CHAPTER IV

ANALYSIS & INTERPRETATION

5.1

CALCULATIONS

OF FUNDS

FROM

OPERATION AND

CASH

OPERATION FOR THE YEAR ENDED (Rs in Thousands)

Particulars

2010-11

2011-12

2012-13

2013-14

Net Profit

621082

1183275

478738

400470

1440184

1620207

1800231

1881243

2623459

2098945

2200701

Sundry debtors

736292

293962

Prepaid Expenses

43200

Sundry creditors

4731130

Outstanding liabilities

1009534

Bank O/D

2950464

Depreciation during the 1260161

year
FFO(FLO)
ADD:

1710210

10643203
91841
10801353

LESS:
Stock

1497634

567073

Bank O/D

2950464

Outstanding liabilities

767131

Sundry Debtors

1755576

334244
9562393

Sundry Creditors

CFO(CLO)

1106913

910746
1699354

9854229

342963

1516020

8950797

5.2 CASH FLOW STATEMENT

Inflow

2010-11

2011-12

2012-13

2013-14

Opening balance

14564

64678

104545

63582

FROM

Cash from operation

9854229

342963

Increase in loan funds

in

8950797

2410798

Sales of Asset
Increase

1516020

797244
share

2800000

capital
Total

9868793

1204885

6831363

9014379

6767781

7004825

Outflows
Cash outflow from
operation
Purchase of Asset
Decrease

in

9776411
loan 27704

900340

1731144

funds
Decrease

in

share

200000

capital
Closing balance

64678

104545

63582

278410

Total

9868793

1204885

6831363

9014379

Inference:

This table shows that the cash flow statements of KOTAK MAHINDRA BANK are to be
efficient. The cash inflow of the company is to be increased for year after year. The fund from
operation is also to differ from every year. The company should increase their share capital from
2013-14 for Rs. 28, 00,000. Its must be used as efficient for the next year for decrease their loan
amount.

5.3 TREND ANALYSIS

Y = a + bX
Where a = Y

;
n

b = XY

X2

5.3.1 INVENTORIES
Inventories
YEAR

X2

(Rs in lakhs)

XY

(Rs in lakhs)

09 10

-2

27,76,072

-55,52,144

10 11

-1

12,78,438

-12,78,438

11 12

18,45,511

12 13

36,01,087

36,01,087

13 14

47,08,000

94,16,000

10

1,42,09,108

61,86,505

TOTAL

1, 42, 09,108

2, 84,182.6

61, 86,505

6, 18,650.5

10
Inference:

This table indicates that the volume of inventory has been increased every year. Its must
be increased for the last year 11, 06,913. Inventories value in 2008 will be about 21, 40,134.1

5.3.2 SUNDRY DEBTORS

YEAR

X2

Sundry
Debtors
(Rs)

XY
(Rs)

Y
09 10

-2

20,69,513

-41,39,026

10 11

-1

28,05,805

-28,05,805

11 12

25,11,842

12 13

1,20,74,236

1,20,74,236

13 14

1,29,84,982

2,59,69,964

10

3,24,46,378

3,10,99,369

TOTAL

3, 24, 46,378

64, 89,275.6

3, 10, 99,369 =

31, 09,936.9

10
Inference:

This table shows that the Sundry Debtors has been more every year. It must be increased
more than 6 times from the beginning of the period of the study. Sundry Debtors value in 2014
will be about 1, 58, 19,086.3.

5.3.3 CASH / BANK

Cash / Bank
YEAR

X2

(Rs)

XY

(Rs)

09 10

-2

14,564

-29,128

10 11

-1

64,679

-64,679

11 12

61,858

12 13

63,582

63,582

13 14

2,78,410

5,56,820

10

4,83,093

5,26,593

TOTAL

= 4, 83,093

96,618.6

5, 26,593

52,659.3

10
Inference:

The cash value of the KOTAK MAHINDRA BANK has been increased and the estimated
it should be decreased for the previous year. Cash value in 2014 will be about 254596.5.

