TABLE OF CONTENTS

SL. CHAPTERS TOPIC PAGE

NO NO

1 CHAPTER-1  INTRODUCTION TO
THE STUDY

 TITLE OF THE PROJECT

 INDUSTRY PROFILE

2 CHAPTER-2  COMPANY PROFILE

3 CHAPTER-3  REVIEW OF
LITERATURE
 CASH FLOW
CONCEPTUAL FRAME
WORK
4 CHAPTER-4  DESIGN OF THE
STUDY
5 CHAPTER-5  DATA ANALYSIS AND
INTERPRETATION

6 CHAPTER-6  CONCLUSION

 FINDINGS

SUGGESTION
 ABSTRACT AND FIGURES
Small business are vital for employment and job creation in south Africa.
The implementation of sound cash management practices is essential to
ensure the profitability and sustainability of any successful business. The
purpose of this paper is to identify the cash management challenges faced
by small business in a developing community. This research targeted small
retail business in the Tongaat area in KwaZulu-Natal, south Africa. The
research design for this paper was descriptive, quantitative and cross-
sectional. The data instrument was a questionnaire. These findings indicate
a significant relationship between cash management knowledge and
managing cash flow. The findings also indicate a correlation between
profitability in the business and implementation of cash management
practices as well as a correlation between the challenges of cash
management practices and their ability to ensure profitability in their
business. This paper recommends that business should implement cash
management procedures to eliminate cash management difficulties.
CHAPTER-1

INTRODUCTION TO THE STUDY

TITLE OF THE STUDY
INDUSTRY PROFILE
CHAPTER-1
INTRODUCTION
Cash play a very important role in the economic life of the business. In fact,
what blood is to human body, cash is to a business enterprise. Thus, it is
very essential for a business to maintain an adequate balance of cash. Cash
is the basic input method to keep the operations of the business going on a
continuing basis, it is also the final output expected to be realized by selling
the product manufactured by manufacturing unit. Cash is both the
beginning and the end of the business operations.
Cash flow statement deals with flow of cash which includes cash
equivalence as well as cash. This statement is additional information to the
users of financial statements. The statement shows the incoming and
outgoing of cash. Thus, cash flow statement may be defined as a summary
of receipts and disbursements of cash for a period. It also explains reasons
for the changes in cash position of the firm. The management of cash also
assumes importance because it is difficult predict cash inflows and outflows
accurately and there is no perfect coincidence between the inflows and
outflows of cash giving rise to either cash outflows exceeding inflows or
inflows exceeding outflows. Cash flow statement is one important tool of
cash management because it throws light on cash inflows and outflows of a
period.
Cash flow analysis uses ratios that focus on cash flow and how solvent ,
liquid and viable the company is. This study will focus on the application of
the cash slow ratio in evaluating the financial position of Dr. Reddy’s
Laboratories Ltd.

TITLE OF THE PROJECT

“A STUDY ON ANALYSIS OF CASH FLOW STATEMENT OF DR.
REDDY’S LABORATORIES”
INDUSTRY PROFILE
Dr. Reddy’s originally launched in 1984 producing active pharmaceutical
ingredients. In 1986, Reddy’s started operations on branded formulations.
Within a year Reddy’s had launched Norilet, the company’s first
recognized brand omeprazole ulcer and reflux oesophagitis medication
launched at half the price of other brands on the Indian market at that
time.
Within a year, Reddy’s became the first Indian company to export the
active ingredients for pharmaceutical to Europe.

