CHAPTER-1

Cash MANAGEMENT

1.1 INTRODUCTION:

Cash is the main current tool for the activities of the business. Cash is the fundamental info
expected to keep the business running consistently; it is additionally a definitive yield
anticipated that would be acknowledged by offering the administration or item made by the
firm. The firm should keep adequate Cash, neither more nor less. Cash lack will disturb the
association's assembling tasks while intemperate Cash will essentially stay sit without moving,
without contributing anything towards the association's gainfulness. In this manner, a networth
capacity of the Cash belongs to chief is a sound Cash position.

Cash is the cash which a firm can dispense instantly with no confinement. The word Cash
incorporates coins, cash and checks thought by the firm, and equalizations in its financial
balances. At this point and at hand close Cash things, for example, attractive securities or bank
times stores, are additionally incorporated into Cash. The fundamental normal for close Cash
resources is they vcan promptly be changed over into Cash. By and large, when a firm has
overabundance Cash, it puts it in attractive securities. This sort of venture contributes some
benefit to the firm.

1.2 NEED FOR THE STUDY

The significance of Cash administration in any mechanical concern can't be overemphasized.

Under the present inflationary condition, administration of Cash is maybe more critical than
even administration of benefit and this requires most prominent consideration and endeavors
of the fund administrator. It needs careful consideration as every one of its segments require
distinctive sorts of treatment and it tosses consistent consideration on exercise of expertise and
judgment, consciousness of financial pattern and so forth, because of desperation and
complicacy the indispensable significance of Cash.

The counter inflationary measure taken up by the Government, making a tight cash condition
has put working capital in the most difficult zone of administration and it requires an
exceptional expertise for its administration. Today, the issue of overseeing Cash has the
acknowledgment of isolated element, so its examination and administration is of real
significance to both inner and outer examiner to judge the present position of the business
concerns. Subsequently, the present examination entitled "An Analysis on Cash Management"
has been taken up.

1.3 OBJECTIVES OF THE STUDY

Primary Objective:

• To investigate the Cash administration of Zuari Cements Ltd.

Secondary Objective:

• To discover the liquidity position of the worry through proportion examination.

• To ponder the development of Zuari Cements Ltd regarding income articulation.

• To influence proposal and suggestion to enhance the Cash to position of Zuari Cements
Ltd.

1.4 SCOPE OF THE STUDY

It takes here and now monetary choice.

It demonstrates the Cash necessity required for plant or gear development programs.

To discover procedures for proficient administration of Cash.

It orchestrates required finances on the most good terms.

It meets routine Cash prerequisite to fund the exchange.

It uncovers the liquidity position of the firm by featuring the different wellsprings of
Cash and its employments.

1.5 LIMITATIONS OF THE STUDY

• The investigation is confined just to Zuari Cements Ltd Being a contextual investigation,
the discoveries can't be summed up.

• The ponder does not consider the expansion.

• The think about considers just the quantitative information and the subjective angles
were not considered

RESEARCH METHODOLOGY

1.6 RESEARCH

Research is a procedure in which the analysts wish to discover the final product for a given
issue and along these lines the arrangement helps in future strategy. The examination has been
characterized as "A cautious examination or enquiry particularly through look for new
certainties in branch of information"

1.7 RESEARCH DESIGN

The examination configuration utilized as a part of this task is Analytical in nature the
methodology utilizing, which analyst needs to utilize certainties or data officially accessible, and
dissect these to make a basic assessment of the execution.
1.8 DATA COLLECTION

Primary Sources

1. Data are gathered through individual meetings and discourse with Finance-

Official.

2. Data are gathered through individual meetings and talk with Material

Arranging Deputy Manager.

Secondary Sources

1. From the yearly reports kept up by the organization.

2. Data are gathered from the organization's site.

3. Books and diaries relating to the subject.

1.9 TOOLS USED IN THE ANALYSIS

• Cash stream articulation

• Trend examination

• Ratio examination.

1.10 Period of study

The present examination has considered Five years viz., 2012-2013 to 2016-2017.
REVIEW OF LITERATURE

Meaning:

Money is the cash which a ffirm can dispense promptly with no limitation.Theitermimoneyi

in corporatesicoins,icashiandichecks iheldibyitheifirm,iandi equalizationsiinitsifinancialibalances.

Here and there close money things, for example, attractive securities or bank times stores, are
likewise incorporated into money. The fundamental normal for close money resources is that
they can promptly be changed over into money.

Aspects OF CASH MANAGEMENT:

Money administration is worried about the overseeing of: (I) Cash streams into and out of the
firm, (ii) Cash streams inside the firm, and (iii) Cash adjusts held by the firm at a state of time by
financing shortage or contributing surplus money. It can be spoken to by a money administration
cycle. Deals produce money which must be dispensed out. The surplus money must be
contributed while shortage this cycle at the very least cost. It likewise appearances to achieve
liquidness and control. It is critical in light of the fact that it is used to pay the overtone's
promises.

In some event, money is ineffective. Not at all like settled resources or inventories, it doesn't
create products available to be purchased. In this way, the point of money administration is to
preserve up and doing satisfactory control over money position to keep the firm adequately fluid
and to utilize abundance trade out some gainful way.

Moneyiadministrationiisilikewiseiimperativeisinceiitiisiharditoianticipateimoneyistreamsiprecisely,i
especiallyitheiinflows,iandithereiisinoiregentifortuitousieventibetweenitheiinflowsiandisurgesiofimo
ney.Amid a rare phases, money floods will surpass money influxs, since installments for duties,
profits, or regular stock develop. Further, money administration is huge in light of the fact that
money constitutes the littlest segment of the aggregate current resources, yet administration's
extensive time is committed in overseeing it. In later past, various advancements have been done
in real money administration methods. An undeniable point of the firm nowadays is to deal with
its trade undertakings out such a route as to keep money adjust at least level and to put the
surplus trade out beneficial venture openings.

The firm ought to create proper techniques for money administration. The firm ought to develop
techniques for money administration. The firm ought to develop techniques with respect to the
accompanying four aspects of money administration.

• Cash arranging: Cash inflows and outpourings ought to be wanted to extend money
surplus or shortfall for every time of the arranging time frame. Money spending plan ought to be
set up for this reason.

• Managing the money streams: The firm ought to choose about the legitimately oversaw.
The money inflows ought to be quickened while, beyond what many would consider possible,
the money outpourings ought to be decelerated.

• Optimum money level: the firm ought to choose about the suitable level of money
adjusts. The cost of overabundance money and threat of money inadequacy ought to be
coordinated to decide the ideal level of money adjusts.

• Investing surplus money: The surplus money adjusts ought to be legitimately contributed
to win benefits. The organizations ought to choose about the division of such money adjusts
between elective here and now speculation openings, for example, bank stores, attractive
securities, or between corporate loaning.
Thought processes In HOLDING CASH

The company's have to hold money might be credited to the accompanying three thought
processes:

• The exchanges thought process

• The preparatory rationale

• The theoretical rationale

Exchange MOTIVE

The exchanges thought process requires a firm to hold money to lead its business in the
customary course. The firm needs money essentially to make installments for buys, wages and
pay rates, other working costs, charges, profits and so forth. tThe need to hold mmoney would
not emerge if there were ideal ssynchronization bbetween money rreceipts and money
iinstallments, i.e., enough money is gotten when the installment must be made. In any case,
money receipts and installments are not flawlessly synchronized. For those periods, when money
installments surpass money receipts, the firm ought to keep up some money adjust to have the
capacity to make required installments. For exchanges reason, a firm may put its trade out
attractive securities. More often than not, the firm will buy securities whose development
compares with some foreseen installments, for example, profits or assessments later on. Notice
that the exchanges intention fundamentally alludes to holding money to meet foreseen
installments whose planning isn't flawlessly coordinated with money receipts.
Prudent MOTIVE

The prudent rationale is the need to hold trade to meet possibilities out what's to come. It gives a
padorcushiontowithstandsomestartlingcrisis.Theipreparatoryimeasureiofimoneyireliesionitheicon
sistencyiofimoneyistreams. In the event that money streams can be anticipated with precision,
less money will be kept up for a crisis. The measure of prudent money is additionally impacted
by the association's capacity to get at short notice when the need emerges. More grounded the
capacity of the firm to obtain at short notice, less the requirement for preparatory adjust. The
prudent adjust might be kept in real money and attractive securities. Attractive securities assume
a vital part here. The measure of money put aside for prudent reasons isn't required to gain
anything; the firm should endeavor to acquire some benefit on it. Such supports ought to be put
resources into high-fluid and generally safe attractive securities. Preparatory adjusts should,
subsequently, be held more in attractive securities and generally less in real money.

