cash mana.docx

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ASTUDY ON CASHMANAGEMENT ON THE

INFOWIZ- A Software

Solution Coman!


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COM"ANY "#OFI$E

INFOWIZ is leading strategic IT Company offering integrated IT

solution. INFOWIZ is having rich experience managing global clients

across various business verticals and align IT strategies to achieve

business goals. The various accreditations that e achieved for every

service! e offer reflect our commitment toards the "uality assurance.

INFOWIZ is a # years young organi$ation ith an I%O Certification

& a member of Confederation of Indian Industry ' CII membership

number ( N)*+), - . We also provide the off shore companies of %!

/! France! Ireland! Canada and 0ustralia ith "uality and timely Web

and %1O services.

INFOWIZ is an organi$ation hich is established in the field of

Web 2evelopment ',3, & .N1T-! 4050 'Core as ell as 0dvance-! I6

phone & 0ndroid 0pplications! 1mbedded systems '057! ,IC & 078-!

7O9OTIC% and Netor:ing '8C%1! CCN0 & 73%1-! 8echanical1ngineering 'C72i! C0TI0! 55T! 5C7! 09%! C7I%1 CONT7O;! ,7O61!

%O;I2 WO7/%-.

Our s:illed team of professionals ma:e sure that the product is

developed as per the customer


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,7O41CT% 7;ermany

D.-;iddle T5 .filmon.com /

).-,aradigms'0ndroid- running 0ustralia

+.-,rintcost .popgraphics.net /*.-,%T2O 9ootstrap .bootstrap.achiever.com %0

#.-1ssencesoftares.essencesoftares.com 0ustralia

E.-2ashboard'Wordpress- running %0

.-7ealstate .realestate.infoi$.in 7ussia

AG.-2ealpartners'Word,ress- .dealpartners.co.u: /

AA.-;ittletonvineyard .littletonvineyard.net %0

A.->pa:offshore .gpa:offshore.com /

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H0 %hip is as good as the cre ho sail her.

Our Technical team of professionals handing! designing & delivering of

pro=ects has a strong presence in the North India & the %. Our

engineers are already or:ing on the latest technologies li:e I6,hone &

0ndroid 0pplications! 7obotics! 5;%I6532;! 1mbedded %ystem!

Netor:ing and Cloud computing.

A- 2r. %eema'8anaging 2irector-

%he is the bac:bone of INFOWIZ and a oman ith more than year

rich practical experience ho believes in ta:ing up ne ventures and

pro=ects.

- 8r. 7a=eev Nayyar'>eneral 8anager-

0 man ho strongly feel that HNothing is Impossible. 0 very committed

team leader ho has been professionally attached ith 8ultinational

companies for more than AE years and has lead the mar:eting teams in

all states of North India.

D- 8r.2eepa:/ashyap'Technical 8anager & 9ranch 8anager-

0 man ho strongly feels that HTeam or: leads to success. 3e strives

to achieve his goals ith full dedication and devotion toards the

organi$ation . 3e has more than # years experience in IT sector.

)- 8s. rvashi'2ean 0cademics-0 oman ho believes that

HChallenges are hat ma:e life interesting and overcoming them is

hat ma:es life meaningful. %he has more than AG year


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+- 1r. 5ishal >oyal'3ead & Technical 0dvisor at % 9ranch-8ore than

AG years industrial experience in % and smooth handling of the entire

% business.

CO7%1% Offered ?6

For C%1BITB8C0 ,rofessionals?6

A- Web 2evelopment in ,3, ith ;I51 ,ro=ects

- Web 2evelopment in .N1T ith ;I51 ,ro=ects

D- 4050 'Core as ell as 0dvance - ith ;I51 ,ro=ects

)- 0ndroid 0pplications ith ;I51 ,ro=ects

+- Web 2esigning ',hotoshop! Coral 2ra-

*- CJ! Console 0pplications! 59.N1T! 0%,.N1T

#- 8y%K;! %K;! O70C;1

E- Netor:ing '8C%1! CCN0! 73%1-

- %1O '%earch 1ngine Optimi$ation-

For 1C1B11B1I1 ,rofessionals?6

A- 7obotics With ;ive ,ro=ect

- 5;%I6532; ith ;ive ,ro=ectD- 1mbedded %ystem 2esign ith ;ive ,ro=ect)- 8icrocontroller ith ;ive ,ro=ect+- 8icroprocessor ith ;ive ,ro=ect*- ,C9 2esigning#- 057 & ,IC FamilyE- ,C9 and layout designing- 0TO80TION ith ;ive ,ro=ectAG.- ,ro=ect development ith 078 processors

For 81B1C1 ,rofessionals?6


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.-09%! C7I%1 CONT7O;.

