A

PROJECT REPORT
ON

A STUDY OF CASH MANAGEMENT

WITH SPECIAL REFERENCE TO

PSP PUMPS PVT LTD,

KOLHAPUR
SUBMITTED TO

SHIVAJI UNIVERSITY, KOLHAPUR

FOR THE PARTIAL FULFILMENT OF

“MASTER OF BUSINESS ADMINISTRATION”

SUBMITTED BY

MR. JAYESH SUBHASH TAWADE

B.com, CS executive

UNDER THE GUIDENCE OF

DR. R. N. BOLAKE
M. Com, M.Phil., PH. D, MA(Eco), M.B.A.(Finance), L.L.B(special)

Assistant professor

MBA UNIT
DEPARTMENT OF COMMERCE AND MANAGEMENT
SHIVAJI UNIVERSITY KOLHAPUR
2022-2023
CHAPTER I
Introduction
1.1 INTRODUCTION:
Cash is probably the most vulnerable asset in any organization. Cash is easily stolen, lost,
misused, uncollected, improperly mismanaged and often lacks adequate written policies
and procedures. Cash is often improperly monitored by management or ignored all
together. Effective cash management is imperative in every business organization, whether
for profit or not for profit. Cash consists of unrestricted and restricted cash accounts,
checking and saving accounts, certificate of deposits. Treasury bills, money market funds,
commercial funds and federal government funds are all cash equivalents. All cash and cash
equivalents must be disclosed as current assets in financial statements in accordance with
gaap (generally accepted accounting principles). Definition: Cash Management refers to
the collection, handling, control and investment of the organizational cash and cash
equivalents, to ensure optimum utilization of the firm’s liquid resources. Money is the
lifeline of the business, and therefore it is essential to maintain a sound cash flow
position in the organization. Effective cash management must be incorporate accuracy,
completeness, authorization, existence, disclosure and reporting overall cash activities and
the cash cycle within the organization. Management requires the control over cash so that
future business planning, forecasts, and projects can be made, as well as for the production
and issuance of the entity’s financial statements to stockholders, investors and financiers.
Cash is the backbone of business transactions, despite the nature of business and personal
society. The cash cycle consists of several key components, regardless of industry type,
profit motivation, and the form of organization of the business. The revenue generates cash
and financing functions of the business and cash is expended by the operating and
acquisition activities. Therefore, every organization must effectively manage its cash flow
– acquire cash, spend cash, anticipate cash needs, and report on sources and uses of cash.
Finance is the lifeblood of the business. In the postmodern highly competitive business
world finance is the very essential factor for every transaction. without finance, none can
set up the business. Direct and indirect expenses needs cash and bank balance.
1.2 OBJECTIVES:

1. To understand the cash management system PSP.

2. To study the factors influencing effective cash management practices.

3. To examine five-year data to find out the performance of both businesses with respect to
cash management.

4. To give suggestions on the basis of findings of the study.

1.3 STATEMENT OF STUDY:

“A study of cash management and analysis with reference to Pratap Shankar Patil (PSP)
Kolhapur.”

The purpose of cash flow statement is to provide detail pitcher of what happened to a
business cash during a specified business.

This study brings importance in decision making at top level management.

1.4 IMPORTANCE OF THE STUDY:

1. This study will help the company in various ways that is for making an analysis of
current cash, for making predictions of future receipts and payments.

2. The cash management is also playing vital role in knowing the pros and cons of cash
collection, and for making an improvement in motives of holding cash. This study
brings importance in decision making at top level management.
1.5 SCOPE AND LIMITATIONS OF THE STUDY:

SCOPE OF THE STUDY:

The study includes the various incomes and expenditure for the past and current period and
also, to study whether the investment of surplus of funds is done in an efficient.

 Geographical :

The study is confined to the whole of PSP PUMPS PVT LTD.

 Functional :
The Study is confined to Effective finance Area.

 Analytical:
The Study is confined to analysis of cash flow statement.

1.6 RESEARCH METHODOLOGY:

The topic under study was selected through discussion with the project guide and organization
guide in the company. The researcher has collected information in two ways i.e.