5.3.4 LOANS & ADVANCES

YEAR

X2

Loans
Advances
(Rs)

&
XY
(Rs)

Y
09 10

-2

1,00,065

-2,00,130

10 11

-1

8,26,377

-8,26,377

11 12

3,60,138

12 13

27,70,937

27,70,937

13 14

5,62,837

11,25,674

10

46,20,354

28,70,104

TOTAL

46, 20,354

9, 24,070.8

28, 70,104

2, 87,010.4

1
Inference:
The table indicates that the loans and advances of KOTAK MAHINDRA BANK will be
reduced from the year 2013-14. Loans & Advances value in 2014 will be about 17, 85,102.

5.3.5 CURRENT LIABILITIES

YEAR

X2

Current
Liabilities
(Rs)
Y

XY
(Rs)

09 10

-2

22,58,576

-45,17,152

10 11

-1

57,45,442

-57,45,442

11 12

38,56,338

12 13

1,44,73,102

1,44,73,102

13 14

1,25,88,203

2,51,76,406

10

3,89,21,661

2,93,86,914

TOTAL

3, 89, 21,661

77, 84,332.2

29, 38,691.4

5
b

2, 93, 86,914
10

Inference:
The table shows that the companys current liability will be increased from the every year.
Current Liabilities value in 2014 will be about 1, 66, 00,406.4

5.3.6 CURRENT ASSET

Current asset
X

X2

YEAR
09 10

-2

(Rs)

XY

(Rs)

21,27,277

-42,54,554

,10 11

-1

41,48,921

-41,48,921

11 12

59,74,933

12 13

1,85,09,842

1,85,09,842

13 14

2,03,50,240

4,07,00,480

10

5,11,11,213

5,08,06,947

TOTAL

5,11,11,213

1,02,22,242.6

50,80,694.7

5
b

5,08,06,947
10

Inference:
This table shows that the current asset of the company will be grown at 9times. When
compared to the beginning of the period of study its must be increased. Current Asset value in
2014 will be about 2, 54,64,326.7.

RATIO ANALYSIS:
Ratio Analysis is a powerful tool of financial analysis. A Ratio is defined as the
indicated quotient of two mathematical expressions and as the relationship between two or
more things. In financial analysis, a ratio is used as a benchmark for evaluating the financial
position and performance of a firm.

Ratio helps to summarize large quantities of financial data and to make qualitative
judgment about the firms financial performance.

5.4 RATIO ANALYSIS

5.4.1 Current Assets to Fixed Assets Ratio
The formula for the ratio is

Current Assets
Fixed Assets

Current Assets to Fixed Assets Ratio

Increase/
Decrease

YEAR

RATIO

2009 10

0.94:1

2010 11

0.72:1

-0.22

2011 12

1.55:1

0.82

2012 - 13

1.28:1

-0.27

2013 14

1.62:1

0.34

Chart Title
1
0.8
0.6
0.4
0.2
0
-0.2
-0.4

Increase/ Decrease

. Inference:
The level of Current Assets can be measured by using this Current Asset to Fixed Assets
Ratio. The level has been fluctuating every year.

5.4.2

Current Assets to Total Assets Ratio

The formula for the ratio is

Current Assets
Total Assets

Current Assets to Total Assets Ratio

Increase/
Decrease

YEAR

RATIO

2009 10

0.26:1

2010 11

0.48:1

0.22

2011 12

0.62:1

0.14

2012 - 13

0.59:1

-0.03

2013 14

0.59:1

Increase/ Decrease
0.2
0.15
0.1

Increase/ Decrease

0.05
0
-0.05
-0.1
-0.15

Inference:
The Table shows the Current Assets to Total Assets ratio of the company, which registered a
fluctuating trend throughout the study period. This ratio varied from 0.26 to 0.48 times
during the study. There is no change for last year.