Theoretical MOTIVE

The theoretical rationale identifies with the holding of trade for contributing out benefit making
chance to make benefit may emerge when the security costs change. The firm will hold money,
when it is normal that loan costs will rise and security costs will fall. Securities can be obtained
when the loan fee is required to fall; the firm will profit by the ensuing fall in financing costs and
increment in security costs. The firm may likewise conjecture on materials costs. In the event
that it is normal that materials costs will fall, the firm can put off materials acquiring and make
buys in future when pric4e really falls. A few firms may hold money for theoretical purposes. All
things considered, business firms don't take part in theories.
Inithisimanneritheiessentialithoughtiprocessesitoiholdimoneyiandiattractiveisecuritiesiareitheiexchan
gesianditheiprudentiintentions
CASH PLANNING

Cash flows are inseparable parts of the business operations of firms. A firm needs
cash to invest in inventory, receivable and fixed assets and to make payment for operating
expenses in order to maintain growth in sales and earnings. It is possible that firm may be
making adequate profits, but may suffer from the shortage of cash as its growing needs may
be consuming cash very fast. The ‘poor cash’ position of the firm cash is corrected if its cash
needs are planned in advance. At times, a firm can have excess cash may remain idle. Again,
such excess cash outflows. Such excess cash flows can be anticipated and properly invested
if cash planning is resorted to. Cash planning is a technique to plan and control the use of
cash. It helps to anticipate the future cash flows and needs of the firm and reduces the
possibility of idle cash balances ( which lowers firm’s profitability ) and cash deficits (which
can cause the firm’s failure).

Cash planning protects the financial condition of the firm by developing a projected
cash statement from a forecast of expected cash inflows and outflows for a given period. The
forecasts may be based on the present operations or the anticipated future operations. Cash
plans are very crucial in developing the overall operating plans of the firm.
Cash planning may be done on daily, weekly or monthly basis. The period and
frequency of cash planning generally depends upon the size of the firm and philosophy of
management. Large firms prepare daily and weekly forecasts. Medium-size firms usually
prepare weekly and monthly forecasts. Small firms may not prepare formal cash forecasts
because of the non-availability of information and small-scale operations. But, if the small
firms prepare cash projections, it is done on monthly basis. As a firm grows and business
operations become complex, cash planning becomes inevitable for its continuing success.
OTHER FACTORS THAT AFFECT THE SIZE OF CASH
BALANCE

1. Availability of short-term credit:

To avoid holding unnecessary large balances of cash, most firms attempt to
make arrangements at borrow money is case of unexpected needs. With such an
agreement, the firm normally pays interest only during the period that the money is
actually used.

2. Money market rates:

If money will bring a low return a firm may choose not to invest it. Since the
loss or profit is small, it may not be worth the trouble to make the loan. On the other
hand, if interest rates are very high, every extra rupee will be invested.

3. Variation in cash flows:

Some firms experience wide fluctuation in cash flows as a routine matter. A firm
with steady cash flows can maintain a fairly uniform cash balance.

4. Compensating balance:
If a firm has borrowed money from a bank, the loan agreement may require the
firm to maintain a minimum balance of cash in its accounts. This is called
compensating balance. In effect this requires the firm to use the services of bank a
guaranteed deposit on which it pays no interest. The interest free deposit is the bank’s
compensation for its advice and assistance.

CASH MANAGEMENT – BASIS STRATEGIES

The management should, after knowing the cash position by means of the cash
budget, work out the basic strategies to be employed to manage its cash.

CASH CYCLE:
The cash cycle refers to the process by which cash is used to purchase materials
from which are produced goods, which are them sold to customers.
Cash cycle=Average age of firm’s inventory
The cash turnover means the numbers of times firm’s cash is used during each year.
360
Cash turnover = ----------------
Cash cycle
The higher the cash turnover, the less cash the firm requires. The firm should, therefore, try
to maximize the cash turn.

MANAGING COLLECTIONS:

a) Prompt Billing:
By preparing and sending the bills promptly, without a time log between the dispatch of
goods and sending the bills, a firm can ensure earlier remittance.

b) Expeditious collection of cheques:

An important aspect of efficient cash management is to process the cheques receives
very promptly.

c) Concentration Banking:
Instead of a single collection center located at the company headquarters, multiple
collection centers are established. The purpose is to shorten the period between the time
customers mail in their payments and the time when the company has use of the funds are
then to a concentration bank – usually a disbursement account.
d) Lock-Box System:
With concentration banking, a collection center receives remittances, processes them and
deposits them in a bank. The purpose is to lock-box system is to eliminate the time between
the receipt of remittances by the company and their deposit in the bank. The company rents a
local post office box and authorizes its bank in each of these cities to pick up remittances in
the box. The bank picks up the mail several times a day and deposits the cheque in the
company’s accounts. The cheques are recorded and cleared for collection. The company
receives a deposits the cheque in the company’s accounts. The cheques are recorded and
cleared for collation. The company receives a deposit slip and a lift of payments. This
procedure frees the company from handling a depositing the cheques.

CONTROL OF DISBURSMENT

a) Stretching Accounts Payable

A firm should pay its accounts payables as late as possible without damaging its credit
standing. It should, however, take advantages of the cash discount available on prompt
payment.

b) Centralized Disbursement
One procedure for rightly controlling disbursements is to cenrealise payables in to a
single account, presumably at the company’s headquarters. Such an arrangement would
enable a firm to delay payments and can serve cash for several reasons. Firstly, it increases
transit time. Secondly, if a firm has a centralized bank account, a relatively smaller total cash
balances will be needed.

c) Bank Draft
Unlike an ordinary cheque, the draft is not payable on demand. When it is presented
to the issuer’s bank for collection, the bank must present it to the issuer for acceptance. The
funds then are deposited by the issuing firm to cover payments of the draft. But suppliers
prefer cheques. Also, bank imposes a higher service charge to process them since they require
special attention, usually manual.
ProfileiofitheicementiIndustry:

Initheimostigeneralisenseiofitheiword,icementiisiaibinder,iaisubstanceiwhichisetsiandihardensiindependentl
y,iandicanibindiotherimaterialsitogether.iTheiwordi"cement"itracesitoitheiRomans,iwhoiuseditheitermi"opu
sicaementicium"itoidescribeimasonryiwhichiresemblediconcreteiandiwasmadeifromicrushedirockiwithibur
ntilimeiasibinder.iTheivolcaniciashiandipulverizedibrickadditivesiwhichiwereiaddeditoitheiburntilimeitoiobtai
niaihydraulicibinderiwereilaterireferreditoiasicementum,icimentum,icämentiandicement.iCementsiusediinic
onstructioniareicharacterizediasihydrauliciorinon-hydraulic.

Theimostiimportantiuseioficementiisitheiproductioniofimortariandiconcrete—
theibondingiofinaturalioriartificialiaggregatesitoiformiaistrongibuildingimaterialiwhichiisidurableiinitheifacei
ofinormalienvironmentalieffects.

Concreteishouldinotibeiconfusediwithicementibecauseitheitermicementirefersionlyitoitheidryipowderisubst
anceiuseditoibinditheiaggregateimaterialsioficoncrete.iUponitheiadditioniofiwateriand/oriadditivesitheicem
entimixtureiisireferreditoiasiconcrete,iespeciallyiifiaggregatesihaveibeeniadded.

Historyiofitheioriginioficement

Itiisiuncertainiwhereiitiwasifirstidiscoveredithatiaicombinationiofihydratedinon-
hydraulicilimeiandiaipozzolaniproducesiaihydraulicimixturei(seeialso:iPozzolanicireaction),ibuticoncreteima
deifromisuchimixturesiwasifirstiusedioniailargeiscaleibyiRomaniengineersTheyiusedibothinaturalipozzolansi(
trassioripumice)iandiartificialipozzolansi(groundibrickioripottery)iinitheseiconcretes.iManyiexcellentiexampl
esiofistructuresimadeifromitheseiconcretesiareistillistanding,inotablyitheihugeimonolithicidomeiofitheiPant
heoniiniRomeianditheimassiveiBathsiofiCaracalla.iTheivastisystemiofiRomaniaqueductsialsoimadeiextensivei
useiofihydraulicicement.iTheiuseiofistructuraliconcreteidisappearediinimedievaliEurope,ialthoughiweakipoz
zolaniciconcretesicontinueditoibeiusediasiaicoreifilliinistoneiwallsiandicolumns.

