flow statement

particulars
Source of funds
Funds from operation.
Issue of share capital.
Raising of long term loans.
Receipts from partly paid shares, called up.
Sales of non current assets.
Non trading receipts, such as dividends received.
Sales of investment(long term)
Decrease in working capital (as per schedule of
change in working capital).
Total:
Application (or) uses of funds
Funds lost in operation.
Redemption of debentures.
Repayment of long term loans.
Purchase of long term investment.
Purchase of non current assets.
Non trading payments.
Payment of dividends.
Payment of tax.
Increase in working capital.
Total:

Rs
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
xxx

1.

T forms an account form or self balancing type funds flow statements

Sources
Funds from

Rs
operation Xxx

Applications
Funds
in

Rs
Operation. Xxx

Issue of Share Capital

xxx

Redemption of preference xxx

Issue of debentures.

xxx

share capital

Raising of long term loans. Xxx

Redemption of debentures. xxx

Receipts from partly paid Xxx

Repayment of long term Xxx

hares.

loans

Sales

of

non

current xxx

Purchase of non current Xxx

(fixed) assets.

(fixed) assets.

Non trading receipts such Xxx

Purchase

as dividends.

investment.

Sales

of

long

term Xxx

investments
Net decrease in working

xxx

capital
Xxx

long

term Xxx

Non trading Payment

Xxx

Payment of dividends

Xxx

Payment of tax

Xxx

Net increasing in working

Xxx
xxx

capital.

of

Total
Total
NOTE:- Payment of dividend and tax will appear as an application of funds
only when these items are appropriations of profit and not current liabilities.

STATEMENT OF CHANGING WORKING CAPITAL FOR THE YEAR

PARTICULARS

YEAR YEAR2

INCREA DECREASE

SE

CURRENT ASSETS
Inventories

xxx

Xxx

xxx

Sunday Debtors

xxx

xxx

xxx

Cash & Bank balance

xxx

xxx

Others Current Assets

xxx

Xxx

Current Liabilities

xxx

Xxx

Provisions

xxx

xxx

Total Current Liabilities xxx

xxx

(A)
Current Liabilities:-

(T.S)
Working Capital =

(+-

(+-

(A+B)

xxx

xxx

Decrease / Increase in

xxx

xxsx

xxx

working Capital

STATEMENT SOWING SOURCES AND APPLICSATION OF

FUNDS:Amount Application of funds

Amount

1.

Sources of funds
Issue of shares

xxx

Preferences of Shares

xxx

Issue of Debentures xxx

Redemption of Debentures

xxx

Long term

Payment of other Long Term

xxx

Borrowings

Loans

xxx

Purchase of Fixed Assets

Sales of Fixed

xxx

Assets

xxx
Payment of Fixed Assets
xxx

Operating profit

xxx

Increase in working Capital

xxx

Decrease in

xxx

working Capital
TOTAL
TOTAL

xxx

xxx

DATA ANALYSIS
&
INTERPRETATION

STATEMENT OF CHANGING IN WORKING CAPITAL FOR THE

YEAR 2012-13 OF MARUTI SUZUKIS LTD.

1.

PARTICULARS

2012

2013

EFFECT ON WORKING
CAPITAL
INCREASE DECREASE

A) Current Assets:a) Inventories

136013824 93957410
b) Sundry Debtors
4097718
153226
c) Cash and Bank
898720
388272
Balance
d) Loans and Advances
262000
26537258
e) Other current assets
242665
384172
Total current Assets:
143872927 121420338
B) Current Liabilities &
Provisions:a) Current Liabilities
b) Other current
Liabilities
Total current Liabilities
NETWORKING
CAPITAL (A-B)
Net increase in
Working Capital