5.4.3 Net Working Capital Ratio

The formula for the ratio is

Net Working Capital

Net Assets

Net Working Capital Ratio

Increase/
Decrease

YEAR

RATIO

2009 10

0.27:1

2010 11

0.12:1

- 0.15

2011 12

0.15:1

0.03

2012 - 13

0.21:1

0.06

2013 14

0.22:1

0.01

Increase/ Decrease
0.2
0.15

Increase/ Decrease

0.1
0.05
0
-0.05
-0.1
-0.15

Inference:
Net Working Capital is used as a measure of a firms liquidity and the firms potential
reservoir of funds. It can also be relate to net assets.
The Net Working Capital Ratio from the table shows a fluctuating trend and the average
Net Working Capital Ratio is 0.21 times of Net Working Capital to Net Assets. Hence it shows
that KOTAK MAHINDRA BANK has an average liquidity position.
5.3.4Inventories to Current Assets Ratio
The formula for the ratio is

Inventories
Current Assets

Inventories to Current Assets Ratio

Increase/
Decrease

YEAR

RATIO

2009 10

1.30:1

2010 11

0.31:1

2011 12

0.31:1

2012 - 13

0.19:1

-0.12

2013 14

0.23:1

0.04

-0.99

Increase/ Decrease
0.2
0.15
0.1

Increase/ Decrease

0.05
0
-0.05
-0.1
-0.15

Inference:
From the table it is known that the Inventories to Current Assets Ratio also register a
fluctuating trend during the entire study period.
The average ratio is 0.31 times and thus it is found that the investment in inventories
(being one of the important Current Assets) is kept at the considerable level
5.4.5 Sundry Debtors to Current Assets Ratio
The formula for the ratio is

Sundry Debtors
Current Assets

Sundry Debtors to Current Assets Ratio

Increase/
Decrease

YEAR

RATIO

2009 10

0.97:1

2010 11

0.68:1

-0.29

2011 12

0.42:1

- 0.26

2012 - 13

0.65:1

0.23

2013 14

0.63:1

-0.02

Increase/ Decrease
0.2
0.15
0.1

Increase/ Decrease

0.05
0
-0.05
-0.1
-0.15

Inference:
From the table the Sundry Debtors to Current Assets Ratio shows a fluctuating trend
throughout the study period from 2002-03 to 2006-07.
The average ratio is 0.65 times. Hence it implies the credit policy followed by KOTAK
MAHINDRA BANK is moderate.
5.4.6 Loans and Advances to Current Assets Ratio
The formula for the ratio is

Loans and Advances

Current Assets
Loans and Advances to Current Assets Ratio
Increase/
Decrease

YEAR

RATIO

2009 10

0.02:1

2010 11

0.19:1

0.17

2011 12

0.06:1

-0.13

2012 - 13

0.15:1

0.09

2013 14

0.02:1

- 0.13

Increase/ Decrease
0.2
0.15

Increase/ Decrease

0.1
0.05
0
-0.05
-0.1
-0.15

Inference:
From the table it is noted that the Loans and Advances to Current Assets Ratio have
registered a fluctuating trend.
It implies that a quarter positions of the Current Assets are kept in for Loans and
Advances; thereby it is found that KOTAK MAHINDRA BANK value of Loans and Advances is
considerable.
5.4.7 Cash to Current Assets Ratio
The formula for the ratio is

Cash

Current Assets
Cash to Current Assets Ratio
Increase/
Decrease

YEAR

RATIO

2009 10

0.006:1

2010 11

0.015:1

0.09

2011 12

0.01:1

-0.14

2012 - 13

0.003:1

- 0.007

2013 14

0.013:1

0.01

Cash Interval Measure Ratio Increase / Decrease

40
30
20
10

Cash Interval Measure

Ratio Increase /
Decrease

0
-10
-20
-30
-40

Inference:
The table shows the details of Cash to Current Assets Ratio and registered a fluctuating
trend throughout the study period from 2002-03 to 2006-07.
Hence we find that KOTAK MAHINDRA BANK had maintained a moderate level of
cash in proportion to Current Assets
5.4.8Cash to Working Capital Ratio
The formula for the ratio is

Cash

Working Capital
Cash to Working Capital Ratio
Increase/
Decrease

YEAR

RATIO

2009 10

0.11:1

2010 11

0.04:1

- 0.07

2011 12

0.03:1

- 0.01

2012 - 13

0.07:1

0.04

2013 14

0.06:1

-0.01

Cash Interval Measure Ratio Increase / Decrease

40

Cash Interval Measure

Ratio Increase /
Decrease

20
0
-20
-40

Inference:
The Cash to Working Capital Ratio registered a fluctuating trend during the study period
this is noted from the table. It was 0.11 times in 2004-05, which sharply increased to 0.04 times
in the next year and later for the following years it is fluctuating.
Hence it is found that 4% of the Working Capital ratio is managed by using the cash &
bank balance available in the company.
The policy regard financing the Working Capital in KOTAK MAHINDRA BANK can be
said as aggressive policy.
5.4.9 Cash to Sales Ratio
The formula for the ratio is