Modernicement

ModernihydraulicicementsibeganitoibeidevelopedifromitheistartiofitheiIndustrialiRevolutioni(aroundi1800)
,idrivenibyithreeimainineeds:

 Hydraulicirendersiforifinishingibrickibuildingsiiniweticlimates
  Hydraulicimortarsiforimasonryiconstructioniofiharboriworksietc,iinicontactiwithiseaiwater.
 Developmentiofistrongiconcretes.

IniBritainiparticularly,igoodiqualityibuildingistoneibecameieverimoreiexpensiveiduringiaiperiodiofirapidigro
wth,iandiitibecameiaicommonipracticeitoiconstructiprestigeibuildingsifromitheinewiindustrialibricks,ianditoi
finishithemiwithiaistuccoitoiimitateistone.iHydraulicilimesiwereifavorediforithis,ibutitheineediforiaifastisetiti
meiencourageditheidevelopmentiofinewicements.iMostifamousiwasiParker'si"Romanicement."iThisiwaside
velopedibyiJamesiParkeriinithei1780s,iandifinallyipatentediini1796.iItiwas,iinifact,inothingilikeianyimaterialiu
sedibyitheiRomans,ibutiwasiai"Naturalicement"imadeibyiburningiseptariai-
inodulesithatiareifoundiinicertainiclayideposits,iandithaticontainibothiclayimineralsiandicalciumicarbonate.i

Theiburntinodulesiwereigrounditoiaifineipowder.iThisiproduct,imadeiintoiaimortariwithisand,isetiini5–
15iminutes.iTheisuccessiofi"RomaniCement"ilediotherimanufacturersitoidevelopirivaliproductsibyiburningia
rtificialimixturesioficlayiandichalk.

JohniSmeatonimadeianiimportanticontributionitoitheidevelopmentioficementsiwheniheiwasiplanningitheic
onstructioniofitheithirdiEddystoneiLighthousei(1755-
9)iinitheiEnglishiChannel.iHeineedediaihydraulicimortarithatiwouldisetiandidevelopisomeistrengthiinitheitw
elveihouriperiodibetweenisuccessiveihighitides.iHeiperformedianiexhaustiveimarketiresearchionitheiavaila
bleihydraulicilimes,ivisitingitheiriproductionisites,iandinotedithatithei"hydraulicity"iofitheilimeiwasidirectlyir
elateditoitheiclayicontentiofitheilimestoneifromiwhichiitiwasimade.iSmeatoniwasiaiciviliengineeribyiprofessi
on,ianditookitheiideainoifurther.iApparentlyiunawareiofiSmeaton'siwork,itheisameiprincipleiwasiidentifiedi
byiLouisiVicatiinitheifirstidecadeiofitheinineteenthicentury.iVicatiwentionitoideviseiaimethodioficombiningic
halkiandiclayiintoianiintimateimixture,iand,iburningithis,iproducediani"artificialicement"iini1817.iJamesiFros
tiworkingiiniBritain,iproducediwhatiheicalledi"Britishicement"iiniaisimilarimanneriarounditheisameitime,ibut
ididinotiobtainiaipatentiuntili1822.iIni1824,iJosephiAspdinipatentediaisimilarimaterial,iwhichiheicallediPortla

ndicement,ibecauseitheirenderimadeifromiitiwasiinicolorisimilaritoitheiprestigiousiPortlandistone.

Allitheiaboveiproductsicouldinoticompeteiwithilime/pozzolaniconcretesibecauseiofifast-
settingi(givingiinsufficientitimeiforiplacement)iandilowiearlyistrengthsi(requiringiaidelayiofimanyiweeksibef
oreiformworkicouldibeiremoved).iHydraulicilimes,i"natural"icementsiandi"artificial"icementsiallirelyiuponit
heiribeliteicontentiforistrengthidevelopment.iBeliteidevelopsistrengthislowly.iBecauseitheyiwereiburnediati
temperaturesibelowi1250i°C,itheyicontainedinoialite,iwhichiisiresponsibleiforiearlyistrengthiinimodernicem
ents.iTheifirsticementitoiconsistentlyicontainialiteiwasimadeibyiJosephiAspdin'sisoniWilliamiinitheiearlyi184
0s.iThisiwasiwhatiweicallitodayi"modern"iPortlandicement.iBecauseiofitheiairiofimysteryiwithiwhichiWilliam
iAspdinisurroundedihisiproduct,iothersi(e.g.iVicatiandiIiCiJohnson)ihaveiclaimediprecedenceiinithisiinventio

n,ibutirecentianalysis[6]iofibothihisiconcreteiandirawicementihaveishownithatiWilliamiAspdin'siproductimad
eiatiNorthfleet,iKentiwasiaitrueialite-basedicement.iHowever,iAspdin'simethodsiwerei"rule-of-
thumb":iVicatiisiresponsibleiforiestablishingitheichemicalibasisiofitheseicements,iandiJohnsoniestablishedit
heiimportanceiofisinteringitheimixiinitheikiln.

WilliamiAspdin'siinnovationiwasicounter-
intuitiveiforimanufacturersiofi"artificialicements",ibecauseitheyirequiredimoreilimeiinitheimixi(aiproblemifo
rihisifather),ibecauseitheyirequirediaimuchihigherikilnitemperaturei(andithereforeimoreifuel)iandibecauseit
heiresultingiclinkeriwasiveryihardiandirapidlyiworeidownitheimillstonesiwhichiwereitheionlyiavailableigrindi
ngitechnologyiofitheitime.iManufacturingicostsiwereithereforeiconsiderablyihigher,ibutitheiproductisetirea
sonablyislowlyiandidevelopedistrengthiquickly,ithusiopeningiupiaimarketiforiuseiiniconcrete.iTheiuseioficon
creteiiniconstructionigrewirapidlyifromi1850ionwards,iandiwasisoonitheidominantiuseiforicements.iThusiPo
rtlandicementibeganiitsipredominantirole.iitiisimadeifromiwateriandisand.

Theisettingioficement

Cementisetsiwhenimixediwithiwateribyiwayiofiaicomplexiseriesiofichemicalireactionsistillionlyipartlyiunders
tood.iTheicomponenticonstituentsislowlyicrystalliseianditheilockingitogetheriofitheicrystalsigivesiitistrength
.iCarboniDioxideiisislowlyiabsorbeditoiconvertitheiLimeiintoiinsolubleicalciumicarbonate.iAfteritheiinitialiset
tingi,immersioniiniwarmiwateriwillispeediupisetting.

Environmentaliandisocialiimpacts

Cementimanufactureicausesienvironmentaliimpactsiatiallistagesiofitheiprocess.iTheseiincludeiemissionsiofi
airborneipollutioniinitheiformiofidust,igases,inoiseiandivibrationiwhenioperatingimachineryiandiduringiblas
tingiiniquarries,iandidamageitoicountrysideifromiquarrying.iEquipmentitoireduceidustiemissionsiduringiqua
rryingiandimanufactureioficementiisiwidelyiused,iandiequipmentitoitrapiandiseparateiexhaustigasesiareico
mingiintoiincreasediuse.iEnvironmentaliprotectionialsoiincludesitheire-
integrationiofiquarriesiintoitheicountrysideiafteritheyihaveibeeniclosedidownibyireturningithemitoinatureio
rire-cultivatingithem.
Climate

iCementimanufactureicontributesigreenhouseigasesibothidirectlyithroughitheiproductionioficarbonidioxide

iwhenicalciumicarbonateiisiheated,iproducingilimeiandicarbonidioxide,[14]iandialsoiindirectlyithroughitheius

eiofienergy,iparticularlyiifitheienergyiisisourcedifromifossilifuels.iTheicementiindustryiproducesiabouti5%iofi
globaliman-
madeiCO2iemissions,iofiwhichi50%iisifromitheichemicaliprocess,iandi40%ifromiburningifuel.iTheiamountiofi
CO2iemittedibyitheicementiindustryiisinearlyi900ikgiofiCO2iforieveryi1000ikgioficementiproduced.i

Oneialternative,iinicertainiapplications,ilimeimortar,ireabsorbsitheiCO2ichemicallyireleasediiniitsimanufactu
re,iandihasiailowerienergyirequirementiiniproduction.

NewlyidevelopedicementitypesifromiNovacemiandiEco-
cementicaniabsorbicarbonidioxideifromiambientiairiduringihardening.