36577367
48460

7887613
16478

36625827

7904091

42056414
3944492
510448
23917258
141507

28689754
31982

6269147

107247100 113516247
6269147
11351627

11356247

52780501

FUNDS FLOW STATEMENT FOR YEAR 2012-13 OF

MARUTI SUZUKIS LTD
Source of
Amount Application of funds
Amount

52780501

funds
Sale of factory

(Rs)
2707908

buildings

Purchase of furniture

166750

& fixtures
Purchase other fixed

Sale of other fixed

3815939

1140902

assets

assets
Decrease in un secured 964002
Increase in

3655878

loans

Reserves & Surplus

increase in working
Increase in secure

6914784

6269147

capital

loans
Funds from

122302

operation
Total

17216811

Total

17216811

INTERPRETATION:The above calculation that in 2013-12total current assets amount

to Rs. 14,38,72,927 has been decreased to Rs. 12,14,20,338. The decrease in
current assets amount Rs. 2, 24,52,589.
Cash and bank balance has lower i.e. from (8,98,720 to
3,88,272) Rs. 610448 loans and advances also increase from 26,20,000 to
2,65,37,258 i.e., Rs 2,39,17,258.

1.

At the same time the current liabilities also decreased from

Rs. 36625827 to Rs. 7904091 i.e. Rs. 28721736.
The net working capital increase during the study period
amount to Rs 62699147. so this is a healthy sign that the company able to
manage current assets and liabilities.

STATEMENT OF CHANGING IN WORKING CAPITAL FOR THE

YEAR 2012-2013 OF MARUTI SUZUKIS LTD
PARTICULARS
EFFECT ON
2012

2013

WORKING

Current Assets:
a) Sundry Debtors

153226

63467

b) Cash and Bank Balances

288272

1470425

c) Loans and Advances

26537258

38838127

d) Other current assets

94441582 148979468
121420338 189351487

Total current Assets (A):

Current Liabilities &
Provisions:
a) Current Liabilities

623100

27029530

1668991
7904091

7130214
34159744

CAPITAL
Increase Decrease
89759
1182153
12300869
54537886

20794430
5461223

b) Other current liabilities

Total Current Liabilities (B)
113516247 155191743

NETWORKING CAPITAL

41675496

(A-B)
Net increase in Working Capital
Total

15519174

155191743

416755496
68020908 68020908

FUNDS FLOW STATEMENTS FOR YEAR 2012-13 OF MARUTI

SUZUKIS LTD
Sources of funds
Amount
Application of funds Amount
(Rs)

(Rs)

1.

Sales of factory

2583834

Purchase of Land

6621525

buildings
Increase in un

12796060

secured loans

Purchase of Plant and 11421497

Machinery

Increase in Reserves

7439073

& Surplus

Increase in working

41675496

capital

Increase in secure

36777251

loans
Funds from

122300

operations
Total

59718518

Total

59718518

INTERPRETATION:The above calculation that in 2013-10 total current assets amount to

Rs. 12,14,20,338 has been decreased to Rs. 18,93,51,487. The increased in
current assets amount Rs. 6,79,31,149.
Cash and bank balance has higher i.e. from ( 288272 to 1470425)
Rs. 1182143 loans and advances also increased from 26537258 to 3583127
i.e.Rs 12300869.
At the same time the current liabilities also decreased from Rs.
6235100 to 27029530 i.e. Rs. 20794430.

The net working capital increased during the study period

amount to Rs. 416755496. So this is a healthy sign that the company able to
manage current assets and liabilities

STATEMENT OF CHANGING IN WORKING CAPITAL FOR THE

YEAR 2012-2013 OF MARUTI SUZUKIS LTD.
EFFECT
PARTICULARS

2012

2013

Capital
INCREASE

ON

working

DECREASE

1.

