Report On Summer Training

Submitted By:
Divyanka Singla
Regd. No.:-
10810018
MBA
2008-10
 Financial Management

MALWA COTTON SPINNING MILLS

LIMITED
 MANAGEMENT STRUCTURE OF MCSML

 Personnel Department  Accounts Department

 Production Department
 Cash Book
 Purchase Department
 Cheque
 Store & Inventory  Pay in Slip
Section  Petty Cash Book
 Research & Development  Bank Reconciliation
Department Statement
 Training & Development  Pay Roll

Department  Machines
Structure of Finance Department
 Objectives

 To study the effect of changes in financial position

on the value of firm.

 To study the effect of existing financial structure on

the profits and dividend policy of firm.

 Study the impact of changes in leverage affect the

value of the firm.
 Research Methodology

 Data Collection

 Primary data is unstructured interview with managers to

get information regarding all variables for working capital
management.

 Secondary data is collected from annual reports, relevant

records of Malwa Cotton Spinning Mills Lid., journals &
articles.
 Introduction of Financial Management

 Meaning
 Characteristics
 Providing Accounting information
 Cause & effect analysis
 Use of special techniques & concepts
 Taking important decisions
 Achieving objectives
 Increase in efficiency
 Gets information takes decisions
 Concerned with forecasting
 Accounting policies of MCSML

 ACCOUNTING  FOREIGN CURRENCY

CONVENTION TRANSACTION
 FIXED ASSETS  SUBSIDIES
 DEPRICIATION  EMPLOYEE’S
 INVESTMENT RETIREMENT
BENEFITS
 INVENTORIES
 FINANCIAL
 SALES
INSTITUTIONS
 INCOME  EXCISE DUTY
 EXPENDITURE DURING  DETERMINATION OF
CONSTRUCTION
SECURITIES
PERIOD
 SEBI
 CASH Management

Management of Cash in
Introduction
MCSML
 Objectives  DETERMINATION OF
 Meeting the payment CASH LEVEL
schedule
 Speedy collection of  COLLECTION OF CASH
cash FROM DEBTORS
 Investing surplus cash

 Minimizing funds  UTILIZATION OF

committed to cash SURPLUS CASH
balance.
 SOURCES OF FINANCE OF MCSML

 Capital required for

two purposes:-

 Fixed Capital

 Working Capital
 COMPARISON of Sources 0f Finance
FOR 2007-08 & 2006-07

Particulars 2007-08 2006-07

A Long Term funds
Share Capital 6116.80 6058.39
Reserve & surplus 9561.26 10094.92
Secured Loans 16781.91 19190.01
Unsecured Loans 516.72 1320.15
B Short Term Funds 6163.15 6620.37
Total Sources of Finance (A+B) 40394.48 43283.84

43500
43000
42500
42000
41500
41000 43283.84
n
a
L
s
c
)
(
I

40500
40000
39500 40394.48
39000
lS
e
tn
c
fm
C
p
o
a
is
r

38500
2007-08 2006-07

Years
1) Current & Liquid Ratio

Quick/Liquid Assets
Current Assets
Quick/Liquid or Acid Test Ratio =
Current Ratio = ------------------------------------------------
-------------------------------
Current Liabilities
Current Liabilities

2.4
2.35
2.3
2.25
2.2
2.15 2.37
2.1
2.05
2 2.08
1.95

Q
uick/LqdorATestRa
1.9
2007-08 2006-07

Years
2) Inventory Turnover Ratio

Net Sales
Inventory Turnover Ratio = --------------------------------------------
Inventory at Cost

4.58
4.56
4.54
4.52
4.57
4.5
im
e
s
)(In
T

4.48
4.49
4.46
R
u
T
a
ry
i In
to
e
v

4.44
2007-08 2006-07

Years
3) Debtors Turnover Ratio

Net Sales
Debtors or Receivables Turnover Ratio = -----------------------------------------
Debtors
4) Creditors Turnover Ratio

Net Credit Annual Purchase

Creditors / Payable Turnover Ratio = ------------------------------------------------
Creditors

25

20

15

10 21.11
im
e
s
)(In
T

15.24
5

0
R
n
u/P
b
lT
va
yo
sC
d
e
r
it

2007-08 2006-07

Years
5) Debt-Equity Ratio

Outsider’s Funds
Debt Equity Ratio = --------------------------------------
Shareholder’s Funds

2.5
2.45
2.4
2.35
2.3
2.25 2.46
2.2
2.15
2.1 2.18
2.05
m
T
s
) R
(In
o
aq
uD
b
tE
iye

2
2007-08 2006-07

Years
 Trend Analysis of Sales & Net Profit

TREND PERCENTAGE TREND PERCENTAGE

(Base Year 2006 = 100)
(Base Year 2006 = 100)
Year Net Profit After Tax
Year Sales
Trend
Amount Trend Percentage Amount
Percentage
2007 42005 100 2007 530.66 100
2008 44967.58 107.1 2008 (180.25) (134)

110
109
Series1
108 107.1
150
107 100
106 100
105
104 50
103
Sales

0
102 Series1
101 100 2006-07 2007-08
-50
100
TrendPctagof

-100
fP
ioA
d
nT
re
a
ly

2006-07 2007-08
s

-134
t

-150
Years Years
Trend Comparison of Sales & Profits

TREND PERCENTAGE
(Base Year 2006 = 100)

Year Sales Net Profit After Tax

Trend Trend
Amount Amount
Percentage Percentage

2007 42005 100 530.66 100

2008 44967.58 107.1 (180.25) (134)

150

100
100 107.1
50

0 sales
2006-07 2007-08 Profit after Tax
-50

-100
&
P
fS
tioA
d
n
T
e
a
ly
sr

-150
Years -134
 Cash Flow Statement OF MCSML

Particulars 2007-08 2006-07

A Net Cash from operating Activities….. 2297.32 1712.38

B Net Cash from Investing Activities…. (167.12) 402.86

C Net Cash from Financing Activities….. (2331.17) (1988.34)

Net Increase/Decrease in Cash & cash Equivalents (A+B+C) (200.97) 126.9

Cash & cash Equivalents As on 01.04.2007(Opening balance) 693.22 566.32

Cash & cash Equivalents As on 31.03.2008(Closing Balance) 492.25 693.22

Conclusion