Fuelsiandirawimaterials

Aicementiplanticonsumesi3itoi6iGJiofifueliperitonneioficlinkeriproduced,idependingionitheirawimaterialsian
ditheiprocessiused.iMosticementikilnsitodayiuseicoaliandipetroleumicokeiasiprimaryifuels,ianditoiailesseriex
tentinaturaligasiandifuelioil.iSelectediwasteiandiby-
productsiwithirecoverableicalorificivalueicanibeiusediasifuelsiiniaicementikiln,ireplacingiaiportionioficonvent
ionalifossilifuels,ilikeicoal,iifitheyimeetistrictispecifications.iSelectediwasteiandiby-
productsicontainingiusefulimineralsisuchiasicalcium,isilica,ialumina,iandiironicanibeiusediasirawimaterialsiini
theikiln,ireplacingirawimaterialsisuchiasiclay,ishale,iandilimestone.iBecauseisomeimaterialsihaveibothiusefu
limineralicontentiandirecoverableicalorificivalue,itheidistinctionibetweenialternativeifuelsiandirawimaterial
siisinotialwaysiclear.iForiexample,isewageisludgeihasiailowibutisignificanticalorificivalue,iandiburnsitoigiveias
hicontainingimineralsiusefuliinitheiclinkerimatrix.i

Cementiindustry

Ini2002itheiworldiproductioniofihydraulicicementiwasi1,800imillionimetricitons.iTheitopithreeiproducersiw
ereiChinaiwithi704,iIndiaiwithi100,ianditheiUnitediStatesiwithi91imillionimetricitonsiforiaicombineditotaliofi
aboutihalfitheiworlditotalibyitheiworld'sithreeimostipopulousistates.i
COMPANYiPROFILE

ItalcementiiGroupiHistory

Foundediini1864,iItalcementiiwasiquotediforitheifirstitimeionitheistockimarkets,iatitheiMilaniStockiExchang
e,iini1925,iunderitheinameiofi“SocietàiBergamascaiperilaiFabbricazioneideliCementoieidellaiCalceiIdraulica”i
andihasibeenioperatingisincei1927iunderitheinameiofiItalcementiiSpa.

ZuariiCementiisipartiofitheiItalcementiiGroup,itheififthilargesticementiproduceriinitheiworldianditheibiggesti
initheiMediterraneaniregion.iWithinetisalesioveri6ibillioniEurosiini2010iandiaicapacityiofi70imillionitonnes.iIt
alcementiiGroupicombinesitheiexpertise,iknow-
howiandicultureiofiainumberioficompaniesifromimoreithani22icountriesiini4icontinents.iThisiincludesianiind
ustrialinetworkiofi63icementiplants,i15igrindingicentres,i5iterminals,i134iaggregatesiquarriesiandi613iconcr
eteibatchingiunits.iIniIndia,iwithiitsiinherentistrengths,iItalcementiiGroup'siZuariiCementiisicommitteditoigi
veitheibuildingiindustryiaicementithatiisitrulyiinternational.i
i

AicommitmentitoicustomerisatisfactionihasiseeniZuariiCementigrowifromiaimodesti0.5imillionitonneicapaci
tyiini1995itoi3.5imillionitonneitoday.iZuariiCementiisiinitheiprocessiofiincreasingithisicapacityitoi6imillionito
nneibyi2010ithroughisettingiupiofiainewi5500itonneiperidayiclinkerilineiatiYerraguntlaiandiaigrindingicenteri
atiChennai.iAicaptiveipoweriplantiwithiaicapacityiofi43iMWihasialreadyibeenisetiupiatitheiCompany'sicemen
timanufacturingifacilityiatiSitapuram.

Withiai6%imarketishareiinitheisouthiIndianicementimarketiandisalesiofiaboutiEuroi188imillioniini2010,iZuarii
Cementihasichalkedioutiambitiousiplansiforitheifuture.iThisiincludesistrengtheningiitsipresenceiinitheiMaha
rashtra,iOrissaiandiWestiBengalimarkets.iWhileitechnologyiisijustioneiofiitsistrengths,ithereiareimanyiotheri
factorsithaticontributeiequallyitoiZuari'sisuccess.iTheseiincludeiaihigh-
leveliorganisationiandidecentralisediqualityiassuranceiteamsitoiguaranteeitheifullicomplianceiwithitheicust
omers'iexpectations.i
OuriHistoryi:

Strongifoundationsiforiaicompanyiofistrength.iZuariientereditheiCementibusinessiini1994itoioperat
eitheiTexmacoiCementiPlant.iIni1995,iTexmaco’siPlantiatiYerraguntlaiwasitakenioveribyiZuariiandiaiCementi
Divisioniwasiformed.iTheifledgingiuniticameiintoiitsiowniinitheiyeari2001iwheniZuariiIndustriesienterediintoi
aiJointiVentureiwithitheiItalcementiiGroup,ithei5thilargestiproduceriofiCementiinitheiworldi,iZuariiCementiL
imitediwasiborn.iZuariiCementitookioveriSriiVishnuiCementiLimitediini2002.iToday,itheiCompanyiisiamongs
titheitopmosticementiproducesiiniSouthiIndia.

ZuariiandiItalcementi.

i Theistrengthiofitwoi
iZuariiCementiisioneiofitheileadingicementiproducersiiniSouthiIndia.AifullyiownedisubsidiaryiofitheiEuroi6ibil

lioniItalcementiiGroup,iCommitmentitoicustomerisatisfactionihasiseeniZuariiCementigrowifromiaimodesti0.
5imillionitonneicapacityiini1995itoi3.5imillionitonesitoday.Andiearnediaiplaceiamongitheimostireliableiceme
ntiproducersiinitheicountry.i

Thanksitoiaicarefuliplaniofiinvestmentsianditake-
oversiofiothericementiproducers,itheicompanyiexpanded,iquicklyireachingiaistrongipositionionitheimarketi
andibecomingitheileadingicementimanufactureriiniItaly.

Afteriseveraliacquisitionsiabroad,iini1992iItalcementiiachievediimportantiinternationalistatusiwithiitsitake-
overiofiCimentsiFrançais,ioneiofitheimainiglobalicementiproducer.i

Ini1997iItalcementiiconsolidatediitsiverticalisationistrategyiwithitheiacquisitioniofiCalcestruzzi,ithusibecomi
ngiItalianileaderiinitheiready-mixediconcreteisector.i

IniMarchi1997,iallitheiinternationalicompaniesiofitheiGroupigatherediunderioneisingleicorporateiidentity.
i
 DATAiANALYSISi&iINTERPRETATION

4.1iCALCULATIONSiOFiFUNDSiFROMiOPERATIONi(RsiiniThousand)

Particulars 2013-2014 2014-2015 2015-2016 2016-2017

NetiProfit 621082 1183275 478738 400470

Depreciationiduringithei- 1260161 1440184 1620207 1800231

year

FFO(FLO) 1881243 2623459 2098945 2200701

ADD:

Sundryidebtors 736292 293962

iExpenditures 43200

Variousicreditors 4731130 1710210 10643203

oOutstandingiiliabilities 1009534 91841

BankiO/D 2950464 10801353

LESS:

Stock 1497634 567073 1755576 1106913

BankiO/D 2950464

oOutstandingiliabilities 767131 334244

SundryiDebtors 9562393 910746

SundryiCreditors 1699354

CFO(CLO) 9854229 342963 1516020 8950797

4.2iCASHiFLOWiSTATEMENT

Inflow 2013-2014 2014-2015 2015-2016 2016-2017

Openingibalance 14564 64678 104545 63582

Cashifromioperation 9854229 342963 1516020 8950797

Increaseiiniloanifunds

2410798

SalesiofiAsset 797244

Increaseiinishareicapital

2800000

Total 9868793 1204885 6831363 9014379

Outflows

Cashioutflowifromioperationi

PurchaseiofiAsset 9776411 6767781 7004825

Decreaseiiniloanifunds 27704 900340 1731144

Decreaseiinishareicapital 200000

Closingibalance 64678 104545 63582 278410

Total 9868793 1204885 6831363 9014379

Inference:

iThisitableishowsithatitheicashiflowistatementsiofiZuariiCementsiLtdiareitoibeiefficient.iTheicashiinflowiofith

eicompanyiisitoibeiincreasediforiyeariafteriyear.iTheifundifromioperationiisialsoitoidifferifromieveryiyear.iTh
eicompanyishouldiincreaseitheirishareicapitalifromi2015-
2016iforiRs.i28,i00,000.iItsimustibeiusediasiefficientiforitheinextiyeariforidecreaseitheiriloaniamount.