Current Assets:
a) Inventories

744879734

60982074

63467

6510948

6447481

1470425

14121860

1261435

d) Loans and Advances

38838127

59992347

21154220

e) Other current assets

74489734
189351487

60982074
202589303

13507660

27029530

30094997

7130214

18242364

34159744

48337361

Total Current Liabilities (B)

NETWORKING CAPITAL(A- 155191743

15425942

b) Sundry Debtors
c) Cash and Bank Balances

Total current Assets (A)

Current Liabilities & Provisions:
a) Current Liabilities
b) Other current liabilities

13507660

365467
11112150

B)
939801
939801

155191

155191743

19098916

FUNDS FLOW STATEMENT FOR YEAR 2012-2013 OF

MARUTI SUZUKIS LTD.
Source of funds
Amount
Application of
Amount (Rs)
(Rs)
funds

19098916

Sales of factory
2733270
buildings
and other fixed assets

Purchased of
Furniture &
Fixtures

82932

Decrease in working
capital

939801

Purchase of plant
&Machinery

13860146

Increase in Reserves
& Surplus

23468817

Purchase of
computers

284216

Increase in un
secured loans

12545805

Purchase of other
fixed assets

1348674

Funds from
operations

122300

Decrease in
secured loans

2423425

Total

39809993

Total

39809993

INTERPRETATION:The above calculation that in 2013-10 total current assets amount to Rs.
189351487 has been increased to Rs. 202589303. The increased in current
assets amount Rs. 13237816.
Cash and bank balance has shown higher i.e. from ( 14742514121860) Rs. 12651435 loans and advances also increased from 38838127
to 59992347 i.e. Rs. 21154550.

1.

At the same time the current liabilities also increased from Rs.
34159799 to 4833736 i.e. 14177617.
The net working capital decreased during the study period amount to
Rs. 939801. so this is a healthy sigh that the company able to manage current
assets and liabilities.
STATEMENT OF CHANGING IN WOKRING CAPITAL FOR THE
YEAR 2012-13 OF MARUTI SUZUKIS LTD.
Effect on working capital
Particulars
Current Assets:-

2012

2013

Inventories

Increase

Decrease

43785015

Sundry Debtors

4428466

Cash & Advantages

12664978

Loans & Advantages

27736239

Other current Assets

Total current Assets (A)

45344515
19411221

193783874

Current liabilities

32775006

59813506

Other current liabilities

4881795
37656801

5897969
65711475

Current liabilities &

Provisions:-

Total current liabilities (B)

Working Capital (A-B)
Decrease in working
capital

156954420 128078399
28876021

28876021

Total

185830441 185830441 73705704

73705704

FUNDS FLOW STATEMENT FOR YEAR 2012-13 OF

MARUTI SUZUKIS LTD.
Particulars
Rs
Particulars
Rs
Source of funds
Application of
funds
Share holder funds

80000
Purchase of fixed

Reserve & surplus

12761

Unsecured loans

1427570

Secured loans

60098

Differed tax liability

34093

Preliminary

1223

168399

assets

Expenses

Total

168399

Total

168399

INTERPETATION:-

1.

The above calculation that in 201282009 total current assets amount to

Rs 1946111221 has been decreased Rs 193789874. The decreased in current
assets Rs 821347.
Cash & Bank balance has shown lower i.e. from (14121860 to
1456882) Rs 12664978 loans and Advances also decreased fro 59992347 to
32256108 i.e. 2854674.
At the same time the current liabilities also decreased from Rs.
37656801 i.e. 28054674.
The net working capital decreased during the study period amount to
Rs 28876021. The decline in net working capital resulted from decrease
sundry debtors. Cash & Bank balances loans & Advances.

STATEMENT OF CHANGING IN WORKING CAPITAL FOR

THE YEAR 2012-13 OF MARUTI SUZUKIS LTD.

Particulars
2012

2013

EFFECT ON working
Capital
Increase
Decrease

Current Assets:Inventories
Sundry Debtors
Cash & Advantages
Loans & Advantages
Other current Assets

150355335 190669403 40314068

1546938
2133751 586813
1456882 25737490 24280608
32256108
35980085 3723977
9485805 119585076 110099271

Total current Assets (A)

195101068 374105885

Current liabilities &

Provisions:Current liabilities
Other current liabilities
Total current liabilities
(B)

60140091
5897968
66038008

149330012
8789433
158119445

Working Capital (A-B)

129063008 215986440

Decrease in working
capital

86923432

86923432

215986440 215986440 172086122

172086122

Total

FUNDS FLOW STATEMENT FOR YEAR 2012-13 OF

MARUTI SUZUKIS LTD.