A) Primary Data
B) Secondary Data

A) Primary Data:

Primary data means first hand source or original source at the hand of a
researcher that is not collected. The researcher collected the primary data from the
following ways.
 1. Discussion
2. Filling the questionnaire

B) Secondary Data:

Secondary data are the second hand information. The secondary data is one
which has already collected by someone else. The researcher collected the secondary data
from the following ways.

1. Annual reports of the company.

2. Balance sheet of the company.
3. Cash flow statements of the company.
1.7 CHAPTER SCHEMES

The project work is divided into chapter broadly and these five chapters are further subdivided
into number of units.

Chapter I – Introduction and Research Methodology

This chapter consists of Definition, Statement of the problem, Importance of the study,
Objectives of the study, Scope of the study, Research Methodology and Limitations of the
study.

Chapter II – Conceptual Framework

This second chapter is related to theoretical information like minimum cash management
motive for holding cash, cash planning, cash forecasting and budgeting fact of cash
management, cash management cycle , cash and cash flow statement.

Chapter III – Company profile

The third chapter consist of information about the organization view of the whole company
nature which is flowed by introduction of company, History of the organization, vision and
mission of the organization and compotators

Chapter IV – Analysis and Interpretation of Data

The forth chapter is presentation of data in consist of related with organization financial
statements.

Chapter V – Findings, Suggestions and Conclusion

The fifth consist findings, suggestions and Conclusions about project report work.
References

1. Books:

1. Prasanna Chandra ‘Financial Management’ 10th edition Tata McGraw – Hill publishing
company limited.

2. P.V. Kulkarni ‘Financial Management’ 7th edition Tata McGraw – Hill publishing company
limited.

2. Website:

1. www.rbi.org.in
2. www.icai.org.in
3.www.icwa.org.in

1.8 LIMITATIONS OF THE STUDY:

1. The study is limited only to the cash management of PSP PUMPS PVT LTD.
2. Time factor is 50 days only.
3. Every organization having their some confidential matter because of that they provide
only limited information.
4. To a major extent the study depends upon secondary data.
 CHAPTER II
Theoretical Background
2.1 MEANING OF CASH MANAGEMENT:

Cash is the important current asset for the operations of the business. Cash is the basic input
needed to keep the business running on a continuous basis, it is also the ultimate output
expected to be realized by selling the service or product manufactured by the firm. The firm
should keep sufficient cash, neither more nor less. Cash shortage will disrupt the firm’s
manufacturing operations while excessive cash will simply remain idle, without contributing
anything towards the firm’s profitability. Thus, a major function of the financial manager is to
maintain a sound cash position.

Cash is the money which a firm can disburse immediately without any restriction. The term
cash includes coins, currency and cherubs held by the firm, and balances in its bank accounts.
Sometimes near-cash items, such as marketable securities or bank time’s deposits, are also
included in cash. The basic characteristic of near-cash assets is that they can readily be
converted into cash. Generally, when a firm has excess cash, it invests it in marketable
securities. This kind of investment contributes some profit to the firm.

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. For some time now, technology has been the key driving force behind
every successful l bank. In such an environment, the ability to recognize and capture market
share depends entirely on the bank’s competence to evolve technically and offer the customer a
seamless process flow. The objective of a cash management system is to improve revenue,
maximize profits, minimize costs and establish efficient management systems to assist and
accelerate growth.
 2.2 CASH MANAGEMENT IN INDIA:
The Reserve Bank of India (RBI) has placed an emphasis on upgrading technological
infrastructure. Electronic banking, cheque imaging, enterprise resource planning
(ERP), real time gross settlement (RTGS) is just few of the new initiatives.

The evolution of payment systems such as RTGS has posed some tough challenges for
cash management providers. It is important that banks now look towards a shift to fees
from float although all those cash management providers who have factored in float
money in their product pricing might take a hit. But of course there are opportunities
also attached like collection and disbursal of payments on-line across the banks.

