A PROJECT REPORT ON “THE STUDY OF CASH

MANAGEMENT AT AXIS BANK”

SUBMITTED TO: -
DOON BUSINESS SCHOOL,
DEHRADUN

Under the guidance of

DR. RANJANA SHARMA
(Faculty of Management at Doon Business School)

SUBMITTED BY: -
HIMANSHU NARANG
M.B.A (SEMESTER II)
ERP: 0191MBA065
SESSION: 2019-21

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 Acknowledgement

This is my pleasure that I acknowledge Dr. Ranjana Sharma for his great valuable assistance
and excellent co-operation by allowing me to have experienced the things practically and
working on the topic “A study on cash management at Axis Bank.” I am thankful to all of
them who directly or indirectly helped me in preparing this project report. It is a great to have
this opportunity to express my heartily gratitude for their valuable guidance, suggestion and
ideas on my report.

A world-beating thanks to my family and my friends for their support during this project.

THANK YOU.

Himanshu Narang
Mba 2nd Semester (2019-21)
0191mba065

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 Table of contents
S.No. Content Page
No.

1 INTRODUCTION 4-11

2 COMPANY PROFILE 12-15

3 LITERATURE REVIEW 16-17

4 RESEARCH METHODOLOGY 18

5 DATA ANALYSIS 19-30

5.1 Ratio Analysis 19-25

5.2 Trend Analysis 26-29

5.3 Cash Flow Statement 30

6 Conclusion 31

7 Findings 32

8 Suggestions 33

9 Bibliography 34

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 1. Introduction
Cash, like the blood stream in the human body, gives vitality and strength to a business
enterprise. Though cash hold the smallest portion of total current assets. However, Cash is both
the beginning and end of working capital cycle - cash, inventories, receivables and cash. It is
the cash, which keeps the business going. Hence, every enterprise has to hold necessary cash
for its existence. Moreover, Steady and healthy circulation of cash throughout the entire
business operations is the basis of business solvency. A Now-a-days non-availability and high
cost of money have created a serious problem for industry. Nevertheless, cash like any other
asset of a company is treated as a tool of profit." Further, "today the emphasis is on the right
amount of cash, at the right time, at the right place and at the right cost. In the words of R.R.
Bari, "Maintenance of surplus cash by a company unless there are special reasons for doing so,
is regarded as a bad sigh of cash management. As, "holding of cash balance has an implicit
cost in the form of its opportunity cost.
Cash may be interpreted under two concepts. In narrow sense, "Cash is very important business
asset, but although coin and paper currency can be inspected and handled, the major part of the
cash of most enterprises is in the form of bank checking accounts, which represent claims to
money rather than tangible property. "While in broader sense, "Cash consists of legal tender,
cheques, bank drafts, money orders and demand deposits in banks. In general, nothing should
be considered unrestricted cash unless it is available to the management for disbursement of
any nature. "Thus, from the above quotations we may conclude that in narrow sense cash means
cash in hand and at bank but in wider sense, it is the deposit in banks, currency, cheques, bank
draft etc. in addition to cash in hand and at bank. "Cash management includes management of
marketable securities also, because in modern terminology money comprises marketable
securities and actual cash in hand or in bank." "The concept of cash management is not new
and it has acquired a greater significance in the modern world of business due to change that
took place in the conduct of business and ever-increasing difficulties and the cost of borrowing.
"Apart from the fact that it is the most liquid current assets, cash is the common denominator
to which all current assets can be reduced because the other current assets i.e. receivables and
inventory get eventually converted into cash. This underlines the significance of cash
management.

MEANING AND DEFINITION: The term cash management refers to the management
of cash resource in such a way that generally accepted business objectives could be achieved.
In this context, the objectives of a firm can be unified as bringing about consistency between
maximum possible profitability and liquidity of a firm. Cash management may be defined as
the ability of a management in recognizing the problems related with cash which may come
across in future course of action, finding appropriate solution to curb such problems if they
arise, and finally delegating these solutions to the competent authority for carrying them out
The choice between liquidity and ij profitability creates a state of confusion. It is cash
management that can provide solution to this dilemma. Cash management may be regarded as
an art that assists in establishing equilibrium between liquidity and profitability to ensure
undisturbed functioning of a firm towards attaining its li business objectives. Cash itself is not
capable of generating any sort of income on its own. It rather is the prime requirement of
income generating sources and functions. Thus, a firm should go for minimum possible balance
of cash, yet maintaining its adequacy for the obvious reason of firm's solvency. Cash

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management deals with maintaining sufficient quantity of cash in such a way that the quantity
denotes the lowest adequate cash figure to meet business obligations. Cash management
involves managing cash flows (into and out of the firm), within the firm and the cash balances
held by a concern at a point of time. The words, 'managing cash and the cash balances' as
specified above does not mean optimization of cash and near cash items but also point towards
providing a protective shield to the business obligations. "Cash management is concerned with
minimizing unproductive cash balances, investing temporarily excess cash advantageously and
to make the best possible arrangement for meeting planned and unexpected demands on the
firms' cash."

GENERAL PRINCIPLES OF CASH MANAGEMENT: Harry Gross has

suggested certain general principles of cash management that, essentially add efficiency to cash
management. These principles reflecting cause and effect relationship having universal
applications give a scientific outlook to the subject of cash management. While, the application
of these principles in accordance with the changing conditions and business environment
requiring high degree of skill and tact which places cash management in the category of art.
Thus, we can say that cash management like any other subject of management is both science
and art for it has well-established principles capable of being skilfully modified as per the
requirements. The principles of management are follows as –
1. Determinable Variations of Cash Needs
A reasonable portion of funds, in the form of cash is required to be kept aside to overcome the
period anticipated as the period of cash deficit. This period may either be short and temporary
or last for a longer duration of time. Normal and regular payment cf cash leads to small
reductions in the cash balance at periodic intervals. Making this payment to different
employees on different days of a week can equalize these reductions. Another technique for
balancing the level of cash is to schedule i cash disbursements to creditors during that period
when accounts receivables collected amounts to a large sum but without putting the goodwill
at stake.
2. Contingency Cash Requirement
There may arise certain instances, which fall beyond the forecast of the management. These
constitute unforeseen calamities, which are too difficult to be provided for in the normal course
of the business. Such contingencies always demand for special cash requirements that was not
estimated and provided for in the cash budget. Rejections of wholesale product, large amount
of bad debts, strikes, lockouts etc. are a few among these contingencies. Only a prior experience
and investigation of other similar companies prove helpful as a customary practice. A practical
procedure is to protect the business from such calamities like bad-debt losses, fire etc. by way
of insurance coverage.
3. Availability of External Cash
Another factor that is of great importance to the cash management is the availability of funds
from outside sources. There resources aid in providing credit facility to the firm, which
materialized the firm's objectives of holding minimum cash balance. As such if a firm succeeds
in acquiring sufficient funds from external sources like banks or private financers,
shareholders, government agencies etc., the need for maintaining cash reserves diminishes.

