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CHAPTER -I EXECUTIVE SUMMARY:

Organization requires many things in order to be effective such as a method of producing a product or service, financial resources, a way of marketing what ever product or service is created, human resources. While all are important to organizational effectiveness, the only factor that represents a potential competitive advantage is financial resources and how these resources are managed. Financial resources play a crucial role in the development process of the organization. To be successful, cash management is very important. It provides healthy working environment. With due attention and importance of cash management a research study is done in Garuda fashions. This gave an opportunity to work with an endeavor focusing on the study of cash management system. The introductory chapter gives an insight into the area of the dissertation i.e. an overview of cash management. The objective of this study is to find out the benefits and applications with regard to the existing cash management system. Also to find the relative strength of the monetary and non- monetary system. After the data analysis it has been observed that the existing system of cash management in the organization was found good and it was also found that various types of services are being used which makes the organization to be effective and make them to achieve their needs. This research has facilitated the organization research to understand the various factors of cash management & how the cash management is very vital in the organization to grow in the perfect market & increasing funds and profits. First and foremost, Cash Flow is all about generating the absolute highest level of cash possible at month or quarter end. This is not done by luck, heroic effort, or secret method.

It is accomplished by passionately executing the most effective strategies, using innovative systems and motivated people to generate cash. Additionally, we regularly see CFOs having no real option other than relying on, at best, well meaning but illequipped internal departments to design, implement and execute strategies that maximize cash. Organizations traditionally cannot consistently rely on internally driven improvements in working capital as a means of gaining improved financial performance. They hire people with the unique skills and personality traits for executing the pursuit of maximizing cash. Driven by fast evolution in the money market during the past two decades, financial and technological innovations, increasing competition, and internationalizing of businesses, cash and treasury management has become an increasingly important function in most firms. It is reasonable to expect that the role of financial transactions in the cash management process in adding to firm value has increased its importance and changed the cash management behavior of firms. The main purpose of this study is to investigate this potential behavioral change in cash management by examining the cash management practices behind the models explaining the cash management behavior and to test the stability of some of these models. It is hypothesized that the environmental changes have been remarkable enough to change the cash management behavior, which can be seen as a structural change in the cash management function. The study concludes that during the research period firms have achieved a significant technological progress and significant behavioral changes concerning cash management practices, referring to opportunities for more effective cash management operations. The stability tests of cash management models indicated that a structural change in cash management behavior occurred after the deregulation years in the money market.

STATEMENT OF THE PROBLEM


Study of Cash Management as a important tool in Organizations. Organizations need to adopt a package of cash management techniques to create funds and increase the profits. This research aims at finding the relative strength of the cash management services which are provided by the organizations. What are the perceptions of company employees towards cash management system being used by the company? How does the company manage the employees benefits and services program.

OBJECTIVES OF THE STUDY


Recognize key concepts, terminology, goals and tools used in the management of corporate cash Examine the cash conversion and operating cycles of a company and methods used to forecast cash flows Identify objectives and methods used to collect receipts quickly and control disbursements Identify basic borrowing and investment techniques used to ensure adequate liquidity Explore fundamental techniques specific to cross-border cash management Define interest rate and exchange rate risk and review instruments used to manage financial risk Identify methods used to compensate financial institutions and understand the account analysis statement To understand the management perspective towards cash management.

To make appropriate recommendations to determine a package of monetary and Non-monetary cash management services to help in increasing working capital. To study employees attitudes towards monetary and non-monetary benefits.

SCOPE FOR FURTHER RESEARCH


From this research investigation, the following areas for further research emerge: A study on a set of principles for successful management of cash. A study on the Impact of cash management systems on the productivity of employees. " Linking cash management system to performance management system effectively Cause and effect relationship of cash management towards the organization position. To find out a number of different cash management products and systems available these days from banks and other financial services companies. To analyze it and generate accurate predictions about the future cash needs of the business and pass these findings along to the cash management services in order to produce the best business cash management plan possible. Interpret key concepts and terminology of the U.S. financial environment Describe financial instruments, payment methods and mechanisms that comprise key cash inflows and outflows, and how to manage them Use excess cash effectively and guard against cash shortfalls Manage cash across international borders Identify how e-commerce affects cash management strategies

METHODOLOGY FOR PRIMARY DATA COLLECTION AND Research method


Survey method has been used to do this research.

Research technique
Interactions with employees and management of the organization have been used to do this research.

Data collection sources

Primary data has been collected for the purpose of the survey. Secondary data has been used to review the literature. Employees Attitude towards Monetary and Non-Monetary Rewards

Data Gathering Procedure


Data has been gathered by interviewing the employees and through interpreting the collection of data.

RESEARCH LIMITATIONS
The research investigation has the following limitations: The research investigation is confined to a limited level. Time and resource constraints

Management is not ready to give the data because of confidential problems. The concept is highly abstract and difficult to study because there are 300 employees working and I felt it difficult to interact with them.

CHAPTER SCHEME:

To ensure clarity and to give a clear picture on the entire project .this has been divided into six chapters 1. the first chapter deals with the subject, objectives methodology and limitations of the study 2. the second chapter gives a brief description of the company profile 3. the third chapter deals with cash management and objectives of cash management 4. The fourth chapter deals with Mc Kensys 7s Frame Work 5. the fifth chapter deals with SWOT Analysis 6. the sixth chapter deals with the findings and suggestions of the company

CHAPTER -II
Company profile:

Background of the company:


Garuda fashion was founded by Mr. M.G.Reddy in 1993 with the brand Independence. He believes that building good relationships with employees, suppliers & wider society is the best guarantee of long term success. This remains backbone of our approach to Corporate Social Responsibility. Right now Garuda fashions owns three distinguished brands with a wide dominancy in market Our brands have a simple, common purpose to make it easy for people to express their personal style. We constantly evolve each brand to meet our customer needs through innovative and inspiring design through convenient and engaging good shopping experience and by communicating with a people in a way that connect to how they live, work & play.