D.-8,Fi&1Fi Technology

).-C0TI0

+.-,7O61

*.-0TOC02BC08

#.-%O;I2WO7/%

For 990B890 ,rofessionals?6

A.-8ar:eting

.-3uman 7esources

D.-Finance

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Our core strength is our timely! technically and cost effective pro=ect

delivery. We also provide customers ith designs as per their demands.

INFOWIZ also provide Industrial Training of * 8onths & * Wee:s in 81 B

IT & 1lectronics to 9.Tech! 8C0 students. We help students in building

their career.


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Intro%u&tion


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CASH MANAGEMENT

Cash management is one of the key areas of working capitalmanagement. A part fromthe fact that it is the most liquid currentassets, cash is the common denomination to which allcurr en t as se tscan be reduced because the other major l iquid assets that arereceivables and inventory get eventually converted into cash.

NOTIC1% FO7 3O;2IN> C0%3?


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The term cash with reference to cash management is used in the two senses.

N077OW %1N%1%

To cover currency and generally accepted equivalents of cash, such ascheque, drafts and demand deposits in bank.

97O02 %1N%1%

It includes near cash, assets such as marketable securities and timedeposits in bank. There are four primary motives for maintaining cash

balances.!Transaction motives.!"recautionary motives.!#peculative motives.!Compensating motives.

0! T70N%0CTION 8OTI51%?

An important reason for maintain cash balance is thetransaction motive. This refers tothe holding of cash to meet routinecash requirements to finance the transactions which a firmcarries onthe ordinary course of business.

9! ,71C0TION07@ 8OTI51% ?

It will clearly determine the cash inflows and outflows in the ordinary course of business,a firm may have to pay cash for purposes which cannotbe predicted or anticipated.

C! %1,C;0TI51 8OTI51

$I t r e f e r s t o t h e d e s i r e o f a f i r m t o t a k e a d v a n t a g e o fop por tu n i t i es wh i ch p re sen t t hemse lves at une%pec ted moments and which ar e typica l ly outsi de the norma l course of business.

2! CO8,1N%0TI51 8OTI51


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&ank provides a variety of service of business firms, such asclearance of cheque, of credit information, transfer of funds.

O941CTI51 OF C0%3 80N0>181NT

The basic objective of cash management is two'fold. To meet the cashdisbursement needs (payment schedule) and. To minimi*e funds committedto cash balance. +eet payments schedule. irms have to make paymentsof cash on a continuous and regular basis to suppliers of goods,employees. At the same time, there is a constant inflow of cash throughcollections from debtors. +inimi*ing funds committed to cash balance.

F0CTO7% 21T178IN> C0%3 N112%

The factors that determine the required cash balance are.

0 %@NC37ONIZ0TION OF C0%3 F;OW%The need for

maintain ing cash balance ar ises f rom the non' synchroni*at ionof the inflows and outflows of cash. If the receipts and payments of cashperfectly coincide or balance each other, there would be no need for cash

balances. The first consideration in determining the cash need is, therefore,the e%tent of non synchroni*ation of cash receipts and disbursement. or

the purpose, the inflows and outflows have to be forecast over aperiod of time, depending upon the planning hori*on which is typically a

one'year period with each of the -months.


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9! %3O7T CO%T.

Another general factor to be considered in determining cash needs is the costassociatedwith a short fall in the cash needs. The cash forecastpresented in the cash budget would reveal periods of cash shortages. In

addition, there, may be some une%pected shortfall. /very shortageof cashwhether e%pected or une%pected' involves a cast depending upon theseverity, durationand frequency of the shortfall and how the shortage iscovered.

T70N%0CTION CO%T%?

Transact ion costs are associated wi th ra is ing cash to t ide over

the shor tage. This isusually the brokerage incurred in relation to the saleof some short'tern near'cash assets such asmarketable securities.

9O77OWIN> CO%T%?

&orrowing costs associated with borrowing to cover the shortage.These include itemssuch as interest on loan, commitment charge and other e%pense relating to the loan.

C. CO%T OF C0%3 (2I%CONT?

Cost of cash'discount a substantial loss because of a temporary shortage ofcash.

2. CO%T 0%%OCI0T12 WIT3 21T17IO70TION OF T31 C712IT 70TIN>

Cost associated with deterioration of the credit rating which is

reflected in shortage of cash charges on loans, stoppage of supplies,demands for cash payment, refusal to sell, loss of image and theattendant decline in sales and profits.

1! ,1N0;T@ 70T1%

"enalty rates by banks to meet a shortfall in compensating balances.

F! 1LC1%% C0%3 90;0NC1 CO%T%?

The cost of having e%cessively large cash balances is known as the e%cessh b l t If l f d idl th i li ti i th t th


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For example, let us assume that the firm sells securities and starts with a cash balance of C rupees.

When the firm spends cash, its cash balance starts decreasing and reaches zero. The firm again gets

back its money by selling marketable securities. As the cash balance decreases gradually, the

aerage cash balance will be! C"#. This can be shown in following figure!