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 4. Maximizing Cash Receipts
Every financial manager aims at making the best possible use of cash receipts. Again, cash
receipts if tackled prudently results in minimizing cash requirements of a concern. For this
purpose, the comparative cost of granting cash discount to customer and the policy of charging
interest expense for borrowing must be evaluated on continuous basis to determine the futility
of either of the alternative or both of them during that particular period for maximizing cash
receipts. Yet, the under mentioned techniques proved helpful in this context: -
(A)Concentration Banking: Under this system, a company establishes banking centers for
collection of cash in different areas. Thereby, the company instructs its customers of adjoining
areas to send their payments to those centers. The collection amount is then deposited with the
local bank by these centers as early as possible. Whereby, the collected funds are transferred
to the company's central bank accounts operated by the head office.
(B)Local Box System: Under this system, a company rents out the local post offices boxes of
different cities and the customers are asked to \ forward their remittances to it. These
remittances are picked by the authorized lock bank from these boxes to be transferred to the
company's central bank operated by the head office.
(C)Reviewing Credit Procedures: It aids in determining the impact of slow payers and bad
debtors on cash. The accounts of slow paying customers should be reviewed to determine the
volume of cash tied up. Besides this, evaluation of credit policy must also be conducted for
introducing essential amendments. As a matter of fact, too strict a credit policy involves
rejections of sales. Thus, curtailing the cash in-flow. On the other hand, too lenient, a credit
policy would increase the number of slow payments and bad debts again decreasing the cash
inflows.
(D)Minimizing Credit Period: Shortening the terms allowed to the customers would definitely
accelerate the cash inflow side-by-side revising the discount offered would prevent the
customers from using the credit for financing their own operations profitably.
(E)Others: Introducing various procedures for special handling of large to very large
remittances or foreign remittances such as, persona! pick up of large sum of cash using airmail,
special delivery and similar techniques to accelerate such collections.
5. Minimizing Cash Disbursements
The motive of minimizing cash payments is the ultimate benefit derived from maximizing cash
receipts. Cash disbursement can be brought under control by preventing fraudulent practices,
serving time draft to creditors of large sum, making staggered payments to creditors and for
payrolls etc.
6. Maximizing Cash Utilization
Although a surplus of cash is a luxury, yet money is costly. Moreover, proper and optimum
utilization of cash always makes way for achievement of the motive of maximizing cash
receipts and minimizing cash payments. At times, a concern finds itself with funds in excess
of its requirement, which lay idle without bringing any return to it. At the same time, the
concern finds it unwise to dispose it, as the concern shall soon need it. In such conditions,
efforts should be made in investing these funds in some interest bearing securities. There are

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certain basic strategies suggested by Gitman, which prove evidently helpful in managing cash
if employed by the cash management. They are: "Pay accounts payables as late as possible
without damaging the firm's credit rating, but take advantage of the favourable cash discount,
if any. Turnover, the inventories as quickly as possible, avoiding stock outs that might result
in shutting down the productions line or loss of sales. Collect accounts receivables as early as
possible without losing future loss sales because of high-pressure collections techniques. Cash
discounts, if they are economically justifiable, may be used to accomplish this objective."

FUNCTION OF CASH MANAGEMENT:

"Cash management is concerned with minimizing unproductive cash balances, investing
temporarily excess cash advantageously and to make the best possible arrangements for
meeting planned and unexpected demands on the firm's cash. "Cash Management must aim to
reduce the required level of cash but minimize the risk of being unable to discharge claims
against the company as they arise. All these aims and motives of cash management largely
depend upon the efficient and effective functioning of cash management. Cash management
functions can be studied under five heads, namely, cash planning, managing cash flow,
controlling cash flow, optimizing the cash level and investing idle cash. All these functions are
discussed below in details:

1. Cash Planning
Good planning is the very foundation of attaining success. For any management decision,
planning is the foremost requirement. "Planning is basically an intellectual process, a mental
pre-disposition to do things in an orderly way, to think before acting and to act in the light of
facts rather than of a guess. "Cash planning is a technique, which comprises of planning for
and controlling of cash. It is a management process of forecasting the future need of cash, its
available resources and various uses for a specified period. Cash planning, thus, deals at length
with formulation of necessary cash policies and procedures in order to carry on business
continuously and on sound lines. A good cash planning aims at providing cash, not only for
regular but also for irregular and abnormal requirements.

2.Managing Cash Flows

The heading simply suggests an idea of managing properly the flow of cash coming inside the
business i.e. cash inflow and cash moving out of the business i.e. cash outflow. These two are
said to be properly managed only, if a firm succeeds in accelerating the rate of cash inflow
together with minimizing the cash outflow. As observed expediting collections, avoiding
unnecessary inventories, improving control over payments etc. contribute to better
management of cash. Whereby, a business can conserve cash and thereof would require lesser
cash balance for its operations.

3. Controlling the Cash Flows

As forecasting is not an exact science because it is based on certain assumptions. Therefore,
cash planning will inevitably be at variance with the results actually obtained. For this reason,
control becomes an unavoidable function of cash management. Moreover, cash controlling
becomes essential as it increases the availability of usable cash from within | the enterprise. As
it is obvious that greater the speed of cash flow cycle, I greater would be the number of times

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a firm can convert its goods and ' services into cash and so lesser will be the cash requirement
to finance the desired volume of business during that period. Furthermore, every enterprise is
in possession of some hidden cash, which if traced out substantially decreases the cash
requirement of the enterprise.

4. Optimizing the Cash Level

A financial manager should concentrate on maintaining sound liquidity position i.e. cash level.
All his efforts relating to planning, managing and controlling cash should be diverted towards
maintaining an optimum level of cash. The foremost need of maintaining optimum level of
cash is to meet the necessary requirements and to settle the obligations well in time.
Optimization of cash level may be related to establishing equilibrium between risk and the
related profit expected to be earned by the company.

