DECLARATION

I, SUVAM SEKHAR BARIK (Roll No. 12BA-053) do hereby declare that, this
piece of dissertation submitted by me to the "BACHELOR IN BUSINESS
ADMINISTRATION" is my own and it is prepared by me with lots of dedication
and toil basing on the facts and data collected during my project work. I also
declare that this report has been neither published before nor submitted to any
other institution and it is fully done may knowledge.

PLACE: Suvam Sekhar Barik

DATE: Roll No:12BA-053

GUIDE CERTIFICATE

This is to certify that Suvam Sekhar Barik, bearing Examination Roll

No.12BA053 a student of Bachelor of Business Administration (B.B.A.) Fakir
Mohan Autonomous College, Balasore, has carried out her dissertation work
titled "THE STUDY ON CASHFLOW STATEMENT OF HONDA MOTORS." As a
partial fulfillment of the degree in Business Administration under my guidance.

Mr. Rabindra Mohanty

H.O.D OF BBA Department,

Fakir Mohan Autonomous College, BLS

ACKNOWLEDGEMENT

I would like to convey my heartfelt thanks to Mr. Rabindra Mohanty, my

Finance Teacher who always gave valuable suggestions and guidance for
completion of my project. He helped me to understand and remember
important details of the project that I would have otherwise lost. My project
has been a success only because of his guidance and cooperative.

Name: Suvam Sekhar Barik

Roll No:12BA053

(BBA Final Year)

COMPANY PROFILE

4.1 INTRODUCTION

4.2 HISTORY OF THE COMPANY

4.3 MANAGEMENT OF THE COMPANY

4.4 FINANCIAL HIGHLIGHTS

DATA ANALYSIS

5. 1 INTRODUCTION

5.2 DATA ANALYSIS

 SUMMARY OF FINDINGS, CONCLUSIONS AND SUGGESTIONS

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Cash is the basic input needed 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 the manufacturing unit. Cash is both the beginning
and the end of the business operations.

Sometimes, it so happens that a business unit earns sufficient profit, but

in spite of this it is not able to pay its liabilities when become due. Therefore, a
business unit should not always try to keep sufficient cash, neither more nor
less because shortage of cash will threaten the firm's liquidity and solvency,
whereas excessive cash will not be fruitfully utilized, will simply remain idle
and will affect the profitability of concern. Effective cash management,
therefore, implies a proper balancing between the two conflicting objectives of
liquidity and profitability.

Cash flow statement is one important tool of cash management because it

throws light on cash inflows and cash outflows of a particular period.
STATEMENT OF THE PROBLEM :-

The balance sheet and profit and loss account provide essential basic
information on the financial activities of Honda Motors Ltd., but their
usefulness is limited for analysis and planning purposes. The balance sheet
does not disclose the causes for changes in the assets and liabilities two
different points of time. The profit and loss a/c also fails to disclose the reasons
for shortage of cash in spite of positive net income. Thus another statement is
called CASHFLOW STATEMENT OF HONDA MOTORS LTD. is prepared to find
out all the cash inflows and outflows of Company.

Information about the cash flows of the enterprise is useful in providing

users in financial statements with a basis to assess the ability of the enterprise
to generate cash and cash equivalents and the needs of the enterprises 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 certainty of their generation.
IMPORTANCE OF STUDY :-

Cash flow statement is vital importance to the financial management. It

is an essential tool of financial analysis for short -term planning. The chief
importance of a cash flow statement is as follows:

Since a cash flow statement is based on the cash basis of accounting, it is

very useful in the evaluation of cash position of the company.

A projected cash flow statement can be prepared in order to know the

future cash position of a concern so as to enable a firm to plan and coordinate
its financial operations properly. By preparing this statement, a firm can come
to know as to how much cash will be generated into the firm and how much
cash will be needed to make various payments and hence the firm can well
plan to arrange for the future requirements of cash.

A comparison of the historical and projected cash flow statements can

be made so as to find the variations and deficiency or otherwise in the
performance so as to enable the firm to take immediate and effective action.

Cash flow statement provides information of all activities classified

under operating, investing and financing activities. The funds statement even
when prepared on cash basis, did not disclose cash flows from such activities
separately. Thus, cash flow statement is more useful than the funds statement.
LIMITATIONS OF THE STUDY :-

In spite of various uses of Cash Flow Statement, it has the following

limitations:-

(1) Cash flow statement gives the main items of inflow and outflow of cash only
and does not show the liquidity position of the company.