5.3iTRENDiANALYSIS

Yi=iai+ibX

Whereiai=i∑Yi;ibi=i∑XY
 n ∑X2
i i

5.3.1iINVENTORIES

Inventories

YEAR X X2 (Rsiinilakhs) XY

Y (Rsiinilakhs)

2012i–i13 -2 4 27,76,072 -55,52,144

2013i–i14 -1 1 12,78,438 -12,78,438

2014i–i15 0 0 18,45,511 0

2015i–i16 1 1 36,01,087 36,01,087

2016i–17 2 4 47,08,000 94,16,000

TOTAL 10 1,42,09,108 61,86,505

iai=i1,i42,i09,108i=i2,i84,182.6

i5

ibi=i61,i86,505i=i6,i18,650.5

i10

Inference:
iThisitableiindicatesithatitheivolumeiofiinventoryihasibeeniincreasedieveryiyear.iItsimustibeiincreasediforith

eilastiyeari11,i06,913.iInventoriesivalueiini2012-17iwillibeiabouti2,i84,182.6

5.3.2iSUNDRYiDEBTORS

SundryiDebtors

YEAR X X2 (Rs) XY

Y (Rs)

2012i–i13 -2 4 20,69,513 -41,39,026

2013i–i14 -1 1 28,05,805 -28,05,805

2014i–i15 0 0 25,11,842 0

2015i–i16 1 1 1,20,74,236 1,20,74,236

2016i–17 2 4 1,29,84,982 2,59,69,964

TOTAL 10 3,24,46,378 3,10,99,369

iai=i3,i24,i46,378i=i64,i89,275.6

i5
ibi=i3,i10,i99,369i=i31,i09,936.9

i10

Inference:

iThisitableishowsithatitheiSundryiDebtorsihasibeenimoreieveryiyear.iItimustibeiincreasedimoreithani6itimesi

fromitheibeginningiofitheiperiodiofitheistudy.iSundryiDebtorsivalueiini2012-

17iwillibeiabouti64,i89,275.6.

5.3.3iCASHi/iBANK

Cashi/iBank

YEAR X X2 (Rs) XY

Y (Rs)

2012i–i13 -2 4 14,564 -29,128

 2013i–i14 -1 1 64,679 -64,679

2014i–i15 0 0 61,858 0

2015i–i16 1 1 63,582 63,582

2016i–17 2 4 2,78,410 5,56,820

TOTAL 10 4,83,093 5,26,593

ai=i4,i83,093i=i96,618.6

i5

ibi=i5,i26,593i=i52,659.3

i10

Inference:

iTheicashivalueiofitheiZuariiCementsiLtdihasibeeniincreasedianditheiestimatediitishouldibeidecreasediforith

eipreviousiyear.iCashivalueiini2012-17iwillibeiabouti96,618.6
 5.3.4iLOANSi&iADVANCES

Loansi&iAdvances

YEAR X X2 (Rs) XY

Y (Rs)

2012i–i13 -2 4 1,00,065 -2,00,130

2013i–i14 -1 1 8,26,377 -8,26,377

2014i–i15 0 0 3,60,138 0

2015i–i16 1 1 27,70,937 27,70,937

2016-17 2 4 5,62,837 11,25,674

TOTAL 10 46,20,354 28,70,104

iai=i46,i20,354i=i9,i24,070.8

i5

ibi=i28,i70,104i=i2,i87,010.4

i10
Inference:

iTheitableiindicatesithatitheiloansiandiadvancesiofiZuariiCementsiLtdiwillibeireducedifromitheiyeari2012-

2017.iLoansi&iAdvancesivalueiini2012-17iwillibeiabouti9,i24,070.8

5.3.5iCURRENTiLIABILITIES

CurrentiLiabilities

YEAR X X2 (Rs) XY

Y (Rs)

2012i–i13 -2 4 22,58,576 -45,17,152

2013i–i14 -1 1 57,45,442 -57,45,442

2014i–i15 0 0 38,56,338 0
 2015i–i16 1 1 1,44,73,102 1,44,73,102

2016i–17 2 4 1,25,88,203 2,51,76,406

TOTAL 10 3,89,21,661 2,93,86,914

ai=i3,i89,i21,661i=i77,i84,332.2

i5

bi=i2,i93,i86,914i=i29,i38,691.4

i10

Inference:

iTheitableishowsithatitheicompany’sicurrentiliabilityiwillibeiincreasedifromitheieveryiyear.

CurrentiLiabilitiesivalueiini2012-17iwillibeiabouti77,i84,332.2
 5.3.6iCURRENTiASSET

Currentiasset

X X2 (Rs) XY
YEAR
Y (Rs)

2012i–i13 -2 4 21,27,277 -42,54,554

2013i–i14 -1 1 41,48,921 -41,48,921

2014i–i15 0 0 59,74,933 0

2015i–i16 1 1 1,85,09,842 1,85,09,842

2016i–17 2 4 2,03,50,240 4,07,00,480

TOTAL 10 5,11,11,213 5,08,06,947

ai=i5,11,11,213i=i1,02,22,242.6

i5

bi=i5,08,06,947i=i50,80,694.7

i10

Inference:
 Thisitableishowsithatitheicurrentiassetiofitheicompanyiwillibeigrowniati9times.iWhenicompare
ditoitheibeginningiofitheiperiodiofistudyiitsimustibeiincreased.iCurrentiAssetivalueiini2012iwillibeiabo
uti1,02,22,242.6.

RATIOiANALYSIS:

RatioiAnalysisiisiaipowerfulitooliofifinancialianalysis.iAiRatioiisidefinediasi“theiindic
atediquotientiofitwoimathematicaliexpressions”iandiasi“theirelationshipibetweenitwoiorimoreithings”.
iInifinancialianalysis,iairatioiisiusediasiaibenchmarkiforievaluatingitheifinancialipositioniandiperforma

nceiofiaifirm.

Ratioihelpsitoisummarizeilargeiquantitiesiofifinancialidataianditoimakeiqualitativeijud
gmentiaboutitheifirm’sifinancialiperformance.
 5.4iRATIOiANALYSIS

5.4.1iCurrentiAssetsitoiFixediAssetsiRatio

iTheiformulaiforitheiratioiisiCurrentiAssets

iFixediAssets

CurrentiAssetsitoiFixediAssetsiRatio

Increase/iDe
RATIO crease
YEAR

2012i–i13 0.94:1

2013i–i14 0.72:1 -0.22

2014i–i15 1.55:1 0.82

 2015i–i16 1.28:1 -0.27

2016i–17 1.62:1 0.34

.iInference:

iTheileveliofiCurrentiAssetsicanibeimeasuredibyiusingithisiCurrentiAssetitoiFixediAssetsiRatio.iTheile

velihasibeenifluctuatingieveryiyear.

Increase/ Decrease
1

0.8

0.6

0.4
Increase/ Decrease
0.2

0
RATIO 0.94:1 0.72:1 1.55:1 1.28:1 1.62:1
-0.2
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-0.4 13 14 15 16 17
i

5.4.2
5.4.3 CurrentiAssetsitoiTotaliAssetsiRatio
i

iTheiformulaiforitheiratioiisiCurrentiAssets

iTotaliAssets

CurrentiAssetsitoiTotaliAssetsiRatio
 Increase/iDe
RATIO crease
YEAR

2012i–i13 0.26:1

2013i–i14 0.48:1 0.22

2014i–i15 0.62:1 0.14

2015i–i16 0.59:1 -0.03

2016i–17 0.59:1

Inference:

TheiTableishowsitheiCurrentiAssetsitoiTotaliAssetsiratioiofitheicompany,iwhichiregisterediaifluct
uatingitrendithroughoutitheistudyiperiod.iThisiratioivariedifromi0.26itoi0.48itimesiduringitheistud
y.iThereiisinoichangeiforilastiyear.

