Miss. Ayodhya Anil Yadav
CHH. SHAHU INSTITUTE OF BUSSINESS
EDUCATION AND RESEARCH, KOLHAPUR.
(Research Student)
|
Abstract: In this paper author assesses the how Fund
Flow Analysis is useful for Dudh Sangh.
A
fund flow statement provides information about Dudh Sangh on how, during the
reporting period, decisions relating to capital structure, dividend &
investment in noncurrent assets have changed the amount invested in working
capital. However it should be clear that there is no cause & effect
relationship between investment in non-current assets & financing
decisions & the investment in working capital.While farmers' cooperatives
of various types play a useful role in promoting rural development, dairy
cooperatives have special attributes that make them particularly suitable.
Among these, they can facilitate the development of remote rural economies,
thus upgrading the standard of living of the poor. The analyses of this paper
fund flow analyses is useful tool for dudh sangh and it shows working
capital.
Key words: Working
Capital, Funds from Operation, Fund Flow Statement
|
1.
Introduction
India has the highest livestock
population in the world with 50% of the buffaloes and 20% of the world’s cattle
population, most of which are milk cows and milk buffaloes. India’s dairy
industry is considered as one of the most successful development programs in
the post-Independence period.
Dairy is the major source of income for landless, marginal, small, medium& large farmers. It has on important bearing on the economy of the rural people. The positive role of co-operative in the collection & distribution of such perishable commodity, farmers also, fight the development of farming.
Dairy is the major source of income for landless, marginal, small, medium& large farmers. It has on important bearing on the economy of the rural people. The positive role of co-operative in the collection & distribution of such perishable commodity, farmers also, fight the development of farming.
The
statement of changes in financial position, prepared to determine only the
sources & application of working capital between dates of two balance
sheets, is known as the Fund Flow Statement. It is useful to dairies for
maintaining the fund flow like sources & application, financial management&
object is understand the changes in assets, see how loans they are used &
point out the financial strength & weaknesses of dairy.
Balance
sheet is the only list of assets &liabilities, indicating financial
position at a certain point of time. It is a tee major instrument used for
analyzing the long range financial policies of the dairy industry.
2.Research
Problem
In Dairy industries
maintaining Fund Flow Statement is very necessary for knowing the financial
position. It shows the Sources, Application, Working Capital etc. of the Dairy.
So, the title isStudy of Fund Flow Analysis of Raja ram Bapu Patil Sahakari
Dudh Sangh ltd. Islampur’.
3. Significance of the study
The importance of the study is as
follows:
1) It
enables to explain the meaning & significance of the fund flow statement.
2) It
enables to analysis to funds management of the organization through calculation
of fund flow statement.
3) It
can consider this analysis for their planning, control & decision
making.
4) It
shows the organization funds sources & application.
4. Objectives of the Study
1)
Study the various sources of raising
fund by the milk union.
2)
Study the utilization of funds by the
milk union.
3)
Study the financial position of the milk
union.
4)
To study the variation in financial
position &funds in every year.
5)
To study the working capital of milk
union.
5.
Research methodology
The
data for the study was drawn from the first-hand information regarding to the
topic. The study through discussion with concerned officers in the milk union.
Secondary data is collected from the annual reports which are published by the
milk union.
6.
Data Analysis & Interpretation
STATEMENT SHOWING FUNDS FROM
OPERATION
(Or loss from operation)
For the year ending 31st
March 2007 to 31st March 2011
Fund Flow
Statement
for the year
ended 31stMarch 2007 to 31st March 2011
As per above fund flow statements we are seen
following points:-
During the financial year
2007-2011 the milk union has raise the fund from issue of share capital &
funds obtains from day to day operation of the milk union.
The total amount of funds received
in 2007 & 2011 is Rs.6, 99, 52,457/-&43, 63, 03,966/- respectively. It
means it is raised every year.
When we consider the uses of funds
the milk union has redemption of deposits from external parties, sale &
purchase fixed assets & funds invested
in the working capital of milk union.