INTERNATIONAL EXPANSION:
The company’s first international move took it to Russia in 1992. There, Dr.
Reddy’s formed a joint venture with the country’s biggest pharmaceuticals
producer, biomed. They pulled out in 1995 amid accusations of scandal;
involving “a significant material loss due to the activities of Moscow’s
branch of Reddy’s Labs with the help of biome’s chief executive”. Reddy’s
sold the joint venture to the Kremlin-friendly Sistema group. In 1993,
Reddy’s entered into a joint venture in the Middle East and created two
formulation units there and in Russia. Reddy’s exported bulk drugs to
these foundation units, which then converted them into finished products.
In 1994, Reddy’s started targeting the US generic market by building state
of art manufacturing facility.
Reddy’s also invested heavily in establishing R&D labs and is the only
Indian company to have significant R&D being undertaken overseas. Dr.
Reddy’s Research foundation was establish in 1992 and inn order to do
research in the area of new drug discovery. At first, the foundation’s drug
research strategy revolved around searching for analogues. Focus has since
changed to innovative R&D , hiring new scientist, especially Indian
students studying abroad on doctoral and post-doctoral courses. In 2000,
the foundation set up an American laboratory is called Reddy US
therapeutics Inc (RUSTI) and its main aim is the discovery of next-
generation drugs using genomics and proteomics. Reddy’s research thrust
focused on large niche areas in western markets anti-cancer, anti-diabetes,
cardiovascular and anti-infection drugs.
Reddy’s international marketing success were built on a strong
manufacturing base which itself was a result of inorganic growth through
acquisition of international and national facilities. Reddy’s merged
Cheminor Drug Limited (CDL) with the primary aim of supplying active
pharmaceutical ingredients to the technically demanding markets off North
America and Europe. This merger also gave Reddy’s an entry into the
value-added generics business in the regulated markets of APIs. APIs in
medicine.

EXPANSION AND ACQUSITION

By 1997, Reddy’s made the transition from being an API and bulk drug
supplier to regulated markets like the USA and the UK, and a branded
formulation supplier in unregulated markets like India and Russia, into
producing generics, by filing an Abbreviated New Drug Application in the
USA.
It strengthened its Indian manufacturing operations by acquiring
American remedies Ltd. In 1999, this acquisition made Reddy’s the third
largest p*armaceutical company in India, after Ranbaxy and Glaxo (1)
Ltd., with a full spectrum of pharmaceutical products, which included bulk
drugs, intermediates, finished dosages, chemical synthesis, diagnostics and
biotechnology.
Reddy’s started exploiting Para 4 filing as a strategy in bringing new drugs
to the market at a faster pace. In 1999 it submitted a Para 4 application for
Omeprazole, the drug that had been the cornerstone of its success in India.
In December 2000, Reddy’s had undertaken its first commercial launch of
a generic product in the USA, and its first product with market exclusively
was launched in August 2001. The same year, it also became the first non-
Japanese pharmaceutical company from the Asia-Pacific region to obtain a
New York Stock Exchange listing . ground-breaking achievement for the
Indian pharmaceutical industry.
In 2001 Reddy’s became the first Indian company to launch the generic
drug, fluoxetine (a generic version of Eli Lily and Company’s Prozac)with
180-day market exclusivity in the USA. Prozac had sales in excess of $1
billion per year in the late 1990s. Barr-Laboratories of the U.S. obtained
exclusivity for all of the approved dosage forms (10 mg. 20 mg) except one
(40 mg), which was obtained by Reddy’s Lily had numerous other patents
surrounding the drug compound and had already enjoyed a long period of
patent protection. The case to allow generic sales was heard twice by the
Federal Circuit Court, and Reddy’s won both hearings. Reddy’s generated
nearly $70 million in revenue during the initial six-month exclusivity
period. With such high returns at stake, Reddy’s was gambling on the
success of the litigation; failure to win the case could have cost them
millions of dollars, depending on the length of the trial.
The fluoxetine marketing success was followed by the American launch of
Reddy’s house-branded ibuprofen tablets in 400, 600 and 800 mg strengths,
in January 2003, direct marketing under the Reddy’s brand name
represented a significant step in the company’s efforts to build a strong and
sustainable US generic business. It was the first step in building Reddy’s
fully-fledge distribution network in the US market. In 2015, Dr. Reddy’s
Laboratories bought the established brands of Belgian drugmaker UCB SA
in South Africa for 8 billion rupees($128.38 million). Dr. Reddy’s
laboratories also signed a licensing pact with xenoport for their
experimental treatment to treat plague [Link] per the agreement, Dr.
Reddy’s will be granted exclusive US rights to develop and commercialize
XP23829 for all indications for an upfront payment of $47.5 million.