2.3 MOTIVES FOR HOLDING CASH:

The organization need to hold cash may be attributed to the following the motives:

1. The transactions motive

2. The precautionary motive

3. The speculative motive

1. The Transaction Motive:

The transaction motive requires a firm to hold cash to conducts its business in the
ordinary course. The firm needs cash primarily to make payments for purchases, wages
and salaries, other operating expenses, taxes, dividends etc. The need to hold cash
would not arise if there were perfect synchronization between cash receipts and cash
payments, i.e., enough cash is received when the payment has to be made. But cash
receipts and payments are not perfectly synchronized. For those periods, when cash
payments exceed cash receipts, the firm should maintain some cash balance to be able
to make required payments. For transactions purpose, a firm may invest its cash in
 marketable securities. Usually, the firm will purchase securities whose maturity
corresponds with some anticipated payments, such as dividends, or taxes in the future.
Notice that the transactions motive mainly refers to holding cash to meet anticipated
payments whose timing is not perfectly matched with cash receipts.

2. The Precautionary Motive:

The precautionary motive is the need to hold cash to meet contingencies in the future. It
provides a cushion or buffer to withstand some unexpected emergency. The
precautionary amount of cash depends upon the predictability of cash flows. If cash
flow can be predicted with accuracy, less cash will be maintained for an emergency.
The amount of precautionary cash is also influenced by the firm’s ability to borrow at
short notice when the need arises. Stronger the ability of the firm to borrow at short
notice, less the need for precautionary balance. The precautionary balance may be kept
in cash and marketable securities. Marketable securities play an important role here.
The amount of cash set aside for precautionary reasons is not expected to earn
anything; therefore, the firm attempt to earn some profit on it. Such funds should be
invested in high-liquid and low-risk marketable securities. Precautionary balance
should, thus, held more in marketable securities and relatively less in cash.

3. The Speculative Motive:

The speculative motive relates to the holding of cash for investing in profit-making
opportunities as and when they arise. The opportunity to make profit may arise when
the security prices change. The firm will hold cash, when it is expected that the interest
rates will rise and security prices will fall. Securities can be purchased when the interest
rate is expected to fall; the firm will benefit by the subsequent fall in interest rates and
increase in security prices. The firm may also speculate on materials’ prices. If it is
expected that materials’ prices will fall, the firm can postpone materials’ purchasing
and make purchases in future when price actually falls. Some firms may hold cash for
speculative purposes. By and large, business firms do not engage in speculations. Thus,
the primary motives to hold cash and marketable securities are: the transactions and the
precautionary motives.
2.4 CASH PLANNING:
Cash flows are inseparable parts of the business operations of firms. A firm needs cash
to invest in inventory, receivable and fixed assets and to make payment for operating
expenses in order to maintain growth in sales and earnings. It is possible that firm may
be taking adequate profits, but may suffer from the shortage of cash as its growing
needs may be consuming cash very fast. The ‘cash poor’ position of the firm can be
corrected if its cash needs are planned in advance. At times, a firm can have excess
cash with it if its cash Inflows exceed cash out flows. Such excess cash may remain
idle. Again, such excess cash flows can be anticipated and properly invested if cash
planning is resorted to. Cash planning is a technique to plan and control the use of cash.
It helps to anticipate the future cash flows and needs of the firm and reduces the
possibility of idle cash balances (which lowers firm’s profitability) and cash deficits
(which can cause the firm’s failure).

Cash planning protects the financial condition of the firm by developing a projected
cash statement from a forecast of expected cash inflows and outflows for a given
period. The forecasts may be based on the present operations or the anticipated future
operations. Cash plans are very crucial in developing the operating plans of the firm.
Cash planning can be done on daily, weekly or monthly basis. The period and
frequency of cash planning generally depends upon the size of the firm and philosophy
of management. Large firms prepare daily and weekly forecasts. Medium-size firms
usually prepare weekly and monthly forecasts. Small firms may not prepare formal
cash forecasts because of the non- availability of information and small –scale
operations. But, if the small firm prepares cash projections, it is done on monthly basis.
As a firm grows and business operations become complex, cash planning becomes
inevitable for its continuing success.
2.5 CASH FORECASTING AND BUGETING:
Cash budget is the most significant device to plan for and control cash receipts and
payments. A cash budget is a summary statement of the firm’s expected cash inflows
and outflows over a projected time period. It gives information on the timing and
magnitude of expected cash flow s and cash balances over the projected period. This
 information helps the financial manager to determine the future cash needs of the firm,
plan for the financing of these needs and exercise control over the cash and liquidity of
the firm. The time horizon of the cash budget may differ from firm to firm. A firm
whose business is affected by seasonal variations may prepare monthly cash budgets.
Daily or weekly cash budgets should be prepared for determining cash requirements if
cash flows show extreme fluctuations. Cash budgets for a longer intervals may be
prepared if cash flows are relatively stable.