The working capital changes in
each year 2007 from 2011.Current assets which are cash & bank balance
debtors, closing stock decrease & increase every year.
Funds from operation increases
every year. Deposits are raised from external parties only in year 2007-2011.
7.
Findings
1) The funds from operations sources have
cover near about 25% portion of the total
Sourcesof funds, in the financial year
2006-2007 to 2010-2011. It means the Dud
Sangh
has raised the funds from there day to day operating activities.
2)
The company has taken long-term loan from banks in the financial year 2006-2007
&
2010-2011.
3) The
company has used specific sources of funds such as issue of share capital &
Raising deposits flow external
parties.
4)The
organization has utilized their funds mostly for increasing their working
capital as
well
as for purchasing of fixed assets in the financial year 2007-2008 to 2010-2011.
5) The
organization has used limited sources of raising funds & limited sources of
utilization
of funds.
6) The organization has obtained
funds from operations in the financial year 2006 -
2007to
2010-2011. The loss from operation is not sustained by the organization
During above financial years.
Also the fund from operations has increased during
7) The working capital of the organization is
increased during 2006-2007 & 2008- 2009.
And
it is decreased in 2007-2008, 2009-2010 & 2010-2011.
8.
Suggestions
1) The Dudh
Sangh should try to use maximum sources of raising funds
such
as to issue of debentures to raise fund from public deposits to issue
Securities
/ Bonds etc. for raising funds at high level & that’s why
Working
capital increases.
2) The
Dudh Sangh has tried to utilize their funds properly. In the financial year
2006-2007 to 2010-2011 the company
has mostly invest their funds either in
working capital or for purchasing fixed
assets. The Dudh Sangh considers
another utilization source of funds.
3)Dudh Sangh has
invested their most of the funds in working capital. I
Suggest that the optimum working capital
is maintained by the Dudh
Sangh. The over working capital or under
working capital is dangerous
to the Dudh Sangh.
4)The raising
long-term loans sources are used by the Dudh Sangh
during the financial year 2007-2008
& 2008-2009. But the repayment of long-
term
loan is not shown in the usage of funds. The proper repayment of long-
term
loan should be made.
5) For maintain the fund flow
like sources and applications the Fund Flow
Analysisis useful for the organization.
9. Conclusion
According to analysis researcher has
conclude that the financial position of “Rajaram Bapu Patil Sahakari Dudh Sangh
Ltd. Islampur” is satisfactory. Dudh sangh works effectively & efficiently.
Dudh sangh raised funds from various sources but large portion of funds are
raised by funds from operation. According to need, DudhSang had taken long term
loan from external sources.
Funds
flow smoothly works in organization & funds raised from operations are
mostly used by Dudh Sangh for establishing & developing organization.
Dudh Sangh made proper repayment of
the long term loan, and also maintained the optimum working capital. This
working capital invests in their funds or purchasing fixed assets.
The all over position of the “Rajaram
Bapu Sahakari Dudh Sangh Ltd. Islampur is financially stable.
10. References
1)
B. K. Chatterjee- Finance or non-Finance
Managers-Jaico-Bombay-1988
2)
Dr.N.Vinayakant &
Dr.I.B.Sinha-Management Accounting tools & techniques-Himalaya-Bombay-1985
3)
Jain S.P & K.L. Narang-Financial &
Management Accounting- Kalyani-Ludhiene -1979.
4)
R.M.Shrivastava- Financial Management
& Policy- Himalaya Publishing House- Bombay-1985
5)
Asish K. Bhattacharyya- Financial
Accounting For Business Managers-Prentice-Hall of India-New Delhi-2006.
6)
N.K.Sharma- Management Accounting- RBSA
Publishers –SMS Highway, Jaipur-1993
7)
Man Mohan & Shiv N.Goyal-Principals of
Management Accounting- Sahitya Bhavan –Agra-1992.
9)
http:// www.ilri.org/InfoServ/Webpub/fulldocs/SmHDairy/chap1.