AMERICAN IPO AND EXPANSION INTO EUROP:

IN 2001 Reddy’s completed its US initial public offering of $132.8 million,
secured by American Depositary Receipts. At that time the company also
because listed on the New York Stock Exchange. Funds raised from the
initial public offering helped Reddy’s move into international production
and take over technology-based companies.
In 2002, Reddy’s started its European operations by acquiring two
pharmaceutical firms in the united kingdom. The acquisition of BMS
Laboratories and its wholly owned subsidiary. Meridian UK, allowed
Reddy’s to expand geographically into the European market. In 2003
Reddy’s also invested $5.25 million (USD) in equity capital into Bio
Sciences Ltd.
Auriegene Discovery Technologies, a contract research company, was
established as a fully owned subsidiary of Reddy’s in 2002. Auriegene’s
objective was to gain experience in drug discovery through contract
research for other pharmaceutical companies. Reddy’s entered into a
venture investment agreement with ICICI Bank, an established Indian
banking company. Under the terms of the agreement, ICICI venture agreed
to fund the development , registration and legal costs related to the
commercialization of ANDAs on a pre-determined basis. Upon
commercialization of these products, Dr. Reddy’s pays ICICI Venture
royalty on net sales for a period of 5 years.
GLOBAL EXPANSION

The company elected to expand globally, and acquired other entities. In

march 2002, Dr. Reddy’s acquired BMS Laboratories, Beverly and its
wholly owned subsidiary meridian healthcare, for 14.81 million Euros.
These companies deal in oral solids, liquids and packaging, with
manufacturing facilities in London and Beverly in the UK. Recently, Dr.
Reddy’s entered into an R&D and commercialization agreement with
Argentina Discovery Ltd., a private drug development company based in
the UK, for the treatment of chronic obstructive pulmonary disease
(COPD).
Dr. Reddy’s entered into a 10-year agreement with Rheoscience holds A|S
of Denmark for the joint development and commercialization of
Balaglitazone (DRF-2593), a molecule for the treatment of type-2 diabetes.
Rheoscince holds this product’s marketing rights for the European union
and China, while the rights for the US and the rest of the world will be held
by [Link]’s .Dr. Reddy’s conducted clinical trials of its cardiovascular
drug RUS 3108 in Belfast, Northern Ireland, in 2005. The trials were
conducted to study the safety and the pharmacokinetic profiles of the drug,
which is intended for the treatment of atherosclerosis, a major cause of
cardiovascular disorders.
Dr. Reddy’s entered into a marketing agreement with Eurodrug
Laboratories, a pharmaceutical company based in Netherlands, for
improving its productd portfolios for respiratory diseases. It introduced a
second-generation xanthine bronchodilator, Doxofylline, which is used for
the treatment of asthma and COPD patients.
In 2004, Reddy’s acquired Triteness Therapeutics Inc; a US-based private
dermatology company. This acquisition gave Reddy’s access to proprietary
products and technologies in the dermatology sector.
In march 2006, Dr. Reddy’s acquired Beta harm Arzneimittel GmbH from
3i for 480 million Euros. This is one of the largest-ever foreign acquisition
by an Indian pharmaceutical company. Betapharm is Germany’s fourth-
largest generics pharmaceutical company.
Dr. Reddy’s presently licensed by Merck &Co, to sell an authorized generic
version of the popular drug simvastatin (Zocor) in the USA. Since Dr.
Reddy’s has a license from Merck, it was not subject to the exclusivity
period on generic simvastatin.
As of 2006, Dr. Reddy’s Laboratories exceeded $500 million USD in
revenues, flowing from their APIs, branded formulations and generics
segments; the former two segments account for almost 75% of revenues.
Dr. Reddy’s deals in and manages all the processes, from the development
of the API to the submission of finished dosage dossiers to the regulatory
agencies.
CHAPTER-2

COMPANY PROFILE
[Link]’S LABORATORIES-A PROFILE
Dr. Reddy’s Laboratories is an Indian multinational pharmaceutical
company based in Hyderabad, Telangana, India. The company was
founded by Anji Reddy, who previously worked in the mentor institute
Indian Drugs and Pharmaceuticals limited, of Hyderabad, India, Dr.
Reddy’s manufactures and markets a wide range of pharmaceuticals in
India and overseas. The company has over 190 medications, 60 active
pharmaceutical ingredients (APIs) for drug manufacturing, diagnostic kits,
critical care, and biotechnology products.
Dr. Reddy’s Laboratories.

