CASH FLOW MANAGEMENT OF RASTRIYA BANIJYA BANK LTD.

A project work Report

Submitted by

Chandika Devi Adhikari

TU Registration No :- 7-2-145-11-2014

Gyankunja Shaikshik Pratisthan

Submitted to:-

The Faculty of Management

Tribhuvan University

Kathmandu, Nepal

In partial fulfillment of the requirement the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Banepa, Nepal

April, 2018
 Declaration

I hereby declare that the project work entitled TITLE OF PROJECT WORK REPORT submitted
to Faculty of Management, Tribhuvan University, Kathmandu is an original piece of work
under the supervision of Mr Jeet lal Shrestha, faculty member,Gyankunj shaikshik
Prathisthan, Banepa, and is submitted in partial fulfillment of the requirements for the
degree of Bachelors of Business Studies (BBS). This project work report has not been
submitted to any other university or institution for the award of any degree or diploma.

Signature:

Name of student:

Date:
 Supervisor’s Recommendation

(In a Campus/College letter head)

The project work report entitled TITLE OF PROJECT WORK

The project work report entitled TITLE OF PROJECT WORK REPORT submitted by …( name of
student) of ….(name of college/campus)….(name of place), is prepared under my
supervisionas per the procedure and format requirements laid by the Faculty of
Management, Tribhuvan University, as partial fulfillment of the requirement for the degree
of Bachelor of Business Studies(BBS). I, therefore recommend the project work report for
evaluation

Signature:

Name of Supervisor:

Date:
Endorsement

(In a Campus/College Letter Head)

We hereby endorse the project work report entitled TITLE OF PROJECT WORK submitted by
Chandika Devi Adhikari of Gyankunj Shaikshik Prathisthan,Banepa, in partial fulfillment of
the requirements for the degree of the Bachelor Studies (BBS) for external evaluation.

Signature: signature:

Name of chair: Name of principal:

Chairman, Research Committee: Campus chief:

Date: Date:
 Table of contents

Title page i

Declaration ii

Supervisor’s Recommendation iii

Endorsement iv

Acknowledgments v

Table of contents vi

List of Table vii

List of Figures viii

Abbreviations ix
CHAPTER I: INTRODUCTION i

Background

Profile of org,/ place/ events, etc

Objectives

Rationale

Review

Methods

CHAPTER II: RESULTS AND ANALYSIS

Data Presentation

Analysis of Results

Findings

CHAPTER III: SUMMARY AND CONCLUSION

Summary

Conclusion

BIBLIOGRAPHY

APPENDICES
 CHAPTER I

INTRODUCTION

1.1 Background of the study

 CHAPTER- I INTRODUCTION

Background

Cash flow statement is a financial tool which discloses the movements or flows or changes in

cash or cash equivalent between the two balance-sheet dates related to the operating

investing financing activities of a business concern. It shows in details the sources and uses

of cash. It also gives readers of the financial statements a food basis for judging the possible

future cash flows. Internal users of financial statements can also be benefitted by

understanding how to read the statements of cash flows. The statement of cash flows can

assist then to evaluate the company’s capability to generate positive cash flows in the future

and evaluate the company’s capability to settle debts, pay dividends and provide loans.

Cash flow management is a process that involves collecting payments, controlling

disbursements, covering shortfalls, forecasting cash needs, investing idle funds, and

compensating the banks that support these actions. Because global cash management is

highly tax and accounting oriented, close working relationships with tax and accounting staff

are vital. In addition, cash flow management requires coordination between treasury and

operations. And in today's volatile markets, it requires powerful electronic tools for gathering

diverse financial information and formatting it into useful reports for decision making.

Cash flow statements are divided into three categories. They are:-

1. Cash flows from operating activities

Operating activities involve the cash inflows and outflows from those activities or

transactions that enter into the determination of net incomes. It does not matter the

immediate cash payment or received; however the operating activities are either affected
from or affects the part of income statement. For example, collection of cash from

customers affects the sale revenue and wages expenses affect the payment made to

employees. The amount of cash flows arising from operating activities is a key indicators of

the extent to which the operations of the enterprise have generated sufficient cash flows to

repay loans, pay dividends and make new investments without recourse to external source

of financing.

2. Cash flows from investing activities

Investing activities involve the cash flows from the activities related to acquisition and sale of

property, plant, and equipment and other long-terms assets, including long-terms

investments. They also involve the acquisition and sale of short-term marketable securities,

other than trading securities, making and collection of cash as a lender.