Cash

Sales
Cash to Sales Ratio
Increase
Decrease

YEAR

RATIO

2009 10

0.0007:1

2010 11

0.0026:1

0.0019

2011 12

0.0028:1

0.0002

2012 - 13

0.0069:1

0.0041

2013 14

0.0064:1

- 0.0005

Cash Interval Measure Ratio Increase / Decrease

40
30
20
10
0
-10
-20
-30
-40

Cash Interval Measure

Ratio Increase /
Decrease

Inference:
This is one of the important ratios of controlling cash. A study of cash to sales ratio will
provide a deep insight into the cash balances held in the concerns.
Evident from the table shows Cash to Sales registered a fluctuating trend throughout the
study period.

5.4.10 Cash Ratio

The formula for the ratio is

Cash
Current liabilities

Cash Ratio
Increase
Decrease

YEAR

RATIO

2009 10

0.0064:1

2010 11

0.0112:1

0.0048

2011 12

0.0160:1

0.0048

2012 - 13

0.0044:1

-0.0116

2013 14

0.0221:1

0.0177

Cash Interval Measure Ratio Increase / Decrease

40
30
20
10

Cash Interval Measure

Ratio Increase /
Decrease

0
-10
-20
-30
-40

Inference:
From the table it is noted that the cash position of the KOTAK MAHINDRA BANK is
satisfactory.
It is found that the cash required to meet out the current liabilities is maintained at a
normal level.
5.4.11Current Ratio

The formula for the ratio is

Current Assets
Current liabilities

Current Ratio
Increase
Decrease

YEAR

RATIO

2009 10

0.94: 1

2010 11

0.72: 1

-0.22

2011 12

1.55: 1

0.83

2012 - 13

1.27: 1

-0.28

2013 14

1.62: 1

0.35

Cash Interval Measure Ratio Increase / Decrease

40
30
20
10
0
-10
-20
-30
-40

Cash Interval Measure

Ratio Increase /
Decrease

Inference:
This ratio is an indicator of the firms commitment to meet its short term liabilities.
From the table it is clear that the Current Ratio of KOTAK MAHINDRA BANK has been
fluctuating from the starting of the study period, later for last year it has been increasing; hence
the Current Ratio is quite satisfactory.
Thus the Current Ratio shows that the company has sufficient funds to meet its short-term
obligations.

5.4.12 Liquidity Ratio

The formula for the ratio is

Liquid Assets
Current liabilities

Liquidity Ratio
Increase
Decrease

YEAR

RATIO

2009 10

0.94: 1

2010 11

0.50: 1

-0.44

2011 12

1.07: 1

0.57

2012 - 13

1.03: 1

-0.04

2013 14

1.24: 1

0.21

Cash Interval Measure Ratio Increase / Decrease

40
20

Cash Interval Measure

Ratio Increase /
Decrease

0
-20
-40

Inference:
This ratio helps the management to measure short-term solvency. The ideal liquid ratio is
1:1
From the table it is clear that KOTAK MAHINDRA BANK liquid ratio is more than the ideal
ratio during the starting of the study period and later in 2004 - 05 it had reduced slightly, yet
for the rest of the period current liabilities were fully secured by liquid assets because the

liquid assets were more than the current liabilities and hence the companys liquidity is
satisfactory.

5.4.13 Super Quick Ratio

The formula for the ratio is

Super Quick Assets

Quick liabilities

Super Quick Ratio

Increase
Decrease

YEAR

RATIO

2009 10

0.65:1

2010 11

0.32:1

-0.33

2011 12

0.58:1

0.26

2012 - 13

0.62:1

0.04

2013 14

0.64:1

0.02

Cash Interval Measure Ratio Increase / Decrease

40
30
20
10

Cash Interval Measure

Ratio Increase /
Decrease

0
-10
-20
-30
-40

Inference:
Super Quick Ratio is the healthy measure of the firms liquidity position.