Garuda is not laid back for casuals. They have experimented the casual wear designs enough to boost in all your fun and frolic days. These great casuals are made from 100% cotton and traditional twills to enhance the durability.

A highly fashionable range offers you 30 shades to choose from, to suit all your moods. Nature is just being yourself, at an unbeatable price of INR 495-995/-.The casuals are stylish to foster the youth in you.

We have a strong tradition of corporate social responsibility (C S R) and we see it has integral to how we do business. Our founders believe that building good relationships with employees, suppliers & wider society was the best guarantee of long term success.

Nature of the company:


The products are sarongs worn by men & woman and especially by men, and in particular on special occasions and in ceremonies. In its further development, new variations of colours and new motives were being introduced, and other fabric material is being used, like silk. The use of batik has also broadened into woman, dresses, man, shirts, table clothes, and other accessories. Its competitive advantage lies in its innovative design, product development and flexible service offering. Company is entitled to use the contents of messages, including ideas, inventions, techniques and expertise contained therein, for any purpose, such as the development, production and/or marketing of products or services The priorities for the new team will be leading industry growth, enhancing customer value by domain, business insights and proprietary frameworks, leveraging increased market synergies from our technology business, and building empowered teams and leaders. By widening and adding depth to our service portfolio, investing in sales and marketing and focusing on training.

Vision:
Team Garuda consist of extremely talented craftsmen, designers and workers with years of expertise. At Independence, we believe in innovation. We create the right ambience

that nurtures talent, creativity and excellence, our comprehensive sales network staffed by competent professional gives us access to market of every kind. To be India 2019s best Garment Makers exceeding customers needs always to be the market leader. The Vision pleads for removing infrastructure constraints and whittle down transaction cost, besides ensuring adequate raw material availability and an end to antiquated laws such as hank yarn obligation, packaging obligation and textile committee cess. The company to focus more on manufacturing value-added items since the higher growth in value would flow from manufacture of more valued products and a rise in use of diversified textile products such as technical textiles.

Mission:
The company is increasingly becoming focused on achieving scale and sophistication in terms of management systems and processes to drive exponential growth. Our focus on advertising strategies, promotions and effective marketing ensure fortune and prosperity for our trade and channel partners. The company 2019s production philosophy is built with the reliance on total quality and unflinching commitment to using environment friendly materials. Today 2019s, the popularity of Independence has spread countrywide.

Product quality policy:


Objectives of Policy:

To produce and provide good quality cloth in affordable price to fulfill different needs of customers. To increase the share of India in Global Textile Market. To increase the contribution for employment and economic growth of country. Increasing contribution of private sector through set up environment-friendly and technologically advance textile units and complexes. To improve the availability, productivity and quality of Raw Materials. Improvement in quality of fiber/Yarn and its availability.

Product profile:
Garuda fashion textiles compete in the better priced category, and cater to the successful, relatively affluent career man, who needs appropriate, fashion conscious attire for their professional life, and prefers stylish, coordinated looks for their leisure activities. This company has been stagnated for lack of local raw material (cotton) therefore, it has been necessary to import it, resulting in a cost increase, which has make difficult to compete with imported fabrics. From several days ago up to date, this product has suffered several changes concerning its quality, in order to offer a product that satisfies market and consumers demand. For this reason, the company has been forced to renew machinery with ones of better technology for the manufacture of a high quality product that also allows lowering costs.

Area of Operation

The information regarding the location of the unit in the industrial Area, Rajaji nager Bangalore. This is more conducive for further improvement in their functioning and technology up gradation. The company operates its work in Karnataka, Andhra Pradesh, Tamilnadu& kerala.

Ownership pattern:
A unit under the ownership of a single individual is termed as Sole Proprietorship. Business where two or more people share the risks and profits equally; registered or unregistered is termed as Partnership. Private Limited is a company with a small number of shareholders. According to the above circumstances, the Garuda fashions units are single man owned by Mr.Govinda reddy and/or assisted/part owned by his own family members.

Competi tiveness:
The company has many competitors in this fast growing textiles industries. Investments in the regional domestic industries have started picking up. It will force down clothing prices further and will also help retail buyers to concentrate upon the most competitive suppliers. It will be a race and emerging winners would include companies who will be able to deliver large volumes from integrated structures through partnership and other ventures.

Infrastructure facilities:
The company has pointed out that infrastructure, labour, fiscal levies, exim policies are the main hindrances to growth, even as power, water, raw materials, are being tackled by companies. The textile industry does not look to be overly hampered by the various obstacles to growth, and is going strong, making the most of what it has, and of the buoyant market conditions. Human resource development is also a focus area for the company. On the raw material front, in anticipation of a tight yarn market in the years to come, the company is putting up its own spinning unit. Sales tax regulations are also a hindrance for the company. "Most of the states provide subsidy in some form or the other to encourage/promote capital investments. Sales tax regulations are made free/subsidised for a number of years. The company also invests a lot in designing innovations. "We are not job workers for our clients. Hundred per cent of our products are designed by us, based on the fashion trends. We are not dictated to by our buyers in terms of the fabrics to be used, the colours to be used, etc. At the same time, we are well aware of the seasonal trends, and are in a position to offer our clients what they are looking for. According to company officials, "Maintaining the cost of production is a Herculean task and it involves, besides manufacturing engineering, a well-planned financial engineering."