5.Investing Idle Cash

Idle cash or surplus cash refers to the excess of cash inflows over cash outflows, which do not
have any specific operations or any other purpose to solve currently. Generally, a firm is
required to hold cash for meeting working needs facing contingencies and to maintain as well
as develop goodwill of bankers.
The problem of investing this excess amount of cash arise simply because it contributes nothing
towards profitability of the firm as idle cash precisely earns no returns. Further permanent
disposal of such cash is not possible, as the concern may again need this cash after a short
while. But, if such cash is deposited with the bank, it definitely would earn a nominal rate of
interest paid by the bank. A much better returns than the bank interest can be expected if a
company deploys idle cash in marketable securities. There are yet another group of enterprise
that neither invest in marketable securities nor willing to get interest instead they prefer to
deposit excess cash for improving relations with banks by helping them in meeting bank
requirements for compensating balances for services and loans.

MOTIVES OF HOLDING CASH:

Every business transaction whether carried on credit or on cash basis ultimately results in either
cash inflow or cash outflows. The pivotal point in present day financial management is to
maximize cash generation and to minimize cash outflows in relation to the cash inflows.17
Keynes postulated three motives for holding cash –

1. Transaction Motive
It refers to holding of cash for meeting routine cash requirements and financing transactions
carried on by the business in the normal course of action. This motive requires cash for payment
of various obligations like purchase of raw materials, the payment of usage and salaries,
dividend, income tax, various other operating expenses etc. However, there exists regular and
counter inflow of cash in the business by way of return on investments, sales etc. However,
cash receipts and cash payments do not perfectly synchronies with each other. Therefore, a
firm requires an additional cash balance during the periods when payments are in excess of
cash receipts. Thus, transaction motive stresses on holding cash to meet anticipated obligations
that are not counter balanced by cash receipts due to disparity of timings.

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2. Precautionary Motive
Under precautionary motive, the need to hold cash arises for meeting any unforeseen,
unpredicted contingencies or unexpected disbursements. Such motives provide a cushion to
withstand unexpected cash requirements arising spontaneously at short notice due to various
causes. In this regard, two factors largely influence the precautionary cash balance, degree of
predictability and availability of short-term credit. If a cash management succeeds in estimating
the cash requirements adequately, it escapes from maintaining big cash balance for emergency.
Likewise, if a management is capable and efficient enough to borrow the required cash from
short-term creditors small balance would be held and vice-versa. 'Ready borrowing power is
the best antidote to emergency cash drains and facilitates release of available cash resources
for remunerative

3. Speculative Motive
The speculative motive finds its origin out of the desire of an enterprise to avail itself the
benefits of the opportunities arising at unexpected moments that do not happen to exist in the
normal course of business. This motive represents a positive and aggressive approach.
Reasonable cash reserve is maintained by concerns for exploiting profitable opportunities like
bulk purchase of raw materials at discounted prices, purchasing securities when interest rates
are expected to fall, postpone purchase of raw material if decline in prices is anticipated, etc.

4. Compensation Motive
Such motives require holding cash balance in case the concern enters into some loan agreement
with the bank. Bank provides a great variety of services to its customers. For some of such
services it charges commission or fee. While for other an indirect compensation is demanded
by it by asking its customers to keep a minimum bank balance sufficient to earn a return equal
to cost of services provided by it. Such balances are termed as compensating balances.

FINANCING OF CASH SHORTAGE AND COST OF RUNNING OUT OF

CASH:
A situation arises, when the cash outflows of a firm exceeds its inflows during a certain period.
Such situation creates cash shortage in a firm. Shortage of cash is highly undesirable in all sort
of business holding for the reason of dreadful consequences that it bears. A management is
deemed to be over-cautious and highly careful while dealing with the problem of cash shortage
even if cash inflows are anticipated in the near future; else a concern may even reach the stage
of final liquidation. Cash flow statement should be prepared to acknowledge the repercussions
of transactions involving the movement of cash. As "Cash flow statement is made to show the
impact of various transactions on the cash position of a firm, it takes into consideration only
such transactions that have relationship with cash.
In case of temporary shortage of cash, a concern is required to procure essential cash
immediately for the anticipated short duration, so as the curb it at the very stage instead of
sustaining the long-term implication later on. 'The immediate source to fall back upon remains
the bank credit. In fact, bank credit is a means to meet cash shortages as well as source of
financing the current assets. The various methods from which a [ firm can procure funds during
the period when its outflows exceed the inflows are stated below -(i) Using bank credit line,

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(ii) Raising loans from institutions and creditors other than banks. (Hi) Liquidity marketable
securities, (IV) Resorting to bills discounting schemes, (v) Disposing off surplus fixed assets,
(vi) Shedding the quantity of raw materials, (vii) Unloading finished goods even at loss, (viii)
By delaying payments.
As a piece of advice, it is recommended by the financial experts that a cash management should
not start searching for external finance at the very instance when the cash shortage is
anticipated. At the initial stage, a management should take appropriate steps to avoid or
minimize the undesirable situation of emerging cash shortage by exercising effective control
over internal resources. In this respect, the matters of special consideration that can be gainfully
employed by the concern for overpowering the situation of cash shortage are -(i) Increasing
efforts to speedup collection, (ii) Reduction in purchase of inventories, (ii) Increasing cash
sales, (iv) Selling-off redundant assets, (v) Selling short-term investments. (vi) Deferment of
capital expenditure, (vii) Postponing and delaying payments.
These considerations are nothing but mere use of tact and skill to overcome a shortage of cash.
They are much economical than any other resources (internal or external) for they cost neither
interest nor any expenses. "Even if an external resources has to be found, this might be seen as
a bridging operation pending the ability to bring on stream an alternative internal source.
No sooner than a firm becomes aware of approaching shortage of cash than it should
concentrate its efforts towards the eradication of such situation. The sooner the shortage is
provided for, the better it is. Every Concern escapes itself form lending into such a situation as
it makes way for numerous costs because of running out cash. A firm bears not only the burden
of unnecessary costs but is subjected to various types of pressures pertaining to its dealings.
All these factors adversely affect the morale of management, causes damages to the hard-
earned reputation and financial credit-worthiness etc. A firm is forced to borrow funds at high
rates of interest has to accept higher price demand of suppliers, loses cash discount on
payments, enter into further negotiations with banks and other financial institutions on account
of slow payment.