Cash forecasts are needed to prepare cash budgets. There are two types of cash forecasting:

1. Short-term Cash Forecasting

2. Long-term Cash Forecasting

2.6 FACTS OF CASH MANAGEMENT:

Cash management is concerned with the managing of the following factors of the
organization:

1. Cash Inflow and cash out flow the organization.

2. Cash Inflow within the organization

3. Cash balances held by the organization at the point of time by financing deficit or
investing surplus cash.

Sales generate cash which has to be disbursed out. The surplus cash has to be invested
while deficit has to be borrowed. Cash management seeks to accomplish this cycle at a
minimum cost. At the same time, it also seeks to achieve liquidity and control. Cash
management assumes more importance than other current assets because cash is the
most significant and the least productive asset that a firm holds. It is significant because
 it issued to pay the firm’s obligations. However, cash is unproductive. Unlike fixed
assets or inventories, it does not produce goods for sale. Therefore, the aim of cash
management is to maintain adequate control over cash position to keep the firm
sufficiently liquid and to use excess cash in some profitable way.

Cash management is also important because it is difficult to predict cash flows

accurately, particularly the inflows, and there is no perfect coincidence between the
inflows and outflows of cash. During some periods, cash outflows will exceed cash
inflows, because payment of taxes, dividends, or seasonal inventory builds up. At other
times, cash inflow will be more than cash payments because there may be large cash
sales and debtors may be realized in large sums promptly. Further, cash management is
significant because cash constitutes the smallest portion of the total current assets, yet
management’s considerable time is devoted in managing it. In recent past, a number of
innovations have been done in cash management techniques. An obvious aim of the
firm these days is to manage its cash affairs in such a way as to keep cash balance at a
minimum level and to invest the surplus cash in profitable investment opportunities. In
order to resolve the uncertainty about cash flow prediction and lack of synchronization
between cash receipts and payments, the firm should develop appropriate strategies for
cash management.

2.7 CASH MANAEMENT CYCLE:

The Cash Management Cycle is followed in industry, where the number of operations
takes place; the operations or transactions were completed after the proper analysis
whether there is a desired quality or not, on what price transactions of sale’s and purchase
are taking place like wise. When the transactions takes place the cash collections and
cash payments were gets started and the results of it were come in front of industry
whether it can be deficit or surplus first if it is deficit the cash is borrowed from bank to
conquer the result, second if is surplus then normally, investment takes place for earning
return on investment.
 Sales generate cash which has to be disbursed. The Surplus cash has to be invested
while deficit has to be borrowed. Cash management seeks to accomplish this cycle at a
minimum cost. At the same time, it also seeks to achieve liquidity and control. Cash
management assumes more importance than other current assets because cash is the
most important and the least productive asset that a company holds.

Therefore, the aim of Cash Management is to maintain adequate control over cash
position to keep the company sufficiently liquid and to use excess cash in some
profitable way.

Cash management is also important because it is difficult to predict cash flows

accurately, particularly the inflows and outflows of cash. During some periods, cash
outflows will exceed cash inflows, because payments for taxes, dividends, or seasonal
inventory buildup. At other times, cash inflows will be more than cash payments
because there may be large cash sales and debtors may be realized in large sums
promptly.