Customers:
Every week thousands of people in India shop with us, our ability to meet the needs of others depends on how successful we are at serving the needs of our customers. . Brand Communication: Aiming to Bridge the gap between target audiences and the organization, product or service. It is the ethereal connection between the physical entity, and the audiences best suited to its purchase or promotion.

Future growth & prospectus:


The Garuda fashions is mainly looking to consolidate its position in the domestic market and to enter in the international market. They are looking forward to have a profitable growth in all the segments we are present in. Our brands have been growing at a rate of 20 - 30 % and we foresee the same to continue for the next few years. We have plans to achieve this by strengthening our retail presence. Organized retail is increasing its share and with more brands coming to India offering world-class retail experience, retail has become one of the critical growth drivers of the company. Our company is also focusing on making innovative product offerings to the market. The future prospect for the company is bright, particularly in the post-quota regime. The industry is in an expansion mode and is likely to benefit from growing demand both in the domestic as well as global markets.

CHAPTER -III

CASH MANAGEMENT:
Definition:
The cash management is defined as the strategy by which a company administers and invests its cash. The control of cash collections. Cash, is the currency and coin the firm has on hand in petty cash drawers, in cash registers, or in checking accounts at the various commercial banks where its demand deposits are maintained. Cash Management:

Is the maintaining of liquidity of a firm to minimize the risk of insolvency. ( An insolvent company is one where it is unable to meet its maturing liabilities on time because it has inadequate liquidity to meet its debt obligation)

Cash Management is also about the proper balancing of keeping cash without letting it idling around.

In United States banking, cash management, or treasury management, is a marketing term for certain services offered primarily to larger business customers. It may be used to describe all bank accounts (such as checking accounts) provided to businesses of a certain size, but it is more often used to describe specific services such as cash concentration, zero balance accounting, and automated clearing house facilities. Sometimes, private banking customers are given cash management services. Cash management is a broad term that refers to the collection, concentration, and disbursement of cash. It encompasses a company's level of liquidity, its management of cash balance, and its short-term investment strategies. In some ways, managing cash

flow is the most important job of business managers. If at any time a company fails to pay an obligation when it is due because of the lack of cash, the company is insolvent. Insolvency is the primary reason firms go bankrupt. Obviously, the prospect of such a dire consequence should compel companies to manage their cash with care. Moreover, efficient cash management means more than just preventing bankruptcy. It improves the profitability and reduces the risk to which the firm is exposed. Cash management is a broad area having to do with the collection, concentration, and disbursement of cash including measuring the level of liquidity, managing the cash balance, and short-term investments. If at any time, because of a lack of cash, a corporation fails to pay an obligation when it is due, the corporation is insolvent. Insolvency is the primary reason firms go bankrupt. Obviously, the prospect of such dire consequence compels companies to manage their cash with care. Moreover, efficient cash management means more than just preventing bankruptcy. It improves the profitability and reduces the risk the firm. Cash management is particularly important for new and growing businesses. As Jeffrey P. Davidson and Charles W. Dean indicated in their book Cash Traps, cash flow can be a problem even when a small business has numerous clients, offers a superior product to its customers, and enjoys a sterling reputation in its industry. Companies suffering from cash flow problems have no margin of safety in case of unanticipated expenses. They also may experience trouble in finding the funds for innovation or expansion. Finally, poor cash flow makes it difficult to hire and retain good employees. It is only natural that major business expenses are incurred in the production of goods or the provision of services. In most cases, a business incurs such expenses before the corresponding payment is received from customers. In addition, employee salaries and other expenses drain considerable funds from most businesses.

These factors make effective cash management an essential part of any business's financial planning. "Cash is the lifeblood of a [store]," wrote Richard Outcalt and Patricia Johnson in Playthings. "Without cash for inventory, payroll, and other expenses, an emergency is imminent." When cash is received in exchange for products or services rendered, many small business owners, intent on growing their company and tamping down debt, spend most or all of these funds. But while such priorities are laudable, they should leave room for businesses to absorb lean financial times down the line. The key to successful cash management, therefore, lies in tabulating realistic projections, monitoring collections and disbursements, establishing effective billing and collection measures, and adhering to budgetary restrictions.

Motives for Holding Cash


The company holds cash for a variety of different reasons. Generally, cash balances held in the company can be called considered, Precautionary Speculative Transactional and Intentional.

The first are the result of management anxieties. Managers fear the negative part of the risk and hold cash to hedge against it. Second, cash balances are held to use chances that are created by the positive part of the risk equation. Next, cash balances are the result of the operating needs of the firm. In this we analyze the relation between these types of cash balances and risk. This also contains propositions for marking levels of precautionary cash balances and speculative cash balances. Current models for determining cash management, assign no minimal cash level, or their minimal cash level is based on the manager's intuition. Presented in this article model avoid intuition and is based on calculation. Application of this proposition should help managers to make better decisions to maximize the value of a firm.