Increase/ Decrease
0.25

0.2

0.15

0.1 Increase/ Decrease

0.05

0
RATIO 0.26:1 0.48:1 0.62:1 0.59:1 0.59:1
-0.05
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
13 14 15 16 17
i

5.4.3iNetiWorkingiCapitaliRatio
iTheiformulaiforitheiratioiisiNetiWorkingiCapital
iNetiAssets

NetiWorkingiCapitaliRatio

Increase/iDe
RATIO crease
YEAR

2012i–i13 0.27:1

2013i–i14 0.12:1 -i0.15

2014i–i15 0.15:1 0.03

2015i–i16 0.21:1 0.06

2016i–17 0.22:1 0.01

Inference:

iNetiWorkingiCapitaliisiusediasiaimeasureiofiaifirm’siliquidityianditheifirm’sipotentialireservoiriofifun

ds.iIticanialsoibeirelateitoinetiassets.
iTheiNetiWorkingiCapitaliRatioifromitheitableishowsiaifluctuatingitrendianditheiaverageiNetiWorkingi

CapitaliRatioiisi0.21itimesiofiNetiWorkingiCapitalitoiNetiAssets.iHenceiitishowsithatiZuariiCementsiL
tdihasianiaverageiliquidityiposition.i
 Increase/ Decrease
0.1

0.05

0
RATIO 0.27:1 0.12:1 0.15:1 0.21:1 0.22:1 Increase/ Decrease

-0.05 YEAR 2012 – 2013 – 2014 – 2015 – 2016 –

13 14 15 16 17
-0.1

-0.15

5.3.4iInventoriesitoiCurrentiAssetsiRatio
iTheiformulaiforitheiratioiisiInventories

iCurrentiAssets

InventoriesitoiCurrentiAssetsiRatio
Increase/iDecr
RATIO ease
YEAR

2012i–i13 1.30:1

2013i–i14 0.31:1 -0.99

2014i–i15 0.31:1

2015i–i16 0.19:1 -0.12

2016i–17 0.23:1 0.04

Inference:

iFromitheitableiitiisiknownithatitheiInventoriesitoiCurrentiAssetsiRatioialsoiregisteriaifluctuatingitrendidurin

githeientireistudyiperiod.

iTheiaverageiratioiisi0.31itimesiandithusiitiisifoundithatitheiinvestmentiiniinventoriesi(beingioneiofitheiimpo

rtantiCurrentiAssets)iisikeptiatitheiconsiderableilevel.

Increase/ Decrease
100%
80%
60%
40%
20%
0% Increase/ Decrease
-20% RATIO 1.30:1 0.31:1 0.31:1 0.19:1 0.23:1
-40% YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-60% 13 14 15 16 17

-80%
-100%

5.4.5iSundryiDebtorsitoiCurrentiAssetsiRatio

iTheiformulaiforitheiratioiisiSundryiDebtors

iCurrentiAssets

SundryiDebtorsitoiCurrentiAssetsiRatio
 Increase/iDecre
RATIO ase
YEAR

2012i–i13 0.97:1

2013i–i14 0.68:1 -0.29

2014i–i15 0.42:1 -i0.26

2015i–i16 0.65:1 0.23

2016i–17 0.63:1 -0.02

Inference:

FromitheitableitheiSundryiDebtorsitoiCurrentiAssetsiRatioishowsiaifluctuatingitrendithroughoutithe
istudyiperiodifromi2012-13itoi2016-17.i

iTheiaverageiratioiisi0.65itimes.iHenceiitiimpliesitheicreditipolicyifollowedibyiZuariiCementsiLtdiisimoderate.

Increase/ Decrease
0.3

0.2

0.1

0
RATIO 0.97:1 0.68:1 0.42:1 0.65:1 0.63:1 Increase/ Decrease
-0.1
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-0.2 13 14 15 16 17

-0.3

-0.4

5.4.6iLoansiandiAdvancesitoiCurrentiAssetsiRatio
 TheiformulaiforitheiratioiisiLoansiandiAdvances

iCurrentiAssets

LoansiandiAdvancesitoiCurrentiAssetsiRatio
i

Increase/iDecr
RATIO ease
YEAR

2012i–i13 0.02:1

2013i–i14 0.19:1 0.17

2014i–i15 0.06:1 -0.13

2015i–i16 0.15:1 0.09

2016i–17 0.02:1 -i0.13

Inference:

FromitheitableiitiisinotedithatitheiLoansiandiAdvancesitoiCurrentiAssetsiRatioihaveiregisterediaifluc
tuatingitrend.i

iItiimpliesithatiaiquarteripositionsiofitheiCurrentiAssetsiareikeptiiniforiLoansiandiAdvances;itherebyiitiisifoun

dithatiZuariiCementsiLtdivalueiofiLoansiandiAdvancesiisiconsiderable.i
 Increase/ Decrease
0.2

0.15

0.1

0.05
Increase/ Decrease
0
RATIO 0.02:1 0.19:1 0.06:1 0.15:1 0.02:1
-0.05
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-0.1 13 14 15 16 17

-0.15

5.4.7iCashitoiCurrentiAssetsiRatio
iTheiformulaiforitheiratioiisiCash

iCurrentiAssets

CashitoiCurrentiAssetsiRatio
Increase/iDecre
RATIO ase
YEAR

2012i–i13 0.006:1

2013i–i14 0.015:1 0.09

2014i–i15 0.01:1 -0.14

2015i–i16 0.003:1 -i0.007

2016i–17 0.013:1 0.01

Inference:
 TheitableishowsitheidetailsiofiCashitoiCurrentiAssetsiRatioiandiregisterediaifluctuatingitrendithroug
houtitheistudyiperiodifromi2012-13itoi2016-17.

iHenceiweifindithatiZuariiCementsiLtdihadimaintainediaimoderateilevelioficashiiniproportionitoiCurrentiAss

ets.

Increase/ Decrease
0.1

0.05

0
Increase/ Decrease
RATIO

0.01:1
0.006:1

0.015:1

0.003:1

0.013:1

-0.05

YEAR 2012 – 2013 – 2014 – 2015 – 2016 –

-0.1 13 14 15 16 17

-0.15

5.4.8iCashitoiWorkingiCapitaliRatio

iTheiformulaiforitheiratioiisiCash

iWorkingiCapital

CashitoiWorkingiCapitaliRatio

Increase/iDecre
RATIO
 YEAR ase

2012i–i13 0.11:1

2013i–i14 0.04:1 -i0.07

2014i–i15 0.03:1 -i0.01

2015i–i16 0.07:1 0.04

2016i–17 0.06:1 -0.01

Inference:

TheiCashitoiWorkingiCapitaliRatioiregisterediaifluctuatingitrendiduringitheistudyiperiodithisiisinote
difromitheitable.iItiwasi0.11itimesiini2012-
13,iwhichisharplyiincreaseditoi0.04itimesiinitheinextiyeariandilateriforitheifollowingiyearsiitiisifluctuating.

iHenceiitiisifoundithati4%iofitheiWorkingiCapitaliratioiisimanagedibyiusingitheicashi&ibankibalanceiavailablei

initheicompany.i

iTheipolicyiregardifinancingitheiWorkingiCapitaliiniZuariiCementsiLtdicanibeisaidiasiaggressiveipolicy.

Increase/ Decrease
0.06

0.04

0.02

0
RATIO 0.11:1 0.04:1 0.03:1 0.07:1 0.06:1 Increase/ Decrease
-0.02
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-0.04 13 14 15 16 17

-0.06

-0.08

5.4.9iCashitoiSalesiRatio
 iTheiformulaiforitheiratioiisiCash

iSales

CashitoiSalesiRatio
Increasei/iDecr
RATIO ease
YEAR

2012i–i13 0.0007:1

2013i–i14 0.0026:1 0.0019

2014i–i15 0.0028:1 0.0002

2015i–i16 0.0069:1 0.0041

2016i–17 0.0064:1 -i0.0005

Inference:

iThisiisioneiofitheiimportantiratiosioficontrollingicash.iAistudyioficashitoisalesiratioiwilliprovideiaideepiinsight

iintoitheicashibalancesiheldiinitheiconcerns.

iEvidentifromitheitableishowsiCashitoiSalesiregisterediaifluctuatingitrendithroughoutitheistudyiperiod.i
 Increase / Decrease
0.005
0.004
0.003
0.002
0.001
Increase / Decrease
0
0.0007:1

0.0026:1

0.0028:1

0.0069:1

0.0064:1
RATIO

-0.001

YEAR 2012 – 2013 – 2014 – 2015 – 2016 –

13 14 15 16 17
i

5.4.10iCashiRatio

iTheiformulaiforitheiratioiisiCash

iCurrentiliabilities

CashiRatio

Increasei/iDecre
RATIO ase
YEAR

2012i–i13 0.0064:1

2013i–i14 0.0112:1 0.0048

2014i–i15 0.0160:1 0.0048

2015i–i16 0.0044:1 -0.0116

 2016i–17 0.0221:1 0.0177

Inference:

FromitheitableiitiisinotedithatitheicashipositioniofitheiZuariiCementsiLtdiisisatisfactory.

