FINANCIAL MANAGEMENT ASSIGNMENT

CASH FLOW ANALYSIS OF KWALITY DAIRY LTD.

Submitted By: Utsav Sanghavi PGDM (IB) 2013-15 Roll No 41

Analysis of 2012:
Cash flow from operating activities: The company has a NPBT of Rs.9267.23 for the year ended 2011. The company has made adjustments towards non-cash expenses which amount to Rs. 7267.39 lakhs. The company has made profit of Rs. 4.11 lakhs on sale of Asset. The Company has made investment of Rs. 3532.45 lakhs towards increase in inventories. There is an increase of Rs. 310.15 lakhs towards short term loans and advances, other current assets, other than cash equivalents, long term loans and advances, long term provision, and trade payables. The company has paid income tax amounting to Rs. 2064.63 Investment Activities: In the current year, the company has invested Rs. 3300.44 lakhs towards capital expenditure on fixed assets, purchase of subsidiaries, and loans given to subsidiaries. The company has received interest and proceeds from sale of fixed assets to the extent of Rs. 16.25 Lakhs. This shows that the company is investing more than it has received indicating the financial stability of the company. Financing Activities: The company has received proceeds from long term borrowings of Rs. 6118.30 lakhs. Also there is an increase in the working capital borrowings to the extent of Rs. 22,844.31 lakhs. The company has made payment of Rs. 11, 498.57 lakhs towards repayment of long term borrowings, finance cost, dividends, and tax on dividend. The cash & cash equivalents at the end of the year is Rs. 718.56 lakhs

Analysis of 2013:
Cash flow from operating activities: The NPBT in the year 2013 has increased from Rs.9267 lakhs to Rs. 11,147 lakhs which indicates the companys business has improved by about 20.28% in comparison to the previous year. The company has made adjustments for depreciation & amortisation, amortisation of expenses, loss on sale of assets, finance cost, provision for doubtful debts, bad debts & other balances w/off, other non-cash charges which amount to approximately Rs.10, 590 lakhs. Interest income, liabilities no longer payable & net exchange gain/loss have been reduced from the net profit. The companys working capital requirements have increased for short term loans & advances, other than cash & cash equivalents, long term loans and advances to Rs. 30,144 lakhs. The company has decreased its inventories by 8.31 lakhs. It has also decreased its long term provisions, trade payables & other current liabilities which indicate the company has reduced the burden of loan upon itself. The company has paid less income tax in comparison to previous year. Investment Activities: In the current year, the company has invested Rs. 3193 lakhs towards capital expenditure on fixed assets, purchase of subsidiaries. The company has received interest and proceeds from sale of fixed assets to the extent of Rs. 35.45 Lakhs. This shows that the company is investing more than it has received indicating the financial stability of the company. Financing Activities: The company has received proceeds from long term borrowings of Rs. 4583.07 lakhs. Also there is an increase in the working capital borrowings to the extent of Rs. 20,664 lakhs. The company has made payment of Rs. 13,299 lakhs towards repayment of long term borrowings, finance cost, dividends, and tax on dividend. The cash & cash equivalents have increased drastically compared to the previous year which shows strong financial stability of the company.