Cash Management: A Synopsis Report ON AT HDFC Bank LTD

A
SYNOPSIS REPORT
ON
CASH MANAGEMENT
AT
HDFC BANK LTD
Submitted
By
D. HIMABINDU
H.T.NO: 1303-20-672-038
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE
OF
MASTER OF BUSINESS ADMINISTRATION
Department of Business Administration
AURORA POST GRADUATE COLLEGE
PEERZADIGUDA
(Affiliated to Osmania University)
2020-2022
AURORA POST GRADUATE COLLEGE
PEERZADIGUDA
Department of Management
SYNOPSIS
Title of the Project : CASH MANAGEMENT
Student Name : D. HIMABINDU
Hall Ticket Number : 1303-20-672-038
Signature of the Student :
Signature of the Guide :

1.1 INTRODUCTION
Cash is the important current asset for the operations of the business. Cash is the
basic input needed to keep the business running on a continuous basis; it is also the ultimate
output expected to be realized by selling the service or product manufactured by the firm.
The firm should keep sufficient cash, neither more nor less. Cash shortage will disrupt the
firm’s manufacturing operations while excessive cash will simply remain idle, without
contributing anything towards the firm’s profitability. Thus, a major function of the financial
manager is to maintain a sound cash position.
Cash is the money which a firm can disburse immediately without any restriction.
The term cash includes coins, currency and cheques held by the firm, and balances in its bank
accounts. Sometimes near-cash items, such as marketable securities or bank deposits, are
also included in cash. The basic characteristic of near-cash assets is that they can readily be
converted into cash. Generally, when a firm has excess cash, it invests it in marketable
securities. This kind of investment contributes some profit to the firm.
Cash management is a broad term that refers to the collection, concentration, and
disbursement of cash. The goal is to manage the cash balances of an enterprise in such a way
as to maximize the availability of cash not invested in fixed assets or inventories and to do so
in such a way as to avoid the risk of insolvency. Factors monitored as a part of cash
management include a company's level of liquidity, its management of cash balances, and its
short-term investment strategies.
In some ways, managing cash flow is the most important job of business managers. If at any
time a company fails to pay an obligation when it is due because of the lack of cash, the
company is insolvent. Insolvency is the primary reason firms go bankrupt. Obviously, the
prospect of such a dire consequence should compel companies to manage their cash with
care. Moreover, efficient cash management means more than just preventing bankruptcy.
Cash management is particularly important for new and growing businesses. Cash flow can
be a problem even when a small business has numerous clients, offers a product superior to
that offered by its competitors, and enjoys a sterling reputation in its industry. Companies
suffering from cash flow problems have no margin of safety in case of unanticipated
expenses. They also may experience trouble in finding the funds for innovation or expansion.
It is, somewhat ironically, easier to borrow money when you have money. Finally, poor cash
flow makes it difficult to hire and retain good employees.
It is only natural that major business expenses are incurred in the production of goods or the
provision of services. In most cases, a business incurs such expenses before the
corresponding payment is received from customers. In addition, employee salaries and other
expenses drain considerable funds from most businesses. These factors make effective cash
management an essential part of any business's financial planning.
When cash is received in exchange for products or services rendered, many small
business owners, intent on growing their company and tamping down debt, spend most or all
of these funds. But while such priorities are laudable, they should leave room for businesses
to absorb lean financial times down the line. The key to successful cash management,
therefore, lies in tabulating realistic projections, monitoring collections and disbursements,
establishing effective billing and collection measures, and adhering to budgetary restrictions.
1.2 NEED OF THE STUDY
The importance of Cash management in any industrial concern cannot be
overstressed. Under the present inflationary condition, management of Cash is perhaps more
important than even management of profit and this requires greatest attention and efforts of
the finance manager. It needs vigilant attention as each of its components require different
types of treatment and it throws constant attention on exercise of skill and judgment,
awareness of economic trend etc, due to urgency and complicacy the vital importance of
Cash.
The anti-inflationary measure taken up by the Government, creating a tight money
condition has placed working capital in the most challenging zone of management and it
requires a unique skill for its management. Today, the problem of managing Cash has got the
recognition of separate entity, so its study and management is of major importance to both
internal and external analyst to judge the current position of the business concerns. Hence, the
present study entitled “An Cash Management” has been taken up.
1.3 OBJECTIVES OF THE STUDY
1. To study about the cash management of HDFC BANK
2. To find out the liquidity position of the company through ratio analysis.
3. To analyze the growth in terms of management of cash flows.
4. To provide suggestions and recommendation to improve the cash position of the
company.
1.4 SCOPE OF THE STUDY
The scope of cash management has undergone changes over the year. Until the middle of
this century. Its scope was limited to procurement of funds under major events in the life of
the such a promotion. To ensure maximum return, funds flowing in and out of the firm
should be constantly monitored to assure that they are safeguarded and properly utilized.
Determining the composition of assets of the enterprise. It is concerned with planning and
controlling of the. The study was carried for a period of 45 days. The result of the analysis are
obtained based on the data obtained through P/L a/c and Balance Sheet for 5 years (2016
2020)
1.5 RESEARCH METHODOLOGY
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 analyze these to
make a critical evaluation of the performance.
DATA COLLECTION
Primary Sources
Primary data is one, which is collected by the investigator himself for the purpose of a
specific inquiry or study.
1. Data are collected through personal interviews and discussion with Finance
Executive.
2. Data are collected through personal interviews and discussion with the Deputy
manager
Secondary Sources
From the annual reports maintained by the company. Data are collected from the company’s
website. Books and journals pertaining to the topic. For the present study on Balance Sheet
and
P/L a/c.
TOOLS USED IN THE ANALYSIS

Cash flow statement
A. Operating activities
B. Investing activities
C. Financing activities
Trend analysis
Formula
%=20*1 amount-20*0 amount*100/20*0 amount
Ratio analysis
1. Liquidity ratio
Current assets
=
Current liabilities
2. Profitability ratio
Net income
=
Net sales
3. Working capital ratio
= Current assets – Current liabilities

LIMITATIONS
 The study is restricted only to HDFC BANK LTD... Being a case study, the findings
cannot be generalized.
 The study does not take into account the inflation.
 The study takes into account only the quantitative data and the qualitative aspects
were not taken into account
 Cash management refers to the practice of dealing with all financial transactions from
a single location, rather than leaving financial transactions in the hands of individual
location

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A

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

AURORA POST GRADUATE COLLEGE

(Affiliated to Osmania University)

Title of the Project : CASH MANAGEMENT

Student Name : D. HIMABINDU

Hall Ticket Number : 1303-20-672-038

Signature of the Student :

Signature of the Guide :

manager is to maintain a sound cash position.

securities. This kind of investment contributes some profit to the firm.

short-term investment strategies.

flow makes it difficult to hire and retain good employees.

management an essential part of any business's financial planning.

therefore, lies in tabulating realistic projections, monitoring collections and disbursements,

The importance of Cash management in any industrial concern cannot be

The anti-inflationary measure taken up by the Government, creating a tight money

1.3 OBJECTIVES OF THE STUDY

1. To study about the cash management of HDFC BANK

3. To analyze the growth in terms of management of cash flows.

4. To provide suggestions and recommendation to improve the cash position of the

make a critical evaluation of the performance.

specific inquiry or study.

TOOLS USED IN THE ANALYSIS

3. Working capital ratio

= Current assets – Current liabilities

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