Itiisifoundithatitheicashirequireditoimeetioutitheicurrentiliabilitiesiisimaintainediatiainormalilevel.

Increase / Decrease
0.02

0.015

0.01

0.005
Increase / Decrease
0
0.0064:1

0.0112:1

0.0160:1

0.0044:1

0.0221:1
RATIO

-0.005

-0.01
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-0.015 13 14 15 16 17

5.4.11iCurrentiRatio

iTheiformulaiforitheiratioiisiCurrentiAssets

iCurrentiliabilities

CurrentiRatio
Increasei/iDecre
RATIO ase
 YEAR

2012i–i13 0.94:i1

2013i–i14 0.72:i1 -0.22

2014i–i15 1.55:i1 0.83

2015i–i16 1.27:i1 -0.28

2016i–17 1.62:i1 0.35

Inference:

iThisiratioiisianiindicatoriofitheifirm’sicommitmentitoimeetiitsishorti–itermiliabilities.i

iFromitheitableiitiisiclearithatitheiCurrentiRatioiofiZuariiCementsiLtdihasibeenifluctuatingifromitheistartingio

fitheistudyiperiod,ilateriforilastiyeariitihasibeeniincreasing;ihenceitheiCurrentiRatioiisiquiteisatisfactory.

iThusitheiCurrentiRatioishowsithatitheicompanyihasisufficientifundsitoimeetiitsishort-termiobligations.

Increase / Decrease
1

0.8

0.6

0.4
Increase / Decrease
0.2

0
RATIO 0.94: 1 0.72: 1 1.55: 1 1.27: 1 1.62: 1
-0.2
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-0.4 13 14 15 16 17

5.4.12iLiquidityiRatio

TheiformulaiforitheiratioiisiLiquidiAssets
 iCurrentiliabilities

LiquidityiRatio

Increasei/iDec
RATIO rease
YEAR

2012i–i13 0.94:i1

2013i–i14 0.50:i1 -0.44

2014i–i15 1.07:i1 0.57

2015i–i16 1.03:i1 -0.04

2016i–17 1.24:i1 0.21

Inference:

Thisiratioihelpsitheimanagementitoimeasureishort-termisolvency.iTheiidealiliquidiratioiisi1:1
FromitheitableiitiisiclearithatiZuariiCementsiLtdiliquidiratioiisimoreithanitheiidealiratioiduringitheis
tartingiofitheistudyiperiodiandilateriini2012i-
i13iitihadireducedislightly,iyetiforitheirestiofitheiperiodicurrentiliabilitiesiwereifullyisecuredibyiliqu
idiassetsibecauseitheiliquidiassetsiwereimoreithanitheicurrentiliabilitiesiandihenceitheicompany’sili
quidityiisisatisfactory.
 Increase / Decrease
1

0.8

0.6

0.4
Increase / Decrease
0.2

0
RATIO 0.94: 1 0.72: 1 1.55: 1 1.27: 1 1.62: 1
-0.2
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-0.4 13 14 15 16 17

5.4.13iSuperiQuickiRatio

iTheiformulaiforitheiratioiisiSuperiQuickiAssets

iQuickiliabilities

SuperiQuickiRatio
Increasei/iDecr
RATIO ease
YEAR

2012i–i13 0.65:1

2013i–i14 0.32:1 -0.33

2014i–i15 0.58:1 0.26

2015i–i16 0.62:1 0.04

2016i–17 0.64:1 0.02

Inference:
SuperiQuickiRatioiisitheihealthyimeasureiofitheifirm’siliquidityiposition.
 Fromitheitablei4.21iitiisinotedithatitheiliquidityiofiZuariiCementsiLtdihadiaisteepislopeiinibetweeni
duringitheiyeari2012-
13,iyetiitiwasiableitoihaveiaislowiincreaseiinitheirestiofitheistudyiperiodiandiableitoimaintainiitsiposi
tion.

iHenceiitishowsithatiZuariiCementsiLtdiisiableitoimeetiitsicurrentiobligationsi(liabilities).

Increase / Decrease
0.3

0.2

0.1

0
RATIO 0.65:1 0.32:1 0.58:1 0.62:1 0.64:1 Increase / Decrease
-0.1
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-0.2 13 14 15 16 17

-0.3

-0.4

5.4.14iWorkingiCapitaliTurnoveriRatio

iTheiformulaiforitheiratioiisisales

iWorkingiCapitali

WorkingiCapitaliTurnover

Increasei/iDe
RATIO crease
YEAR

2012i–i13 12.36:i1
 2013i–i14 17.70:i1 5.34

2014i–i15 11.55:i1 -25.15

2015i–i16 31.55:i1 20.00

2016i–17 5.45:i1 -26.15

Inference:

iThisiratioiindicatesiwhetheriWorkingiCapitalihasibeenieffectivelyiutilizediinimakingisalesiorinot.

FromitheitableiitiisinotedithatiWorkingiCapitalihadisomeifluctuationiinitheimiddleiofitheistudyiperio
d,iyetitheicompanyiwasiableitoiincreaseiitiinitheilateriyears.i

HenceitheiturnoveriindicatesithatiZuariiCementsiLtdihadiutilizediitsiWorkingiCapitaliefficientlyiandit
heicompanyicanialsoitryitoiworkionithisitoigetimoreieffectiveivalues.

Increase / Decrease
30

20

10

0 Increase / Decrease
RATIO 12.36: 1 17.70: 1 11.55: 1 31.55: 1 5.45: 1
-10
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
13 14 15 16 17
-20

-30

5.4.15iInventoriesiTurnoveriRatio
iTheiformulaiforitheiratioiisiCostiofiGoodsiSoldi
 iAverageiStocki

InventoriesiTurnover

YEAR RATIO Increasei/iDecr

ease

2012i–i13 1.36:i1

2013i–i14 1.02:i1 -0.34

2014i–i15 1.02:i1 0

2015i–i16 1.02:i1 0

2016i–17 1.53:i1 0.51

i Inference:

Thisiratioiindicatesiwhetheriinvestmentiiniinventoryiisiefficientlyiusediorinotiandiwhetheritheiinves
tmentiisiwithiniproperilimits.

iFromitheitableiitiisifoundithatitheiInventoryiturnoveriRatioiofiZuariiCementsiLtdihadisomeifluctuationsiinith

eistartingiofitheistudyiperioditheniitihadiaigrowthiiniit.

iHenceitheiefficiencyiofiinventoryicontroliiniZuariiCementsiLtdishowsiaisatisfactoryiposition.

Increase / Decrease
0.6
0.5
0.4
0.3
0.2
Increase / Decrease
0.1
0
-0.1 1.36: 1 1.02: 1 1.02: 1 1.02: 1 1.53: 1
-0.2 2012 – 2013 – 2014 – 2015 – 2016 –
-0.3 13 14 15 16 17
-0.4
 5.4.16iDebtorsiTurnoveriRatio

iTheiformulaiforitheiratioiisiSales

iSundryiDebtors

DebtorsiTurnover
Increasei/iDe
RATIO crease
YEAR

2012i–i13 7.84:i1

2013i–i14 8.54:i1 0.70

2014i–i15 8.49:i1 -0.05

2015i–i16 3.30:i1 -5.19

2016i–17 3.26:i1 -0.04

Inference:

Thisiisioneiofitheitechniquesiemployedibyitheicompanyiwithiregarditoitheicollectioniofitheirec
eivablesithroughieffectiveimanagementioficollectionipolicyiwithitheihelpiofifactoringiservices.
iFromitheitableiitishowsithatitheiDebtors’iturnoveriRatioihadisatisfactoryiincreaseiinitheistartingiofitheistud

yiperiod.iHowever,iinimiddleiofitheistudyiperiodiitihadislightifluctuations,itheicompanyiwasiableitoiraiseiitiini
theinextiyear.
 Increase / Decrease
1

0
RATIO 7.84: 1 8.54: 1 8.49: 1 3.30: 1 3.26: 1
-1
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-2 13 14 15 16 17
Increase / Decrease
-3

-4

-5

-6

5.4.17iDebtiCollectioniPeriodiRatio
iTheiformulaiforitheiratioiisiDaysiiniaiMonth

iSundryiDebtorsiturnover

DebtiCollectioniPeriodiRatio
Increasei/iDec
RATIO rease
YEAR

2012i–i13 46.5

2013i–i14 42.7 -3.8

2014i–i15 81.29 39.79

2015i–i16 110.6 29.31

2016i–17 111.9 1.3

Inference:
iThisiratioiindicatesitheiextentitoiwhichitheidebtsihaveibeenicolletediinitime.iItigivesitheiaverageidebticollec

tioniperiod.

iZuariiCementsiLtdiuseithisiratioitoifindioutiwhetheritheiriborrowersiareipayingionitime.iFromitheitableiitiisif

oundithatithroughoutitheistudyiperioditheicollectioniperiodiisifluctuatingiandiisiwithinitheiaverage.i

Increase / Decrease
40
35
30
25
20
15 Increase / Decrease
10
5
0
-5 RATIO 46.5 42.7 81.29 110.6 111.9
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
13 14 15 16 17
i

5.4.18iCashiIntervaliMeasureiRatio
iTheiformulaiforitheiratioiisiCurrentiAssetsi–iInventories

iAvg.iDailyiOperatingiExp i .

