A STUDY ON CASH MANAGEMENT ON RINEX

TECHNOLOGY

Submitted in partial fulfilment of the requirements for the award of

MASTER OF BUSINESS ADMINISTRATION

by
SAMRAJ P
Register No. 41410264

SCHOOL OF MANAGEMENT STUDIES

SATHYABAMA
INSTITUTE OF SCIENCE AND TECHNOLOGY

(DEEMED TO BE UNIVERSITY)
Accredited with Grade “A” by NAAC I 12B Status by UGC I Approved by AICTE
JEPPIAAR NAGAR, RAJIV GANDHI SALAI, CHENNAI - 600 119.

MAY 2023
 SCHOOL OF MANAGEMENT STUDIES

BONAFIDE CERTIFICATE

This is to certify that this Project Report is the bonafide work of SAMRAJ P
41410264 who carried out the project entitled “A Study on Cash Management on
Rinex Technology” under my supervision from January 2023 to April 2023.

Jo
Dr. JOYCE.S
Internal guide External Guide

Dr. BHUVANESWARI G, MBA., Ph.D.

Dean – School of Management Studies

Submitted for Viva voce Examination held on 06.05.2023

Internal Examiner External Examiner

 DECLARATION

I SAMRAJ P (41410264) hereby declare that the Project Report entitled “A Study
on Cash Management on Rinex Technology” done by me under the guidance of
DR. JOYCE. S is submitted in partial fulfilment of the requirements for the award of
Master of Business Administration degree.

DATE:06.05.2023

PLACE: CHENNAI SAMRAJ P

 ACKNOWLEDGEMENT

I am pleased to acknowledge my sincere thanks to Board of Management of

SATHYABAMA for their kind encouragement in doing this project and for
completing it successfully. I am grateful to them.

I convey my sincere thanks to Dr. G. Bhuvaneswari, MBA., Ph.D., Dean - School

of Management Studies and Dr. A. Palani, M.Com., MBA., Ph.D., Head - School
of Management Studiesfor providing me necessary support and details at the right
time during the progressive reviews.

I would like to express my sincere and deep sense of gratitude to my Project Guide
DR. JOYCE.S for her valuable guidance, suggestions and constant encouragement
paved way for the successful completion of my project work.

I wish to express my thanks to all Teaching and Non-teaching staff members of the
School of Management Studies who were helpful in many ways for the completion
of the project.

SAMRAJ P
 TABLE OF CONTENTS

CHAPTER PAGE
CONTENTS
NO NO
Abstract
List of tables
List of charts
I Introduction 1
1.1 Introduction 1
1.2 Industry profile 16

1.3 Company profile 18

1.4 Objectives of the study 23
1.5 Need for the study 23
1.6 Scope of the study 24
1.7 Limitation of the study 55
II Review of literature 25
2.1 Review of literature 25
III Research methodology 40
3.1 Research design 40
3.2 Data collection 40
IV Data analysis and interpretation 45
V Findings, suggestion and conclusion 53
5.1 findings of the study 53
5.2 suggestions 54
5.3 conclusion 55
References 57

i
 ABSTRACT

The study on cash management on Rinex Technology aims to analyze the current
cash management practices of the company and identify areas for improvement.
The research methodology involves a combination of qualitative and quantitative
data collection techniques, including surveys, interviews, and financial analysis. The
study examines the company's cash flow, cash conversion cycle, and cash
reserves, and evaluates the effectiveness of existing cash management policies and
procedures. The findings of the study suggest that Rinex Technology could improve
its cash management by implementing more efficient cash forecasting and
budgeting processes, optimizing its working capital management, and enhancing its
cash reserves management practices. These recommendations could help the
company to mitigate cash flow risks, improve its financial stability, and support its
growth and expansion objectives.

ii
 LIST OF TABELS

S.NO PARTICULARS PAGE NO

4.1 Selected Ratio and Formula

45
4.2 Descriptive statistics
46
4.3 Model Summary
47
4.4 Coefficients
48
4.5 Correlation
50

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 CHAPTER-I

INTRODUCTION

1.1 INTRODUCTION OF THE STUDY

The digital data industry encompasses a wide range of activities related to the creation,
processing, storage, management, and distribution of digital data. It includes
companies involved in software development, cloud computing, data analytics, artificial
intelligence, Internet of Things (IoT), block chain technology, and other related areas.
The following is an overview of the industrial profile for digital data

Software Development: The software development industry is one of the largest

sectors within the digital data industry. It includes companies that design, develop, and
distribute software applications for a variety of purposes, including business,
entertainment, education, and communication.

Cloud Computing: Cloud computing is the delivery of computing services, including

servers, storage, databases, networking, software, analytics, and intelligence, over the
internet. This industry has grown rapidly in recent years and is expected to continue to
do so due to its scalability, flexibility, and cost-effectiveness.

Data Analytics: Data analytics is the process of examining and interpreting data using
statistical and computational methods to identify patterns, correlations, and trends. The
data analytics industry includes companies that provide tools and services for data
collection, analysis, and visualization.

Artificial Intelligence: Artificial Intelligence (AI) involves the development of intelligent

machines that can perform tasks that typically require human intelligence, such as
perception, reasoning, learning, and decision-making. The AI industry includes
companies that develop AI algorithms, platforms, and applications for a variety of
industries.

Internet of Things: The Internet of Things (IoT) refers to the interconnection of

everyday objects via the internet, allowing them to send and receive data. The II

1
IOT industry includes companies that design and manufacture IoT devices, as well
as thosethat provide software and services for IoT applications.

Block chain Technology: Block chain technology is a distributed ledger technology

that allows for secure and transparent transactions between parties without the need
for a central authority. The block chain industry includes companies that develop
block chain platforms, protocols, and applications for a variety of use cases,
including finance, supply chain management, and digital identity.

Overall, the digital data industry is characterized by innovation, rapid technological

advancements, and increasing demand for digital solutions across various
industries. It is a highly competitive and dynamic industry, with many opportunities
for growth andexpansion.

Cash

In the recent era of cashless transaction in India, cash get less attention than before,
reason why people start doing more cashless and less cash transaction into their
dailylives. Considering the cashless approach, many corporate sectors is also doing
the cashless transaction. The present research focus on the cash management
practices of the two selected sample companies and its impact on the profitability
as well. Basison the concept of cash, it can clearly be stated that, no matter how
much cashless company or corporate sector will be, they need the cash or cash
equivalent for their day-to-day activities.

Cash refers to physical currency in the form of banknotes or coins that is used to
makepurchases or pay debts. It is a widely accepted medium of exchange for goods
and services, and is typically considered to be the most liquid form of payment. Cash
can be used in most transactions, from buying groceries at a local store to paying
bills, andis also commonly used in informal transactions or transactions between
individuals. Cash can be held in different currencies, with each currency having its
own value relative to other currencies, and can be exchanged for other currencies
through currency exchange services or banks.

2
 Meaning of Cash Management

Cash management refers to the process of managing a company's or individual's

cashresources to ensure that they are used effectively and efficiently. Effective

cash management involves managing cash inflows and outflows, optimizing cash
balances,and investing excess cash in order to maximize returns.

For businesses, cash management involves maintaining sufficient cash on hand to

meet the company's short-term obligations, while also investing excess cash to earn
areturn. It also involves managing cash collections and disbursements, forecasting
cash flows, and making decisions about borrowing or investing funds. For
individuals, cash management may involve budgeting, monitoring and managing
expenses, and savingmoney for future expenses or investments.

Concept of Cash Management

Cash management is a financial management concept that involves managing cash

inflows and outflows to optimize cash balances and ensure that there is enough
cash available to meet short-term financial obligations. The main objective of cash
management is to ensure that a business or individual has enough cash on hand to
meet immediate financial obligations while also maximizing the return on excess
cash.Effective cash management involves several key processes, including:

• Cash Forecasting: This involves projecting future cash inflows and outflows to
determine the amount of cash that will be available at any given time.
• Cash Flow Management: This involves managing cash inflows and outflows to
ensure that there is always enough cash on hand to meet short-term obligations.This
may involve strategies such as delaying payments, accelerating collections, or
utilizing short-term borrowing to manage cash flow.
• Cash Balances Optimization: This involves maintaining an optimal level of cash
balances to minimize the opportunity cost of holding excess cash, while also
ensuring that there is enough cash on hand to meet financial obligations.
• Investment of Excess Cash: This involves investing excess cash in short-term
investment vehicles such as money market funds, treasury bills, or certificates of
deposit to earn a return on idle cash.

3
Structure of Cash Flow Statement

A significant financial report has always been the Statement of Cash Flows, but over
the years it has been called various names. The "Statement of Changes in Financial
Position," "Statement of Sources and Applications of Funds," and "Changes in
Working Capital." The last prepared financial statement is the statement of cash
flows. It appliesto both cash inflows and outflows over a period of time. This implies
that the cash flow statement reports the adjustments in cash from the beginning to
the closing phases ofa session, usually a year. It's important to note that only cash
transactions are recordedin the cash flow statement.

Cash flow from operating operations is the core portion of the cash flow statement.
Many cash transactions that settle on net profits are included. Such examples of
cash inflows from operating actions are: sales cash, interest payment cash, dividend
cash, and credit sales cash collections. Cash outflows from operating activities
include payrollspending in cash, supply costs in cash, interest payments in cash,
and tax payments incash.

The investing section is the second component of the statement of cash flows. Cash
transactions that impact long-term assets, such as assets, plants, and equipment,
are included in the investment portion. It also includes the purchase and selling,
rather thantrading shares, of short-term assets and the lending and collection of
receivables on notes. Cash obtained from the sale of long-term properties, cash
earned on large loans,and cash received from short-term trading investments are
some examples of cash inflows from investing. Cash outflows from investment
activities include money used tobuy long-term properties, money loaned to others,
and money used to buy short- termfunds.
=

Significance of the Cash Flow Statement:

In order to understand why the Cash Flow Statement is relevant, we need to define
theword "working capital" as the diversity between current assets and current
liabilities. Businesses run on loop aimed at creating more responsible working
capital to grow. For instance, cash is used to buy inventory, inventory is sold at a profit,
and thus createsadditional working capital that can be used for additional inventory.
The following are examples of the sources and the uses of working capital

4
 Sources:

• Net Income from Operations

• Sale of fixed assets (land, buildings, equipment)

• Acquisition of long-term debt

• Sale of stock

Uses:

• Cash dividends paid

• Purchase of fixed assets

• Reducing or retiring long term debt

• Stock repurchases

The Declaration of Cash Flows gives the reader very useful in the series relating to
thecompany when reviewing a company's financial statements; items such as its
competitiveness and organizational behaviors towards stock sales and dividend
issuance. It can also tell the booklover how long-term debt is done and whether it is
a pleasant place to reinvest in capital assets.

Purpose of Cash Flow Statement:

The object of the Cash Flow Statement is to provide details on the gross receipts
and gross payments of a business for a precise period of time. In the cash flow
statement, the gross receipts and gross payments are listed according to one of the
following classifications: operating activities, investment activities and financing
activities. The net change from these three classifications over the reporting period
should be equal tothe change in the cash and cash equivalents of a company. For
example, between theDecember31, 2015 and December 31, 2016 balance sheets,
the cash flow statement for the calendar year 2016 will report the causes of the
difference in the cash and cashequivalents of a business.

Use of Cash Flow Statement to manage the Working capital of the

organization:

Profitable companies unexpectedly collapse several times. Generally, this loss is

5
exacerbated by a lack of working capital. This lack of working capital will render a
business unable to pay its employees or suppliers, even though there are sufficient
sales and profits. Except in situations where these short-term obligations may be
met,the degeneration of cash flow dramatically threatens the capacity of a business
to plough into the company and, ultimately, thrive.

A cash flow statement is a record of cash flows that happened during the preceding
period of accounting. A cash flow budget is called a prediction of potential money
flows.You will flow the budget to your checking account as a prediction of the future
depositsand withdrawals. Not only is a cash flow statement confused by the quantity
of cash flows, but also the timing of the flows. With several time spans, many cash
flows are constructed. For example, monthly cash inflows and outflows over a year's
period maybe listed. The cash balance left at the end of the year is not only expected,
but also thecash balance for each month.

Importance of Cash Flow:

Cash flow defines the transfer of money into and out of the corporation through its
revenue- generating and expenditure-acquiring actions. Cash flow occurs in three
ways: investment, operational, and funding operations. These activities produce a
cash flow into and out of the business. Investment activities contribute to a cash
inflow from the selling of properties and the outflow of capital expenditure
outstanding. Operational operations result in the expenditure or collection of cash
from the company's internal activities.

Presentation of Cash Flow Statement:

The income statement should report cash flows during the amount. The cash flows
need to be classified activity wise into operating, investing, and financing activities.
The foremost The foremost important reason for the preparation of the income
statement is that the earnings report of an enterprise is usually prepared on an
accounting and it is going toshow profits within the earnings report but the cash
received out of those profits couldalso be low to run the business or vice-versa.

Cash Flow from Operating Activities:

The earnings report should report cash flows during the quantity. The cash flows got
to be classified activity wise into operating, investing and financing activities. The

6
 foremostimportant reason for the preparation of the income statement is that the
income statement of an enterprise is typically prepared on an accounting and it's
getting to show profits within the earnings report but the cash received out of these
profits couldeven be low to run the business or vice-versa.

Examples-

• Cash received from the sale of goods and services.

• Cash receives from commission, fees, royalties etc.

• Cash paid to suppliers to purchase raw material etc.

• Payment of expenses like wages, salaries, commission etc.

• Payment and refund of tax.

Cash Flow from Investing Activities:

For completing business effortlessly, an enterprise acquires future assets like

machinery, land and building. Likewise, old assets are sold and new are purchased.
They occasionally also invest unoccupied funds outside the business to urge
additionalearning. All this leads to inflow and outflow of money. These flows of money
are termedas cash flows from investing activities.