FINANCING CURRENT ASSETS:

Current assets of enterprises may be financed either by short-term sources or long term sources
or by combination of both. The main sources constituting long-term financing are shares,
debentures, and debts form banks and financial institutions. "The long term source of finance
provides support for a small part of current assets requirements which is called the working
capital margin. Working capital margin is used here to express the difference between current
assets and current liabilities. Short-term financing of current assets includes sources of short-
term credit, which a firm is mostly required to arrange in advance. Short term bank loans,
commercial papers etc. are a few of its components. Current liabilities like accruals and
provisions, trade credit, short-term bank finance, short-term deposits and the like warranting
the current assets are also referred to a short-term term sources of finance. Spontaneous
financing can also finance current assets, which includes creditors, bills payable, and
outstanding receipts. A product firm would always opt for utilizing spontaneous sources fully
since it is free of cost. Every concern that can no more be financed by spontaneous sources of
financing has to decide between short-term and long-term source of finance along with relevant
proportion of the two. There are three approaches of financing current assets that are popularly
used

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1. Matching Approach
As the name itself suggests, a financing instrument would offset the current asset under
consideration, bearing financing instrument bearing approximately same maturity. In simple
words, under this approach a match is established between the expected lives of current asset
to be financed with the source of fund raised to finance the current assets. For this, reason a
firm would select long-term financing to finance or permanent current assets to finance
temporary or variable current assets. Thus, a ten-year loan may be raised for financing
machinery bearing expected life of ten years. Similarly, one-month stock can be financed by
means of one-month bank loan. This is also termed as hedging approach.

2. Conservative Approach
Conservative approach takes an edge over and above matching approach, as it is practically not
possible to plan an exact match in all cases. A firm is said to be following conservative
approach when it depends more on long-term financial sources for meeting its financial needs.
Under this financing policy, the fixed assets, permanent current assets and even a part of
temporary current assets is provided with long-term sources of finance and this make it less
risky nature. Another advantage of following this approach is that in the absence of temporary
current assets, a firm can invest surplus funds into marketable securities and store liquidity.

3. Aggressive Approach
As against conservative approach, a firm is said to be following aggressive financing policy
when depends relatively more on short-term sources than warranted by the matching plan.
Under this approach the firm finance not only its temporary current assets but also a part of
permanent current assets with short-term sources of finance. In nutshell, it may be concluded
that for financing of current assets, a firm should decide upon two important constraints; firstly,
the type of financing policy to be selected (whether short-term or long term and secondly, the
relative proportion of modes of financing. This decision is totally based on trade-off between
risk and return. As short-term financing is less costly but risky, long-term financing is less risky
but costly.

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 2. Company Profile

HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors. For the past
three decades India’s banking system has several outstanding achievements to its credit. The
most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners
of the country. This is one of the main reasons for India’s growth. The government’s regular
policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major
private banks of India
The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases. They are as
mentioned below:
• Early phase from 1786 to 1969 of Indian Banks.
• Nationalization of Indian Banks and up to 1991 prior to Indian.
• Banking sector Reforms.
• New phase of Indian Banking System with the advent of Indian.
• Financial & Banking Sector Reforms after 1991.

Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These
three banks were amalgamated in 1920 and Imperial Bank of India was established which
started as private shareholders banks, mostly European shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore
were set up. Reserve Bank of India came in 1935. During the first phase the growth was very
slow and banks also experienced periodic failures between 1913 and 1948.
There were approximately 1100 banks, mostly small. To streamline the functioning and
activities of banks, mostly small. To streamline the functioning and activities of commercial
banks, the Government of India came up with The Banking Companies Act, 1949which was
later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No.23 of
1965). Reserve Bank of India was vested with extensive powers for the supervision of banking
in India as the Central Banking System. During those day’s public has lesser confidence in

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the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank
facility provided by the Postal department was comparatively safer. Moreover, funds were
largely given to traders.

Phase II
Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas.
It formed State Bank of India to act as the principal agent of RBI and to handle banking
transactions of the Union and state government all over the country. Seven banks forming
subsidiary of State Bank of India was nationalized in 1960 on 19th July 1969, major process
of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs.
Indira Gandhi. 14 major commercial banks in the country were nationalized. Second
phase of nationalization Indian Banking Sector Reform was carried out in1980 with seven more
banks. This step brought 80% of the banking segment in India under Government ownership.
After the nationalization of banks, the branches of the public sector bank India rose
to approximately 800% in deposits and advances took a huge jump by 11000%. Banking in the
sunshine of Government ownership gave the public implicit faith and immense confidence
about the sustainability of these institutions.

Phase III
This phase has introduced many more products and facilities in the banking sector in its reforms
measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his
name, which worked for the Liberalization of Banking Practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being put to give
a satisfactory service to customers. Phone banking and net banking is introduced. The entire
system became more convenient and swifter. Time is given more importance than money.
The financial system of India has shown a great deal of resilience. It is sheltered from any crisis
triggered by any external macroeconomics shock as other East Asian Countries suffered. This
is all due to a flexible exchange rate regime, the foreign reserves are high, the capital account
is not yet fully convertible, and banks and their customers have limited foreign exchange
exposure. Banking in India originated in the first decade of 18th century with The General
Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both
these banks are now defunct. The oldest bank in existence in India is the State Bank of India
being established as “The Bank of Calcutta” in Calcutta in June 1806.
Couple of Decades later, foreign Banks like HSBC and Credit Lyonnais Started their Calcutta
operations in 1850s. At that point of time, Calcutta was the most active trading port, mainly
due to the trade of British Empire and due to which banking actively took roots there and
prospered. The first fully Indian owned bank was the Allahabad Bank set up in 1865.
By 1900, the market expanded with the establishment of banks like Punjab National Bank
in1895 in Lahore; Bank of India in 1906 in Mumbai-both of which were founded under private

13
ownership. Indian Banking Sector was formally regulated by Reserve Bank of India from
1935.After India’s independence in 1947, the Reserve Bank was nationalized and given
broader powers.

