ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal, ISSN NO. 2456-1037
Available Online: www.ajeee.co.in/index.php/AJEEE
Vol. 06, Special Issue 07, (ICMR-2021) October 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL)
70
A STUDY ON THE EFFECTIVE UTILIZATION OF CASH MANAGEMENTDr. (Prof.) Jayesh Shah
Dean (Research), Renaissance University, Indore
Abstract- In this study the Cash Management of leading dock service company is taken in to consideration. This company provides the services of cargo handling and provides the containers for export and import of the goods. As the cash is an essential tool for the smooth function of routine operations of any business concern, it also determines the past
& present financial position of the concern. The adequate cash availability also ensures the growth and planning of the concern. To study the effectiveness of cash management trend analysis, ratio analysis and Cash flow statement is used.
Keywords: Working Capital, Cash Management.
1 INTRODUCTION
The Management of cash is essential to the survival of any organization. Managing an organization’s financial operation requires knowledge of the economy and ways to maximize the revenue. For any organization to operate on a daily basis adequate cash flow is required.
Without cash management the organization will be unable to function because there is no cash readily available in case of inconsistencies in the market. Cash is also needed to keep the cycle of the company’s operations going. The maximization of the firm’s financial resources is achieved by effectively receiving the payments as fast as possible while taking advantage of all liability provisions, payable periods, which are low in cost.
This study on cash and receivables management discloses the position of a company in the present economic world. So, it is clearly evident that through proper cash management a company can play a very important role in the development of the economy.
1.1 Scope of the Study
In this study all the inflow and outflow of cash is taken in to consideration to assess the financial performance of the concern.
Through this study we can understand the role of the finance department in the management of cash.
To conduct this study financial results of five years have taken in to consideration.
1.2 Objectives of the study Primary objective:
To study about the effective utilization of cash management Secondary objectives:
To study the trend of the cash movement and on the basis that the future cash requirement is also assessed.
For the smooth function of routine operations try to find out the current cash requirement to have adequate liquidity position in the concern.
To measure the economic growth of the concern in terms of inflow of cash.
On the basis of this study draw some conclusions and provide essential suggestions for the improvement of liquidity position.
2 RESEARCH METHODOLOGY 2.1 Secondary Data
Considering the current scenario of Covid it looks feasible to go with the published data only. So here in this study annual report has taken in to consideration.
ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal, ISSN NO. 2456-1037
Available Online: www.ajeee.co.in/index.php/AJEEE
Vol. 06, Special Issue 07, (ICMR-2021) October 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL)
71
Table 1 Trend Analysis in (Lakhs) In PercentagePARTICULARS 2015-16 2016-17 2017-18 2018-19 2019-20
Cash and Bank 100 119 129 143 120
Current Liabilities 100 107 116 130 131
Sundry Debtors 100 149 402 407 466
Loans and Advances 100 98 100 106 146
Current Asset 100 121 144 156 139
Source: Annual Reports 2.2 Interpretations
The above table shows that Cash and Bank balance has increasing trend in the first four years while in the fifth-year cash balance has declined slightly, this the matter where we have to find out the reason that why this has declined and accordingly decision should be taken to maintain the increasing trend. The Cash balance also becomes important particularly when the current liabilities are increasing every year. The sundry debtors are also increasing every year, it shows that credit services are increasing continuously. From the third-year debtors have increased substantially, so here we must try to realize our cash from the service recipients. As far as the loans and advances are concerned it has also increased from the third year. The current assets have increased up to fourth year and thereafter it has come down in the last year. Probably because of decline in cash it is also coming down.
3 FINDINGS
The trend for the cash and bank balance is growing rapidly and reaches high in the year ended 2018-19 (143) and again decreased to (120) in2019-20.
The cash from operation has shown the upward movement as compare to previous year.
The cash is also expanded more towards the purchase of assets. This is the trend of growth of the concern.
The application of cash in Investment is also increasing this shows that the company has increased the Investment.
4 RECOMMENDATION
1) The current ratio of the concern is little bit low and it must be improved through issuing short term instrument like commercial paper, treasury bills, term deposits and deposit with financial institutions. This will help to maintain the optimum level of cash in the organization.
2) The debtor is consistently increasing this is the sign of mismanagement of debtor in the organization. So now organization should try to come up with a sound credit policy and fix the credit limit with the help of this measure cash will be managed properly.
3) The working capital position of this concern is very low. Therefore inflow of cash must be increased through various innovative method this would definitely increase the working capital in the organization.
5 SUGGESTION
This project was very useful to show the financial status of the company from the management point of view and this evaluation provided a great deal to the management to make decision on the regulation of the funds to increase the business activities and also to bring profit to the company. The future projections show a growth in all aspects of the company.
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