THE
STUDY OF
...IMPLICATION OF GST ON SMALL VENDORS/BUSINESS...
PROJECT REPORT
SUBMITTED TO
SAVITRIBAI PHULE PUNE UNIVERSITY
FOR THE AWARD OF
BACHELOR IN BUSINESS ADMINISTRATION (BBA)
SUBMITTED BY
Mr.MANTHAN MORE
UNDER THE GUIDANCE OF
PROF. DR.MINA.D
THROUGH
Sanghavi Kesari College of Arts, Commerce and Science, Pune
CHINCHWAD,PUNE
2022-2023
Sanghavi Kesari College of Arts, Commerce and Science, Pune
CHINCHWAD,PUNE
(Affiliated to SPPU and Recognized by Govt. of Maharashtra)
PU/PN/305ACS/2008
CERTIFICATE
This is to Certify that Mr___MANTHAN BHARAT MORE____of the
Class TY-B.B.A_. Roll.No.(_309_)has satisfactory completed project of
Semester-Vth_in the Subject: Analysis of Financial Statement-(505B) A
as laid down by the University of Pune for the Academic Year:-
2022 - 2023
Project Guide Lab In-charge Head of
Department
Academic Head Seal Principal
Project Examination
Seat no Date:
Internal Examiner: External Examiner:
ACKNOWLEDGEMENT
Firstly, I would like to praise and thank Almighty to help me successfully come till this
point of my life, may
he always keep showering his blessings on all of us.
I wish to express my deep sense of gratitude to Prof. Dr.Mina D for her valuable advice and
guidance to me throughout my project.
I would like to place on record my sincere thanks to the Analysis of Financial Statement
behaviour, with reference to “Fund Flow Statement”.
Mr.MANTHAN MORE
_________________
DECLARATION
I, the undersigned, Mr MANTHAN MORE, hereby declare that the Project Report entitled “Fund
Flow Statement, with reference to Analysis of Financial Statement ” written and submitted by
me to the University of Pune in partial fulfillment of the requirement for award of Degree of
Bachelor in Business Administration. Under the guidance of Dr Mina Dushman is my original
work. The empirical findings and suggestions are in the report and based on the original
information collected by me.
Place : Name of Student
:
MANTHAN MORE
Date : Student :
CONTENT:
CHAPTER- 1. INTRODUCTION
⦁ Introduction
⦁ GST Advantages
⦁ Impact of GST on real estate
⦁ GST on under construction property – Affordable housing
⦁ Impact of GST on property prices – Luxury segment
⦁ Reverse charge mechanism in GST and its impact on construction costs
⦁ GST on ready properties
⦁ Conclusion
CHATPER- 2. OBJECTIVES OF THE STUDY
2.1 Problem statement
2.2 Objectives of the study
2.3 Additional research questions
2.4 Limitations of study
CHAPTER- 3. LITERATURE REVIEW
3.1 Literature view
3.2 Conclusion
CHAPTER- 4. COLLECTION PRIMRY DATA
4.1 Methodology
4.2 Research design
4.3 Type of research:
• Design of the research instrument
• Sample selection
• Research execution
• Analysis of Data
CHAPTER- 5. ANALYSIS AND CONCLUSION
5.1 Hypothesis testing
5.2 Intermediate conclusion(s)
CHAPTER- 6. CONCLUSIONS AND RECOMMENDATIONS
6.1 Summary of findings
6.2 Overall conclusion
6.3 Recommendations
6.4 Ethical implications Glossary (if needed) Bibliography
Appendices:
➢ References
➢ Questionnaire
CHAPTER-1 INTRODUCTION
1.1 Introduction
At the end of each accounting period, preparation and presentation of financial statements are
undertaken with an objective of providing as much information as possible for the public. The balance
sheet presents a snapshot picture of the financial position at a given point of time and the income
statement shows a summary of revenues and expenses during the accounting period. Though these are
significant statements especially in terms of the principal goals of the enterprise, yet there is a need for
one more statement which will indicate the changes and movement of funds between two balance sheet
dates which are not clearly mirrored in the balance sheet and income statement. That statement is called
as funds flow statement. The analysis which studies the flow and movement of funds is called as funds
flow analysis. Similarly one more statement has to be prepared known as cash flow statement. This
requires the doing of cash flow analysis. The focus of cash flow analysis is to study the movement and
flow of cash during the accounting period.
Concept of Funds
How are funds defined? Perhaps the most ambiguous aspect of funds flow statement understands what
is meant by funds. Unfortunately there is no general agreement as to precisely how funds should be
defined. To a lay man the concept of funds means `cash‟. According to a few, `funds‟ means `net current
monetary assets‟ arrived at by considering current assets (cash + marketable securities + short term
receivables) minus short term obligations. A third view, which is the most acceptable one, is that concept
of funds means `working capital‟ and in this lesson the term `funds‟ is used in the sense of Working capital
Working Capital Concept of Funds
The excess of an enterprise‟s total current assets over its total current liabilities at some point of time
may be termed as its net current assets or working capital. To illustrate this, let us assume that on the
balance sheet date the total current assets of an enterprise are Rs.3,00,000 and its total current liabilities
are Rs.2,00,000. Its working capital on that date will be Rs.3,00,000 – Rs.2,00,000 = Rs...1,00,000. It follows
from the above, that any increase in total current assets or any decrease in total current liabilities will
result in a change in working capital.