Axis Bank
The bank was founded in December 1993, as UTI Bank, opening its registered office in
Ahmedabad and corporate office in Mumbai. UTI Bank began its operations in 1993, after
the Government of India allowed new private banks to be established. The bank was promoted
in 1993 jointly by the Administrator of the Unit Trust of India (UTI-I), Life Insurance
Corporation of India (LIC), General Insurance Corporation, National Insurance Company, The
New India Assurance Company, The Oriental Insurance Corporation and United India
Insurance Company. The first branch was inaugurated on 2 April 1994 in Ahmedabad by
Dr. Manmohan Singh, the then finance minister of India.
In 2001 UTI Bank agreed to merge with Global Trust Bank, but the Reserve Bank of
India (RBI) withheld approval and the merger did not happen. In 2004, the RBI put Global
Trust into moratorium and supervised its merger with Oriental Bank of Commerce.
In 2003, UTI Bank became the first Indian bank to launch a travel currency card. In 2005, it
was listed on London Stock Exchange.
UTI Bank opened its first overseas branch in 2006 in Singapore. That same year it opened a
representative office in Shanghai, China. In 2007, UTI Bank opened a branch in the Dubai
International Financial Centre and branches in Hong Kong. In 2008, it opened a representative
office in Dubai.
With effect from 30 July 2007, UTI Bank changed its name to Axis Bank.
In 2009, Shikha Sharma was appointed as the MD and CEO of Axis Bank.
Axis Bank opened a branch in Colombo in October 2011, as a Licensed Commercial Bank
supervised by the Central Bank of Sri Lanka.[18] Also in 2011, Axis Bank opened a
representative office in Abu Dhabi. In 2011, Axis bank inaugurated Axis House, its new
corporate office in Mumbai.
In 2013, Axis Bank's subsidiary, Axis Bank UK commenced banking operations. Axis Bank
UK has a branch in London.
Bollywood actress Deepika Padukone is the brand ambassador of Axis Bank.
In 2014, Axis Bank launched its first ‘All Women Branch’ in Patna.
In 2015, Axis Bank opened its representative office in Dhaka.
In 2019, Amitabh Chaudhry takes over as the MD & CEO from 1 January.
As of 31 March 2016, the bank has over 50,001 employees. It spent ₹26.7
billion (US$370 million) on employee benefits during the FY 2012–13.
Current scenario
Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum
of financial services to customer segments covering Large and Mid-Corporates, MSME,
Agriculture and Retail Businesses.
The Bank has a large footprint of 4,050 domestic branches (including extension counters) with
11,801 ATMs & 4,917 cash recyclers spread across the country as on 31st March, 2019. The
overseas operations of the Bank are spread over eleven international offices with branches at

14
Singapore, Hong Kong, Dubai (at the DIFC), Colombo, Shanghai and Gift City-IBU;
representative offices at Dhaka, Dubai, Abu Dhabi, Sharjah and an overseas subsidiary at
London, UK. The international offices focus on corporate lending, trade finance, syndication,
investment banking and liability businesses.
Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India
(SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC),
General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New
India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd. The share holding of Unit Trust of India was subsequently transferred
to SUUTI, an entity established in 2003.
With a balance sheet size of Rs. 8,00,997 crores as on 31st March 2019, Axis Bank has
achieved consistent growth and with a 5 year CAGR (2013-14 to 2018-19) of 16% in Total
Assets, 14% in Total Deposits, 17% in Total Advances.

Vision
To be the preferred financial solutions provider excelling in customer delivery through insight,
empowered employees and the smart use of technology.

Business Segments

Retail Banking
• Deposits •17 million Savings Account customers
• Loans • `1,058 billion Savings Bank deposits
• Investments • 3.7 million Axis Internet Banking users
• Payment Solutions • `194 billion Credit Card spends
• Digital Banking

Corporate Credit
• Working Capital
• Term Loan
• Project Finance • `1,554 billion Corporate Credit portfolio

Treasury
• Asset Liability Management • `1,241 billion bonds and debentures arranged
• Correspondent banking activity for various Public Sector Undertakings and
• Foreign Exchange and Derivative Trading corporates
• Bullion Business
• Investments in SLR and Non-SLR securities
• Arranger Ship Business

Transaction Banking
• Current Accounts • `637 billion Current Account deposit base
• Collection & Payment Solutions
• Forex
• Trade Services
• Capital Market Solutions

15
 3. Literature Review
A survey carried out by Navon (Navon, Company level cash flow management, 1996)
among construction companies in Israel revealed that although all companies prepared cash
flow at the company level, only 60 % of them compile cash flow at project level although
infrequently at various levels of accuracy with a lot of manual efforts. The technique used for
cash flow forecasting was to assign estimated costs on aggregated schedule and distribute them
as a function of time using rule of thumb. The same method was applied to income flow, but
no time lags for expenses or income were taken into account. Another technique used was to
use well known software packages. However, it also required a lot of manual work and
therefore was not very popular with the practitioners. It was also observed that both the methods
were mainly used for expense-flow generation and the income-flow was generally assessed
very roughly.

Odeyinka et al (Odeyinka, Kaka, & Marledge, 2003) carried out a study about use and
application of different approaches and strategies in resolving deficit cash flow being followed
by small, medium and large scale contractors in U.K. The study also identified various cash
flow forecasting methods in use. It was found that overvaluation, company’s cash reserves and
tender unbalancing were the most common approaches to resolve the cash deficit. As regards
method used for cash flow forecasting, it was found that the traditional method of breaking
down the bill of quantities in line with the project schedule; supplemented by use of computer
spreadsheet was the most common method. Considering that the Indian construction and
projects industry being under development stage at present, a similar study in India would be
very useful at this stage.

AbdulRazaq et al (AbdulRazaq, Ibrahim, & Ibrahim, 2012) in a study examined the

practices of cash flow forecasting by contractors in Nigeria and concluded that the practice of
cash flow forecasting by contractors in Nigeria was not consistent. Those who practiced it did
not have an appropriate way of doing it, while others did not seem to think it deserves thorough
consideration. Most contractors showed nonchalant attitude towards the practice as no formal
policy was embedded in their company policy to forecast cash flow. Those who engaged in the
practice as a company policy did not adhere strictly to suggestions by researchers to streamline
practices along defined activities.

Cui et al (Cui, Hastak, & Halpin, 2010) developed a system dynamics model for project cash
flows using Vensim DSS Version 5.5 and simulated project cash flow management scenarios
for different cash flow management strategies such as front loading, back loading and optimal
cash balance strategies. Also different cash management policies such as overbilling and under-
billing, subcontracting, trade credit etc. were studied for a typical case. Impact of different
strategies on requirement of trade overdraft was analysed to find the most appropriate strategy
for minimizing the overdraft.

Mahamid (Mahamid, 2011) in a study carried out in Palestine also has emphasized that cash
flow management and dependency on banks and paying high interest as some of the major
financial causes of contractor’s failure.

There have also been various studies by researchers on causes of delays in Indian engineering
and construction projects. Some of the studies referring to different engineering and
construction sector projects have been mentioned below.