1. Transaction Motive
Arise in the ordinary course of doing business. Maintaining cash for the purpose of meeting cash needs arising in the ordinary course of doing business. Includes regular payments like wages, utilities, acquisition of fixed assets and inventories The amount of cash needed for transaction requirements depends on the nature of business and varies from industry to industry

2. Precautionary Motive
To satisfy possible, but as yet indefinite, needs. affected by the cash flow predictability, and access to external fund the motive is met by holding a portfolio of liquid assets Maintaining of cash balance as buffer for UNEXPECTED needs that may arise. Either holding in cash or marketable securities that can be liquidated easily

3. Speculative Motive
To take advantage of potential profit making situations Holding cash for potential profit making situation like purchasing raw materials in bulk in anticipation of a fall in price

Cash Collection and Disbursement


Cash collection systems aim to reduce the time it takes to collect the cash that is owed to the firm (for example, from its customers). The time delays are categorized as mail float, processing float, and bank float. Obviously, an envelope mailed by a customer containing payment to a supplier firm does not arrive at its destination instantly. Likewise, the moment the firm receives payment it is not deposited in its bank account. And finally, when the payment is deposited in the bank account oftentimes the bank does not give immediate availability to the funds.

These three "floats" are time delays that add up quickly, requiring the firm in the meantime to find cash elsewhere to pay its bills. Cash management attempts to decrease the time delays in collection at the lowest cost. A collection receipt point closer to the customer, such as a lock box, with an outside third-party vendor to receive, process, and deposit the payment (check) will speed up the collection. For example, the firm collects $10 million each day and can permanently speed up collections by five days, at 6 percent interest rates, then annual before-tax profits would increase by $3 million. The techniques to analyze this case would utilize data involving where the customers were; how much and how often they pay; the bank they remit checks from; the collection sites the firm has (their own or a third-party vendor); the costs of processing payments; the time delays involved for mail, processing, and banking; and the prevailing interest rate that can be earned on excess funds.

Once the money has been collected, most firms then proceed to concentrate the cash into one center. The rationale for such a move is to have complete control of the cash and to provide greater investment opportunities with larger sums of money available as surplus. There are numerous mechanisms that can be employed to concentrate the cash, such as wire transfers, automated clearinghouse transfers, and checks. The tradeoff is between cost and time. Disbursement is the opposite of collection. Here, the firm strives to slow down payments. It wants to increase mail delays and bank delays, and it has no control over processing delay.

Optimal cash balance


Another aspect of cash management knows the optimal cash balance. There are a number of methods that try to determine the magical cash balance, which should be targeted so that costs are minimized and yet adequate liquidity exists to ensure bills are paid on time. One of the first steps in managing the cash balance is measuring liquidity. There are numerous ways to measure this, including: cash to total assets ratio, current ratio (current assets divided by current liabilities), quick ratio (current assets less inventory, divided by current liabilities), and the net liquid balance (cash plus marketable securities less short-term notes payable, divided by total assets). The higher the number generated by the liquidity measure, the greater the liquidity and vice versa. There is a trade off, however, between liquidity and profitability that discourages firms from having excessive liquidity. Cash management is evolving with the increasing acceptance and use of electronic payments, such as debit cards. Shifting from paper-based payments to electronic transfers reduces the uncertainty in cash flow forecasting. The change in form of payment decreases both float and per item transaction costs.

Stumbling blocks to the complete switchover to electronic payments include the initial equipment investment for businesses and resistance by consumers who still prefer checks. Nevertheless, the use of electronic versus paper payments is gaining, affecting the importance of current cash management techniques. Cash collection systems aim to reduce the time it takes to collect the cash that is owed to a firm. Some of the sources of time delays are mail float, processing float, and bank float. Obviously, an envelope mailed by a customer containing payment to a supplier firm does not arrive at its destination instantly. Likewise, the payment is not processed and deposited into a bank account the moment it is received by the supplier firm. And finally, when the payment is deposited in the bank account oftentimes the bank does not give immediate availability to the funds. These three "floats" are time delays that add up quickly, and they can force struggling or new firms to find other sources of cash to pay their bills. Cash management attempts, among other things, to decrease the length and impact of these "float" periods. A collection receipt point closer to the customer perhaps with an outside third-party vendor to receive, process, and deposit the payment is one way to speed up the collection. The effectiveness of this method depends on the location of the customer; the size and schedule of their payments; the firm's method of collecting payment; the costs of processing payments; the time delays involved for mail, processing, and banking; and the prevailing interest rate that can be earned on excess funds. The most important element in ensuring good cash flow from customers, however, is establishing strong billing and collection practices.

One of the first steps in managing the cash balance is measuring liquidity, or the amount of money on hand to meet current obligations. The higher the number generated by the liquidity measure, the greater the liquidity and vice versa. However, there is a tradeoff between liquidity and profitability which discourages firms from having excessive liquidity. A Cash Flow Statement is typically divided into three components so that you can see and understand both the internal and external sources and uses of cash.

Good cash management means:


Knowing when, where, and how your cash needs will occur, Knowing what the best sources are for meeting additional cash needs; and, Being prepared to meet these needs when they occur, by keeping good relationships with bankers and other creditors.

Objectives of cash management:


Cash Management is part of the Financials family of applications. Cash management involves forecasting, receiving, controlling, disbursing, and investing funds from your company's operations. Besides helping to improve liquidity and increase profits, effective cash management will: Increase cash inflow. Reduce cash outflow. Increase the yield on idle funds

The company (Garuda fashions pvt Ltd) is maintaining very effective cash cash management to reach the following objectives

Design collection and disbursement management systems Develop cash flow planning models Improve rate negotiations Evaluate investment and financing options Build sophisticated cash management models Understand the effects of changes in technology

Cash Management is an enterprise wide solution for managing liquidity and controlling cash. Cash Management gives you direct access to expected cash flows from your operational systems. You can quickly analyze enterprise wide cash management cash requirements and currency exposures, ensuring liquidity and optimal use of cash resources.