For completing business efficiently, an enterprise acquires future assets like

machinery, furniture, land and building. Equally old assets are sold and new are
purchased. They often also invest idle funds outside the business to urge
supplementary earnings. All this leads to inflow and outflow of money. Theses flows
of money are termed as Cashflows from Investing Activities.

Examples-

• Cash paid to acquire fixed assets e.g. machinery, land etc.

• Cash paid to purchase investments e.g. Shares and debentures of other company
• Cash receipts from the disposal of fixed assets.
• Cash receipts as dividend or income on investments outside the concern.

Advance Cash Management

Advanced cash management refers to the use of sophisticated tools and techniques
7
tomanage cash resources more effectively and efficiently. This may include the use
of technology, data analytics, and automation to optimize cash flows, manage cash
balances, and make strategic investment decisions.

Some examples of advanced cash management techniques include:

Cash Positioning: This involves identifying the optimal level of cash balances to
maintain in different accounts, such as checking, savings, and investment accounts,
tomaximize the return on available cash resources.

Cash Pooling: This involves consolidating cash balances from multiple accounts or
business units to optimize cash balances and reduce transaction costs.

Zero Balance Account (ZBA): This involves automatically transferring funds

betweenaccounts to maintain a zero balance in each account, which can help to
optimize cashbalances and reduce borrowing costs.

Cash Forecasting and Analysis: This involves using data analytics and
forecasting tools to predict cash flows, identify trends and patterns, and make
strategic cash management decisions

Automated Cash Management: This involves using technology and automation to

streamline cash management processes and reduce manual intervention. For
example, companies may use automated invoicing and payment systems,
electronic fund transfers, and real-time reporting and analytics to manage cash more
effectively.

Concept of Cash Conversion Cycle

The Cash Conversion Cycle (CCC) is a financial metric that measures the amount
of time it takes for a business to convert its investments in inventory and other
resources into cash inflows from sales. It provides insights into how efficiently a
business is managing its working capital, and how quickly it can convert its
investments into cash.

The CCC is typically calculated by adding the number of days it takes a business to
sell its inventory (Days Sales of Inventory, or DSI) to the number of days it takes to
collect cash from customers (Days Sales Outstanding, or DSO), and then

8
subtracting the number of days it takes to pay suppliers (Days Payable Outstanding,
or DPO).

example, companies may use automated invoicing and payment systems,

electronic fund transfers, and real-time reporting and analytics to manage cash more
effectively.

Concept of Cash Conversion Cycle

The Cash Conversion Cycle (CCC) is a financial metric that measures the amount
of time it takes for a business to convert its investments in inventory and other
resources into cash inflows from sales. It provides insights into how efficiently a
business is managing its working capital, and how quickly it is able to convert its
investments into cash.

The CCC is typically calculated by adding the number of days it takes a business to
sell its inventory (Days Sales of Inventory, or DSI) to the number of days it takes to
collect cash from customers (Days Sales Outstanding, or DSO), and then
subtracting the number of days it takes to pay suppliers (Days Payable Outstanding,
or DPO).

The formula for calculating the CCC is:

CCC = DSI + DSO - DPO

A shorter CCC indicates that a business is able to generate cash more quickly and
efficiently, while a longer CCC indicates that a business is tying up its cash in
inventoryand other resources for a longer period of time.

By monitoring and optimizing the CCC, businesses can improve their working capital
management, reduce financing costs, and improve overall financial performance.
For example, a business can reduce its CCC by improving inventory turnover,
acceleratingcash collections, and negotiating more favorable payment terms with
suppliers.

Cash Planning

Cash planning is the process of forecasting a business's or an individual's cash

inflowsand outflows over a specific period of time, typically on a monthly or quarterly
basis. The goal of cash planning is to ensure that a business or individual has

9
enough cash on hand to meet their financial obligations, while also maximizing the
use of available cash resources. The process of cash planning typically involves the
following steps:

Forecasting cash inflows: This involves estimating the amount and timing of cash
receipts from customers, investments, and other sources.

Forecasting cash outflows: This involves estimating the amount and timing of
cash payments for expenses such as rent, salaries, inventory, and other obligations.

Determining cash needs: This involves comparing cash inflows to cash outflows
to determine if there will be any cash shortfalls or surpluses.

Developing a cash plan: This involves developing a plan to address any cash
shortfalls or surpluses, which may include strategies such as borrowing, investing,
or delaying payments.

Monitoring and adjusting the cash plan: This involves monitoring actual cash
inflowsand outflows against the cash plan and making adjustments as needed to
ensure thatcash needs are met.

Methods of Determining the Optimum Cash Level

There are several methods that can be used to determine the optimum cash level for
abusiness or an individual, depending on their specific financial situation and goals.
Some common methods include:

Operating Cash Balance: This involves calculating the minimum cash balance
neededto cover day-to-day operating expenses and other regular cash outflows.

Target Cash Balance: This involves setting a target cash balance based on the
specificfinancial goals of the business or individual, such as maintaining a certain
level of liquidity, reducing debt, or investing in growth opportunities.

Cash Conversion Cycle: This involves analyzing the time it takes to convert
investments in inventory and other resources into cash inflows from sales, and
determining the minimum cash balance needed to cover cash outflows during this
period.

10
Opportunity Cost of Cash: This involves comparing the potential returns from
investingavailable cash resources to the costs of holding excess cash, such as lost
investment opportunities or financing costs.

Control of Cash Flows

Control of cash flows is an essential aspect of financial management for both

individuals and businesses. Cash flow control involves managing the inflow and
outflowof cash to ensure that there is enough cash available to cover expenses,
investments,and other financial obligations. There are several ways to control cash
flows, including:

Budgeting: Creating and adhering to a budget is one of the most effective ways to
control cash flows. A budget helps to track cash inflows and outflows, and identify
areaswhere spending can be reduced or reallocated.

Cash flow forecasting: Forecasting cash inflows and outflows can help individuals
and businesses to anticipate and prepare for changes in cash flow, and identify
potential shortfalls or surpluses.

Invoice and payment management: Effective management of invoices and

payments can help to improve cash flows by ensuring timely receipt of payments
and reducing the risk of late payments and bad debts.

Managing inventory: Managing inventory levels and turnover can help to reduce the
amount of cash tied up in inventory, and improve the overall efficiency of cash flow.
Negotiating payment terms: Negotiating favourable payment terms with suppliers
and customers can help to improve cash flow by allowing for extended payment
periods orearly payment discounts.

11
Financing strategies: Using financing strategies such as loans, lines of credit, and
factoring can help to improve cash flow by providing access to cash when needed.

Benefits of Cash Flow Statement Information:

When used in conjunction with the rest of the financial statements, the cash flow
statement offers information that helps consumers to determine improvements in
the net assets of the unit, its financial organization (including its liquidity and
solvency) andits ability to control the amounts and timing of cash flows to respond
to changing situations and opportunities. Cash flow information is constructive in
assessing the power of the body to get cash and cash equivalents and enables users
to expand modelsto assess and evaluate this value of the longer term cash flows of
various entities. It also enhances the comparability of the coverage of operating
performance by differententities because it eliminates the consequences of using
different accounting treatments for an equivalent dealings and proceedings.

Operating activities

Operating operations are the entity's main revenue-producing activities and other
non-investment or funding activities. First and foremost, cash flows from operating
operations are an imitation of the entity's primary revenue-producing activities. They
are also normally the product of transactions and other proceedings that come into
thestrength of benefit or loss mind. The sum of cash flows resulting from operating
activities is a key measure of the extent at which the entity’s operations have
generated sufficientcash flows in order to repay debt, sustain the entity's operating
capacity, pay dividends and make new investments without any alternative to
external funding sources. The sum of cash flows resulting from operating activities
is a key measure of the amount in which the unit's operations have produced
satisfactory cash flows for the repayment of loans, the maintenance of the entity's
operating capacity, the payment of dividends and the making of new investments
without the possibility of external financing sources.

In conjunction with other details, information about the detailed components of

historicaloperating cash flows is useful in predicting future operating cash flows. An
entity shall report cash flows from operating activities using either: The direct form of
declaration ofthe key classes of gross cash receipts and gross cash payments; or An
indirect measure by which the consequences of non-cash sales, any deferrals or

12
accruals of past or futureoperating cash receipts or payments, and items of income
or cost associated with the investment or funding of cash flows are considered to be
gains or losses.

Investing activities

The separate confession of cash flows resulting from investment activities is

relevant because the cash flows relate to the degree to which the tools proposed to
produce potential revenue and cash flows have been spent. Only expenses resulting
in a reported asset in the financial position statement qualify as investment activities
for categorization. The accomplishment and disposition of long-term assets and
other investments not integrated into cash equivalents is an investment practice.
The separate disclosure of cash flows resulting from investment activities is relevant
because the cash flows represent the amount of expenditure made on the capital
proposed to produce potential revenue and cash flows. The combined cash flows
resulting from the acquisition and loss of control of subsidiaries or other
undertakings shall be separately presented and listed as investment activities.

Financing activities

The separate disclosure of cash flows resulting from funding operations is relevant
because it helps to forecast claims on potential cash flows to the entity by providers
of capital. Financing activities are activities which lead to changes in the size and
composition of the entity’s contributed equity and borrowings. The separate
confessionof cash flows resulting from the activity of financing is relevant because
it is useful in forecasting claims on potential cash flows of capital suppliers to the
unit. An organization shall separately disclose main classes of gross cash receipts
and gross cash payments resulting from the operations of expenditure and
financing.

Non-cash transactions

Investment and funding activities which do not include the use of cash or cash
equivalents are removed from the cash flow statement. Such transactions shall be
reported in the financial statements in such a manner as to include all relevant
information on the investment and financing activities in question. Investment and
funding investments that do not need cash or cash equivalents to be used are

13
removed from the cash flow statement. These transactions shall be reported
elsewhere in the financial statements in such a manner that all relevant details
relating to these investment and financing activities shall be provided.

Foreign currency cash flows

Cash flows resulting from transactions in a foreign currency are registered in the
realistic currency of an individual by applying the exchange rate between the usable
currency and the foreign currency at the date of cash flow to the sum of the foreign
currency. At the date of the cash flows, the cash flows of a foreign subsidiary are
converted at exchange rates between the usable currency and the foreign currency.
Cash flows are not unrealized gains and losses resulting from changes in foreign
currency exchange rates. Cash flows resulting from transactions in a foreign
currency are registered in the functional currency of an individual by applying the
exchange ratebetween the functional currency and the foreign currency at the date
of the cash transfer to the sum of the foreign currency.

Cash and cash equivalents

An organization shall reveal the workings of cash and cash equivalents and shall
present an arrangement of the sums of the equivalent items recorded in the
statement of financial conditioning its statement of cash flows. An element shall
report, together with a management explanation, the quantity of substantial cash
and cash equivalent balances retained by the company which are not available for
use by the community.

Equity investments shall be exempt from cash equivalents because they are, in
effect, cash equivalents, e.g. in the case of preferred shares purchased within a brief
maturity period and on a specified redemption date. Borrowings from banks are
generally knownas funding operations. In certain nations, however, bank overdrafts
that are repayable

on demand form an integral part of the cash management of an individual. Bank

overdrafts are used as a portion of cash and cash equivalents in these
circumstances.

What Is Cash Management?

The process involving gathering and handling cash flows from a company's running,

14
spending, and funding activities is cash management, also known as treasury
management. In industry, it is a crucial aspect of the financial stability of an
organization.For both businesses and individuals, cash management is essential,
as it is a key component of financial stability. Money market funds, Treasury bills,
and certificates of deposit comprise financial instruments involved in cash
management. To assist in all aspects of cash management, businesses and
individuals provide a wide variety of services available across the financial
marketplace. Banks are usually a key provider of financial services.

Understanding Cash Management

In an organization, the key persons responsible for overall cash management plans,
stability analysis, and other cash-related duties are typically chief financial officers,
business managers, and corporate treasurers. Many organizations, however, can
outsource to some service providers part or all of their cash management
responsibilities. The cash flow statement is the key component of the cash flow
management of a company. The cash balance statement documents all of the cash
inflows and outflows of the company comprehensively. It covers cash from
operationaloperations, cash paid for investment activities and cash from funding
activities. The bottom line of the cash flow statement indicates how much revenue
is readily availableto a company.

The statement of cash flow is divided into three sections: acquisition, funding, and
operating activities. The working portion of cash operations is heavily dependent on
networking capital, which is presented as the current assets of a company minus
current liabilities on the cashflow statement. Businesses aim to ensure that the
current balanceof assets exceeds the current balance of liabilities. With cash inflows
and outflows related to expenditure and financing, such as acquisitions in real
estate, the

procurement of new equipment and machinery and the origination of stock

repurchases, or the payment of dividends as part of financing operations, the other
two sections of the cash flow statement are much simpler. To maintain and attain
productivecompany cash flows, there are many internal controls used. The average
length of account receivables, write-offs for uncollected receivables, collection
procedures, rates of return on cash equivalent assets, liquidity, and credit line

15
 management are some ofthe main cash flow considerations of a company.

Cash management refers to the accumulation, concentration, and disbursement of

cash as a general term. The aim is to control an enterprise's cash flows in such a
waythat the supply of cash not invested in fixed assets or inventories is maximized
and to do so in such a way that the risk of insolvency is avoided. Factors tracked
part of cash management include the li level of business

1.2 INDUSTRY PROFILE

India occupies a significant position in the global education sector. One of the
world's largest networks of institutions of higher learning is found in India. With
almost 27% ofIndia’s population in the age group of 0-14 years, India’s education
sector provides numerous opportunities for growth. The number of colleges in India
stood at 42,343 inFY20. As of November 25, 2022, the number of universities in
India stood at 1,072. India had 38.5 million students enrolled in higher education in
2019-20, with 19.6 million male and 18.9 million female students. In FY20, Gross
Enrolment Ratio (GER) in Indianhigher education was 27.1%. The education sector
in India was estimated to be worthUS$ 117 billion in FY20 and is expected to reach
US$ 225 billion by FY25. The Indian edtech market size is expected to reach US$
30 billion by 2031, from US$ 700-800 million in 2021. The online education sector
in India is growing rapidly, with growth of US$ 2.28 billion expected during 2021-
2025, at a CAGR of almost 20%. Higher education institutes in India are focusing
on creating online programmers due to the increasing demand from consumers.