2.8 CASH & CASH FLOW:

It is not the amount of cash that a business has in its bank accounts that will make it
successful; the role of cash management is to generate financial return on the business
activities that is substantially greater than an investor can achieve from other less risky
investments such as a deposit account. Holding cash will not help to achieve this objective.
The focus of management is therefore to build a business that can generate a sustainable
cash flow and deliver a superior return on investment for investors. Cash flow is the ability
to generate a sufficient supply of cash so that a business is able to meet its demand for cash.
The alternative is to have external investors who are prepared to fund any shortfall; but to
encourage external investment, the management must demonstrate that the business can
achieve a positive cash flow that will be sufficient to pay interest and ultimately enable
repayment. An example of a business with a highly predictable cash flow is a supermarket
chain, where every day its customers pay over a vast amount of cash (or cash equivalents
such as cheques and credit cards). The volume of the core food products that are sold is
 little affected by the economic climate and therefore the daily receipts from sales are easy
to forecast. Payments to suppliers will usually be made after the cash has been received
from customers, which could be up to two months or more after the goods were supplied.
In these circumstances, the business needs to hold little cash. In Contrast this with a house
builder that makes a few irregular sales of large amounts yet may have almost daily
invoices to pay for construction materials and subcontractor wages. To manage this type of
business requires It is not the amount of cash that a business has in its bank accounts that
will make it successful; the role of cash management is to generate financial return on the
business activities that is substantially greater than an investor can achieve from other less
risky investments such as a deposit account. Holding cash will not help to achieve this
objective. The focus of management is therefore to build a business that can generate a
sustainable cash flow and deliver a superior return on investment for investors. Cash flow
is the ability to generate a sufficient supply of cash so that a business is able to meet its
demand for cash. The alternative is to have external investors who are prepared to fund any
shortfall; but to encourage external investment, the management must demonstrate that the
business can achieve a positive cash flow that will be sufficient to pay interest and
ultimately enable repayment. An example of a business with a highly predictable cash flow
is a supermarket chain, where every day its customers pay over a vast amount of cash (or
cash equivalents such as cheques and credit cards). The volume of the core food products
that are sold is little affected by the economic climate and therefore the daily receipts from
sales are easy to forecast. Payments to suppliers will usually be made after the cash has
been received from customers, which could be up to two months or more after the goods
were supplied. In these circumstances, the business needs to hold little cash. In Contrast
this with a house builder that makes a few irregular sales of large amounts yet may have
almost daily invoices to pay for construction materials and subcontractor wages. To
manage this type of business requires.
2.8 CASH FLOW STATEMENT:
Meaning:
Information about the cash flow of an enterprise is useful in providing users of financial
statements with a basis to assess the ability of the enterprise to generate cash and cash
equivalents and the needs of the enterprise to utilize those cash flows. The economic decisions
that are taken by users require an evaluation of the ability of an enterprise to generate cash and
cash equivalents and the timing and uncertainty of their generation. In view of importance of
cash flows in decision making, an enterprise should prepare a cash flow statement giving both
inflows and out flows of cash during a particular period. A cash flow statement, when used in
conjunction with other financial statements, provides information that enables to users to
evaluate the changes in net assets of an enterprise, its financial structure and its ability to affect
the timings of the cash flows in order to adapt to changing circumstances.
Definitions:
The following terms are used in this statement with the meaning specified

1. Cash compromise cash on hand and demand deposits with banks.

2. Cash equivalents are short term, highly liquid investments that are readily
Convertible into known amounts of cash and which are subject to an insignificant
risk of changes in value.

3. Cash flows are inflows and outflows of cash and cash equivalents.

4. Operating activities are the principal revenue-producing activities of the

enterprise and other activities that are not investing or financing activities.

5. Investing activities are the acquisition and disposal of long-term assets and other
investments not included in cash equivalents.

Significance:
1. It helps in efficient management of cash.

2. It helps in internal financial management.

3. Disclose the movement of cash.

 4. Disclose the success or failure of cash planning.

5. Helps to control cash expenditures.

6. It enables the financial manger to access the liquidity position of the firm.

7. It helps the management in investment decisions.

8. Proper arrangement can be made well in advance for the availability of adequate cash.

Limitations:

Cash flow statement is an important tool to analyze the financial statements.

However it suffers from the followings limitations:

1. A cash flow statement takes into account both cash and non-cash items and as such it cannot
be equated with income statement. Hence cash fund cannot be taken as net income of the
business.

2. It reveals only the inflow and outflow of cash and may not depict the true position of cash.

3. Working capital being a bigger concept of funds, cash flow statement will not present a
complete picture as compare to fund flow statements.