The Importance of Cash Management


Business analysts report that poor management is the main reason for business failure. Poor cash management is probably the most frequent stumbling block for entrepreneurs. Understanding the basic concepts of cash flow will help you plan for the unforeseen eventualities that nearly every business faces.

Cash vs. Cash Flow


Cash is ready money in the bank or in the business. It is not inventory, it is not accounts receivable (what you are owed), and it is not property. These can potentially be converted to cash, but can't be used to pay suppliers, rent, or employees. Profit is not equating to cash flow. A highly profitable company might collapse if without adequate cash flow due to the tying up of companys funds with the accounts receivable and worsen by the needs to make regular payments like wages, rent & utilities, taxes. Profit growth does not necessarily mean more cash on hand. Profit is the amount of money you expect to make over a given period of time, while cash is what you must have on hand to keep your business running. Over time, a company's profits are of little value if they are not accompanied by positive net cash flow. You can't spend profit; you can only spend cash. Cash flow refers to the movement of cash into and out of a business. Watching the cash inflows and outflows is one of the most pressing management tasks for the business. The outflow of cash includes those checks you write each month to pay salaries, suppliers, and creditors. The inflow includes the cash you receive from customers, lenders, and investors.

Positive Cash Flow If its cash inflow exceeds the outflow, the company has a positive cash flow. A positive cash flow is a good sign of financial health, but is by no means the only one. Negative Cash Flow If its cash outflow exceeds the inflow, the company has a negative cash flow. Reasons for negative cash flow include too much or obsolete inventory and poor collections on accounts receivable. If the company can't borrow additional cash at this point, it may be in serious trouble.

What Are the Components of Cash Flow?


A "Cash Flow Statement" shows the sources and uses of cash and is typically divided into three components: Operating Cash Flow: Operating cash flow, often referred to as working capital, is the cash flow generated from internal operations. It comes from sales of the product or service of the business, and because it is generated internally, it is under organisational control. Investing Cash Flow. Investing cash flow is generated internally from non-operating activities. This includes investments in plant and equipment or other fixed assets, nonrecurring gains or losses, or other sources and uses of cash outside of normal operations. Financing Cash Flow. Financing cash flow is the cash to and from external sources, such as lenders, investors and shareholders. A new loan, the repayment of a loan, the issuance of stock, and the

payment of dividend are some of the activities that would be included in this section of the cash flow statement. The starting point for good cash flow management is developing a cash flow projection. Smart business owners know how to develop both short-term (weekly, monthly) cash flow projections to help them manage daily cash, and long-term (annual, 3-5 year) cash flow projections to help them develop the necessary capital strategy to meet their business needs. They also prepare and use historical cash flow statements to understand how they used money in the past.

Cash Management Services generally offered:


The following is a list of services generally offered by banks and utilized by larger businesses and also include the company Garuda fashions pvt Ltd:

Account Reconcilement Services:

Balancing a cheque book can be a difficult process for a very large business, since it issues so many checks it can take a lot of human monitoring to understand which checks have not cleared and therefore what the company's true balance is. To address this, banks have developed a system which allows companies to upload a list of all the checks that they issue on a daily basis, so that at the end of the month the bank statement will show not only which checks have cleared, but also which have not. More recently, banks have used this system to prevent checks from being fraudulently cashed if they are not on the list, a process known as positive pay.

Advanced Web Services:

Most banks have an Internet-based system which is more advanced than the one available to consumers. This enables managers to create and authorize special

internal logon credentials, allowing employees to send wires and access other cash management features normally not found on the consumer web site.

Armored Car Services:

Large retailers who collect a great deal of cash may have the bank pick this cash up via an armored car company, instead of asking its employees to deposit the cash. .Automated Clearing House: These Services are usually offered by the cash management division of a bank. The Automated Clearing House is an electronic system used to transfer funds between banks. Companies use this to pay others, especially employees. Certain companies also use it to collect funds from customers (this is generally how automatic payment plans work). This system is criticized by some consumer advocacy groups, because under this system banks assume that the company initiating the debit is correct until proven otherwise.

Balance Reporting Services:

Corporate clients who actively manage their cash balances usually subscribe to secure web-based reporting of their account and transaction information at their lead bank. These sophisticated compilations of banking activity may include balances in foreign currencies, as well as those at other banks. They include information on cash positions as well as 'float' (e.g., checks in the process of collection). Finally, they offer transaction-specific details on all forms of payment activity, including deposits, checks, and wire transfers in and out, investments, etc.

Cash Concentration Services:

Large or national chain retailers often are in areas where their primary bank does not have branches. Therefore, they open bank accounts at various local banks in the area. To prevent funds in these accounts from being idle and not earning sufficient interest, many of these companies have an agreement set with their primary bank, whereby their primary bank uses the Automated Clearing House to electronically "pull" the money from these banks into a single interest-bearing bank account.

Lockbox services:

Often companies which receive a large number of payments via checks in the mail have the bank set up a post office box for them, open their mail, and deposit any checks found. This is referred to as a "lockbox" service.

Positive Pay:

Positive pay is a service whereby the company electronically shares its check register of all written checks with the bank. The bank therefore will only pay checks listed in that register, with exactly the same specifications as listed in the register (amount, payee, serial number, etc.). This system dramatically reduces check fraud.