India’s large English-speaking population allows easy delivery of educational

products.India was ranked 48th out of 112 countries in the English Proficiency Index
2021. NineIndian institutes - the Indian Institute of Science (IISc) in Bengaluru and
eight Indian

Institutes of Technology (IITs) - were among the top 500 universities in the QS World
University Rankings 2023. A total of 100 Indian institutions have been qualified for
the Times Higher Education World University Rankings 2023, with the Indian
Institute of Science in Bengaluru being the highest-ranked. Edtech startups in India
raised US$ 296 million across 5 deals in October 2022. Amazon has launched its
global computerscience education initiative in India. The aim of this initiative is to offer
one lakh studentsthe opportunity to study computer science. Amazon India has also

16
launched the secondedition of Machine Learning (ML) Summer School, with the aim
to provide students theopportunity to learn important ML technologies from Amazon
scientists, making them ready for careers in science.

To liberalize the sector, the Government has taken initiatives such as the National
Accreditation Regulatory Authority Bill for Higher Educational and the Foreign
Educational Institutions Bill. The government schemes of Revitalizing Infrastructure
and System in Education (RISE) and Education Quality Upgradation and Inclusion
Program me (EQUIP) are helping the government tackle the prominent challenges
faced by the education sector. The National Education Policy (NEP), which will be
fully implemented over the course of this decade starting from 2021-22, will have a
strong focus on high-quality vocational education. Under the National Education
Policy 2021, the government will set up regional and national institutes for virology,
>15,000 schools, 100 new Sainik schools,and 750 Eklavya model residential schools
in tribal areas. The Central Government has approved the “New India Literacy
programmer” for the period FY22-27 to cover all the aspects of adult education to
align with the National Education Policy 2020 and BudgetAnnouncements 2022-23.
The National Commission for Women has started a country-wide capacity building
and personality development programmer for women undergraduate and
postgraduate students in an effort to make them more independentand job-ready.
The commission will partner with central and state institutions to prepare women
students for the job market by providing sessions on personal capacity building,
professional career skills, digital literacy and effective use of social media. India has
the largest population in the world in the age bracket of 5-24 years with 580
million people, presenting a huge opportunity in the education sector. *India has
over 250 million school going students, more than any other country. *Applications
for the ‘Studyin India' programmer increased by 146% in 2021.

COMPETITIVE ADVANTAGE

*Large English-speaking population allows easy delivery of educational products.

Indiawas ranked 52nd out of 111 countries in the English Proficiency Index 2022.

* Nine Indian institutes - the Indian Institute of Science (IISc) in Bengaluru and eight
Indian Institutes of Technology (IITs) - were among the top 500 universities in the
QS World University Rankings 2023.

17
 POLICY SUPPORT

*100% FDI (automatic route) is allowed in the education sector in India.

*The Government of India has taken initiatives like National Accreditation

Regulatory Authority Bill for Higher Educational and the Foreign Educational
Institutions Bill.

INCREASING INVESTMENTS

*The education market in India is expected to amount to US$ 225 billion by FY25.

*From April 2000-June 2022, FDI equity inflows stood at US$ 7.92 billion.

*Indian edtech start-ups have received total investment of US$ 3.94 billion across
155deals in FY22.

*In June 2022, edtech platform Physics Wallach became India’s 101st unicorn by
raisingUS$ 100 million in a Series-A funding round from West Bridge Capital and
GSV Ventures, valuing the company at US$ 1.1 billion.

1.3 COMPANY PROFILE:

RineX is one of the finest E-learning platform to all students and professional that
facilitates studying top-notch technical certification courses from profound industry
experts with the best study resources. They strive to prove that learning stops at
nothing and promote upskilling yourself to devise the path to success for every
student that joins us. They, at RineX aim at inspiring improvement through education
and for this they are focused on creating an educational community that helps create
an innovativetomorrow. They are always with our hands wide open to welcome new
teammates, because you know, the more the merrier. Join us to help shape the
future of students by voicing them towards receiving cutting-edge training from
experts. Together, let us be the reason behind some genius minds.

18
Computer Science/Information Science

In Computer Science and Engineering, students study about the design,

computational processes & programming languages. They also learn how to
developdifferent hardware’s & software’s.

Civil Engineering

This engineering discipline is considered one of the oldest and broadest. It revolves
around construction and its project managements that help facilitate better living
environments to all.

Electronics and Communication Engineering

The study mainly involves research, design, development and testing of the
electronicequipment and software applications used in various types of systems.

Mechanical Engineering

This engineering branch combines engineering physics and mathematical

principleswith material sciences to design and develop mechanical systems/
machines.

How We Do It?

Agile Approach

The course curriculum focuses on approaching learning in an agile methodology, so

that students will have continual training with assignments, assessment and
guidance.

Project-oriented Courses

Make training with us both an exciting and beneficial mastering journey for students.

Result-oriented Dynamic Applications

With dynamic methods and positive can-do attitudes, our syllabus is set to be both
exciting and beneficial subject-mastering for all the students.

Certified Expert Mentors

The course curriculum focuses on approaching learning in an agile methodology, so

19
that students will have continual training with assignments, assessment and
guidance.

How you Can Help?

Small actions done by many people is a huge step towards destiny. Donate for the
beautiful cause of saving dreams that might help save tomorrow. Help in the form
of monetary benefaction or book donation is what we seek to together help the
younger generation be better than us.

What We Do?

Rinex accepts the help you have provided with at most pride and happiness to help
yetanother student. Right from the minute the book is donated to us, to the moment
it reaches the reader’s door-step, we have all the procedures of storing and
maintainingthe quality of book set in as the top priority. Rinex is the front-man that
ensures everyone gets all the help they need in the field of education. Your money
shall be usedto provide various other educational needs to the students. And so yes,
we are happy that you are here to help!

Certification Partners:

And now learning never Stops Upgrade to Rinex to learn in-demand skills and
advanceyour career

Projects Undertaken:

Self-driving Automobiles

AI powered automobile systems that is featured with self-driving, is yet another huge
20
project that follows machine learning and neural network algorithms to go through
its decision making processes. It consumes and uses large amounts of data from its
image recognition systems in order to function properly. So overall its primary
algorithmic tasks involve object detection and object classification

Biometric AI-Facial Recognition

Using deep learning, Biometric Artificial Intelligence captures a person’s facial

texture and facial recognition such as eye retina, nose, face shape, lips, etc. Not
only is this used in the security department to identify people, but also is used for
government citizen documentation, phone unlocking and many more times. The
most commonly used AI powered software for phone unlocking that make your
smartphones smarter are Android Basic Facial Technology, Apple Face ID and
Samsung Iris Technology.

Heart Disease Prediction Project

Owing to the fact that most people die on various conditions of Heart Diseases (HD),
Researchers have used Artificial Intelligence to predict heart disease using neural
networks. This system takes the help of Data Science in order to process the huge
amounts of data produced in the healthcare field. This AI Project simply automates
the prediction process to avoid the risk pertaining to follow it and so alerts the patient
well in advance so that the necessary precautions could be taken.

Handling Phishing Attack

Phishing is the fraudulent activity of sending emails pretending to be a great

corporate in order to collect the personal information from individuals. Legally
Authorized Ethical Hackers & Cyber-security Experts will know all the techniques to
be performed during a phishing attack. They need to identify the loopholes perfectly
to secure themselves.

Man-in-the -Middle Attacks

Wi-Fi is available for anyone within the router broadcast area and this makes it easy
to hack someone’s system in the same network. So, man-in-the-middle attacks are
simply eavesdropping into two people’s communication, without their knowledge.
The attacker here will be able to intercept or even inject new messages in-between
conversations without detection.

21
Password Strength Testing

We all know the importance of a password and so even the website generally gives
suggestions as to how to make the password of that website stronger to prevent

cybercrimes. Cyber Security Experts use various tools for the testing of the same to
generate the commands needed to be provided to the user such as, always
remember to use alphabets, digits, caps and different symbols in your password.

Air-Conditioning System using AutoCAD

To design the air-conditioning system that monitors the indoor environmental

conditions, the project includes AutoCAD MEP Program and Building Information
Modeling (BIM) Software. The conditioning system monitors the humidity,
temperature, airflow, and others. It is also based on two system- centralized and
decentralized.

Cryptography Processor for Smart Cards

The usage of cryptography circuits for smart cards and smart electronic devices
provides the advantage of authentication and highly secured data communication to
all its users. The project implements both private key and public key algorithms. The
micro-coded processor uses very limited power, and so this poses as an advantage
to the VLSI circuit designers to deign within compact circuits.

Mechanism Design using CATIA

Ever since 2014, CATIA has been made available in cloud version and now has
increased usage in the field of Automotive and Aerospace Engineering. This 3D
experience also helps in reducing costs by identifying and solving design issues,
way before the manufacturing starts. CATIA is also used for part designing,
automobile prototyping, 3D modeling, design optimization & others.

Design & Analysis of IC Engine Piston

Piston is a part of the internal combustion engine of an automobile among other

similar mechanism. This project has two primary goals, one- analysis of temperature
disturbance and heat flow through the piston of the engine and second- FEA
analysis of the piston to measure temperature and analyze heat flow inside the
piston.

22
1.4 OBJECTIVE OF THE STUDY

Primary objectives: -

To Fulfil Working Capital Requirement to cover its regular expenditures.

Secondary objectives:-

• To design an effective Cash Management policy for smooth cashprocurement and

disbursement.
• To determine the exact working cash balance in conformity with the nature ofthe
firm
• To measure the Cash Flow from Operating activity, Investing activity and
Financing activity and net increase / decrease in cash flow.

1.5 NEED FOR THE STUDY

There are several reasons why a study on cash management may be necessary or
beneficial, including:

• Improving financial performance: Effective cash management can improve

financial performance by ensuring that cash is available whenneeded, avoiding the
risk of cash shortages, and making the most use of available cash resources.

• Reducing financial risks: Poor cash management can lead to financial riskssuch as
late payments, missed opportunities, and increased debt. A study on cash
management can help to identify and address these risks.
• Optimizing working capital: Cash management is closely linked to workingcapital
management, and a study on cash management can help businessesto optimize
their working capital by minimizing cash tied up in inventory or accounts receivable.
• Enhancing decision-making: Cash management is a key aspect of financial
decision-making, and a study on cash management can help individuals and
businesses to make informed decisions about investments, financing, and other
financial matters.
• Compliance with regulations: Cash management is subject to various regulations
and legal requirements, and a study on cash management can help businesses to
ensure compliance and avoid penalties.Overall, a study on cash management can

23
 provide valuable insights and tools for individuals and businesses to improve their
financial management practices, reducerisks, and achieve their financial goals.

1.6 SCOPE OF THE STUDY

The scope of a study on cash management on Rinex Technology would involve

examining the company's current cash management practices and identifying areas
for improvement. Some potential areas of focus may include:

• Cash flow forecasting: Analyzing Rinex Technology's historical cash flows and
projecting future cash flows to identify potential shortfalls or surpluses.
• Working capital management: Examining Rinex Technology's management of
working capital, including inventory, accounts receivable, and accounts payable, to
optimize cash flow. Cash conversion cycle: Analyzing the time it takes for Rinex
Technology to convert its inventory andaccounts receivable into cash, and identifying
strategies to shorten this cycle.
• Cash balance management: Examining Rinex Technology's management of its
cash balance, including strategies for investing excess cash andminimizing cash
shortages.
• Cash management policies and procedures: Reviewing Rinex Technology's
cash management policies and procedures to identify areas forimprovement or gaps
in compliance with regulations and legal requirements.

Overall, the scope of the study on cash management on Rinex Technology would
involve a comprehensive analysis of the company's cash management practices,
with the goal of identifying opportunities to improve cash flow, optimize working
capital, and enhance financial performance.

24
 CHAPTER 2
REVIEW OF LITREATURE

2.1 REVIEW OF LITREATURE

Erapu Peter De Pietropapa (2021) did study on institute for international co-
operation and development (C&D) with aim to establishing the effect of internal
control systems on cash management research or used descriptive and analytical
research designs. Primary and secondary data collected for which 30 respondent
selected for primary data collection. Some negative elements like no internal
auditors in C&D, irregularly revise training programs, no proper mean of
communication with entities operating payment systems and supervisory
authorities. The significant positive relationship between internal control systems
and cash management policies.

Patricia m. Dechow, s.p.kothari and ross L. Watts (2022) had undertaken study
on “the relationship between earnings and cash flows” they test the predictions on
a sample of 1337 firmsand they conclude that Current earnings are a better forecast
of future cash flows than current cashflows as predicted by the model.
And, as also predicted by the model, the difference in the abilityof current earnings
and current cash flows to predict future cash flows is a positive function of thefirm’s
expected operating cash cycle. Overall, the evidence suggests the model has some
statisticalexplanatory power.

Gilbert Uwonda, Nelson Okello, Nicholas G Okello (2021) had undertaken study
on “cash flow management utilization by small medium enterprises in northern
Uganda” with the objectivesof managing cash flow as accelerating cash inflows
wherever possible, delaying cash outflows until they come due, investing surplus
cash to earn a rate of return, borrowing cash at the best possible terms, maintaining
an optimal level of cash that is neither excessive nor deficient. The research findings
revealed that the service sectors of SMEs studied fight an uphill battle from thestart
mostly due to cash flow management issues, but became stable after five years.
The majorityof these service sectors SMEs studied wereunincorporated enterprises
that operate as soleproprietorship, partnership, while others only registered under
their professional bodies. Failure by the private incorporated enterprises within the

25
first year of operation has been due to very manybriefcase private companies
registered among other factors. The second

obstacle in cash flour management is the monitoring of cash flows and as revealedin
the research findings, a big numberof the sectors of SMES studied could prepare
budget but could not stick to them during the implementation periods, while other
SMEs could not exercise budgetary review and budgetary control. A third hindrance
highlighted by the study results with regards to cash flow managementwas cash
flow controls and as revealed by the study findings, a big number of SMEs owners
overdepend on the business income for survival and in meeting other non-business
related expenses.