2.9 There Are Three Main Categories of Cash Inflows and Cash Outflows
Namely:
A) Operating Activities:

The amount of cash flows arising from operating activities is a key indicator of
the extent to which the operations of the enterprise have generated sufficient cash flows
to maintain the operating capability of the enterprise, repay loans and make new
investments without recourse to external sources of financing, information about the
specific components of historical operating cash flows is useful, in conjunction with
other information in forecasting future operation cash flows.

Cash flow from operating activities is primarily derived from the principal revenue
producing activities of the enterprise. Therefore, they generally result from the
transactions and other events that enter into the determination of net profit or loss.

Examples of cash flow from Operating activities are:

1. Cash receipts from the sale of goods and the rendering of services.

2. Cash receipts form royalties, fees, commissions and other revenue.

3. Cash payments to suppliers for goods and services.

4. Cash payments to and on behalf of employees.

5. Cash receipts and cash payments of an insurance enterprise for premiums and claims.

6. Annuities and other policy benefits.

7. Cash Payments or refunds of income taxes unless they can be specifically identified
with financing and investing activities.

8. Cash receipts and payments relating to future contracts, forward contracts, option
Contracts and swap contracts when the contracts are held for dealing or trading
purposes.
B) Investing Activities:

Investing activities are the acquisition and disposal of long term assets and other
investments not include in cash equivalents.

It is important because the cash flows represent the extent to which expenditures have
been made for resources intended to generate future income and cash flows.

Examples of cash flows arising from investing activities are:

1. Cash payments to acquire fixed assets (including intangibles). These payments

include those relating to capitalized research and development costs and self-
Constructed, fixed assets.

2. Cash receipts from disposal of fixed assets (including intangibles).

3. Cash payments to acquire shares, warrants, or debt instruments of other enterprises

and interests in joint ventures (other than payments for those instruments considered to
be cash equivalents and those held for dealing or trading purposes).

4. Cash payments to acquire shares, warrants, or debt instruments of other enterprises

and interests in joint ventures (other than payments for those instruments considered to
be cash equivalents and those held for dealing or trading purposes).

5. Cash advances and loans made to third parties (other than advances and loans made
by a financial enterprise).

6. Cash receipts from the repayment of advances and loans made to third parties. (other
than advances and loans of a financial enterprise).

7. Cash receipts from future contracts, forward contracts, opting contracts and swap
contracts except when the contracts are held for dealing or trading purposes or the
receipts are classified as financing activities.
 When a contract is accounted for as a hedge of an identifiable position the cash flows of
the contract are classified in the same manner as the cash flows of the position being
hedged.

C) Financing Activities:

Financing activities are activities that result in change in the size and composition of
the owner’s capital (Including Preference share capital in the case of a company) and
borrowings of the enterprise.

Examples of cash flows arising from financing activities are:

1. Cash proceeds from issuing shares or other similar instruments.

2. Cash proceeds from issuing debentures, loans, notes, bonds, and other short or long term
borrowings.
3. Cash repayments or amount borrowed.

2.10 Ratio Analysis:

I) Liquidity Ratios:

To meet its commitments business needs liquid funds. The ability of the business to pay the
amount due to stakeholders as and when it is due is known as liquidity and the ratios calculated
to measure it are known as ‘Liquidity Ratios’.

There are various liquidity ratios.

a) Current Ratio:

The Current Ratio is one of the best-known measures of short-term solvency. It is the most
common measures of short-term liquidity. It measures whether Current Assets in the business
are sufficient to meet Current Liabilities.

Current Ratio = Current Assets/ Current Liability.

b) Quick Ratio:

The Quick Ratio is sometimes called the “acid-test” ratio and is one of the best measures of
liquidity. It is considered better than Current Asset Ratio.

Quick Ratio or Acid Test Ratio = Quick Assets / Current Liabilities

Where,

Quick Assets = Current Assets – Inventories- Prepaid Expenses.

c) Cash Ratio/ Absolute Liquidity Ratio:

The cash ratio measures the absolute liquidity of the business. The ratio considers only the
absolute liquidity available with the firm.