Sweep Accounts:

These are typically offered by the cash management division of a bank. Under this system, excess funds from a company's bank accounts are automatically moved into

a money market mutual fund overnight, and then moved back the next morning. This allows them to earn interest overnight. This is the primary use of money market mutual funds.

Zero Balance Accounting:

can be thought of as somewhat of a hack. Companies with large numbers of stores or locations can very often be confused if all those stores are depositing into a single bank account. Traditionally, it would be impossible to know which deposits were from which stores without seeking to view images of those deposits. To help correct this problem, banks developed a system where each store is given their own bank account, but all the money deposited into the individual store accounts are automatically moved or swept into the company's main bank account.

This allows the company to look at individual statements for each store. U.S. banks are almost all converting their systems so that companies can tell which store made a particular deposit, even if these deposits are all deposited into a single account. Therefore, zero balance accounting is being used less frequently.

Wire Transfer:

A wire transfer is an electronic transfer of funds. Wire transfers can be done by a simple bank account transfer, or by a transfer of cash at a cash office. Bank wire transfers are often the most expedient method for transferring funds between bank accounts. A bank wire transfer is a message to the receiving bank requesting them to effect payment in accordance with the instructions given. The message also includes

settlement instructions. The actual wire transfer itself is virtually instantaneous, requiring no longer for transmission than a telephone call.

Controlled Disbursement: This is another product offered by banks under Cash Management Services. The

bank provides a daily report, typically early in the day, that provides the amount of disbursements that will be charged to the customer's account. This early knowledge of daily funds requirement allows the customer to invest any surplus in intraday investment opportunities, typically money market investments. In the past, other services have been offered the usefulness of which has diminished with the rise of the Internet. Cash management services can be costly but usually the cost to a company is outweighed by the benefits: cost savings, accuracy, efficiencies, etc

Successful Cash Flow Management:


Cash management is ultimately about cash flow and very few small businesses are awash in cash. Even successful, growing companies are vulnerable to cash flow problems because they tend to add employees and inventory rapidly. This may quickly deplete the company coffers and lead to cash shortages. Because having cash at the right time is so important, entrepreneurs must pay close attention to cash management. Here are some tips for saving money and managing cash flow: Make financial projections.

Forecast both expenses and anticipated revenues for at least the coming year. This will help you predict when you're likely to have cash and when you're likely to need it. You should also maintain a cash reserve if possible.

Create contingency plans. Have several budget projections, including best case and worst case scenarios, and think about how you might respond. In the event sales don't take off as expected or there's some unforeseen problem, you'll be better prepared.

Keep a lid on spending. One of the most common problems with new businesses is the owners' tendency to spend freely. There's no need to have lavish offices or expensive furniture. Remember, you're in this for the long haul: You should try to get as much value as possible out of every transaction, whether you're leasing office space or stocking the company kitchen. Keep inventory low. Don't stock inventory based on your fantasy of what you think you'll be selling in six months. Instead, stock only what you know you can sell in the short term.

Lease, don't buy. Another good way to conserve cash is to lease equipment instead of buying it. Although leasing can be more expensive in the long run, it helps you avoid laying out a lot of capital all at once for things like office furniture, computers and copiers. Delay hiring employees.

Try to improve the productivity of current employees (without burning them out), use independent contractors and consider outsourcing certain nonessential functions. Employees are expensive, so you should put off adding permanent hires as long as you can or at least until you're earning the revenue to support them.

Go without a salary. Some experts recommend stockpiling a year's worth of living expenses before going into business. Admittedly, this may be difficult, but you should at least avoid paying yourself an excessive salary. Too many entrepreneurs waste cash by paying themselves big salaries without the revenues to justify them. Speed up customer payments. Try to get customers to pay on time or early, if possible. Offer incentives like discounts or late fees, and adopt more effective collection techniques for deadbeat customers. Don't be wasteful. Recycle and reuse what you can -- for example, boxes, computer discs and file folders. The savings may not be large on any given item, but they can add up over time.

Cash Management Services:


Cash Management Services provide structured, automated tools that give you maximum flexibility to help manage your company's funds efficiently and profitably This is why they have a wide array of cash management services to help firms effectively collect and disburse money as well as optimize the cash flow of business. It is a convenient way for the business to make large cash deposits and/or order cash.

Cash Management is the process of optimizing receivable and payables while ensuring predictability in the cash flows. Efficient Cash Management is about getting funds in time, quick transfers, quick realization of local and outstation cheques, easy disbursements, account reconciliation, controlled processes and customized MIS. Thus Cash Management Services (CMS) eliminates the inherent delays of a funds transfer mechanism, thus enhancing liquidity and ensuring optimum planning and utilization of funds Cash Management Services include the following basic components: 1. Collection or Receivables Management 2. Payment or Payables Management

Benefits of Cash Management Services:


Financial Benefits

Collection & Disbursement products enable to reduce the interest cost on borrowings by getting access to funds faster there-by reducing the borrowings. Additionally, it helps to improve the liquidity position by realizing cheques earlier, there-by improving the Balance Sheet and Financial Ratios. Operational Benefits

Financing and Treasury functions can be managed with far less number of people as most of the funds and liquidity management functions get outsourced to us as your Bank and in addition will require lesser manpower for performing various payment related activities. Control Benefits

CMS products allows you to maintain better control over the various Treasury related activities, improve speed and ease of reconciliation and reduces the risk of fraud.