Annika Pitkanen (2019) had undertaken study of “ cash flow forecasting” the
purpose of this thesis research and development project was to develop a cash flow
forecast model for the case company that operates on building constructions field.
The author evaluates that the project teammanaged to reach the objective with the
exception of few attributes. To achieve a successful cashflow management in the
case company the author suggests that the rest of these necessary attributeswill be
defined in a technical sense to complete the forecastingmodel.

Mohammad Ashrafuzzaman and Md. Tanim-Ul-Islam (2020) had undertaken

study on “statement of cash flows disclosure: a study on listed financial institution in
Bangladesh”. There are 556 companies are listed in the Dhaka Stock Exchange.
DSE classified these companies into 22 industry categories. The study is conducted
for a period of recent five financial years, from 2010 to 2014. This is a descriptive
research and no statistical techniques were applied. The resultof the above study is
the significance of this study is that the stakeholders of these companies canknow
whether these companies prepare their cash flow statement in accordance with the
related accounting standard and other regulatory laws. Due to time constrain the
study period was only period was only five years and no statistical techniques were
used because of its descriptive nature.

Ramlugun Vidisha Gunesh and Hosanee Priscille (2016) had undertaken study
on “user’s perception on cash flow reporting practices in Mauritius”. The study
demonstrates that allrespondents from the sample claim they use the indirect cash
flow reporting format. However, users have a preference for the direct cash flow

26
reporting method as far as their relevance, reliability and decision usefulness power
are concerned. In addition, as far as under sand ability isconcerned, results

suggest that users prefer the indirect method. The study provides an insight on
perception of users on the usefulness of the direct and indirect cash flow reporting
method. The main limitation of the study pertains to the sample size. Given that only
81 respondents participatedin the study, results are not generalizable. Therefore,
perception of users will be assessed by havinga bigger sample and investigate
differences among and between user groups.

Joseph Otieno Oluoch (2016), research conducted on 171 respondents from

eldoret central business district, uasin gishu country Kenya. Questionnaires and
document analysis were the source of data. Descriptive statistics and inferential
statics were used. A positive and significant effect on SME performance of cash
management practices were found in this paper.

Kasim Hamza, Zubieru Mutala and Stephen Kwadwo Antwi (2018) conducted a
research study with a purpose to assess cash management practices and its effect
on the financial performance of SMEs in the Northern Region of Ghana. The study
adopted a descriptive cross sectional survey research design which allowed the
collection of primary quantitative data through structured questionnaires. The target
population was 1,000 owner/managers of SMEs. Stratified random sampling
technique was used to obtain a sample of 300 SMEs comprising 164 trading, 26
manufacturing, 10 hairstyling, 62 dressmaking and 38 carpentry enterprises. The
data was analyzed using both descriptive and inferential statistics. The study
revealed that SME financial performance was positively related to efficiency of cash
management (ECM) at 1 percent significance level. The study concluded that cash
management practices have influence on the financial performance of SMEs, hence
there was need for SME managers to embrace efficient cash management practices
as a strategy to improve their financial performance and survive in the uncertain
business environment.

Matthew Abioro (2019) conducted a study on the impact of cash management the
performance of manufacturing companies in Nigeria.

Zeljana Aljinovic Barac (2022) had undertaken study on “voluntary disclosure of

cash flows information and company’s characteristics: evidence from the Croatian

27
capital market”. The primary goal of this paper is to analyse financial and qualitative
characteristics of companies thatprovide extensive cash flow disclosure.

The paper provides information about disclosure practicesof Croatian companies as

a case of bank oriented economy with emerging capital market, with regard to a
variety of company’s specific factors which can be found as contribution.
Summarizingtheoretical and empirical results of the research, the following
recommendations can be derived: 1. the international standards setters as well as
national legislative authorities should aim to makemandatory the publication of cash
flow statement for all entities. 2. Future researches should aimto explore cash flow
reporting practise in more detail.

Mst. Joynab Siddiqua and Mohd. Takdir Hossan (2018) had undertaken study
“cash flow statement disclosures in pharmaceutical companies: Bangladesh
perspective “ with the objective of to identify the current practice of cash flow
statement of pharmaceutical companies in Bangladesh and to provide present cash
flow statement format, structure and reporting on the basisof information provided
in annual reports. From this they conclude that a materially misstated cash flow
statement, whether it is in terms of incorrect classification in the categories or
numerical accuracy, can be misleading to the users and can lead to wrong decision
taken by the users of the statement.

Mark A. Clatworthy, Christopher K.M. Pong, Woon K. Wong (2017) had

undertaken study on “therole of accruals and cash flows in explaining UK stock
returns and the impact of auditor quality” This paper examines the relative
importance of earnings and cash flow in explaining the varianceof unexpected UK
stock returns using a variance decomposition approach. Based on a variance
decomposition framework using a sample of UK listed companies, this study
examines the importance of accounting information in driving stock returns with
particular emphasis on the relative role of accruals and cash flow and the
importance of auditor type as a proxy for audit quality. Our study represents the first
non-US research employing the variance decomposition approach to investigate the
importance of accruals and cash flows in explaining variation in stock returns.
Although there is research indicating that these apparently similar accounting
regimes can produce marked differences in the accounting/market relationships.
further research will be necessary to examine the extent to which these relationships

28
are affected by international boundaries and by the respective accounting
system/standards used to generate the earnings components.

Fred Petro, Farrell Gean (2019) had undertaken study on “A Logical Approach To
the Statement Of Cash Flows”. The purpose of this paper has been to logically
explain the indirect approach of cash flow whereby an understanding is established
together with the mechanics of preparing the document. The reader should find this
logical approach to preparing the indirect method statement of cash flows
reasonably understandable and useful. The advantages of this approach include:
(1) an acceptable means to logically and analytically understand the statement of
cash flows; (2) a manageable level of retention; and (3) eliminating the reliance on
cumbersome worksheets which add confusion and complexity to completing the
statement of cash flows. An analysis, completed from a brief to an extended time
period, can provide useful insight into firm operations. However, by separating cash
flow from operations and income from operations, a newdimension of the firm is
added. If we stay with the three prongs approach as endorsed by FAS 95,there are
two issues that need additional research. First, consider the purchase and sale of
equity and debt instruments as investment activities. Second, FAS 95 currently
leaves interest expense inthe operating activities category.

Yelena larkin (2019) had undertaken the study on “brand perception, cash flow
stability and financial policy”. This paper demonstrates that intangible assets play
an important role in financial policy. Using a proprietary database of consumer brand
evaluation, he shows that positive consumer attitude toward a firm’s products
alleviates financial frictions and provides additional net debt capacity, as measured
by higher leverage and lower cash holdings. Overall, the findings indicate that
characteristics of intangible assets are just as significant in explainingfinancial policy
as are tangible assets. The results also suggest that brand Stature can be viewed
as an alternative forward-looking measure of cash flow volatility, which helps
reconcile the mixed empirical evidence on the impact of cash flow volatility on
leverage. In addition, this paper explores cross- sectional differences in cash flow
volatility from the perspective of the product market. This paperhelps in
understanding the source of volatility by examining characteristics of a firm’s brand.
Finally, the paper shows the importance of the interaction between the fields of
marketing and finance, and suggests that marketing policy such as brand

29
management, and financial policy, such as capital and cash holding decisions, is
interdependent.

S.K. Khatik and Ms. Ankita Singh (2020) conducted a research on cash
management of public company. A case study of Hindalco industries Ltd. The study
was try to analyse short term solvency, utilization of cash resources and capacity of
financial management. During the study it was found that there was high fluctuation
in total cash management and cash ratio.

Ben Ebo Attom (2021) studied the 263 micro & small scale enterprise within kasoa
in the Efutu-senga east municipality in the central region of Ghana. The data
collected by the field work, August 2013 with the help of questionnaires collected
from 263 enterprises and the information was related to preparation of Budget,
operating bank accounts, keeping track of cash receipts, keeping track of cash
payments, keeping proper books of accounts. The study revealed that the majority
(77.78%) of respondents have no knowledge about cash control procedures. The
absence of appropriate cash management procedures has contributed significantly
to the exposure of these enterprises to financial impropriety and misapplication of
cash as a resource, leading to slow growth of most of the businesses.

Njeru Mugambi Duncan et. al. (2015) conducted a research on thirty licensed
deposit taking Sacco’s in Mount Kenya region for checking effect of cash
management on financial performance with the help of descriptive and inferential
statistics. Primary and secondary data were analyzed which reveals that there is
need to introduce cash management controls in the Sacco. Better strengthen role of
SASRA, more awareness, increase monitoring role of government etc. are some
suggestion of authors.

Sunil luthara, vinod kumar, sanjay kumar and abid Haleem (2018) had
undertaken study on” barriers to implement green supply chain management in
automobile industry using interpretive structural modelling technique- an Indian
perspective” with the purpose to develop a structural model of the barriers to
implement GSCM in Indian automobile industry and they conclude that Eleven
barriers to implement GSCM in Indian automobile industry have been identified.
Interpretive Structural Modelling (ISM) methodology has been used for finding
contextual relationships among various barriers to implement GSCM in Indian

30
automobile industry. Market Competition and Uncertainty; Lack of Implementing

Green Practices; Cost Implications; Unawareness of Customers and Supplier

Reluctance to Change Towards GSCM have been identified as dependent
variables. Lack of Government Support Systems; Lack of Top Management
Commitment and Lack of IT Implementation have been identified as the driver
variables. Resistance to Technology Advancement Adoption; Lack of Organization
Encouragement and Poor Quality of Human Resources have been identified as the
linkage variables. No barrier has been identified as autonomous variable.
Market Competition and Uncertainty; Lack of Implementing Green Practices; Cost
Implications; Unawareness of Customers have been identified as top level barriers
and Lack of Government Support Systems as most important bottom level barrier.
Removal of these barriers will be help in implementing GSCM in Indian automobile
industry.

Avika Mungal (2016) the impact of cash management on profitability and

sustainability of small retail businesses in the Tongaat area Kwazula-Natal. The aim
of the study was to identify the current cash management practice of small retail
businesses in the tongaat area and identify the impact of such practices on their
profitability and sustainability. The descriptive, cross sectional study, using a
quantitative research paradigm and a non-probability sampling method targeted a
sample of 69 businesses in the chosen area. The sample structure consisted of
small retail businesses in the tongaat area of kwazulaNatal.

Dr. Ronald mani amd Mr. Debasis tripathy (2020) had undertaken the study on
“a study on consumer buying behavior towards two wheeler bikes in context to
Indian market”. The survey is mainly focused on the buying behavior of the
consumer that motivates them to purchase the two wheeler bikes. This study is
based to identify the factors that influences the consumer buying behavior of the two
wheeler bikes at Allahabad, Lucknow and Varanasi cities of Uttar Pradesh andthe
study conclude that Honda and Bajaj shows maximum satisfaction whereas TVS
remains last.

Abdirizak Mohamed Jama and others (2017), conducted a study on effect of cash
management practices on the profitability of bottled purified companies. Sample of
46 was used to collect the data through questionnaire, document analysis and

31
interviews. Correlation and regression analysis were used to analyze the data.
Solvene’s formula was also used in this study. Researcher found that

cash budgeting has significantly influence the profitability of the water purified
companies.

Yamoah Gilbert (2015), researcher conducted the study on cash management

practices of the various Halls & Hostels that provide accommodation for Kwame
Nkrumah University of Science & Technology (KNUST) students. Researcher
collects the data through questionnaires from the samples which was selected
through purposive sampling. By analyzing the data, researcher had found poor cash
management practices and suggest the better tuning between collection ofcash and
disbursement of cash by good partnership of university with hostels.

Sree harsha bandaru(2015) had undertaken study on “alternative transmission

system for 4 wheeler”. The purpose of this is to overcome the shortcoming of
differential and provide automatictransmission for better drivability. On the basis of
this study she concludes that the alternate transmission component and the smart
parking system are fabricated. Friction losses in the transmission component can
be reduced by using oil which is used in cvt. The transmission component can be
used in passenger cars. The smart parking system can be easily implemented in
cars.

Vikram shende(2019) had undertaken study on “analysis of research in consumer

behaviour ofautomobile passenger car customer” and he conclude that From study
there are various major classof consumer behaviour determinants and expectations,
namely socioeconomic, psychological, political, geographical, demographic and
Product & Technology. Further classification of humanbehaviors under main
categories will enable car manufacturer to align their strategies in concurrence to
customer behaviour. While purchasing mini segment car though customer is
highlycost conscious but this segment is also upgrading their requirements and due
to rise in disposableincome, with in segment migration is observed, Customer is
more inclined to purchase Suzuki Swift, 120. For mid-size segment customer focus
is for safety, driving & seating comfort, brand. Also this segment requires value for
money, best features and customer friendly vehicles. In highersegment cars like
Executive and Premium brand image is main deciding factor which gives assurance

32
of meeting their needs in terms of safety, performance and feature requirements.

Lydiah Wambui Ndirangu (2017), in this study, researcher analyze the effect of
cash management on the financial performance of the companies listed at The
Nairobi Securities Exchange, for which 15 Companies were selected and descriptive
research design was used. The study based on secondary data collected for 7 years
(2010-2016) from NSE, published financial statements from respective websites of
company and capital market authority. Researcher analyzed the data with the help
of multiple regression and correlation. Study found positive but insignificant effect of
cash conversion cycle on financial performance, negative and insignificant effect of
size of company on financial performance and positive and significant effect of
leverage on financial performance of selected companies. Therefore, it was
recommended by researcher to increase the debt proportion in its capital structure
which improve the financial performance of selected samples.