From the table 4.21 it is noted that the liquidity of KOTAK MAHINDRA BANK had a steep
slope in between during the year 2003-04, yet it was able to have a slow increase in the rest
of the study period and able to maintain its position.
Hence it shows that KOTAK MAHINDRA BANK is able to meet its current
obligations (liabilities).
5.4.14 Working Capital Turnover Ratio
The formula for the ratio is

sales
Working Capital

Working Capital Turnover

Increase
Decrease

YEAR

RATIO

2009 10

12.36: 1

2010 11

17.70: 1

5.34

2011 12

11.55: 1

-25.15

2012 - 13

31.55: 1

20.00

2013 14

5.45: 1

-26.15

Cash Interval Measure Ratio Increase / Decrease

40
20
0
-20
-40

Inference:

Cash Interval Measure

Ratio Increase /
Decrease

This ratio indicates whether Working Capital has been effectively utilized in making sales
or not.
From the table it is noted that Working Capital had some fluctuation in the middle of the
study period, yet the company was able to increase it in the later years.
Hence the turnover indicates that KOTAK MAHINDRA BANK had utilized its Working
Capital efficiently and the company can also try to work on this to get more effective values.
5.4.15 Inventories Turnover Ratio
The formula for the ratio is

Cost of Goods Sold

Average Stock

Inventories Turnover
YEAR

RATIO

2009 10

1.36: 1

2010 11

1.02: 1

-0.34

2011 12

1.02: 1

2012 - 13

1.02: 1

2013 14

1.53: 1

0.51

Increase
Decrease

Cash Interval Measure Ratio Increase / Decrease

40
30
20
10
0
-10
-20
-30
-40

Inference:

Cash Interval Measure

Ratio Increase /
Decrease

This ratio indicates whether investment in inventory is efficiently used or not and whether
the investment is within proper limits.
From the table it is found that the Inventory turnover Ratio of KOTAK MAHINDRA
BANK had some fluctuations in the starting of the study period then it had a growth in it.
Hence the efficiency of inventory control in KOTAK MAHINDRA BANK shows a
satisfactory position.
5.4.16 Debtors Turnover Ratio
The formula for the ratio is

Sales
Sundry Debtors

Debtors Turnover
Increase
Decrease

YEAR

RATIO

2009 10

7.84: 1

2010 11

8.54: 1

0.70

2011 12

8.49: 1

-0.05

2012 - 13

3.30: 1

-5.19

2013 14

3.26: 1

-0.04

Cash Interval Measure Ratio Increase / Decrease

40
20
0
-20
-40

Inference:

Cash Interval Measure

Ratio Increase /
Decrease

This is one of the techniques employed by the company with regard to the collection of
the receivables through effective management of collection policy with the help of factoring
services.
From the table it shows that the Debtors turnover Ratio had satisfactory increase in the
starting of the study period. However, in middle of the study period it had slight fluctuations, the
company was able to raise it in the next year.
5.4.17 Debt Collection Period Ratio
The formula for the ratio is

Days in a Month
Sundry Debtors turnover

Debt Collection Period Ratio

160
140
120
100
80
60
40
20
0
-20
-40

Inference:

Increase
Decrease

YEAR

RATIO

2009 10

46.5

2010 11

42.7

-3.8

2011 12

81.29

39.79

2012 - 13

110.6

29.31

2013 14

111.9

1.3

Cash Interval Measure

Ratio
Cash Interval Measure
Ratio Increase /
Decrease

This ratio indicates the extent to which the debts have been colleted in time. It gives the
average debt collection period.
KOTAK MAHINDRA BANK use this ratio to find out whether their borrowers are
paying on time. From the table it is found that throughout the study period the collection period
is fluctuating and is within the average.
5.4.18 Cash Interval Measure Ratio
The formula for the ratio is

Current Assets Inventories

Avg. Daily Operating Exp.