Flow of Funds
The term `flow‟ means change and therefore, the term `flow of funds‟ means `change in funds‟ or
`change in working capital‟. According to manmohan and goyal, “the flow of funds” refers. To movement
of funds described in terms of the flow in and out of the working capital area. In short, any increase or
decrease in working capital means `flow of funds‟. Many transactions which take place in a business
enterprise may increase its working capital, may decrease it or may not affect any change in it. Let us
consider the following examples.
(i) Purchased Machinery For Rs.3,00,000: The effect of this transaction is that working capital
decreases by 3,00,000 as cash balance is reduced. This change (decrease) in working capital
is called as application of funds. Here the accounts involved are current assets (cash a/c) and
fixed asset (machinery a/c).
(ii) Issue of Share Capital of Rs.10,00,000: This transaction will increase the working capital as
cash balance increases. This change (increase) in working capital is called as source of funds.
Here the two accounts involved are current assets (cash a/c) and long-term liability (share
capital a/c).
(iii) Sold Plant For Rs.3,00,000: This transaction will have the effect of increasing the working
capital by rs.3,00,000 as the cash balance increases by rs.3,00,000. It is a source of funds. Here
the accounts involved are current assets (cash a/c) and fixed assets (plant a/c).
(iv) Redeemed Debentures worth Rs.1,00,000: This transaction has the effect of reducing the
working capital, as the redemption of debentures results in reduction in cash balance. Hence
this is an example of application of funds. The two accounts affected by this transaction are
current assets (cash a/c) and long-term liability (debenture a/c).
(v) Purchased Inventory Worth Rs.10,000: This transaction results in decrease in cash by
rs.10,000 and increase in stock by rs.10,000 thereby keeping the total current assets at the
same figure. Hence there will be no change in the working capital (there is no flow of funds in
this transaction). Both the accounts affected are current assets.
(vi) Notes Payable Drawn by Creditors Accepted for Rs.30,000: The effect of this transaction on
working capital is nil as it results in increase in notes payable (a current liability) and decreases
the creditors (another current liability). Since there is no change in total current liabilities
there is no flow of funds.
(vii) Building Purchased for Rs.30,00,000 And Payment Is Made By Shares: This transaction will
not have any impact on working capital as it does not result in any change either in the current
asset or in the current liability. Hence there is no flow of funds. The two accounts affected are
fixed assets (building a/c) and long term liabilities (capital a/c).
(a) Sources and Application of Funds:
The following are the main sources of funds:
1. Funds From Operations: the operations of the business generate revenue and entail
expenses. Revenues augment working capital and expenses other than depreciation
and other amortizations. The following adjustments will be required in the figures of
net profit for finding out the real funds from operations:
Rs.
Funds from Operations Net profit for the year xxx
Add*: depreciation of fixed assets xxx
Preliminary expenses, goodwill, etc. Written off xxx
Loss on sale of fixed assets xxx
Transfers to reserve xxx
Less: profit on sale or revaluation xxx
Dividends received, etc. xxx
Funds from operations xxx
*These items are added as they do not result in outflow of funds.
In case of „net loss‟ for the year these items will be deducted.
(ii) Issue Of Share Capital: an issue of share capital results in an inflow of funds.
(iii) Long-Term Borrowings: when a long-term loan is taken, there is an increase in
working capital because of cash inflow. A short term loan, however, does not increase
the working capital because a short-term loan increases the current assets (cash) and
the current liability (short term loan) by the same amount, leaving the size of working
capital unchanged.
(iv) Sale Of Non-Current Assets: when a fixed asset or a long-term investment or any
other non-current asset is sold, there will be inflow represented by cash or short-term
receivables.
(b) Uses Of Funds: The following are the main uses of funds
(i) Payment Of Dividend: the transaction results in decrease in working capital owing to
outflow of cash.
(ii) Repayment Of Long-Term Liability: The repayment of long-term loan involves cash
outflow and hence it is used for working capital. The repayment of a current liability
does not affect the amount of working capital because it entails an equal reduction
in current liabilities and current assets.
(iii) Purchase Of Non-Current Assets: when a firm purchases fixed assets or other
noncurrent assets, and if it pays cash or incurs a short-term debt, its working capital
decreases. Hence it is a use of funds.
Importance and Utility of Funds Flow Analysis
Funds flow analysis provides an insight into the movement of funds and helps in
understanding the change in the structure of assets, liabilities and owners‟ equity.
This analysis helps financial managers to find answers to questions like:
(i) How far capital investment has been supported by long term financing?
(ii) (ii) How far short-term sources of financing have been used to support capital
investment?
(iii) (iii) How much funds have been generated from the operations of a
business?
(iv) (iv) To what extent the enterprise has relied on external sources of financing?
(v) (v) What major commitments of funds have been made during the year?
(vi) (vi) Where did profits go?
(vii) (vii) Why were dividends not larger?
(viii) (viii) How was it possible to distribute dividends in excess of current earnings
or in the presence of a net loss during the current period?
(ix) (ix) Why are the current assets down although the income is up?
(x) (x) Has the liquidity position of the firm improved?
(xi) (xi) What accounted for an increase in net current assets despite a net loss
for the period?
(xii) (xii) How was the increase in working capital financed? Preparation of Funds
Flow Statement Two statements is involved in funds flow analysis.
(I) Statement Or Schedule Of Changes In Working Capital
(II) Statement Of Funds Flow
(A) Statement Of Changes In Working Capital:
This statement when prepared shows whether the working capital has increased or decreased
during two balance sheet dates. But this does not give the reasons for increase or decrease in
working capital. This statement is prepared by comparing the current assets and the current
liabilities of two periods