Ivan Klyuchankin (2017), researcher conducted this study on RE Trading company

with the objective to analyze the cash flow management. For this, researcher use
empirical research design. Data for the study was collected through interview of
manager, employees and reports & documents of selected company. Study found
that there were no any problem with cash flow and its management and company
can manage better cash flow by create a subdivision for internal control for financial
activity of company.

Noor salfizan fawzi, amrizh kamaluddin and zuraidah mohd sanusi (2015)
undertook the study on “monitoring distressed companies through cash flow
analysis” and purpose of this paperis to examine the importance of cash flow ratio in
determining financial distressed companies. Theobjective had been analyzed using
the logistic regression model. On the basis of the study they concluded that solvency
and profitability ratios that are based on cash flow variables have significant
relationship with financial distressed.
Leonie jooste (2016) had undertaken study on “cash flow ratios as a yardstick for
evaluating financial performance in African business” the aim of this paper is to
compare the norms for the industries in SA with those in the US. Such a

33
comparison may lead to a better understanding of the financial performance ofsouth
Africa industries in an internationally competitive market.

Sulayman H. atieh (2021) had undertaken the study on “liquidity analysis using
cash flow ratiosas compared to traditional ratios in the pharmaceutical sector in
Jordan” the purpose of this studyis to examine the liquidity position of the Jordanian
pharmaceutical sector using the traditional ratios as compared to the more recently
developed cash flow ratios. The study showed that there was example of companies
that had good traditional ratios. While their cash flow ratios are weak,in contrast there
were also companies that had poor traditional ratios, but the cash flow ratios showed
a better liquidity position. The cash flow ratios provide more information than
traditionalratios in measuring the liquidity position ofthe company. As a result, testing
the study hypothesis,and applying SPSS, the significant difference between the
cash flow ratios and traditional ratios are determined to measure the liquidity of the
Jordanian pharmaceutical companies.

Kisang ryu and shawn jang (2021) undertook the study on “performance
measurement throughcash flow ratios and traditional ratios: a comparison of
commercial and casino hotel companies. The objective of the study was to examine
and compare the financial performance of commercialand casino hotel companies,
using cash flow ratios and traditional ratios from income statement and balance
sheet. The result of this study suggest that casino hotel companies have been in
betterliquidity, solvency and profitability conditions than commercial hotel
companies over the past fiveyears. The results indicated that the type of hotelmight
be one of the influencing factor on differentiating financial liquidity of the hotel
companies.

Surorna barua and anup kumar saha (2015) had undertaken study on “traditional
ratios vs. cash flow based ratios: which one is better performance indicator” the
primary objective of this study is to establish the usefulness of the cash flow based
ratios in today’s competitive business world. The second objective is to investigate
some cash flow ratios. Third objective is to suggest a listof cash flow ratios to be
included in a financial analysis. After an evaluation of entities by means of selected
cash flow ratios, it was found that cash flow information has explanatory power.The
ratios that are suggested in this study, if

34
used in conjunction with traditional balance sheet andincome statement that willlead
to a better indication of the financial strength and weaknesses of an entity.

Omer faruk gulek and tucan bektas (2019)undertook the study on “cash flow ratio
analysis: the case of turkey” the main motivation of this study is to demonstrate the
power of the statementof cash flow by using 8 fundamental cash flow ratios with 10
traditional ratios in the areas of liquidity, profitability and financial structure.
According to the results, firms are not good enoughto generate sufficient cash to
maintain activities and there is low quality of income due to the values in cash quality
of sales ratio and quality of income. In addition to high external financing needs of
firm, liquidity is also another big concern for the sample period.

Shailendrasinh J. vaghela (2016) had undertaken the study on “performance

evaluation throughcash management: Indian automobile industry” to know the cash
management, to analyses the working capital, to analyses the cash flow cycle, to
evaluate the cash flow from different activities,to analyses the relationship between
availability and profitability, to analyses the cash conversioncycle and to make
suggestion for improvement of cash management. On the basis of the study it has
been found that the companies having efficient control over its cash flows are
performing better than those not. So it is suggestible to all the companies to pay
focus on managing their cashflow more efficiency in order to obtain a strong position
in the industry.

N. Suresh Babu and Prof. G.V. Chalam (2015) conducted empirical investigation
on relationship between the components of working capital and firm’s profitability in
Indian leather industry. The main objective was to determine whether there is a
significant relationship between inventory conversion period (ICP) and the
profitability of the firm. The analysis was done by the Pearson’s correlation and
regression analysis. They found that there is positive and insignificant relationship
of inventory conversion period and profitability and also average collection period is
positive relationship with leverage but statistically significant. Even though, average
payment period and cash conversion cycle were significant negatively related to
profitability. The result show that for overall leather industry, working capital
management has significant impact on profitability of the firm.

35
Nandhu n. and dr.ranjith kumar (2020) had undertaken study on “effectiveness of
cash flow ratios to measure the performance divergences of selected steel
companies in India” the objectiveof this study is to highlight the financial efficiency
of an organization with support of cash flow measures during the study period. The
present study has found that sufficient cash maintenance has encouraged the
organizations to make it their operations without disrupt. Adequate cash
management supported a lot to the organization to make it their cash flow easily. It
has been notedthat opportunity cast is high at a high level of cash balance. Cash
flow ratios yield the significant result during the study period of the selected ratios.

Leonie jooste (2017) had undertaken the study on “an evaluation of the usefulness
of cash flowratios to predict financial distress” this article investigates cash flow
ratios suggested by various researchers and suggested a list of ratios with the
potential to predict financial future. The comparison revealed that cash flow ratios
have predict value with the cash flow to total debt identified as best indicator in
failure. It was also determined that although failed entities have lower cash flows
that non failed entities, they also had smaller reserves of liquid assets. Furthermore,
they have less capacity to meet debt obligations and they tend to incur more debt.
The ratios of thefailed entities were unstable and fluctuated fromone year to the
next. Finally, bankruptcy could be predicted three years prior to financial failure.

Maxwell Samuel amuzu (2020) undertook the study on “cash flow ratio as measure
ofperformance of listed companies in emerging economies: The Ghana example”
and they concludedthat for most cash flow ratios, it is observed that the Ghanaian
company is an competitive as its US counterparts. The comparison of the individual
data points from 2003-2005 for all thecompanies verified that the Ghanaian
company could measure as well to the US companies in thesame industries. For
some of the cash flow ratio measured, the Ghanaian companies did better as
compare to their US counterparts. It was also evident that Ghana is competitive
when it comes tothe milk products and alcoholic beverages industries. On the other
hand, US evidently have stronghold on the telecommunications industries.

36
Padachi DK and Carole Howorth (2014), a study of working capital management
practices among Mauritian SMEs with six main industry groups. According to
findings, Mauritian SMEs are not a homogenous group with regard to working capital
management routines. Further the financial knowledge in accounting related field
make a difference. The firm which claimed a more severely late payment, focused
more on credit management and more attention to working capital financing were
paid. Small firm may avoid formal analysis of working capital management due to a
lack of need instead of resource constraint.

Lalit Kumar Joshi & Sudipta Ghosh (2016) examines in their research paper the
working capital performance of Cipla Ltd. during the period 2004-05 to 2008-09.
Financial ratios are applied in measuring the working capital performance and
statistical as well as econometric techniques are employed in order to assess the
behavior of the selected ratios. The empirical findings reveal significant positive
trend growth in most of the selected performance indicators. Further, the selected
ratios show satisfactory performances during the study period. Motaals test also
indicates significant improvement in liquidity performance during the said period.
Finally, there exists significant negative relationship between liquidity and
profitability, which indicates that Cipla Ltd. has maintained post optimal level of
liquidity (i.e. excess liquidity) during the period under study.

Srinivas K.T (2016) conducted the research to evaluate the association between
traditional and alternative working capital measures and return on investment (ROI).
Specifically in industrial firms listed on the Johannesburg stock exchange (JSE).
Results indicated that there were no significant differences amongst the years with
respect to the independent variables. The results of their stepwise regression
corroborated that total current liabilities divided by fund flow accounted for most of
the variability in Return on Investment (ROI). Well-known liquidity concept such as
the current and quick ratios registered insignificant associations whilst only one of
the never working capital concepts, the comprehensive liquidity index, indicated
significant associations with return on investment.

Neelam and mr. Nirmal dhir(2017)had undertaken study on “performance

evaluation and capacity estimation for selected undisciplined intersections in
Gurgaon city” and they aims to studyand explore the capacity estimation for an

37
undisciplined junctions. On the basis of this study theyconclude that Since the

vehicles differ in various ways as per their characteristics, the classified gap
acceptance behaviour was studied through the estimation of critical gap by each
type of vehicleusing Raff’s Method. The critical gap value is lowest for only 2
wheelers as 1.25 seconds. It is found highest for 3 wheelers as 1.78 seconds. Forthe
same, when cars were considered, the criticalgap value obtained is 1.425 seconds.
This variation can be related to the vehicular characteristics such as magnitude and
acceleration rate due to which they are found to differ from each other.

Lijuan Zhao (2021) had undertaken study on “does the presentation format of the
statement of cash flow affect analysts- cash flow forecast”. The study was based on
a hypothesis which is long-term debate over the benefits and costs of DM disclosure
and IM disclosure. And on the basis of above study he conclude that IAS 7 and
SFAS 95 recommend firms use DM to present the statement of cash flows, however,
DM information is more useful in forecasting future cash flows.Thisstudy finds that
the analysts will be more likely to forecast future cash flow for firmsusing DM. These
results are consistent with prior literature that DM provides more useful information
than IM in predicting future cash flows.

Jaan Alver(2020) had undertaken study on “preparation and analysis of cash flow
statement: the net profit approach and operating profit approach” The paper focuses
on the statement of cash flows that recasts the financial statement data provided by
the accrual process. It discusses the use and analysis of the information provided
by the cash flow statement. Three important areas that affect cash flows are
operations, financing, and investing. Not surprisingly, they provide the structure
forboth the preparation and interpretation of the cash flow statement. The opinion
that the treatment of an item in the income statement should determine its
classification in the cash flow statement is expressed in this paper.
For classification of operating cash flows, preparing and analysis of cashflow
statements two approaches (net profit approach and operating profit approach) are
recommended.

Mark L. Defond and mingyi(2007) hung had undertaken the study on “investor
protection and analysts cash flow forecasts around the world” they hypothesize that
analysts are more likely to issue cash flow forecasts in countries with weak investor

38
protection because earnings are less likelyto reflect underlying economic

performance in these countries. Consistent with our hypothesis, they find that
analysts are more likely to forecast cash flows for firms in countries with weaker
investor protection. they also find that cash flow forecasts are more common in
countries with higher accounting disclosure and larger foreign investment, and
among companies that have greater analyst coverage and that are cross-listed. they
note, however, that their investigation is subject to several limitations that are known
to be associated with cross-country research designs.Specifically, their proxies for
broad concepts such as the extent of investor protection may capturea number of
country-level characteristics, suggesting that our regression results may suffer from
correlated omitted variables problems. In addition, because they analyze only 36
countries, their analysis necessarily has a small number of degrees of freedom.
Given these limitations, they acknowledge that their paper is essentially exploratory
in nature and their results should be interpreted as suggestive.

Ovidiu megan, camellia hategan, Leonora caciuc, bogdan cotlet (2019) had
undertaken study on “the cash flow statement- between true and manipulation”. On
the basis of the study they conclude that The advantage of a cash flow statement,
when used in conjunction with the rest of the financial statement, is that it provides
information that enables users to evaluate the changes in the net assets of an
enterprise Cash is one of the major lubricants of business activity, but there are
certain things that cash flow doesn't tell us. It doesn't tell us the profit earned or lost
during a particular period. As it doesn't tell the whole profitability story, cash flow
doesn't do a very good job of indicating the overall financial well-being of the
company. On the other hand, the cash flow statement is a compressed version of
the company's check book that includes a few other items that affect cash, which
shows how much the company spent or collected from the repurchase or sale of
stock, the amount of issuance or retirement of debt and the amount the company
paid out in dividends. Being considered to be one of the cleaner figures in the
financial statements cash flow statement is sometime the object of manipulation.
Over all cash flow statement is very necessary for decision makers because it
measures the actual money paid out or received by a company over a certain period
of time.

39
 CHAPTER 3

RESEARCH METHODOLOGY
3.1 RESEARCH METHODOLOGY
Research work traditionally known as gathering data that can help to answer the
questions about various aspects in the concern subject for research. The research
work helps to provide answers to questions of theoretical interest to particular
subject discipline. This may include such questions which have no interest to the
society. Research must be conducted with the objective that can be add something
or develop a new concepts, idea, theory, and practices. Research should not
consider as only academic activity, because it also applies to all the respect of
human activity. Research is basis for making decision effective and more
meaningful. Research includes the defining of research problem, formulating
hypothesis, collection of data, analysing of data and arriving to conclusion.

This chapter focused on following points like introduction of Research Methodology,

Definition of Research Methodology, title of the study, Objectives of the Study,
scope of the study, Hypothesis of the Study, Period of the Study, Chapter Plan,
significance of the Study and Limitations of the Study.

3.2 RESEARCH DESIGN

Research design shows the way research may go on. For a good research,
systematic pattern helps a lot, design gives the advantage to researcher in the form
of effective research work with well define path. Researcher adopt the Descriptive
research design for this study.

3.3 DATA COLLECTION

Data collection is very important task for the researcher because the result of the
research depends ultimately on the data of that research. For different research
different type of data are used like primary data which is collected by the researcher
first time and for that research only and other type is secondary data which is not
collected first time by the researcher but it is used by the researcher which is
prepared by some other parties for their own purpose. This study is based on
secondary data, which is collected mainly from the annual reports of the selected
samples for the ten years of study period which is 2008-09 to 2017- 18. Researcher

40
 also used other source to collect the necessary data for the study from the official
website of respective sample companies, books, journals, newspapers and others
sources.