16
Assaf and Al-Heiji (Assaf & Al-Heiji, 2006) studied delays in large construction projects in
Saudi Arabia and found that difficulties in financing project by the contractor and delays in
payments by the owner were few of the significant causes for project delays.

Enshassi et al (Enshassi, Al-Hallaq, & Mohammed, 2006) find in a study in Palestine that
dependence on bank loans with high interest rates and cash flow mismanagement are two most
significant financial factors for contractors’ business failures.

Abdul-Rahman et al (Abdul-Rahman, Takim, & Min, 2009) carried out a study in Malaysia
among clients, contractors, consultants and bankers reveal that poor cash flow management is
the most significant factor that leads to a project delay, followed by late payments and
insufficient financial resources.

Doloi et al35 (Doloi, Sawhney, Iyer, & Rentala, 2012) analysing causes of delays in Indian
construction projects have identified various project related, site related, process related,
human related, authority related and technical issue related attributes for project delays
compiled on the basis of earlier research carried out by other researchers on the topic. The
attributes were ranked by Relative Importance Index (RII) calculated on the basis of weights
given to each attribute by the respondent. One of the attributes identified under technical Issues
as ‘Financial Constraints of Contractors’ was ranked third among 45 attributes. The meaning
of ‘financial constraint’ is not very clear from the paper and therefore cannot be related to poor
cash flow management.

Pai and Bharath37 (Pai & Bharath, 2013) in a study on Indian infrastructure projects
identified 74 different causes for project delay in different groups such as project, owners,
contractors, consultant etc. The survey responses were analysed by calculating ‘frequency
index’ based on frequency of occurrence, ‘severity index’ based on severity of occurrence. An
‘importance index’ was defined as the multiplication of frequency and severity indices. The
factors were categorised in extremely critical, very critical and critical on the basis of
importance factor within each group. ‘Difficulties in financing project by contractor’ was
observed as a very critical factor.

17
 4. Research Methodology

A. Objectives of study
The main objective of the study is to study about the cash management, which will prove
essential for ascertaining past and present financial position of the study. The tool which was
used for the data analysis and interpretation is: trend analysis, ratio analysis, cash flow
statement, and method of least square.
Primary objective: To study about the effectiveness cash management
Secondary objectives: To analyse the trend and also project the future cash flow in the
organization.
• To find out the short-term liquidity position in the organization.
• To measure the growth of the organization in terms of cash flow.
• To provide suggestions for improvement.

B. Scope of the Study

• This study covers all the Revenues and Expenses in the organization to evaluate its
performance.
• It conveys the role of finance department in terms of cash management.
• It takes into account the profit and loss and balance sheet of five consecutive years.

C. Research Design: -
The research design used in this project is Analytical in nature the procedure using, which
researcher has to use facts or information already available, and analyse these to make a
critical evaluation of the performance.

D. TYPE OF DATA COLLECTED

There are two types of data. They are primary and secondary data. Primary data is defined as
data that is collected from original sources for a specific purpose. Secondary data is data
collected from indirect sources.
SECONDARY SOURCES
These include books, the internet, company brochures, the company website, competitor’s
websites etc, newspaper articles etc.
So, the data used for this study is secondary data.

18
 5. Data Analysis & Interpretation

A. Ratio Analysis
Ratio analysis is the one of the most powerful tool of financial analysis. It aims at making use
of quantitative information for decision making. A ratio is an expression of relationship
between two figures or two amounts. It is a yard – stick which measures relationship between
two variables. Ratios are simply a mean of highlighting in arithmetical terms the relationship
between figures drowns from various financial statements. Robert Antony defines a ratio as
“simply one number expressed in terms of another”
a. CURRENT RATIO

Current ratio is the most common ratio for measuring liquidity. It represents the “ratio of
current assets to current liabilities”. It is also called working capital ratio. It is calculating by
dividing current assets by current liabilities.

Current Assets
Current ratio = Current Liabilities

Current assets are those, the amount of which can be realized with in a period of one year in
includes cash in hand, cash at hand etc.
Current liabilities are those amounts which are payable with in a period of one year- current
liabilities are creditors, bills payable etc. The current ratio of the firm measures its short-term
solvency, i.e., its ability to meet short term obligations. In a sound business a current ratio of
2:1 is considered an idle one. It provides a margin of safety to the creditors.

Year Current Assets Current Liability Ratio

2019 127192.64 734320.24 0.17
2018 93831.51 627884.31 0.15
2017 95858.05 545705.13 0.17
2016 61164.52 472302.71 0.13
2015 45992.02 417255.88 0.11

19
 Current Ratio
0.18 0.17 0.17

0.16 0.15

0.14 0.13

0.12 0.11

0.1

0.08

0.06

0.04

0.02

0
2019 2018 2017 2016 2015

Interpretation
From the above table and from the above chart it can be seen that the current ratio during the
year 2015 was 0.11 and in 2016 it was an increased to 0.13 while during the year 2017 there
was a increase in to 0.17 during the year 2018 the current ratio was decreased to 0.15 but in the
case of 2019 the final year it was a slight increase to 0.17 But it can be analysed from the above
that the organization did not attained a satisfactory as the current liabilities are more than the
current assets. The company does not have adequate current assets to meet their current
liabilities, so the firm has to increase its assets then the performance will improve.

b. Absolute Liquid Ratio

The ratio is obtained by dividing cash (of course cash in hand and cash at bank) and marketable
securities by current liabilities. It is also known as cash position ratio.
Cash+marketable Securities
Absolute Liquid Ratio = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Year Cash+ Marketable Current Liabilities Ratio

Securities

2019 101775.33 734320.24 0.14

2018 98926.32 627884.31 0.16
2017 86620.48 545705.13 0.16
2016 75526.06 472302.71 0.16
2015 64495.35 417255.88 0.15

20
 Absolute Liquid Ratio
0.165
0.16 0.16 0.16
0.16

0.155
0.15
0.15

0.145
0.14
0.14

0.135

0.13
2019 2018 2017 2016 2015

Interpretation
We have seen from the above table and from the above chart that the absolute liquid ratio
during the year 2015 was 0.15 and the subsequent year 2016 the ratio has a slight increase to
0.16. While during the year 2016-17-18 the ratio has its maximum in last five years to 0.16 but
in 2019 it has decreases to 0.14.

c. Cash to sales ratio

This ratio compares the operating cash flows a company to its sales revenue. This ratio gives
the analysts and investors indications about the ability of a company to generate cash from its
sales. In other words, it shows the ability of a company to turn its sales into cash.
𝐶𝑎𝑠ℎ
Cash to sales: - 𝑆𝑎𝑙𝑒𝑠