Dr. Reddy’s

Type public
Traded as NSE:DRREDDY
BSE:500124
NYSE:RDY
Industry pharmaceuticals
Founded 1984
Founders kallam Anji Reddy
Headquarters Hyderabad, Telangana, India
Key people G. V. Prasad(ceo)
Kallam Satish Reddy (chairman)
Revenue ₹15.697.80 crore(US$2.4 billion)(2016)
Net income ₹2,151.40 crore(US$330 million)(2016)
Total assets ₹20,010.40 crore(US$3.1 billion)(2016)
Total equity ₹82.80crore(US13 million)(2016)
Number of employees 20,373(April 2015)
Website [Link]
ADDRESS OF THE COMPANY:
Dr. Reddy’s laboratories ltd.
Registered address
8-2-337, Road no 3, Banjara hills, Hyderabad 500034,
India.
Vision:
Tobecome a discovery ruled global pharmaceutical company with a core
purpose of helping people lead healthier lives.

MISSION:
To be India’s first pharmaceutical that successfully takes its products
from discovery to commercial launch globally.
BOARD OF DIRECTORS:
NAME DESIGNATION

Mr. Satish Reddy Chairman

Mr. G.V Prasad Co-chairman &CEO
Mr. Bharat NarotamDoshi Independent director
Mr. Anupam puri Independent director
Dr. Omkar Goswami Independent director
Mr. Hans peter Hasler Independent director
Ms. Kalpana Morparia Independent director
Dr. Bruce LA Carter Independent director
Dr. Ashok Ganguly Independent director
Mr. Sridar Iyengar Independent director
KEY PRODUCTS:

Ciprofloxacin Ranitidine-HCI Losartan-potassium

Hydrochloride Form 2 Sparfloxacin
Ramipril Naproxen Nizatidine Clopidogrel
Terbinafine-HCI Sodium Fexofenadine Omeprazole
Ibuprofen Naproxen Ranitidine Finasteride
Sertraline Atorvastatin Hydrochloride- sumatriptan
hydrochloride Montelukast form1

AWARDS AND RECOGNITIONS

 Best workplace in the Biotech/pharmaceutical industry-2009
 Gold shield-ICAI Awards for excellence in financial reporting.
 Best CSR and Sustainability practice 2008-9th international
conference on corporate governance and sustainability.
 HR Awards at world HRD congress.
 Awards from public relations society of india.
 RedituxTM-“product of the year 2008”
 AIF-Annual spring award to Dr. K. Anji Reddy.
CHAPTER-3

REVIEW OF LITERATURE
CASH FLOW CONCEPTUAL FRAME WORK
INTRODUCTION LITERATURE
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.
-Keek, T, E. Levengood, and A, Longfield, 1998:
The value of equity can be calculated by subtracting any outstanding
debts from the total of all discounted cash flows.
-Aswath Damodaran 2001 Investment Valuation:
Calculating cash flows after the forecast period is much more difficult as
uncertainty and therefore the risk factor, rises with each additional year
into the future. The continuing value, or terminal value, is a solution that
represents the cash flow after the forecast period.
-Kuhr , Marches, Flar, Kienhuis. 1998. Starting up. McKinley &
company:
The role played by cash flow statement in understanding the financial
position of the company is very much significant. Hence we need to know
how the cash flow helps the organization in resolving its financial crisis.
Therefore, the analysis of cash flow statement is selected for the study.

CASH FLOW STATEMENT- CONCEPTUAL FRAMEWORK

INTRODUCTION:
A statement which discloses the changes in position of cash and cash
equivalents between two periods. According to revised AS-3 issued by ICAI
an organization should prepare a cash flow statement and present it each
period.