3.4 SAMPLE PROFILE

This chapter includes the information of selected company. The research includes
the Basic details, products, growth, turnover, achievements etc. in the information
of the various selected samples.

3.5 TOOLS FOR ANALYSIS

Multiple Regression Analysis

In statistical model, multiple regression analysis is a set of statistical processes

which helps in estimating the relationships among variables. It has many techniques
for model and analysing the variable especially when the aim is to measure
relationship between a dependent variable and one or more independent variables
(predictors). Instead of it, multiple regression analysis helps in understanding that
how the typical value of the dependent variable changes when any one of the
independent variables is changed, while the other independent variables are
remains fixed.

Multiple Regression analysis is the process of forming a mathematical equation or

function which can be used to predict or ascertain one variable by another variable
or other variables. Multiple Regression is a statistical method for estimating the
impact of one or more independent (predictor) variables on dependent (criterion)
variable. The main values of regression analysis are as follow:

R: R is a square root of R-squared and it is the correlation between the observed

and predicted values of the dependent variable.

R Square: R-square is the proportion of variance in the dependent variable (cash

conversion cycle) which can be predicted from the independent variables
(predicators).

41
Adjusted R-square: As predictors are added to the model, each such predictor will
explain some of the variance in the dependent variable simply due to chance. One
could continue to add more predictors to the model which would continue to improve
the predictor’s ability to explain the dependent variable, although sometime increase
in R-square would be simply due to chance variation in that sample. The Adjusted
R-square try to yield a more honest value to estimate the R-square for the
population.

Pearson Correlation
The Karl Pearson product-moment correlation coefficient, popularly known as
Pearson Correlation Coefficient is a measure of the strength of a linear association
between two variables and it is denoted by r. A Pearson Correlation Coefficient
attempts to draw a line of best fit through the data of two variables which indicate
how far away this data points are to the line of best fit.
The Pearson Correlation Coefficient can take a range of values between +1 to -1.A
value of 0 (zero) indicates that there is no association between the two variables.A
value greater than 0 indicates a positive association which means that increasein
value of one variable cause the increase in the value of another variable. And the
value less than 0 indicate negative association, that is, as the value of one variable
increases, the value of another variable decreases.
The stronger the association of the two variables, the closer the r will be to either
+1 or -1 depending on whether the relationship is positive or negative respectively.
The value of +1 and -1 indicate that all the data value are included on the line of
best fit and no data value is showing any variation away from this line. The value of
r between +1 and -1indicate that there is variation around the line of best fit. Asthe
value of r is closer to 0 then the variation is greater around the line of best fit.
Cash Conversion Cycle

The Cash Conversion Cycle is defined as length of time between purchase of raw-
materials and collection of cash from debtors. In the area of liquidity management,
Cash Conversion Cycle is an important parameter which measure efficiency of
company. The Cash Conversion Cycle is indicating the efficiency of managing
working capital. For the purpose of measuring Cash Conversion Cycle, payable
deferral period is deducted from the addition of inventory conversion period and

42
 receivable collection period.

The Cash Conversion Cycle (CCC) is a useful technique which can easily and
quickly assess the liquidity of firm. Traditionally some static balance sheet value
such as quick ratio and current ratio are useful indicators of liquidity but in case of
CCC, it is a dynamic measure of continuous liquidity management. The CCC canbe
calculated by the sum of days of sales outstanding and days of inventory
outstanding less days payable outstanding.

The Cash Conversion Cycle is Cash Gap. Cash Gap measures the length of time
between actual cash expenditures on resources and actual cash receipts from the
sale of services or product. It is one of the easiest procedures to measure the cash
movement of the firm.

• Equation for calculating cash conversion cycle is as follow.

CCC = Days of Sales Outstanding + Days of Inventory Outstanding- Daysof Payable
Outstanding.
• The calculation of various ratio for CCC is as follow. Days of Sales
Outstanding = Account Receivables/Sales*365
Days of Inventory Outstanding = Average inventory/COGS*365Days of Payable
Outstanding = Account Payable/COGS*365

Current Ratio
The Current Ratio is a liquidity ratio which measures the ability of firm to pay off its
short-term liabilities with its current assets. The current ratio is an important ratio of
liquidity because short-term liabilities are due within a year, so company has a
limited time in order to raise the funds to pay for these liabilities.
Current assets like cash and cash equivalents and marketable securities can easily
available for paying debt because they are considering as most liquid assets of the
company. This means that companies with more current assets will easily be able to
meet its current obligations when they become due withoutneed to sell off long-term
assets which generate revenue in company.
The standard current ratio is 2:1, which prefer that company should have twicethe
current assets as compared to its current liabilities. Which provides enoughliquidity to
the company.

43
Quick Ratio
This ratio is also known as acid ratio. The Quick Ratio is also one type of liquidity
ratio which is stricter than current ratio because it measure the liquidityon the basis
of more liquid assets which exclude the inventory of the firm because it takes time
to convert the inventory into cash, in other words, quick assets are those which can
be easily converted into cash like cash and cash equivalents, marketable securities,
debtors etc.

Thus while calculating this ratio, quick assets are divided by the current liabilities.
The advance payment of expenses are also deducted from current assets while
calculating the quick ratio. The standard quick ratio is 1:1, which shows the
requirement of keeping at least that much quick assets which are equal to the
current liabilities.

Cash Coverage Ratio

This ratio is also called the cash ratio. This is also one type of liquidity ratio which
measures the short term liquidity of firm by dividing its cash and cash equivalents
by current liabilities. This ratio measures that against the total current liabilities of the
company howmuch cash and cash equivalents are available with the firm. This ratio
is very useful not only to company but also to investors and those who are providing
finance to the company because they can get the idea that in emergency situation
how much portion of cash and cash equivalents are kept by the company.

Inventory Turnover Ratio

This ratio shows how much time inventory repeat or replaced in an accountingyear.
Higher the ratio better the performance of the company. The turnover of inventory
shows how much company produce and ultimately how much it sales, more turnover
of inventory generally indicate good performance of the company. This ratio is based
on cost of goods sold and average inventory of the company. The cost of goods
sold is divided by the average inventory and then company gets the idea that how
much time inventory repeat in an accounting period. If anyone wants to find the time
of repetition of inventory then the result obtainis again divided by 365 which shows
that in how many days inventory is repeated or turnover. The reason of choosing
this ratio for study is that it helpsto understand the cash management practice by
taking the help of turnover rate of inventory which ultimately affect the cash.

44
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

In this chapter, researcher analyze the collected data by using descriptive statistics,
Pearson Correlation technique and Multiple Regression technique. The statistical
inference obtain by the researcher are discuss in this chapter. The seven ratios are
calculated by researcher based on data which is collected from the company. The
ratios include CCC, CR, QR, CCR, and ITR. Researcher analyze the impact of CR,
QR, CCR, ITR, and RTR on CCC o by using the multiple regression analysis. The
correlation also shows that degree of relationship among the various ratios in which
correlation of CCC with other ratios are consider for analysis purpose. The
information of various ratios and technique used by researcher as well as analysis
and interpretation of data included in this chapter.
Table-4.1 A Table Showing Information of Various Selected Ratio and Formula
of it
Ratio Abbreviation Formula

Cash Conversion Cycle CCC DIO+DSO-DPO

Current Ratio CR Current Assets/ Current Liabilities
Quick Ratio QR Quick Assets/ Current Liabilities
Cash & Cash equivalents/ Current
Cash Coverage Ratio CCR
Liabilities
Inventory Turnover Ratio ITR COGS/ Average Inventory

The above table-4.1 showing the ratios which are used by the researcher in orderto
fulfil the objective of study. Here CCC is used as dependent variable which is varies
due to change in various other factors of liquidity.

For the purpose of calculating CCC three ratio are required which are Days of
Inventory Outstanding, Days of Sales Outstanding and Days Payable Outstanding
To analysed the cash management practices, researcher includeliquidity ratio which
provides the idea about the liquidity condition of company. Three liquidity ratios are
used namely Current Ratio, Quick Ratio and Cash Coverage Ratio (Cash Ratio).

45
Table-4.2 A Table Showing Descriptive Statistics
Std.
Mean
Deviation

CCC 86.78 198.95

CR 1.38 0.44

QR 0.97 0.40

CCR 0.28 0.30

ITR 1.11 0.29

The Table No. 4.2 showing information about the descriptive statistics of selected
cement companies for the period of ten years i.e., 2008-09 to 2017-18. The cash
conversion cycle showing mean (average) of approximately 60 days which is almost
two months. This indicate that selected company need to arrange on an average
two month’s cash to meets its working capital and routine expense requirements. In
other words, cash needs 60 days to complete its cycle or convert inventory again
into cash.
The Current Ratio of selected company is shown mean of 1.38 which indicate good
availability of current assets against its current liability. Standard Current

Ratio is 2:1 and 1.38 is a mean of selected cement companies which shows
comparatively acceptable and good ratio. The standard Quick Ratio is 1:1 which
suggest that it’s an idle position of liquidity when company has at least that much
quick assets which can be able to repay its short-term debt which is current liabilities.
The average of quick ratio for the selected cement companies is 0.97 which is
almost 1. This average quick ratio meets the requirement of standard ratio or it is
near to standard quick ratio. Thus, in this study, selected cement companies
showing good quick ratio which ultimately indicates strong liquidity position of
selected cement companies.
The Table No. 4.2 shows the mean of Cash Coverage Ratio is 0.28 which means
that company has 28% cash and cash equivalent against its total 100% current
liability. Here is the still scope to improve this ratio and getting liquidity position

46
stronger. The Inventory Turnover Ratio measure that how many time inventory
repeat or get turnover in an accounting year.
The mean of this ratio is 1.11 which indicates that during the year, inventory gets
turnover or repeat approximately one time (1.11), generally high inventory turnover
ratio is preferable.

Table-4.3 A Table Showing Model Summary

Model R R Adjusted R Std. Error of the
Square Square Estimate
1 .796 .634 .582 128.55432
a

The Table No. 4.3 showing summary of multiple regression model. On the basis of
this table, researcher is able to know that how much variability of dependent variable
is measured by the independent variable, in other words, how much impact on
dependent variable is measured by the independent variables.
The R coefficient is 0.796, it is showing significant relationship between the cash
conversion cycle and all independent ratio. The value of R-square (R2) is 63.4%,
which indicates that 63.4% of the variance in cash conversion cycle can be predicted
from the predictor variables.R-square is also called the coefficient of determination.
The value of R-squareis 0.634, while the value of Adjusted R-square is 0.582.
To find out whether the multiple regression model is fit to data or not, validationof R2
is necessary. As per the general rule, 0% R2 shows that none of the variability of the
data around its mean and 100% R2 indicate that the model explains all the variability
of the data around its mean.
Generally, it is accepted that higher the percentage of R2, the better model fitsto data
but it is not always be the true as R2 may be higher as more variable added in the
model.
In the given multiple regression table, value of R2 is 0.634 which is 63.4%, this
indicate that model is fits to the data collected and 63.4% impact can be measured
of independent variable on dependent variable.
Thus, based on this further analysis can be done by the researcher for the selected
company during the study period. Thus, from the above table,researcher found that
the value of R square is 0.634, so the 63.4% impact is found by independent
variables on dependent variable.
47
In the multiple regression model summary table, value of adjusted R 2 shows the
expected impact of independent variables on dependent variable in more efficient
manner.

Table-4.4 A Table Showing Coefficients

Unstandardizedd Standardized
Model Coefficients t Sig.
Coefficients

B Std. Error Beta

(Constant) 308.64 151.95 2.031 .04
8
CR -35.50 162.88 - -.218 .82
0.078 9
1 QR 169.41 188.86 0.337 .897 .37
5
CCR - 111.43 111.95 - 0.165 -.995 .32
5
ITR - 81.63 - -2.951 .00
240.93 0.348 5
a. Dependent Variable: Cash Conversion Cycle

The Table No. 4.4 showing coefficient which measure impact of independent
variable on dependent variable. In this table, dependent variable is Cash Conversion
Cycle.
Multiple Regression Model: Y= a+b1*x1+b2*x2+b3*x3+b4*x4+b5*x5+b6*x6

CCC=308.64-35.50*CR+169.41*QR-111.43*CCR-240.93*ITR-
6.63*RTR+74.38*PTR

The above equation is estimating the relationship between dependent and

independent variable. These estimates measure the amount of increase or
decrease in CCC that would be predicated by a one value/point/unit increase in the
predictor.

Current Ratio: The Coefficient (parameter estimate) is -35.50, which indicatesthat

for one value increase in current ratio, a -35.50 value, that meansdecrease of -35.50
value in CCC is predicated, where all other variables are assume to be constant.

Quick Ratio: The value of coefficient is 169.41, so for every one value increase in
Quick Ratio, there is increase of 169.41 in CCC can be predicted. This value of
48
coefficient is positive which indicate the same impact on CCC by QR in case of
increase or decrease. The Cement industry should try decrease

its QR in order to decrease its CCC as the shorter CCC is preferred.

Cash Coverage Ratio: the coefficient is -111.43, that shows, for every one point
increasing cash coverage ratio, -111.43 units decrease in CCC is predicated,
holding all other variables constant.
Inventory Turnover Ratio (ITR): The value of coefficient is -240.93, which indicates
by increase in one unit of ITR, a -240.93 unit decrease in CCC was predicted, when
holding all other variables are constant.

Receivable Turnover Ratio (RTR): The coefficient is -6.63, so for every one unit
increasing RTR, a -6.63 unit decrease in CCC is predicted. When other variables
remain constant.
Payable Turnover Ratio (PTR): The value of coefficient is 74.38 which means, for
one value of increase in PTR there is 74.38 value of increase in CCC is predicted
when all other variable holding constant.