The firm incurs a cost known as holding cost for maintaining the cash balance. $t is known as

opportunity cost, the return ineitable on the marketable securities. $f the opportunity cost is k, then

the firm%s holding cost for maintaining an aerage cash balance is as follows!

CON517%ION CO%T?

Conversion costs are incurred each time marketable securities are convertedinto cash.Total conversion cost per period 7 Tb8c9here, b 7 cost per conversion 7 total transaction cash need for the period.C7 value of marketable security sold to each conversion.

O,,O7TNIT@ CO%T

5pportunity cost is derived from the cost8forfeited interest rate (i)that could have been earned on the investment of cash balance.I (c8)9here,c87 the average cash balance(i)7interest rate that could havebeen earned.i(c8):(Tb8c)

9! 8I;;176 O77 8O21;

To d e t e r m i n e t h e o p t i m u m c a s h b a l a n c e l e v e l w h i c h m i n imi*es the cost of cash management C7b/ (n)8t:i/ (+)


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construction of the model comprises three sections #election of theappropriate planning hori*on. #election of the appropriate decision variablesandormulation of the cash management strategy itself. The advantage oflinear programming model is that it enables coordinates of the optimal cashmanagement strategy with the other operations of the firm such as production

and with less restriction on working capital balances. The model basically usesone year planning hori*on with twelve monthly periods because of itssimplicity. It has four basic sets of decisions variables which influencecash management of a firm and which must incorporated into the linearprogramming model of the firm. These are "ayment schedules.

#hort'term financing, "urchase and sale of marketable securities andCash balance.

The formulation of the model requires the financial managers firstspecify an object ive function and then specify a set of constraints.

O941CTI51 OF T31 %T2@

!To determine the overall performance of cash in the concern.!To know the credit worthiness of the concern.!To assess the liquidity and short term solvency position of the firm.!To understand the relationship maintained with the trade creditors and thedebtors of the firm.!To identify the basic forces influencing the cash management of the firm

71%107C3 81T3O2O;O>@

71%107C3 21%I>N

The research approach used for the study is descriptive. The form ofthe study is on the financial statement analysis in general and specific tothe cash position.

20T0CO;;1CTION ,7I807@20T0


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The primary data is collected from the personnel interview.

%1CON207@ 20T0

The study has been made using secondary data, which are obtainedfrom annual reports and statements of accounts. The study is period for theannual reports and statements of accounts e%tended form the year ;;-';to ;;0';


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managers an idea of when improements needed to correct the company%s cash flow

problems. Therefore, cash budgeting is another aid to an effectie cash management.

;indado (#66


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flow in order to adapt to changing circumstance and opportunities. Cash flow

information is useful in assessing the ability of the enterprises to generate

cash and cash'equivalents and enables users to develop models to assess

and compare the present value of the future cash flows of different

enterprises. It also enhances the comparability of the reporting of operating

performance by different because it eliminates the effects of using different

accounting treatments for the same transactions and events.

C0%3 F;OW %T0T181NT 'GGE6G-


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ASH FLOW STATEMENT (2009-10)

31-03-201031-03-


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C0%3 F;OW %T0T181NT 'GAA6A-

31-03-201231-03-


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CASH FLOW STATEMENT (2012-13)

31-03-201331-03-


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Con&lu+ion+ re,ar%in, &a+' mana,ement +eri&e+

$n today%s competitie world the key differentiator between a successful company and other

company is the stress each lays on technology.


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The aboe chart gies a clear explanation regarding the Cash :anagement infrastructure proided

by all the three sectors. The network, technology and the corporate relationship serices proided

by all the three sectors are highly sophisticated and good but the scalability, marketing proided by

the ;ublic sector is low in terms of the ;riate and :=C sector. As well as the serices proided by

the public sector is not fairly good and up to the standard. As Cash management is constantly

changing to meet the needs of the corporate treasurer. The challenge for both corporation and

proider is to keep up with deelopments, technology, changing regulations and fitting these in with

normal business. A changing regulatory enironment, new technology and mergers that expand the

scope of traditional companies are redefining the traditional treasury management paradigm for

both company and corporations. >lectronic commerce is eoling far beyond simply ordering goods

online or buyer2to supplier commerce.

$n a ast country like $ndia ;roiding Cash :anagement 3erices do posses a challenge to the Cash

:anager as well as the banks. cash management serices need to deise innoatie methods and

means to expedite the clearing to benefit the corporate customer. cash management serices in $ndia

ary from company to company and also from customer to customer.


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.I.$IOG#A"HY

Internet)We/+ite+

12 www.google.com

#2 www.wikipedia.org"

'2 http!""wiki.answers.com


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#2 $ntroduction of operation 7esearch y .D.3harma

'2 Eearning operation 7esearch y 3.D aiswal

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