Cash management functions:


In Garuda fashions pvt Ltd the cash management department plays various functions. These are the following Short-term treasury forecasts, at least monthly Establishment of an optimum cash level Optimization of liquidity Monitoring and optimization of the purchase-payment circuit Monitoring and optimization of the sales-cash circuit Monitoring of company positions at the value date Day-to-day control of organization positions Maximization of returns on treasury surpluses Minimization of costs of short-term borrowing Coverage of interest-rate risk Coverage of exchange-rate risk Forecast cash flows in any currency and in multiple time periods Streamline the reconciliation process Monitor for exceptions and fraud

Forecast based on historical or future transactions Manage the cash cycle efficiently and with control

Cash Flow Process:


1. Cash Inflows
Irregular - not daily or frequent - Bond sales, other debt contracts, P/S sale, C/S sale - sale of marketable securities Regular - collections from A/R, cash sale, sale of inventory and fixed asset

2. Cash Outflows
Irregular - Payment of dividends, interest, principal on debt, Share repurchase, Taxes payment - purchase of marketable securities Regular - investment in fixed asset (capital expenditure program) - investment in inventory

Cash Management: Concepts Included


Cash management can be seen from two different perspectives depending on how many responsibilities it includes: treasury management (or basic cash management) and advanced cash management. Specifically, treasury management handles actual cash management at companies, and one of its main functions is to establish the optimum cash level so that payments can be made and received as necessary for the proper operation of the company. The second concept includes not only treasury management per se but also other tasks such as treasury forecasting, negotiation and establishment of relationships with financial institutions and financial risk management. However, if the profit opportunities available in the process of cash flow creation are to be maximized, this scope must be broadened to take in more operational decisions, since optimum cash levels are influenced by other factors outside the restrictive concept of "treasury".

Basic cash management:

Treasury management or basic cash management propitiates the development of administrative techniques conducive to optimizing the level of disposable assets to be maintained by a company. To prevent breaks or gaps in the trading cycle due to lack of cash, administrators must calculate the cash amount best suited to their level of activity, plan the timing of the relevant payments and collections and draw up a policy of investment in assets with high liquidity that can be converted to cash at a low transactional cost to serve as support for the treasury funds maintained by the company. It is therefore essential to establish the right level of disposable assets to short-term financial investments at companies. Holding the wrong amount in cash or cash equivalent may interrupt the normal flow of business activities. Moreover, the wrong safety margin may result in financial difficulties, with firms unable to meet needs that may arise at any given time or unable to take advantage of unexpected investment opportunities. Maintaining a cash surplus thus has a number of advantages. On the one hand it enables companies to carry on the normal transactions that arise in the course of their activities and avoid any treasury gaps. On the other hand it helps them cover any unexpected needs for cash by acting as a preventive balance. However, there are also disadvantages in being too conservative, as reflected in the opportunity costs entailed by assets with little or no profitability.

Advanced cash management:


Treasury management as a set of techniques that act on the short-term liquidity of a company, and at the same time affect those factors and processes that translate

immediately into cash, with the ultimate aim of increasing the profitability of the company and improving working capital management. In this sense cash management as an overall, integrated service of which the customer takes that part that best suits him or that he needs at any given time, served basically by a computer or another online solution. All these responsibilities are interconnected, which generates an overall model of cash management with a policy aimed at obtaining profits or reducing costs to generate value for firms and, in short, help attain the general goals of those firms.

Evaluation of Costs of Cash-Management Services:


Cash management services can be costly but usually the cost to a company is outweighed by the benefits: cost savings, accuracy, efficiencies, etc. A form of break-even analysis can help the financial officer decide whether a particular collection or disbursement service will provide an economic benefit to the firm. The evaluation process involves a very basic relationship in microeconomics: Added costs = added benefits If equation 19-1 holds exactly, then the firm is no better or worse off for having adopted the given service. We will illustrate this procedure in terms of the desirability of installing an additional lock box. Equation 19-1 can be restated on a per-unit basis as follows: P=(D)(S)(i) Where P= increases in per-check processing cost it the new system is adopted D= days saved in the collection process (float reduction)

S=average check size in dollars i= the daily, before-tax opportunity cost (rate of return) of carrying cash

CHAPTER -IV

MCKINSEYS 7-S FRAMEWORK: The profile of the company can be explained with the help of McKinseys 7-S model. The McKinseys 7-S Framework is as shown below

Strategy Style Skills System Shared value Staff

Structure

Mckensys 7S frame work

The 7-S-Model is better known as McKinsey 7-S. The two persons who developed this model are, Tom Peters and Robert Waterman, have

been consultants at McKinsey & Co at that time. They published their 7-S-Model in their article Structure Is Not Organization (1980) and in their books The Art of Japanese Management (1981) and In Search of Excellence (1982). Perhaps the most important element, which trigged the interest of American managers in the issue of culture, was the emergence of Japanese Competition. As Japan began to take a leading role in one basic industry after another, the question of cultural difference emerged as a casual factor to explain Japanese superiority. There were those who signal the deterioration of sound cultural values as the central reason behind the slipping of America as a world wide industrial power. They suggest that Americans have gotten too fat, demanding too much from society without imposing any equivalent internal demands of themselves, and that they seem to have a lost a sense of pride and selfsatisfaction derived from a job well done. When contrasted with their Japanese counterparts, the gap seems to be enormous and still growing. Somehow, there is basic erosion of standards of excellence that seems to undermine the basic fabric of American society. The most notable exception, which might be the cause of its enormous popularity, has been the book In search of excellence by Peters and Waterman (1982), where they emphasize the lesson to be derived form

