Cash Flow Statement - Hero

A
SYNOPSIS ON
“CASH FLOW STATEMENT”
AT
“HERO MOTOCORP LIMITED”
Submitted in partial fulfillment of the requirement for the award of the
MASTER OF BUSINESS ADMINISTRATION
BY
VEDALA SRI REVANTH
H.T NO: 1422-20-672-123
Department of management studies
CSI INSTITUTE FOR P.G. STUDIES
(Affiliated to Osmania University)
East marredpally, secunderabad, telengana
2020-2022
1. INTRODUCTION
From the financial point of view a firm basically generates cash and spends cash. It
generates cash when it issues securities, rises a bank loan sells a product disposes an asset, so
a so forth. It spends cash when it redeems securities, pays interest and dividends. Purchases
materials, acquires an asset etc. The activities that generate cash and called sources of cash
and the activities that absorb cash are called uses of cash.
MEANING OF CASH FLOW MANAGEMENT
A cash flow MANAGEMENT is a MANAGEMENT depicting change in cash
position from one period to another. For example, if cash balance of a business is shown by
its balance sheet on 31st December 1978 at rs 20, 000 while the cash balance as its balance
sheet on 31st December 1979is Rs 30,000 there has been an inflow of cash rs 10,000 in the
year 1979 as compared to the year 1978. The cash MANAGEMENT explains the reasons for
such inflows or out flows cash, as the case might be. It also helps management in making
plans for the immediate future. A projected sash flow MANAGEMENT of a cash budget will
help the management in ascertaining how much cash will be available to meet obligations to
trade creditors, to pay bank loans and to pay dividend to the shareholders. A proper planning
of cash resources will enable the management to have cash available whenever needed and
put it to some profitable or productive use in case there is surplus cash available.
The term “cash” here stands for cash and bank balances it has already been explained
in the previous chapter that the term “funds” will exclude from its purview all other current
assets and current liabilities and the terms “funds flow MANAGEMENT” and “cash flow
MANAGEMENT” will have synonymous meanings. However, for the purpose of this study,
we are calling this part of this study cash flow analysis and not funds flow analysis.
2. NEED OF THE STUDY:
To study has great significance and will provide benefits to various parties who
directly or indirectly interact with the company.
It is important because it is beneficial to the employs and offer motivation by showing how
actively they are contributing for the company’s growth.
It is beneficial to the management of the company as it provides a clear cut picture with
regard to the cash flow MANAGEMENTs.
3. SCOPE AND PERIOD OF THE STUDY:

The scope of the study is limited to HERO MOTOCORP LIMITED only and the
period of he study 2017-2021.
4. OBJECTIVES OF THE STUDY:

 To assess the ability of the enterprise.
 To plan and coordinate the financial operations properly.
 To know much cash is needed from which source it will be derived, to know how
much will be available to meet obligations to trade creditors.
 How much can be generated internally and how much could be obtained from
outside.
5. HYPOTHESIS
Ho1: Free cashflow does not have a significant impact on agency cost
Ho2: Leverage does not have a significant impact on agency cost
Ho3: Free cash flow conditioned on high leverage does not have a significant impact on
agency cost
Ho4: The impact of free cash flow on agency cost is not significantly difference from the
impact of free cash
flow on agency cost when conditioned on high leverage
6. LIMITATIONS
Cash flow analysis is a useful tool of financial analysis. However, it has been own
limitations. These limitations are as under:
 Cash flow MANAGEMENT cannot be equated with the income MANAGEMENT.
An income MANAGEMENT takes into account both cash as well as noncash items
and, therefore, net cash flow does not necessarily mean net income of the business.
 The cash balance as disclosed by the cash flow MANAGEMENT may not represent
the real liquid position of the business since it can be easily influenced by postponing
purchases and other payments.
 Cash flow MANAGEMENT cannot replace the income MANAGEMENT or the
funds flow MANAGEMENT. Each of them has a separate function to perform.
In spite of these limitations, it can be said that cash flow MANAGEMENT is a useful
supplementary instrument. It discloses the volume as well as the speed at which the cash
flows in the different segments of the business this helps the management in knowing the
amount of capital tied up in a particular segment of the business. The technique of cash flow
analysis, when used in conjunction with ratio analysis, serves as a barometer in measuring the
profitability and financial position of the business.
BIBLIOGRAPHY
Financial management - Khan - Jain

Financial management –K.Srinivas Reddy
Financial management –D.Sridhar Reddy
Annual reports of HERO MOTOCORP. for the year 2015-2016 and 2017-2021
Internal reports of www.heromotocorp.com
www. heromotocorp.com

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A

“CASH FLOW STATEMENT”

“HERO MOTOCORP LIMITED”

Submitted in partial fulfillment of the requirement for the award of the

MASTER OF BUSINESS ADMINISTRATION

VEDALA SRI REVANTH

H.T NO: 1422-20-672-123

Department of management studies

CSI INSTITUTE FOR P.G. STUDIES

(Affiliated to Osmania University)

East marredpally, secunderabad, telengana

3. SCOPE AND PERIOD OF THE STUDY:

4. OBJECTIVES OF THE STUDY:

Financial management - Khan - Jain

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