26-02-2013, 03:56 PM
CASH FLOW FORCASTING AT BHARTI AIRTEL LIMITED COCHIN
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INTRODUCTION
Cash flow
Cash flow can be either revenue or expense stream that changes a cash account over a given period. Cash inflows usually arise from one of three activities - financing, operations or investing. Cash outflows result from expenses or investments. Cash flows are essential to solvency. They can be presented as a record of something that has happened in the past, such as the sale of a particular product, or forecasted into the future, representing what a business or a person expects to take in and to spend. Cash flow is crucial to an entity's survival. Having ample cash on hand will ensure that creditors, employees and others can be paid on time. If a business or person does not have enough cash to support its operations, it is said to be insolvent, and a likely candidate for bankruptcy should the insolvency continue.
Cash flow statement
In financial accounting, a cash flow statement or statement of cash flows is a financial statement that shows a company's incoming and outgoing money sources and uses of cash) during a time period (often monthly or quarterly). The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents, and breaks the analysis down according to operating, investing, and financing activities.
As an analytical tool the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7), is the International Accounting Standard that deals with cash flow statements.
People and groups interested in cash flow statements include
• accounting personnel, who need to know whether the organization will be able to cover payroll and other immediate expenses
• potential lenders or creditors, who want a clear picture of a company's ability to repay
• potential investors, who need to judge whether the company is financially sound
• potential employees or contractors, who need to know whether the company will be able to afford compensation
The cash flow statement includes only inflows and outflows of cash and cash equivalents; it excludes transactions that do not directly affect cash receipts and payments. These noncash transactions include depreciation and write-offs on bad debts. The cash flow statement is a cash basis report on three types of financial activities: operating activities, investing activities, and financing activities. Noncash activities are usually reported in footnotes.
OBJECTIVES OF THE STUDY
• To understand the cashflow forecasting process carried out in Airtel– Kerala circle
• To measure the deviation of forecasted figures to the actual
• To study the reasons for the deviation
SCOPE OF THE STUDY
The study was done during the month of 2nd May 2008- 15th –June 2008. The Organisation selected by me to conduct the study in “BHARATI AIRTEL LIMITED”.
The findings of the study can be used as the primary data prepared at Airtel.
This study shall serve as design material for organisation orientation programs.
NATURE OF THE STUDY
The study is restricted to the exploration of various functions under taken by each department. It provides better understandings at functional level of each department.
This study is confined to one month based on the primary data obtained from finanve department, middle level managers and supervisory staff. Secondary data include reports and brochures provided by the organization