Americas best run companies. Mc. Kinseys 7S model reflects upon the framework used to evaluate the best managerial companies. Framework of Mckinseys 7 S model 1. Shared value: The interconnecting centre of Mckinseys model is shared value. What does the organization stands for and what it attitudes. believes in; central beliefs and

2. Strategy: Plans for the allocation of firms scarce resources, over time, to reach identified goals; Environment, competition, customers. 3. Structure: The way the organizations units relate to each other. Centralized, functional division (top down); decentralized; matrix, network, holding, etc, 4. System: The procedures and processes that characterize how important work is to be done. 5. Staff: Numbers and types of personnel within the organization. Promoters of the company and the qualities of the key staff. 6. Style: cultural style of the organization and how key managers behave in achieving the organizations goals. 7. Skill: distinctive capabilities of personnel or of the organizations as a whole

CHAPTER V SWOT analysis

Swot analysis of this company is as follows

Strengths:
A diversified manufacturing base having a capacity to produce quality Products. Capability to produce World class end products. Good R&D base and quality human resources Major raw material component sources within the country It has rich resources of raw materials of textile industry. It is rich in highly trained manpower. The country has a huge advantage due to lower wage rates. Because of low labor rates the manufacturing cost in textile automatically comes down to very reasonable rates. Experience and good penetration in regional markets. Good managerial exporting capability. Export knowledge. Existing renovation and expansion projects in progress. Company has specialized in product lines. Favorable climate for raw material production (cotton), throughout the year. High flexibility: Fast response Peoples creativity

Weakness:
Cost of Power: Very high cost of power, unreliability of supply and frequent interruption. Transmission and distribution losses are very high. Infrastructure: Infrastructure facilities are not of world class. Transport and communications are complex resulting in delays and slow movement of goods. Inadequate port facilities result in high demurrage costs.

Technology: In the days of sheltered economy, up-gradation of technology was not critical. Bulk of the textiles Industry has grown by concentrating on processes modification rather than basic research. Investment in R&D with a view to generating intellectual property is absent. Import and movement is not allowed freely by State Governments. Lack of training programs: Middle management, machinery operators. Difficulties in supplying raw material and capital goods. Customs obstacles. Strong need for operation capital: difficult access to credit. Weak technology for textile finishing process, both in knowledge and Difficult labor relations. Labor code is old and inflexible.

Opportunities:
Value sharing by the Indian producers in the area of raw materials, manufacturing, distribution and entering into collaboration arrangements with MNCs could be of mutual advantage. A decade of economic reforms has tested the resilience of the Indian textiles Industry. Individual enterprises have realized their weaknesses and are gearing up to face the new challenges. The markets in the developed countries are opening up and India can take advantage of this. A large number of products are going off Patent. India can pursue the possibility of producing these on a more economic scale as compared to other countries. the confidence to take on global competition squarely.

Cultural similarities with countries in the region. Possibility of exploiting developed export knowledge.

High costs of imports have strengthened local market (temporarily). There is unoccupied installed capacity in the tailoring sector.

Threats:
Movements of key raw material prices for the production of textiles in India are influenced by political considerations rather than economic principles. The banking system qualified the sector as a high risk one. High financial cost . Lack of credit lines for these industrial sectors, specially for small industry. Lack of coherent and systematical Government policies, specifically for export promotion. Economic and legal political instability.

CHAPTER -VI FINDINGS & SUGGESTIONS: FINDINGS:


1. The sales of the company are in increasing trend. This is largely because of quality & prompt delivery. 2. The company should try to speed up the credit collection from its customers 3. The company is having good management & mutual understanding because of good management system the company turned the loss in making the profit making unit

SUGGESTIONS:
1. Debtors should be realized as early as possible so as to meet the companys capital needs 2. Interest paid to the creditors should be reduced. 3. Cost of production should be tried to be reduced

Conclusion:
Garuda fashions has come a long way, for renovation & modernization of work, seems to be a part of their vision. Garuda fashions and its promoters have long standing relationship with banks like SBI, IDBI is the last 11years these institutions have extended substantial support to the various expansion and modernization schemes of the company. Wise management of cash is essential for the survival and success of any business organization. They prescribe a set of principles for successful management of cash, a key component of working capital but the least productive for the firm holding it. The organizations need to develop a financial strategy that is how its policies and processes should be developed so that it is mutually beneficial to the employees and the organization. From this research we can infer that any organization need to be constantly provided

opportunities for learning new skills so that they do not feel monotonous and they are motivated to use the acquired skills on their job. Garuda fashions has earned a lot of goodwill in the textile industry in the past years, it is also well known company in the textile industry a quality of clothes is assurance to ensure good quality products for its costumers. HR & A department is ensuring for good compensation policies for the worker and employees of the company. Marketing department is stimulating sales and to get more revenues. The development of the textile industry went backwards, starting from the downstream consumer end products of fabrics, knitwear, to the upstream subsectors like spinning, printing, finishing and man-made fibre manufacturing. The industry developed rapidly with the fast growth in garment exports.

BIBLIOGRAPHY

Company Profile:

Records & Reports of the firm Employee Handouts

Books:
Financial management I M Pandyen Khan & Jain Prasanna chandra

Website: www.garuda fashions.com www.cashmanagement.com www.google.com www.moneymarket.com

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