3. Cash flows from financing activities

Financing activities involve obtaining resources from stockholders and providing them with a

return on their investments, and obtaining resources from creditors and repaying the

amounts borrowed or otherwise settling the obligations. The separate disclosure of cash

flows arising from financing activities is important because it is useful in predicting claims on

future cash flows by providers of capital to enterprise.

 Problems Statement

This research focuses to explore the followings research questions:

a. Whether the cash flow from operating activities is sound or not?

b. Whether the cash flow from investing activities is sound or not?

c. Whether the cash flow from financing activities is sound or not?

 Objectives

The main objective of the study are:

i. To study the cash flow from operating activities.

ii. To explore the cash flow from investing activities.

iii. To examine the cash flow from financing activities.

Rationale

Its significances are as follows:

i. It shows the banks’ ability to generate positive future net cash flow.

ii. It shows the banks’ ability to manage cash flow.

iii. It shows the ability to meet its obligations and to pay dividends, interests etc.

iv. It shows the banks’ need of external financing.

v. It shows the liquidity position of bank.

 Report Structure

The repot includes the following the following chapters:-

a) Introduction

b) Related Literature Review

c) Methods

d) Results And Findings

e) Discussion and conclusion

Consolidated Cash Flow Statement

For the period Shrawan 1, 2073 to Ashad 31, 2074 (July 16, 2016 to July 15, 2017)

Particulars This Year (in NPR) Previous Year (in NPR)

(A). CASH FLOW FROM OPERATING ACTIVITIES

1. Cash Received

1.1 Interest Income

1.2 Commission and

Discount Income

1.3 Income from Foreign Exchange transaction

1.4 Recovery of Loan

Written off

1.5 Other Income

2. Cash Payment

2.1 Interest Expenses

2.2 Staff Expenses

 2.3 Office Operating
Expenses

2.4 Income Tax Paid

2.5 Other Expenses

Cash Flow before changes in Working Capital

(Increase) / Decrease in
Current Assets

1.(Increase)/Decrease in Money at Call and

Short Notice

2. (Increase)/Decrease in Short Term Investment

3. (Increase)/Decrease in Loans, Advances and

Bills Purchase

4. (Increase)/Decrease in
Other Assets

Increase /( Decrease) in Current Liabilities

1. Increase/(Decrease) in
Deposits
 2. Increase/(Decrease) in Certificates of Deposits

3. Increase/(Decrease) in Short Term Borrowings

4. Increase/(Decrease) in Other Liabilities

(b) Cash Flow from

Investment Activities

1. (Increase)/Decrease in Long-term Investment

2. (Increase)/Decrease in
Fixed Assets

3. Interest income from Long term Investment

4. Dividend Income

5. Others

(c) Cash Flow from

Financing Activities

1. Increase/(Decrease) in Long term Borrowings

(Bonds,Debentures etc)

2. Increase/(Decrease) in Share Capital & Share

Premium
 3. Increase/(Decrease) in Other Liabilities

4. Increase/(Decrease) in Refinance/facilities
received from NRB

5. Interest expenses on Long term Borrowings

(Bonds, Debentures etc)/

Dividend Paid

(d) Income/Loss from change in exchange rate in

Cash & Bank Balance

(e) Current Year's Cash Flow from All Activities

(f) Opening Balance of Cash

and Bank

(g) Closing Balance of Cash

and Bank
 CHAPTER-II METHODS

This study will investigate the management of cash flow of Banijya Bank Ltd. The following

methodological approach will be conducted to evaluate the inflows and outflows of bank.

Types of Research

These studies will descriptive study. Data will be collected from the secondary resources

provided by banks’ cash flow statements.

Population and Sampling

There are 28 Commercial Banks in Nepal. Among these commercial banks, Banijya Bank Ltd. is

selected as a sample to study the cash flow management.

Types of data

The data used in report will be secondary data as these data are the data that are prepared

by the bank and audited by the auditor.

Data Collection Procedures

The data are collected through the audited cash flow statement.
 Limitation of the study

Within the certain constraints and limiting inside the boundary of available information, and

attempt will be made to notice the cash flow management of the bank. The limitations of the

study are:

i. The data and information in the study are secondary data.

ii. The exactness depend upon the data provided the bank.
References

Umesh Pd. Gupta .et.al.(2072) Accounting for financial analysis & planning, Kathmandu;

Samjhana Publication Pvt. Ltd.

Dasharatha Shrestha et.al.(2012), A Textbook of Accountancy,(V Ed.). Kathmandu

M.K Publishers and Distributors