1.

Particulars
Sources

Amount (Rs)
of

Particulars
Application

FUNDS

Amount (Rs)
of

FUNDS

Secured loans

955799.5

Reserve & Surplus 7056.19

Unsecured loans

418527.6

Differed

tax

346.8

liability

Purchase of fixes 1275569.3

assets

Miscellaneous

2606

Expenditure

Net current Asset

Total

1374327.1

Total

88407.9
1374327.1

INTERPETATION:The total current assets value for the year 2013-10 is 195101068. It
increased to 37410585 for the year ending 2009-10. Cash & Bank balance
showed an increase of 24280608. Which is derived from a sea change in
companys cash balances? The cash & Bank balance for the year 2009-13 are
1456882 and 25733490 respectively.

At the same time the current liabilities also increased from Rs

6603860 to 158119445 i.e. Rs 92081385.
The net working capital increased during the study period amount
to Rs. 86923432. So this is a healthy sighs that the company able to manage
good liquidity.

FINDINGS

1.

1. In the year 2012-13 the total source of funds is Rs. 1,70,94,509. The main
source of the fund is secured loans amounted to Rs 6914784.

Total

applications of funds for the year 2013-2012 are Rs 17216811. The main
application component is purchase of other fixed assets Rs 1140902.
2. In the year 2013-12the total source of funds is Rs 59596218. The main
source of fund is secured loans amounted to Rs 36777252.

Total

applications of funds for the year 2012-2013 are Rs 59718518. The main
application component is purchase of plant and machinery Rs 11421497.
3. In the year 2013-2012 the total source of funds is Rs 39687693. The main
source of funds is Reserves & Surplus amounted Rs 23468817.

Total

applications of funds for the year 2013-2012 are Rs 3980993. The main
application component is secured loans Rs 242324025.
4. In the year 2013-12the total source of fund is Rs 94926638. The main
source of the fund is unsecured loans amounted to Rs 1427570. Total
applications of funds for the year 2012-2009 are 168399000. The main
application component is purchase of fixed assets Rs 168399000.
5. The year 2008-09 the total source of fund are Rs 13743271. The main
source of the fund is secured loans amounted to Rs 955799.5.

Total

applications of funds for the year 2009-2012 are 1374327.1. The main
application component is purchase of fixed assets Rs 1275569.3.

CONCLUSION

1. The company always maintains sound level of funds.

2. Company maintains adequate level of working capital during the study
period except the year 2009-10, 2012-13.
3. The company paid the amount of unsecured loans.
4. For meeting working capital requirement the company has cash credit
arrangement from various banks.
5. Depreciation calculates from beginning of the month for all the assets.
6. Investment is carried at market value with out providing any provision.
7. The company maintained their fixed assets at book value and providing
depreciation where is necessary.
8. The company has taken loans from Government of India.
9. The company maintains their reserves and surplus consistently.

SUGGESTION

1.

 There is lot of pretension consistence demand the automobile industry as a

automobile producer the company can able to source, their funds throw more
share holders funds.
Company is maintaining in inventories a part of current assets for the entire
study period. At shows that excessive inventory level are not good for any
organization and any company. Si the company has to concentrate much
more on inventory maintains.
The company has to main super quick assets in order to maintain sound
liquidity.
During study period there are negative working capital levels for the
company so the company must maintained enough current assets the keep
working capital, figure positively.
A company has to recollect their our standing amount from the debtors
regularly.
The company has to maintain same funds long-term investment.
The company has to monitory from liability position, in regular intervals.
The company must be conscious about their working capital position.

BIBILIOGRAPHY

Author
RK Sharma shashi K Gupth
Dr.S.N.Maheshwari
I.M pandey

Name of the book

Management of accounting
Financial management
Financial management

Edition
8th edition
6 th edition
9 th edition

SOURCES:
Company reports.
Memorandum of association and Articles of association.

1.