Year Cash Sales Ratio

2019 35099.03 54985.8 0.638329

2018 35481.06 45780.3 0.775029
2017 30857.94 44542.2 0.692781
2016 22361.15 40988 0.545553
2015 19818.84 35478.6 0.558614

21
 Cash to sales Ratio
0.9
0.775028828
0.8
0.692780503
0.7 0.638329335
0.6 0.545553044 0.558613925

0.5
0.4
0.3
0.2
0.1
0
2019 2018 2017 2016 2015

Interpretation
Having regarded the ratio of cash to sale it can be seen from the above that during the year
2015 the ratio of cash to sales was 0.55 and for the year 2016 the same was 0.55. While during
the year 2017 the ratio of cash to sales was 0.69. The ratio of cash to sales is higher in 2018
which is 0.78. It can be also analysed that during the year 2019 the ratio of cash to sales was
0.64 the above ratio indicates that when the sales increases that cash position also increases
and thus the organization can achieve the better liquidity position.

d. Cash to other income

Cash to Income Ratio. Cash to income ratio is a cash flow ratio which measures dollars
of cash flows from operating activities per dollar of operating income. It is calculated by
dividing cash flows from operations by the operating income.
Cash
Cash to other income: - Other income

Year cash other income Ratio

2019 35099.03 13130.339 2.673124
2018 35481.06 10967.087 3.235231
2017 30857.94 11691.311 2.639391
2016 22361.15 9371.4644 2.386089
2015 19818.84 8365.0458 2.369245

22
 Ratio
3.5
3.235231162

3
2.673124352 2.639390979
2.5 2.386089201 2.369244649

1.5

0.5

0
2019 2018 2017 2016 2015

Interpretation
As from the above table and graph, it can be seen the ratio of cash to other income during the
year 2015 was 2.37 and for the year 2016 it was 2.38. it can be further analysed that during the
year 2017 the ratio had been increased to 2.64 while for the year 2018 the value of the ratio
was 3.24 during this year the ratio is at its maximum. The ratio shows that while the amount in
the other income increases the cash position of the organization also increases and vice versa.

e. Gross profit Ratio

The gross profit ratio plays an important role in two management areas of financial
management, the ratio serves as a valuable indicator of the firms ability to utilize effectively
outside sources of funds.
Gross Profit
Gross Profit Ratio = × 100
Net Sales

This ratio help to ascertaining whether the average percentage of mark up on the goods is
maintained or not It also indicate the degree to which selling price per unit may decline
without resulting in losses from operations to the firm.
Year Gross Profit Sales Ratio
2019 52992.43 54985.8 96.37481
2018 43325.16 45780.3 94.6371
2017 44542.36 44542.2 100.0004
2016 40702.59 40988 99.30358
2015 35045.57 35478.6 98.77946

23
 Ratio
101
100.000449
100 99.30357734
98.77946142
99
98
97 96.37480752
96
95 94.6371049

94
93
92
91
2019 2018 2017 2016 2015

Interpretation
As from the above table it can be seen that the gross profit ratio in 2015 it was 98.77 then it
was slightly increase to 99.03 in 2016. In 2018 it was decreased to 94.63. The gross profit in
2017 is maximum which is 100.03. However, the gross profit should be adequate to cover
operating expenses and to provide for fixed charges dividend and building up to reserve.

f. Net Profit Ratio

This ratio is also called as the net profit to sale or net profit margin ratio. It is determined by
dividing the net income after tax to the net sales for the period and measures the profit per
rupee of sale.
In this context, the term net profit “net profit after interest and tax but before dividend” The
ratio is used to measure the overage profitability and hence it is very useful to profitability of
the business. Higher the ratio better is the operational efficiency of the concern
Net Profit
Net Profit Ratio = ×100
Sales

Year Net profit Sales Ratio

2019 4676.61 54985.8 8.505128
2018 275.68 45780.3 0.60218
2017 3679.28 44542.2 8.260219
2016 8223.66 40988 20.06356
2015 7357.82 35478.6 20.73876

24
 Ratio
25

20

15

10

0
2019 2018 2017 2016 2015

Interpretation
From the above table, it can be seen the highest value in the past five years is 20.74. It has a
decreasing tendency to 8.26 in 2017, it was decreased to 0.60 in 2018 it was a increase to 8.51
in 2019.

25
 B. Trend Analysis
The trend method determines the direction upwards or downwards and involves the
computation of the percentage relationship that cash statement item hears to the same item in
have year. Trend analysis of ratio indicates the direction of change. This kind of analysis of
particularly applicable to the particular item of profit and loss account. The ratio analysis will
reveal the financial condition of the firm more reliable when trends in ratios over time are
analysed. The trend analysis of ratio considerable significance to financial analysis because is
studies ratios several years and isolates to financial analysis because it studies ratio of several
years and isolates the exceptional instances occurring in one or two periods.
Cash in Hand

Year Cash in Hand Trend Analysis

2015 19818.84 100
2016 22361.15 112.827744
2017 30857.94 155.700031
2018 35481.06 179.026926
2019 35099.03 177.099316

Trend Analysis
200 179.0269259 177.0993156
180
155.7000309
160
140
112.8277437
120 100
100
80
60
40
20
0
2015 2016 2017 2018 2019

Interpretation
As from the above table and from the above chart it can be seen that trend in cash in hand
shows an increasing trend in expect for the year 2016 companied to the base year 2015. During
the year 2017 the trend ratio had been increased by 12.83. It can be also analysed that during
the year 2017 the trend ratio had been increased by 55.7. While for the year 2018 the trend had

26
been increased by 79.03. It can be also analysed that the increase in trend in cash is a favourable
situation and vice versa.

Trend on other income

Year Other income Trend Analysis

2015 8365.0458 100
2016 9371.4644 112.0312
2017 11691.3107 139.7639
2018 10967.0865 131.1061
2019 13130.3394 156.9667

Trend Analysis
180
156.9667365
160
139.7638576
140 131.1061142
112.0312384
120
100
100
80
60
40
20
0
2015 2016 2017 2018 2019

Interpretation
As from the above table and from the above chart it can be seen that the trend on other
income shows an increasing trend expect for the year 2016. It can be also analysed that
during the year 2016 the trend had been increased by 12.03 while for the year 2017 the trend
had been increased by 39.76, during the year 2018 the trend had been decreased by 31.11.
During the last year 2019 the trend had been increased by 56.97 in other income which is a
favourable situation to the business as it renders a liquidity position.