MEANING:
Cash flow statement is a statement of changes in financial position of the
firm on cash basis.
It shows various sources of cash during a particular period and their net
impact on the cash balance.
DEFINITIONS:
The institute of cost and works accountant of India defines cash flow
statement as “a statement setting out the flow cash under distinct heads of
sources of funds and their utilization to determine the requirements of cash
during the given period and prepare for its adequate provision”.
According to khan and Jain “cash flow statements are statements of
changes in financial position prepared on the bases of funds defined as cash
or cash equivalents.

CASH FLOW IMPORTANT TERMS

 CASH AND CASH EQUIVALENTS:
Asstated earlier, cash flow statement shows inflows and outflows of cash
and cash equivalents from various activities of an enterprise during a
particular period. As per AS-3, ‘Cash’ comprises cash in hand and
demand deposits with banks, and ‘cash equivalents’ means 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 [Link] investment normally qualifies as cash equivalents
only when it has a short maturity, of say, three months or less from the
date of acquisition. Investments in shares are excluded from cash
equivalents unless they are in substantial cash equivalents.
 CASH FLOWS:
‘Cash flows’ implies movement of cash in and out due to some non-cash
items. Receipt of cash from a non-cash item is termed as cash inflow
while cash payment in respect of such items as cash outflow.

FEATURES OF CASH FLOW STATEMENTS

 It is periodical statement as it covers a particular period of time, say
month or year.
 It shows moments of cash in between two balance sheet dates.
 It establishes the relationship between net profit and changes in cash
position of the firm.
 It does not involve matching of cost against revenue.
 It shows the sources and application of funds during particular
period of time.
  It records the change in fixed assets as well as current assets.
 It projected cash flow statement is referred to as cash budget.
 It is an indicator of cash earning capacity of the firm.
 It reflects clearly how financial position of firm changes over period
of time due to its operating activities, investing activities, financial
activities.

CLASSSIFICATION OF ACTIVITIES FOR THE PREPARATION

OF CASH FLOW STATEMENT
As per AS-3 these are to be classified into three categories.
 Operating activities.
 Investing activities.
 Financial activities.

So as to show separately the cash flow generated or used by in these

activities. This helps users of cash flow statement to assess the impact of
these activities on the financial position of an enterprise and also on its cash
and cash equivalents.

CASH FROM OPERATING ACTIVITIES:

Operating activities are the activities that constitute the primary or main
activities of an enterprise. For example, for a company manufacturing
garments, operating activities are procurement of raw material, incurrence
of manufacturing expenses, sale of garments, etc. these are the principal
revenue generating activities(or the main activities) of the enterprise and
these activities are not investing or financing activities. The amount of cash
from operations indicates the internal solvency level of the company, and is
regarded as the key indicator of the extent to which the operations of the
enterprise have generated sufficient cash flow to maintain the operating
capability of the enterprise, repaying loans without recourse to external
source of financing.
CASH INFLOWS FROM OPERATING ACTIVITIES
  Cash receipts from sale of goods and the rendering of services.
 Cash receipts from royalites fees, commission, and other revenue.
CASH OUTFLOWS FROM OPERATING ACTIVITIES
 Cash payments to suppliers of goods and services.
 Cash payments to and on behalf of the employees.
 Cash payment to an insurance enterprise for premium and claims,
annuities and other policy benefits.
 Cash payments of income taxes unless they can be specifically
identified with financing and investing activities.

CASH FROM INVESTING ACTIVITIES:

As per AS-3, investing activities are the acquisitions and disposal of long-
term assets and other investments not included in cash equivalents.
Investing activities relate to purchase and sale of long-term assets or fixed
assets such as machinery, furniture, land and building, etc. Transactions
related to long-term investment are also investing activities.

CASH OUTFLOWS FROM INVESTING ACTIVITIES

 Cash payments to acquire fixed assets including intangibles and
capitalized research and development.
 Cash payments to acquire shares, warrants, or debts instrument of
other enterprise other than the instruments those held for trading
purposes.
 Cash advances and loans made to third party(other than advances
and loans made by financial enterprise where in it is operating
activities)

CASH INFLOWS FROM INVESTING ACTIVITIES

 Cash receipt from disposal of fixed assets including intangibles.
 Cash receipts from the repayment of advances or loans made to third
parties.
 Cash receipt from disposal of shares, warrants, or debt instruments
of other enterprises except those held for trading purposes.
  Interest received in cash from loan and advances.
 Dividend received from investments in other enterprises.