Cash Ratio = Cash and Bank balance+ Current Investment / Current Liability.

d) Net Working Capital Ratio:

Net Working capital is more a measure of cash flow than a ratio. The result of this calculation
must be a positive number.

Net Working Capital Ratio = Current Assets – Current liabilities (excluding short-term bank
borrowing).

II) Capital Structure Ratio:

These ratios provide an insight into the financing techniques used by a business and focus as a
consequence on the long-term solvency position.

a) Equity Ratio:

Equity Ratio = Shareholders Equity/ Capital Employed

III) Profitability Ratio:

The profitability ratios measure the profitability or the operational efficiency of the firm. These
ratios reflect the final results of business operations. They are some of the most closely
watched and widely quoted ratios. Management attempts to maximize firm value.

Profitability Ratios based on sales.

a) Gross Profit (G.P) Ratio/ Gross Profit Margin:

It measures the percentage of each sale in rupees remaining after payment for the goods sold.

Gross Profit Ratio = Gross Profit/ Sales * 100

b) Net Profit Ratio/ Net Profit Margin:

It measures the relationship between net profit and sales of the business.

Net Profit = Net Profit/ Sales *100

c) Operating Profit ratio:

Operating Profit Ratio = Operating Profit/ Sales*100

 CHAPTER III
Company Profile

(Source:
http/psppumps.com)
3.1 INTRODUCTION OF ORGANIZATION:
3.2. DIRECTORS: (Signatory Details)

The company has 3 directors and no reported key management personnel.

S.R NAME OF DIRECTORS DESIGNATION

.
NO.

1. PRATAP SHANKAR PATIL DIRECTOR

2. SIDDHARTH PRATAP PATIL DIRECTOR

3. JAYRAJ PRATAP PATIL DIRECTOR

3.3. CHARGES:

3.4. HISTORY OF ORGANISATION:

PSP TRADITION OF INNOVATION FOR OVER 30 YEARS.

 PRATAP SHANKAR PATIL an inventor and entrepreneur began working on viscous
pumping solution in 1987. PSP’s first commercially available pump was sold in 1989. It
was built around unique concept of minimizing leakage.

(Source:
http/psppumps.com)

PSP received the first design patent for its spring less single lobe pump in 1998. Since
2005, PSP has enhanced sealing technology in dynamically sealed centrifugal pumps.

PSP’s latest creation is newly patented heavy duty universal joint for progressive cavity
Pumps and backup sealing kits for process pumps.

Today, PSP PUMPS has thousands of pumps running in demanding applications in the
sugar industry worldwide. Our high quality products and deep understanding of sugar
processes generate reliable pumping solutions to meet the needs of our customers. PSP
provides personalized engineering and repair services for customized pumps and parts that
last longer and require less maintenance in difficult applications than conventional pumps.

Let’s make the best out of your sugar process pumping!

3.5. VISION AND MISSION:

 Vision:

PSP become a leading player in the field of sugar industry pumps this is the strong point.
Quality, service, reliability, commitment and management we work with relationship and
providing high quality product through optimum utilization of available terming resources.

Mission:

PSP will develop design of innovative product such as industrial pumps, sugar industrial
pumps and submersible pumps. PSP shall expand the current distribution’s network and
highest technology models.

3.6. PHILOSOPHY:

1. Be unselfish, have infinite patience and success is ours.

2. Understanding the basic needs of our customers, collaborative thinking and continuous
development result in creation of best performing products.

3. This was the mindset of our company founders over 30 years ago and we still work to
the same principle today.

4. It’s for this reason, that many of our innovations are now leading product ideas on the
global market, across the industries.

3.6. FUNCTIONAL DEPARTMENT OF PSP PUMPS:

Marketing Department

Finance Department

Production Department

Design Department

3.7. PSP PRODUCT RANGE:

(Source: http/psppumps.com)

3.8. COMPETITORS:

1. Kirloskar Ebara pumps

2. Geeta pumps

3. Laxmi pumps

4. Kirloskar pumps

3.9. APPLICATION:
Over decades, PSP has tapped several new industrial markets with thousands of centrifugal and
positive displacement pumps running in demanding applications across the globe.

Chemical Distilleries

Sugar

(Source: http/psppumps.com)