27
 Trend on Sales
Year Sales Trend Analysis
2015 35478.6 100
2016 40988 115.52891
2017 44542.2 125.54655
2018 45780.3 129.03641
2019 54985.8 154.98292

Trend Analysis
180
154.9829193
160
140 125.5465548 129.036405
115.5289104
120
100
100
80
60
40
20
0
2015 2016 2017 2018 2019

Interpretation
It can be seen from the above table and from the above chart that the trend on sales shows
increasing trends when compared to the base year 2015. During the year 2016 the trend had
been increased by 15.53 and for the year 2017 the increase was 25.55 while for the year 2018
the increase was 29.04 during the last year 2018 the increase was 54.98. This shows that the
sales had been increased every year which is good for the firm.

28
 Trend on Total Income
Year Total income Trend Analysis
2015 43843.64 100
2016 50359.5 114.86159
2017 56233.47 128.25913
2018 56747.4 129.43132
2019 68116.11 155.36144

Trend Analysis
180
155.361439
160
140 128.2591272 129.4313155
114.8615854
120
100
100
80
60
40
20
0
2015 2016 2017 2018 2019

Interpretation
It can be seen from the above table and from the above chart that the trend on total income
always shows an increasing trend. During the year 2016 the trend had been increased by 14.86
and for the year 2017 the same had been increased by 28.26 while during the year 2018, the
same had been increased by 29.43 and for the year 2019 the same had been increased by
55.36.This shows that total income had been increased through out every year which is good
for the firm.

29
 C. Cash Flow Statement

Particulars Mar'19 Mar'18 Mar'17 Mar'16 Mar'15

Profit Before Tax 6974.09 121.57 5467.56 12393.75 11056.83
Net Cash Flow from Operating 37566.92 -46693.3 34192.28 -15971.9 -12922
Activity
Net Cash Used in Investing Activity -18736.5 -10500.3 -12630.4 -5435.51 -7989.65
Net Cash Used in Financing Activity 4931.34 50400.78 -4628.87 18671.58 28846
Net Inc/Dec In Cash and Cash 23749.74 -6801.29 16930.74 -2773.59 7860.34
Equivalent
Cash and Cash Equivalent - 43454.89 50256.18 33325.44 36099.03 28238.69
Beginning of the Year
Cash and Cash Equivalent - End of 67204.64 43454.89 50256.18 33325.44 36099.03
the Year

Inference: -
The cash flow statement (CFS) measures how well a company manages its cash position,
meaning how well the company generates cash to pay its debt obligations and fund its operating
expenses.
The CFS allows investors to understand how a company's operations are running, where its
money is coming from, and how money is being spent. The CFS is important since it
helps investors determine whether a company is on a solid financial footing.
Creditors, on the other hand, can use the CFS to determine how much cash is available (referred
to as liquidity) for the company to fund its operating expenses and pay its debts.
This table shows that the cash flow statements are to be efficient. The cash inflow of the
company is to be increased for year after year. Profit before tax is high in march 2016 and very
low in march 2018. It means the performance of a company is not good in 2018 so, the firm
had used 50400.78 of cash in financing activity.
The highest investment made through cash is in 2019 which gives a good return in that year
that leads to high cash inflow.

30
 6. Conclusion

• In this study, an analysis on Efficiency of Cash Management of Axis bank was done.
The Efficiency of the firm during last five years is taken up for study.

• The Efficiency of fund has been analysed on the basis of the data collected from the
Annual report of Axis bank.

• The Efficiency of Cash Management in axis bank was analysed with the help of Ratio
Analysis and cash flow statement.

• The study conducted in axis bank was successful. The study also guides to get
knowledge regarding actual functioning of the Firm. Cash Flow Statement of the firm
reveals that overall performance of cash management of the firm is above average level.
So, cash managers give more importance to utilization of cash through using profitable
pattern.

31
 7. Findings

The major findings of the study are the following.

• By studying Ratio analysis, it has been found the current ratio of the firm is not attain
a satisfactory expected level for every year of the study period.

• The Absolute Liquid Ratio also not attained the satisfactory level because the current
liabilities are more increasing year by year. Cash to other income shows a satisfactory
level in the year 2018 which means at this year company have shown a good solvency
position.

• It has found from the ratio analysis of gross profit; the company has shown a good
increasing rate of profit for the last consecutive years.

• From trend analysis it has been found that trend on sales and total income shown an
increasing trend throughout the analysis period were as trend on cash in hand and other
income shown a fluctuating trend throughout the study period.

• The cash flow of the company is increasing year after year which is favourable for the
firm in the long run. It means the company can manages its cash and pay their debts
and obligations.

32
 8.Suggestions

1. Axis bank must maintain its liquidity position. This indicates that the axis needs to improve
its short-term financial position.
2. Block funds used properly and profitability.
3. Firm should maintain optimum cash balance throughout the year.
4. Solvency position is to be studied and steps to be taken for improving it.
5. Fund managers give more importance to utilization of fund.
6 Step to be taken to increase the working capital of the firm to meet short term obligation.
7. Excess funds invested to diversified projects.
8. The firm can adopt modern method of cash management.
9. The firm should fix proper working capital and inventory level.

33
 9. Bibliography

A. Reference News Papers:

• Economics Times
• Times of India
• Business Line
• Business Standard

B. Reference Websites:
• https://en.wikipedia.org/wiki/Axis_Bank#History
• https://www.axisbank.com/about-us/corporate-profile
• https://economictimes.indiatimes.com/axis-bank-ltd/profitandlose/companyid-
9175.cms
• https://www.moneycontrol.com/financials/axisbank/profit-lossVI/AB16#AB16
• https://acadpubl.eu/jsi/2017-116-13-22/articles/19/77.pdf
• https://www.axisbank.com/docs/default-source/default-document-library/1_new-
introduction-sectiond2edbbb9be576bf08df9ff03000b8c1c.pdf?sfvrsn=93bad055_0

C. Books:
• S.N. Maheshwari, Financial management, Eleventh Edition 2006, Sultan Chaqnd &
Sons, Educational Publishers. New Delhi.
• I.M Pandey, Financial management, Ninth Edition, Vikas publishing house pvt Ltd.
• M.Y Khan- P.K Jain, Management Accounting, Third edition, Tata Mc Graw-Hill
Publishing co. Ltd
• B.L. Gupta, Management of Liquidity and Profitability, Arihant Publishing House,
Jaipur.

34