CASH FROM FINANCING ACTIVITIES:

As the name suggests, financing activities relate to long-term funds or
capital of an enterprise, e.g., cash proceeds from issue of equity shares,
debentures, raising long-term bank loans, repayment of bank loan, etc. as
per AS-3, financing activities are activities that result in changes in the size
and composition of the owner’s capital and borrowings of the enterprise.
Separate disclosure of cash flows arising from financial activities is
important because it is useful in predicting claims on future cash flows by
provides of funds to the enterprise.

CASH INFLOWS FROM FINANCING ACTIVITIES

 Cash proceeds from issuing shares.
 Cash proceeds from issuing debentures, loans, bonds, and other
short/long term borrowings.

CASH OUTFLOWS FROM FINANCING ACTIVITIES

 Cash repayments of amounts borrowed.
 Interest paid on debentures and long-term loans and advances.
 Dividends paid on equity and preference capital.
RATIOS USED TO ANALYZE THE CASH FLOW STATEMENT
 OPERATING CASHFLOW RATIO:
The operating cash flow ratio is a measure of hoe well current
liabilities are covered by the cash flow generated from a company’s
operations. The operating cash flow ratio can gauge a company’s
liquidity in the short-term.
Operation cash flow ratio = Net cash flow from operating
activities
Net sales

 ASSET EFFICIENCY RATIO:

Asset efficiency ratios are the key to analyzing how effectively and
efficiency your small business is managing its assets to produce sales.
Asset efficiency ratios are also called turnover ratios or management
ratios. if you have too much invested in your company’s assets, your
operating capital will be too high.
Asset Efficiency ratio = Net cash flow from operating activities
Total assets

 CURRENT LIABILITY COVERAGE RATIO

To test for solvency, this is a simple ratio. The more accurate
method is to subtract the cash used to pay off dividends as it will give a
truer picture of the operating cash flows. This ratio gives you an idea
about the company’s debt management practices. E.g. a value of 4.3
means that the current cash flows can pay for 4.3x the current liabilities
the highest the number the better. If it drops below 1, then CFO is
unable to pay the current liabilities.
Current liability coverage ratio = net cash flow from operating
activities
Current liabilities
LONGTERM DEBT COVERAGE RATIO
The long-term debt coverage ratio indicates whether a company can repay
its existing liabilities and take on additional debt without jeopardizing its
survival. It is efficiency metric, meaning it shows investors how adeptly a
company manages its resources. The metric equals net profit plus any non-
cash expenses divided by the principal amount of long-term debt.
Long term debt coverage ratio = Net cash flow from operating
activities
Long term debt

INTEREST COVERAGE RATIO

The interest coverage ratio is a debt ratio or profitability ratio used to
determine how easily a company can pay interest on outstanding debt. The
interest coverage ratio may be calculated by dividing a company’s earning
before interest and tax(EBIT) during a given period by the amount a
company must apy in interest on its debts during the same period.
Cash interest coverage ratio = CFO+ Taxes paid + interest paid
Interest paid

EXTERNAL FINANCING INDEX RATIO:

This ratio compares the cash flow from financing activities with cash flow
operation to show how dependent the company is on financing. The higher
the number, the more dependent the business is on external money.
External financing index ratio =Cash from financing
Net cash flow from operating
 Equation
Operating cash flow ratio
Cash flow from operations
Sales

Asset efficiency ratio Cash flow from operating

Total assets

Current liability coverage ratio Cash flow from operating

Current liabilities

CFO-Dividends paid
Current liabilities

Long term debt coverage ratio Cash flow from operating

Long term debt

CFO-Dividends paid
Long term debt

Interest coverage ratio CFO+ Interest paid + taxes paid

Interest paid

Cash generating power ratio CFO

CFO + Cash investing inflow +
cashfinancing inflow

External financing index ratio Cash from financing

CFO
CHAPTER-4
DESIGN OF THE STUDY
NEED OF THE STUDY
OBJECTIVES OF THE STUDY
METHODOLOGY OF THE STUDY
CHAPTERIZATION
LIMITATIONS
NEED OF THE STUDY
Cash flow analysis measures how much cash is generated and spend by the
business during a given period. It is the best measure of the company’s
performance. Therefore, the role played by cash flow statement in
understanding the financial position of the company is very much
significant. The analysis of cash flow statement is selected for the study.