CashiIntervaliMeasureiRatio
Increasei/iDec
RATIO rease
YEAR

2012i–i13 135.14
 2013i–i14 104.27 -30.89

2014i–i15 136.44 32.17

2015i–i16 144.72 8.28

2016i–17 146.13 1.41

Inference:

Thisiratioiexaminesitheifirm’siabilityitoimeetiitsiregularicashiexpenses.i

iTheidefensiveiintervalimeasuresitheitimeiperiodiforiwhichiaifirmicanioperateionitheibasisiofipresentiliquidia

ssetsiwithoutiresortingitoitheinextiyear’sirevenue.

iThisiratioiofiZuariiCementsiLtd,ifromitheitableishowsithatitheicompanyicanimeetiitsioperatingicashirequire

mentsiwithiniaiperiodiofi105itoi146idaysiwithoutiresortingitoinextiyear’siincome.

Increase / Decrease
40

30

20

10

0 Increase / Decrease
RATIO 135.14 104.27 136.44 144.72 146.13
-10
YEAR 2012 – 2013 – 2014 – 2015 – 2016 –
-20 13 14 15 16 17
-30

-40
 5.1iFINDINDS

 TheicashimanagementiofiZuariiCementsiLtdihasibeeniworkingiwelliinitheiorganization.
 TheiFundsifromioperationsiofiaicompanyihasibeeniincreasedifromiyearibyiyear.
 Theicashifromioperationsihasibeenifindithatiitiusediasiefficient.
 Theicashiinflowiandioutflowioficashiflowistatementihaveiaicashibalanceiwillibeiincreasedi4.2itimesi
whenicompareditoilastiyearibalance.
 CurrentiRatioishowsithatitheicompanyihasisufficientifundsitoimeetiitsishort-termiobligations.
 Theicompany’siLiquidityiRatioishowsiaisatisfactoryitrend.
 SuperiQuickiRatioishowsithatiZuariiCementsiLtdiisiableitoimeetiitsicurrentiobligationsi(liabilities)..
 TheiefficiencyiofiinventoryicontroliiniZuariiCementsiLtdishowsiaisatisfactoryiposition..
 TheiCashiRatioishowsithatitheicashirequireditoimeetioutitheicurrentiliabilitiesiisimaintainediatiainor
malilevelihence,iitishowsithatiZuariiCementsiLtdifollowsianiaverageipolicy.
 IntervaliMeasureiRatioishowsithatitheicompanyicanimeetiitsioperatingicashirequirementsiwithiniai
periodiofi105itoi146idaysiwithoutiresortingitoinextiyear’siincome.
 TheiCurrentiAssetsitoiTotaliAssetsiRatioiimpliesithatiZuariiCementsiLtdiisimaintainingiaiconsiderabl
eileveliofiCurrentiAssetsiiniproportionitoiTotaliAssets.
 TheiaverageiCashitoiCurrentiAssetsiisimaintainediati0.009itimes.iHence,iitiisifoundithatitheicompan
yihadimaintainediaimoderateilevelioficashiiniproportionitoiCurrentiAssets.
 TheiaverageiratioiofiInventoriesitoiCurrentiAssetsiisi0.46itimesiandithusiitiisifoundithatitheiinvestme
ntiiniinventories.
 TheiaverageiratioiofiSundryiDebtorsitoiCurrentiAssetsiisi0.67itimes.iHenceiitiimpliesithatitheicrediti
policyifollowedibyiZUARIiCEMENTSiLTDiisimoderate.
 TheiloansiandiAdvancesitoiCurrentiAssetsiratioiofitheicompanyiimplyithatiaiquarteripositionsiofithei
CurrentiAssetsiareikeptiiniforiloansiandiadvances,iwhichiisiconsiderable.i
 TheipolicyiregardifinancingitheiWorkingiCapitaliiniZuariiCementsiLtdicanibeisaidiasiAggressiveipolic
yiaccordingitoitheiCashitoiWorkingiCapitaliRatio.
 Theiaverageicashitoisalesiratioiisi0.004itimesiandiwhichiindicatesithationlyi0.4%iofisalesihasibeenim
aintainediasicashiwithitheibusiness.
 6.2iSUGGESTIONSi&iRECOMMENDATIONS

 ZuariiCementsiLtdishoulditryitoimatchitheiriCashiwithitheisales.iInicaseiofisurplusiCash,iitishouldibeii
nvestedieitheriinisecuritiesiorishouldibeiuseditoirepayiborrowings.
 Theicompanyishoulditryitoiprepareiaiproperiageingischeduleiofidebtors.iThisiwillihelpithemitoiredu
ceitheibadidebtsiandispeediupicollectioniefforts.
 Theicompanyishouldibeipromptiinimakingipaymentsisoiasitoienjoyicashidiscountiopportunities
 Theicompanyishouldidetermineitheioptimumicashibalanceitoibeikept.
 Theicompanyifollowedianiaggressiveipolicyiofifinancingiworkingicapitalishoulditryitoifinancei50%iof
itheiriworkingicapitaliusingilongitermisourceiandiimproveitheiristatus.

 TheicurrentiRatioiofi2:1iisiconsideredinormallyisatisfactory.iZuariiCementsiLtdishoulditryitoiimprov
eitheicurrentiratio.iSoiitishouldiinvestilargeiamountiinicurrentiratio,iiniorderitoimaintainiliquidityian
disolvencyipositioniofitheiconcern.
 TheicompanyishoulditryitoifollowiaimatchingipolicyiforifinancingicurrentiAssetsi(i.e.)iusingibothilon
gitermiandishort-termisourcesiofifinances.
 CONCLUSION

TheiCashiManagementiAnalysisidoneionitheifinancialipositioniofitheicompanyihasiprovide
diaicleariviewionitheiactivitiesiofitheicompany.iTheiuseiofitheiratioianalysis,itrendianalysis,iCashiFlowiStatem
entiandiotheriaccountingiandifinancialimanagementihelpediinithisistudyitoifindioutitheifinancialisoundnessi
ofitheicompany.

Thisiprojectiwasiveryiusefuliforitheijudgmentiofitheifinancialistatusiofitheicompanyifromith
eimanagementipointiofiview.iThisievaluationiprovediaigreatidealitoitheimanagementitoimakeiaidecisionioni
theiregulationiofitheifundsitoiincreaseitheisalesiandibringiprofititoitheicompany.

BeforeiIiconcludeiIiwishitoiconveyimyithankfulnessiiniregarditoitheitrainingigivenitoimeiiniZ
uariiCementsiLtd.iItigaveimeiextremeisatisfactioniandipracticaliknowledgeiofitheifinancialiactivitiesicarriedi
outiinitheicompany.iTheikindness,iattention,iandiimmenseico-
operationiextendeditoimeibuyiallitheiofficialsiinitheicompanyimadeimyiprojectieasyiandicomfortable.iReally
iitiwasiaiveryipleasantiexperienceiZuariiCementsiLtd.
 BIBILIOGRAPHY

BOOKS:

 S.N.iMaheshwari,iFinancialimanagement,iEleventhiEditioni2006,iSultaniCh
aqndi&iSons,iEducationaliPublishers.iNewiDelhi.
 I.MiPandey,iFinancialimanagement,iNinthiEdition,iVikasipublishingihouseip
vtiLtd.
 M.YiKhan-iP.KiJain,iManagementiAccounting,iThirdiedition,iTataiMciGraw-
HilliPublishingico.iLtdi
 B.L.iGupta,iManagementiofiLiquidityiandiProfitability,iArihantiPublishingiH
ouse,iJaipur.