The standardized coefficient shows that CCC has inverse relation with CR, CCR,
ITR and RTR and positive relation with QR and PTR.

The highest value found in standardized coefficient is of PTR which is 0.471

indicating that significant difference can be made by PTR in CCC because value of
coefficient shows that as the PTR increase it result into increase in CCC as well.
Thus, while taking decision regarding CCC, PTR is has significant part to consider.

The second highest value in standardized coefficient is of RTR which is -0.428

showing inverse and significant impact on CCC. Thus in order to decrease the CCC
company need to increase its RTR that means quick collection from debtors.

After RTR, ITR also have negative relation with CCC as per the value of
standardizes coefficient. The value of ITR is -0.348, this ITR also plays significant
role for in CCC decision and as the ITR is increases the CCC may decreases dueto
it.

The remaining three ratio that is CR, QR and CCR also shows standardized
coefficient value of -0.078, 0.337 and -0.165 respectively. Thus by increasing CR
and CCR as well as decreasing QR company can fulfill its goal of low CCC. Thus,

49
this table showing the coefficient of multiple regression on the basis of which

multiple regression model is developed and analysis is made for the selected
industry. By using this formula, CCC can be predicted at the various values of
independent ratios, which provides the facility to achieve low CCC by changing
various independent ratios.
Table-4.5 A Table Showing Correlation
CCC CR QR CCR ITR RTR PTR
CCC 1.000 -.035 -.147 -.381 -.368 -.476 .606
CR -.035 1.000 .940 .490 -.411 .580 -.185
QR -.147 .940 1.000 .640 -.303 .616 -.310
Pearson
CCR -.381 .490 .640 1.000 -.263 .616 -.470
Correlation
ITR -.368 -.411 -.303 -.263 1.000 -.085 -.065
RTR -.476 .580 .616 .616 -.085 1.000 -.294
PTR .606 -.185 -.310 -.470 -.065 -.294 1.000
CCC . .405 .155 .003 .004 .000 .000
CR .405 . .000 .000 .002 .000 .099
QR .155 .000 . .000 .016 .000 .014
Sig. (1-
CCR .003 .000 .000 . .033 .000 .000
tailed)
ITR .004 .002 .016 .033 . .279 .328
RTR .000 .000 .000 .000 .279 . .019
PTR .000 .099 .014 .000 .328 .019 .

In the Table No. 4.5 given above, Pearson Correlation is calculated for this
study. A positive value in the table indicates a direct proportional relationship among
the variables and negative value indicates an inverse or opposite relationship
among the variables.
For the purpose of calculating Pearson Correlation researcher workout variousratio
like Cash Conversion Cycle (CCC), Current Ratio (CR), Quick Ratio (QR), Cash
Coverage Ratio (CCR), Inventory Turnover Ratio (ITR), Receivable Turnover Ratio
(RTR) and Payable Turnover Ratio (PTR).

The Cash Conversion Cycle showing negative correlation with all ratio except the
Payable Turnover Ratio. The negative relation shows that when CR, QR, CCR, ITR

50
and RTR are increases then CCC of the company is decrease. Company cannow
manage its all ratio who has negative relation with CCC and try to increase all

that ratio which ultimately decrease the CCC of the company because short CCC is
always preferable which means company get cash converted quickly, this also
improve the liquidity of the company.
On other hand, a PTR has positive relation with CCC which express that by reducing
PTR Company can decrease its CCC. For this company if company getsgood credit
from its creditor and pay them after reasonably later time then company can
efficiently use that cash for the other business purpose. Among all the ratio, payable
turnover ratio has significant positive relation of 60.6% with the CCC.
Thus company can decrease the CCC by decreasing its payable turnover ratio or
frequency of payment to creditors. Other ratio like CR has very low negative relation
of only -3.5% with CCC, which express that by increase CR of selected companies
can decrease its CCC little bit.
The QR shows -14.7% relation with CCC which is again showing negative but not
significant relation, this means company can decrease its CCC to some extent by
increasing its QR. A CCR has a significant negative relation with the CCC which is
-38.1%.
A CCR shows availability of cash against current liabilities of company. Due to the
negative relation if company increase its CCR through either increase its cash
availability or decrease its current liability then company can significantly decrease
or reduce its CCC which is desirable for good liquidity.
An ITR has significant negative relation with CCC which is -36.8%. The ITR explain
that how many times inventory is sold and replaced during an accounting year. By
increasing ITR, company can decrease its CCC significantly. A CCC has significant
negative relation with RTR, which is -47.6%.
A RTR shows effectiveness of company in collecting its receivables and also
indicate how well company manage the credit which it extends to customer. A RTR
also shows how many time company receive the money from its debtors in an
accounting year.
Thus company can decrease its CCC by increasing it RTR that means if company
collects the cash from debtors more quickly (giving low credit period to customer).
The PTR only indicates positive as well as significant relation with CCC which is

51
60.6%. This relation shows that by decreasing PTR, company can reduce

its CCC. This means if company get more credit period from creditors that means if
company has a more time to repay its creditors then company can utilize that money
in business operation and for other objectives.
In this condition, company is able to decrease its CCC because CCC and PTRhas
significant positive relation with each other which means increase in one ratio results
in increase in other ratio and vice versa.
Thus from the correlation table of cement industry, it can be conclude that during
the study period of ten years, industry showing highest relation of CCCwith the PTR
which is 60.6% which is significantly positive.
And negative relation with ITR and RTR. Which is -36.8 and -47.6%, thus in
respective to manage the CCC in better when and reduce it as much as possible,
company need to have quick collection from its debtors and more turnover of its
inventory, with this, company also need to put efforts in respect to get more credit
period from creditors which reduce the turnover ratio of payable and untimely
decrease the CCC of industry.
All three-liquidity ratio that is CR, QR and CCR has negative relation with CCCout of
which significant negative relation is showing by CCR. Thus, industry require to
increase all three-liquidity ratio in order to achieve low CCC. By using this value of
Pearson correlation, the strategy related to cash management canbe made. For the
purpose of efficient management of cash, firm should analyse how on variable is
correlated with other. After having the information about correlation, the strategy
should be frame in such a way that can be manage the cash more efficiently.
Here also correlation between CCC, CR, QR, CCR, ITR, RTR and PTR is measured
by the researcher which shows the highest correlation of CCC with PTR as
compared to another ratio. Thus, more attention is required to manage toPTR in
order to achieve the low CCC by the industry.

52
 CHAPTER 5
FINDINGS, SUGGESTION, AND CONCLUSION

5.1 FINDINGS

The first and important ratio calculated by researcher is Cash Conversion Cycle. It
is generally accepted that shorter the CCC better the cash management of the
company is. A shorter CCC shows quick conversion of inventory into sales and
ultimately into cash.

The three-liquidity ratio are calculated by the researcher which include Current
Ratio, Quick Ratio and Cash Coverage Ratio. To measure the liquidity condition,
mean (average) of each of this ratio is analyse. For that, first is Current Ratio, the
standard Current Ratio is 2:1 which indicate that company should have double
current assets against its total current liabilities. It is generally accepted that higher
the liquidity ratio better the liquidity condition company has. But excess of anything
is not desirable, so if company has excess liquidity, then its shows inefficient
management of liquidity by it. Thus, deficit or surplus of liquidity is not desirable.
Industry has an average of CR more than one which shows satisfactory position of
current assets against current liabilities.

The more restricted liquidity ratio is Quick Ratio because it does not consider the
component which takes more time to convert into cash like inventory. Thus, from
current assets, inventory and advance payments of expenses are deducted and
then quick assets are derived which is easily converted into cash. The QR is also
called Acid Ratio. The better liquidity position is measured by the QR. The standard
QR is 1:1 that suggest company at least have that much quick assets which are
equal to current liabilities of company Industry have average of QR less than 1,
which shows not satisfactory condition of liquidity as far as QR is concern.

The third liquidity ratio used in this study is Cash Coverage Ratio (CCR). This ratio
checks the liquidity position by taking only cash and cash equivalent which compare
with the current liabilities of the company. This is strict ratio as compared to QR.
There is no any standard ratio available for CCR but generally higher ratio is
considered good. Industry has average CCR of 0.28.

53
 In this study, researcher also calculate other three ratio by taking the main
components of Current Assets and Current Liabilities which is Inventory Turnover

Ratio 220 (ITR), Receivable Turnover Ratio (RTR) and Payable Turnover Ratio
(PTR). Through these ratio, researcher put effort to understand how quickly the
inventory and receivables are repeat or turnover in an accounting year, in other
words how much time inventory repeat and receivables are collected by the
company in an accounting year. With this two ratio, PTR also calculated to check
how much time in an accounting year company is paying to its creditors. Out of this
three ratio, ITR and RTR is desirable to be as high as possible or in other words
high ITR and RTR is always desirable though there is no any standard ratio is
available to fix how much ITR and RTR is adequate. The PTR on other hand, is
desirable to be as low as possible or in other words low PTR is beneficial for
company as company need to pay its creditors less frequently. The lowest average
of ITR out of all the selected industry is only 1.11.

To analyze data in more accurate way Pearson Correlation and Multivariate

Regression technique is used by the researcher. In the Pearson Correlation,
researcher found that various ratio have correlation with each other. Here, the
correlation of CCC with all other ratio is checked. The various type of correlation is
found like positive and negative as well as significant and not significant. Industry
shows negative correlation of CR with CCC which is not significant.

The Multivariate Regression is apply by the researcher to check the impact of CR,
QR, CCR, ITR, RTR and PTR on CCC of the selected samples. The result obtain
by the researcher indicate that in various selected industries, impact of different ratio
on CCC is different. To check the impact, value of R2 of the summary of regression
table is taken into consideration. This industry shows CCC of almost three months
(87 days) and also satisfactory performance in liquidity ratio with CR of 1.38, QR of
0.97 and CCR of 0.28. The industry can improve this ratio and manage its liquidity
and cash in better manner.

5.2 SUGGESTIONS

For the purpose of managing cash and achieving adequate liquidity position
following suggestions. Industry having almost two months CCC (60 days) which can
be decrease if industry manage its inventory, receivable and payable in better

54
 manner. The liquidity ratio of this industry also has a scope of improvement and
manage the cash components in better way. The Descriptive Statistics, Pearson
Correlation and Multiple Regression is used by the researcher as the statistical
techniques of the data analysis. Researcher found that, out of all selected samples,
some companies have efficient cash management practices, whereas some
companies need to improve its cash management practiceby taking corrective steps
and formulating suitable cash management policy for the company.

5.3 LIMITATIONS OF THE STUDY

• Small sample size: The study was conducted on a small sample size, the results
may not be representative of the entire population of Rinex Technology.
• Limited scope: The study only focused on one aspect of cash management,such as
accounts receivable, it may not provide a comprehensive understanding of the
company's overall cash management practices.
• Lack of data: The study relied on limited data sources or incomplete data, the
findings may not be entirely accurate or reliable.
• Time frame: The study was conducted over a short period; the results may not
reflect the company's long-term cash management strategies and practices.
• Bias: The study was conducted by a party with a vested interest in the outcome,
such as a consulting firm hired by Rinex Technology, the results may be biased.

5.4CONCLUSION:

• The ultimate goal of any company is to achieve a balance between cash

inflow andcash outflow which can safeguard the company against liquidity
crisis. The good management of cash is a key function of liquidity
management.
• In this study, seven ratio are used to analyze cash management practice. In
this area further scope is available like cash flow, techniques of receipt and
payment etc. can be used to analyze the cash management practice and
draw a better conclusion.
• The cash management practice is taken in respect of corporate sector in this
study, in future one can measure the cash management practice of financial
and banking sector also because they had cash management as its main

55
 task.,
• The present study is limited only for ten years i.e. 2008-09 to 2017-18. In
future, one can take a more years to measure cash management practice
and draw a more generalize result.
• As many companies are closed down due to financial crisis, one can also has
a scope to research in the area that what is a role and how much is cash
management practices is affect to company when company facing financial
crisis. The answer can also be found that how can company manage cash to
prevent financial crisis.

56
 REFRENCES

• Allen k. Hunt, Linda m. Lovata and Michel l. Costigan (2008) characteristics of

companies using different cash flow methods.
• Amarnath, D. (2005). Business Mathematics. Mumbai: Himalaya Publishing House.
• Amuzu, M. S. (2010). Cash flow ratio as a measure of performance of listed
companies in emerging economies: The Ghana example. Unpublished PhD
dissertation. Retrieved fromhttp://stclements. Edu/grad/gradmaxw. pdf.
• Deepak, C. (2018). Research Methodology Concept and Cases. Noida: Vikas
Publishing House Pvt. Ltd.
• Ding, Y., Jeanjean, T., & Stolowy, H. (2006, February). The usefulness of disclosing
both direct and indirect cash flows: An empirical study. InWorkshop Comptabilitie-
Audit-Publications.
• Gilbert uwonda, nelsons okello and Nicholas okello (2013) cash flow management
utilization by small medium enterprises in northern Uganda
• Hooda, R. (2003). Statistics For Business And Economics. New Delhi: Macmillan
India Ltd.
• Jaipur: Paradise Publishers.

• John, C. (2000). Introductory Mathematics & Statistics For Business.

Irwin/McGraw-Hill.
• Jooste, L. (2007). An evaluation of the usefulness of cash flow ratios to predictfinancial
distress. Professional Accountant, 7(1), 1-13.

• Kirkham, R. (2012). Liquidity analysis using cash flow ratios and traditional ratios:
The telecommunications sector in Australia. Journal of New Business Ideas &
Trends, 10(1), 1-13.
• Kothari, C. R. Research Methodology Methods and Techniques. New Age
International Publishers.
• Kumar, R. (2011). Research Methodology. Chennai: SAGE Publications Ltd.