OBJECTIVES OF THE STUDY:

 Familiar with methodology for preparation of cash flow statement
and different components of cash flow statement.
 To find out the liquidity position of the company.
 To understand the types of transactions that result in cash flows from
operating.

METHODOLOGY OF THE STUDY:

Methodology is the general research strategy that outlines the way in which
the research is to be undertaken and among other things identifies the
methods to be used in it.
The data can be collected and analyzed with the help of ratios, diagram and
charts which help in carrying to a conclusion.

TYPE OF DATA USED:

This study is based entirely based on the secondary data.

SOURCES OF DATA COLLECTION:

 The data collected is from the following sources:
 Official website of Dr. Reddy’s Laboratories Ltd.
 Annual reports of Dr. Reddy’s Laboratories Ltd.

PERIOD OF DATA USED:

 The data collected and analyzed is for a period of past five years.

LIMITATIONS:
 The information is collected from secondary data.
 Only five years statements were taken into account for the stud.
 Time as a limited factor.
CHAPTER-5

ANALYSIS AND INTERPRETATION OF DATA

DATA ANALYSIS:
Data analysis is the process of inspecting, cleaning, transforming, and
modelling data with a goal highlighting useful information, suggesting
conclusion, and supporting decision [Link] analysis involves
converting a series of recorded observations into descriptive statements and
inferences about relationships.

Data interpretation:
Data interpretation is the process of assigning meaning to collected
information and determining the conclusions, significance, and implication
of findings. The interpretation of data is an important factor.
Interpretation needs skills, intelligence and foresightedness. The inherent
imitation of data analysis should be kept in mind while interpreting them.
The impact of factors such as price level changes, changes in accounting
policies, window dressing, etc., should also be kept in mind when
accounting to interpret data.

FOR ANALTZING THE CASH FLOW SATEMENT OF DR.

REDDY’S LABORATORIES LIMITED FOLLOWING RATIOS ARE
BEING USED:
 Asset efficiency ratio.
 Current liability coverage ratio.
 Operating cash flow ratio.
 External financing index ratio.
 Long term debt coverage ratio.
 Current ratio.
CHAPTER-6

CONCLUSION
FINDINGS
SUGGESTIONS
CONCLUSION
The present study on cash flow statements DR,]. REDDY’S
LABORATORIES LIMITED includes the analysis of cash flow ratios and
such as current liability coverage ratio, operating cash flow ratio, asset
efficiency ratio, etc. which determine the company’s financial position. It
shows that analysis of cash flow of the company is achieving growth year by
year.
FINDINGS:
 The current ratio has shown increasing trend as 1.607844, 1.626599,
2.16513, and 2.214128 during 2013, 2014, 2015, and 2016 respectively
but in the year 2017 slight decreased to 2,103674.
 Total assets of the company are increased from 2013 to 2017.
 Net sales of the company is also in increasing trend from 2013 to
2017.
 Current liabilities coverage ratio is decreased in 2014 to .004419 and
remaining year it is increasing constantly.
 Cash flow from financing activities is negative in 2017 and 2013, in
rupees -6937 and -1949 respectively.
 Operating cash flow ratio is fluctuating year by year from 2013 to
2017.
SUGGESTIONS
 The company must lower the external financing index ratio to
minimize the dependency on external finance.
 Current liability coverage ratio of the company below 1 for the past
years. So, it is advised to increased the CLCR above 1.
 The company has to use its assets to generate more cash flow.
 Cash flow from net operating is increasing from past 5 years, except
in the year 2014. Company should be planned in a way that it should
increase on yearly basis.
 Long term debt coverage ratio is high in some of the year, higher the
number the more cash from operating is required to pay off debt. So
it is advised to maintain lower number of long term debt coverage
ratio.