Cash Interval Measure Ratio

160
140
120
100
80
60
40
20
0
-20
-40

Increase
Decrease

YEAR

RATIO

2009 10

135.14

2010 11

104.27

-30.89

2011 12

136.44

32.17

2012 - 13

144.72

8.28

2013 14

146.13

1.41

Cash Interval Measure

Ratio
Cash Interval Measure
Ratio Increase /
Decrease

Inference:
This ratio examines the firms ability to meet its regular cash expenses.
The defensive interval measures the time period for which a firm can operate on the basis
of present liquid assets without resorting to the next years revenue.
This ratio of KOTAK MAHINDRA BANK, from the table shows that the company can
meet its operating cash requirements within a period of 105 to 146 days without resorting to next
years income.

CHAPTER V

FINDINDS
The cash management of KOTAK MAHINDRA BANK has been working well in the
organization.
The Funds from operations of a company has been increased from year by year.
The cash from operations has been find that it used as efficient.
The cash inflow and outflow of cash flow statement have a cash balance will be increased
4.2 times when compared to last year balance.
Current Ratio shows that the company has sufficient funds to meet its short-term
obligations.
The companys Liquidity Ratio shows a satisfactory trend.
Super Quick Ratio shows that KOTAK MAHINDRA BANK is able to meet its current
obligations (liabilities)..
The efficiency of inventory control in KOTAK MAHINDRA BANK shows a satisfactory
position..
The Cash Ratio shows that the cash required to meet out the current liabilities is
maintained at a normal level hence, it shows that KOTAK MAHINDRA BANKfollows
an average policy.
Interval Measure Ratio shows that the company can meet its operating cash requirements
within a period of 105 to 146 days without resorting to next years income.
The Current Assets to Total Assets Ratio implies that KOTAK MAHINDRA BANK is
maintaining a considerable level of Current Assets in proportion to Total Assets.
The average Cash to Current Assets is maintained at 0.009 times. Hence, it is found that
the company had maintained a moderate level of cash in proportion to Current Assets.
The average ratio of Inventories to Current Assets is 0.46 times and thus it is found that
the investment in inventories.
The average ratio of Sundry Debtors to Current Assets is 0.67 times. Hence it implies that
the credit policy followed by KOTAK MAHINDRA BANK is moderate.

 The loans and Advances to Current Assets ratio of the company imply that a quarter
positions of the Current Assets are kept in for loans and advances, which is considerable.
The policy regard financing the Working Capital in KOTAK MAHINDRA BANK can be
said as Aggressive policy according to the Cash to Working Capital Ratio.
The average cash to sales ratio is 0.004 times and which indicates that only 0.4% of sales
has been maintained as cash with the business.

SUGGESTIONS & RECOMMENDATIONS

KOTAK MAHINDRA BANK should try to match their Cash with the sales. In case of
surplus Cash, it should be invested either in securities or should be used to repay
borrowings.
The company should try to prepare a proper ageing schedule of debtors. This will help
them to reduce the bad debts and speed up collection efforts.
The company should be prompt in making payments so as to enjoy cash discount
opportunities
The company should determine the optimum cash balance to be kept.
The company followed an aggressive policy of financing working capital should try to
finance 50% of their working capital using long term source and improve their status.
The current Ratio of 2:1 is considered normally satisfactory. KOTAK MAHINDRA
BANK should try to improve the current ratio. So it should invest large amount in current
ratio, in order to maintain liquidity and solvency position of the concern.
The company should try to follow a matching policy for financing current Assets (i.e.)
using both long term and short-term sources of finances.

CONCLUSION
The Cash Management Analysis done on the financial position of the company has provided
a clear view on the activities of the company.
The use of the ratio analysis, trend analysis, Cash Flow Statement and other accounting and
financial management helped in this study to find out the financial soundness of the company.
This project was very useful for the judgment of the financial status of the company from the
management point of view.
This evaluation proved a great deal to the management to make a decision on the regulation of
the funds to increase the sales and bring profit to the company.
Before I conclude I wish to convey my thankfulness in regard to the training given to me in
KOTAK MAHINDRA BANK.
It gave me extreme satisfaction and practical knowledge of the financial activities carried out in
the company.
The kindness, attention, and immense co-operation extended to me buy all the officials in the
company made my project easy and comfortable.
Really it was a very pleasant experience in KOTAK MAHINDRA BANK.