• Nandhu n. and dr. ranjith kumar (2020) effectiveness of cash flow ratios tomeasure
the performance divergences of selected steel companies in india

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• Negakis, C. I. (2006). The cash flow statement: implications for the use of the direct
or the indirect method. Managerial Finance, 32(8), 634- 644.
• Omer faruk gulek and tucan bektas (2019) cash flow ratio analysis: the case of turkey
• Pankaj, M. (2016). Research Methodology. New Delhi: Global Academic
Publishers & Distributors.
• Panneerselvam, R. (2014). Research Methodology. Delhi: PHI LearningPrivate
Limited.
• Ryu, K., & Jang, S. (2004). Performance measurement through cash flow ratios and
traditional ratios: A comparison of commercial and casino hotel companies. The
Journal of Hospitality Financial Management, 12(1), 15-25.
• Sandeep, K. (2014). Business Statistics. Delhi: A.K. Publications.
• Sejal, D. (2013). Statistical Methods in Business and Management. NewDelhi:
Horizon Press.
• Sharma, J. (2015). Business Statistics. New Delhi: Vikas Publishing HousePvt. Ltd.
• Sharma, N. (2012). Business Statistics. Jaipur: Sunrise Publishers &Distributors.
• Singh, K. (2013). Statistics For Management. Jaipur: Ritu-Publications.Tailor, R.
(2011). Statistics In Finance.
• Surorna barua and Anup Kumar saha (2015) traditional ratios vs. cash flowbased
ratios: which one is better performance indicator
• Vaghela, S. J. Performance evaluation through cash management Indian
automobile industry

58
APPENDIX

59
 A STUDY ON CASH MANAGEMENT ON RINEXTECHNOLOGY
Dr. Joyce, B. Com; MBA; Ph.D.,
School of Management studies, Sathyabama Institute of Science and
Technology, Chennai, Tamil Nādu
Mr Samraj P, Student
Sathyabama Institute of Science and Technology, Chennai, Tamilnadu
ABSTRACT
The study on cash management on Rinex Technology aims to analysed the current cash
management practices of the company and identify areas for improvement. The research
methodology involves a combination of qualitative and quantitative data collection
techniques, including surveys, interviews, and financial analysis. The study examines the
company's cash flow, cash conversion cycle, and cash reserves, and evaluates the
effectiveness of existing cash management policies and procedures. The findings of the study
suggest that Rinex Technology could improve its cash management by implementing more
efficient cash forecasting and budgeting processes, optimizing its working capital
management, and enhancing its cash reserves management practices. These
recommendations could help the company to mitigate cash flow risks, improve its financial
stability, and support its growth and expansion objectives.

INTRODUCTION

Cash management refers to the process of managing a company's or individual's

cash resources to ensure that they are used effectively and efficiently. Effective cash
management involves managing cash inflows and outflows, optimizing cash
balances, and investing excess cash in order to maximize returns. For businesses,
cash management involves maintaining sufficient cash on hand to meet the
company's short-term obligations, while also investing excess cash to earn a return.
It also involves managing cash collections and disbursements, forecasting cash
flows, and making decisions about borrowing or investing funds. For individuals,
cash management may involve budgeting, monitoring and managing expenses, and
saving money for future expenses or investments.
REVIEW OF LITERATURE
Annika Pitkanen (2016) had undertaken study of “cash flow forecasting” the purpose of
this thesis research and development project was to develop a cash flow forecast model for
the case company that operates on building constructions field. The author evaluates that the
project team managed to reach the objective except for few attributes. To achieve a
successful cashflow management in the case company the author suggests that the rest of
these necessary attributes will be defined in a technical sense to complete the forecasting
model.
Mohammad Ashrafuzzaman and Md. Tanium-Ul-Islam (2015) had undertaken study on
“statement of cash flows disclosure: a study on listed financial institution in Bangladesh”.
There are 556 companies are listed in the Dhaka Stock Exchange. DSE classified these
60
companies into 22 industry categories. The study is conducted for a period of recent five
financial years, from 2010 to 2014. This is descriptive research and no statistical techniques
were applied. The result of the above study is the significance of this study is that the
stakeholders of these companies can know whether these companies prepare their cash flow
statement in accordance with the related accounting standard and other regulatory laws. Due
to time constrain the study period was only period was only five years and no statistical
techniques were used because of its descriptive nature.
Erapu Peter De Pietropapa (2011) did study on institute for international co-operation and
development (C&D) with aim to establishing the effect of internal control systems on cash
management research or used descriptive and analytical research designs. Primary and
secondary data collected for which 30 respondents selected for primary data collection.
Some negative elements like no internal auditors in C&D, irregularly revise training
programs, no proper mean of communication with entities operating payment systems and
supervisory authorities. The significant positive relationship between internal control
systems and cash management policies.
Patricia m. Dechow, s.p.kothari and ross L. Watts (2012) had undertaken study on “the
relationship between earnings and cash flows” they test the predictions on a sample of 1337
firms and they conclude that Current earnings are a better forecast of future cash flows than
current cashflows as predicted by the model. And, as also predicted by the model, the
difference in the ability of current earnings and current cash flows to predict future cash
flows is a positive function of the firm’s expected operating cash cycle. Overall, the evidence
suggests the model has some statistical explanatory power.
Matthew Abioro (2013) conducted a study on the impact of cash management the
performance of manufacturing companies in Nigeria.
Joseph Otieno Oluoch (2016), research conducted on 171 respondents from eldoret central
business district, uasin gishu country Kenya. Questionnaires and document analysis were the
source of data. Descriptive statistics and inferential statics were used. A positive and
significant effect on SME performance of cash management practices were found in this
paper.
OBJECTIVE OF THE STUDY
• To design an effective Cash Management policy for smooth cash procurement and
disbursement.
• To determine the exact working cash balance in conformity with the nature of the
firm
• To measure the Cash Flow from Operating activity, Investing activity and Financing
activity and net increase / decrease in cash flow.
NEED FOR THE STUDY
• Effective cash management can improve financial performance by ensuring that cash
is available when needed, avoiding the risk of cash shortages, and making the most
use of available cash resources.
• Poor cash management can lead to financial risks such as late payments, missed
opportunities, and increased debt. A study on cash management can help to identify
and address these risks.

61
 • Cash management is closely linked to working capital management, and a study on
cash management can help businesses to optimize their working capital by
minimizing cash tied up in inventory or accounts receivable.
SCOPE FOR THE STUDY
• Analysing Rinex Technology's historical cash flows and projecting future cash flows
to identify potential shortfalls or surpluses.
• Examining Rinex Technology's management of working capital, including
inventory, accounts receivable, and accounts payable, to optimize cash flow.
• Analysing the time, it takes for Rinex Technology to convert its inventory and
accounts receivable into cash, and identifying strategies to shorten this cycle.
• Examining Rinex Technology's management of its cash balance, including strategies
for investing excess cash and minimizing cash shortages.
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It is a branch of
science that studies how scientific research is conducted. The several approaches that are
often taken by a researcher to explore the research topic, as well as the reasoning behind
them, are analysed.
RESEARCH DESIGN
The research design for a particular problem usually requires consideration of many factors.
Researchers should use facts or information already available. Researchers must analyse the
facts to critically evaluate the material.
SOURCES OF DATA
This study is based on secondary data, which is collected mainly from the annual reports of
the selected samples for the ten years of study period which is 2008-09 to 2017- 18.
ANNUAL REPORT
It provides all the information about the company for the accounting period. This enables us
to understand the existing performance of the company.
A. TOOLS USED FOR THE STUDY
i. Ratio analysis
ii. Cash conversion Cycle
iii. Regression
iv. Correlation

DATA ANALYSIS AND INTERPRETATION

REGRESSION
Model R R Adjusted R Std. Error of the
Square Square Estimate
1 .796 .634 .582 128.55432
a

The R coefficient is 0.796, it is showing significant relationship between the cash conversion

62
cycle and all independent ratio. The value of R-square (R2) is 63.4%, which indicates that
63.4% of the variance in cash conversion cycle can be predicted from the predictor variables.
R-square is also called the coefficient of determination. The value of R-square is 0.634, while
the value of Adjusted R-square is 0.582. To find out whether the multiple regression model
is fit to data or not, validation of R2 is necessary. As per the general rule, 0% R2 shows that
none of the variability of the data around its mean and 100% R2 indicate that the model
explains all the variability of the data around its mean.
Generally, it is accepted that higher the percentage of R2, the better model fits to data but it
is not always be the true as R2 may be higher as more variable added in the model.
In the given multiple regression table, value of R2 is 0.634 which is 63.4%, this indicate that
model is fits to the data collected and 63.4% impact can be measured of independent variable
on dependent variable. Thus, based on this further analysis can be done by the researcher for
the selected company during the study period. Thus, from the above table, researcher found
that the value of R square is 0.634, so the 63.4% impact is found by independent variables
on dependent variable.
CORRELATION
Pearson Correlation is calculated for this study. A positive value in the table indicates a direct
proportional relationship among the variables and negative value indicates an inverse or
opposite relationship among the variables. For the purpose of calculating Pearson
Correlation researcher workout various ratio like Cash Conversion Cycle (CCC), Current
Ratio (CR), Quick Ratio (QR), Cash Coverage Ratio (CCR), Inventory Turnover Ratio
(ITR), Receivable Turnover Ratio (RTR) and Payable Turnover Ratio (PTR).
The Cash Conversion Cycle showing negative correlation with all ratio except the Payable
Turnover Ratio. The negative relation shows that when CR, QR, CCR, ITR and RTR are
increases then CCC of the company is decrease. Company can now manage its all ratio who
has negative relation with CCC and try to increase all that ratio which ultimately decrease
the CCC of the company because short CCC is always preferable which means company get
cash converted quickly, this also improve the liquidity of the company.
For this company if company gets good credit from its creditor and pay them after reasonably
later time then company can efficiently use that cash for the other business purpose. Among
all the ratio, payable turnover ratio has significant positive relation of 60.6% with the CCC.

CCC CR QR CCR ITR RTR PTR

CCC 1.000 -.035 -.147 -.381 -.368 -.476 .606
CR -.035 1.000 .940 .490 -.411 .580 -.185
QR -.147 .940 1.000 .640 -.303 .616 -.310
Pearson CCR -.381 .490 .640 1.000 -.263 .616 -.470
Correlation ITR -.368 -.411 -.303 -.263 1.000 -.085 -.065
RTR -.476 .580 .616 .616 -.085 1.000 -.294
PTR .606 -.185 -.310 -.470 -.065 -.294 1.000
CCC . .405 .155 .003 .004 .000 .000
CR .405 . .000 .000 .002 .000 .099

63
 QR .155 .000 . .000 .016 .000 .014
Sig. (1- CCR .003 .000 .000 . .033 .000 .000
tailed) ITR .004 .002 .016 .033 . .279 .328
RTR .000 .000 .000 .000 .279 . .019
PTR .000 .099 .014 .000 .328 .019 .

Thus, company can decrease the CCC by decreasing its payable turnover ratio or frequency
of payment to creditors. Other ratio like CR has very low negative relation of only -3.5%
with CCC, which express that by increase CR of selected companies can decrease its CCC
little bit. The QR shows -14.7% relation with CCC which is again showing negative but not
significant relation, this means company can decrease its CCC to some extent by increasing
its QR. A CCR has a significant negative relation with the CCC which is -38.1%. An ITR
has significant negative relation with CCC which is -36.8%. The ITR explain that how many
times inventory is sold and replaced during an accounting year. By increasing ITR, company
can decrease its CCC significantly. A CCC has significant negative relation with RTR, which
is -47.6%.
FINDINGS
• The first and important ratio calculated by researcher is Cash Conversion Cycle. It is
generally accepted that shorter the CCC better the cash management of the company
is. A shorter CCC shows quick conversion of inventory into sales and ultimately into
cash.
• In the Pearson Correlation, researcher found that various ratio has correlation with
each other. The various type of correlation is found like positive and negative as well
as significant and not significant. Industry shows negative correlation of CR with
CCC which is not significant.
• The result obtain by the researcher indicate that in various selected industries, impact
of different ratio on CCC is different. To check the impact, value of R2 of the
summary of regression table is taken into consideration. This industry shows CCC
of almost three months (87 days) and also satisfactory performance in liquidity ratio
with CR of 1.38, QR of 0.97 and CCR of 0.28. The industry can improve this ratio
and manage its liquidity and cash in better manner.
SUGGESTION
For the purpose of managing cash and achieving adequate liquidity position following
suggestions. Industry having almost two months CCC which can be decrease if industry
manage its inventory, receivable and payable in better manner. The liquidity ratio of this
industry also has a scope of improvement and manage the cash components in better
way. The Descriptive Statistics, Pearson Correlation and Multiple Regression is used by
the researcher as the statistical techniques of the data analysis. Researcher found that,
out of all selected samples, some companies have efficient cash management practices,
whereas some companies need to improve its cash management practice by taking
corrective steps and formulating suitable cash management policy for the company.

64
 CONCLUSION
• The ultimate goal of any company is to achieve a balance between cash inflow and
cash outflow which can safeguard the company against liquidity crisis. The good
management of cash is a key function of liquidity management.
• In this study, seven ratio are used to analyze cash management practice. In this area
further scope is available like cash flow, techniques of receipt and payment etc. can
be used to analyze the cash management practice and draw a better conclusion.

REFERENCE
• Allen k. Hunt, Linda m. Lovata and Michel l. Costigan (2008) characteristics of
companies using different cash flow methods.
• Amarnath, D. (2005). Business Mathematics. Mumbai: Himalaya Publishing House.
• Amuzu, M. S. (2010). Cash flow ratio as a measure of performance of listed
companies in emerging economies: The Ghana example. Unpublished PhD
dissertation. Retrieved from http://stclements. Edu/grad/gradmaxw. pdf.
• Deepak, C. (2018). Research Methodology Concept and Cases. Noida: Vikas
Publishing House Pvt. Ltd.
• Ding, Y., Jeanjean, T., & Stolowy, H. (2006, February). The usefulness of disclosing
both direct and indirect cash flows: An empirical study. In Workshop Comptabilitie-
Audit-Publications.

65