(2) This statement is not a substitute of income statement which shows both
cash and non-cash items. Therefore, net cash flow does not necessarily mean
net income of the business.

(3)It cannot replace funds flow statement as it cannot show the financial

Position of the concern in totality.

 FLOW OF CASH: CONCEPTS

INTRODUCTION
Cash plays a very important role in the entire economic life of a business. A
firm needs cash to make payments to its suppliers, to incur day to day expenses
and to pay salaries, wages, interest and dividend, etc. In fact, what blood is to a
human body, cash is to a business enterprise. This may be because:

Even if cash has been received, it may have drained out (used) for some
other purposes. This movement of cash is of vital importance to the
management.

Cash flow statement is a statement which describes the inflows (sources)

and outflows (uses) of cash and cash equivalents in an enterprise during a
period of time.

CONCEPT OF CASHFLOW :-

A cash flow statement summarizes the causes of changes in cash position

a business enterprise between dates of the two balance sheets. An enterprise
should prepare a cash flow statement and should prepare it for each period for
which financial statements are prepared.

The terms cash, cash equivalents and cash flows are used in this
Statement with the following meanings:-
Cash comprises cash on hand and demand deposits with banks.

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

Cash flows are inflows and outflows of cash and cash equivalents. Flow of
cash is said to have taken place when any transaction makes changes in the
amount of cash and cash equivalents available before happening of the
transaction.

DEFINITION:-
“A cash flow statement can be defined as a statement which summarizes
sources of cash flows and uses of cash outflows of a firm during a particular
period of time, say a month or a year.”

CLASSIFICATION OF CASH FLOWS:-

The cash flow statement should report cash flows during the period classified
by operating, investing and financing activities. Thus, cash flows classified into
three main categories:-

A. Cash flows from operating activities:-

Operating activities are the principle revenue- producing- activities

of the enterprise and other activities that are not investing or financing
activities. The amount of cash flows rising 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, Day dividends. repay loans, and make new investments without
resource 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 operating cash flows.

Cash flows from operating activities are primarily derived from the
principal revenue-producing activities of the enterprise.

For examples:-

a) Cash receipts from the sale of goods and the rendering of services.

b) Cash receipts from royalties, fees, commissions, and other revenue.

c) Cash payments to suppliers of goods and services.

B. Cash flows from investing activities:-

Investing activities are the acquisition and disposal of long term assets End
other investments not included in cash equivalents. The separate disclosure of
cash flows arising from investing activities is important because the cash flows
represent extent to which expenditures have been made for resources intended
to generate future income and cash flows.
For examples:-

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

payments include those relating to capitalized research and
development costs and self constructed fixed assets.

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

c) Cash payments to acquire shares, warrants, or debt instruments considered

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

C. Cash flows from financing activities:-

Financing activities are activities that result in changes 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.

The separate disclosure of cash flows arising from -arcing activities is

important because it is useful in predicting claims on future cash flows by
providers of funds (both capital and borrowings) to the enterprise.

For examples:-
(a)Cash proceeds from issuing shares or other similar instruments.

(b)Cash proceeds from issuing debentures, loans, notes, bonds, and other short
or long term borrowings.

Why cash flow statement is preferred as compared to funds flow statement ?

Cash flow statement is preferred over funds flow statement as cash flow
statement focuses on cash flow rather than on working capital. A company has
to convert its current assets into cash in order to meet its financial
obligations. Hence, study of management of cash and cash equivalent is
more is useful than the study of movement of working capital.

METHODOLOGY

INTRODUCTION:-

Information about the cash flows of an enterprise is useful in providing

uses 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 certainty of their generation.

Cash Flow Statement deals with the provision of information about the
historical changes in cash and cash equivalents of an enterprise by means of a
cash flow statement which classifies cash flows during the period from
operating, investing and financing activities.

Cash comprises cash on hand and demand deposits with banks.

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.

SOURCES OF DATA

The sources of data for this project on Cash Flow are observed from the
Annual Report of Honda Motors Ltd 2010-2011. The Cash flow statement
of Honda Motors ltd 2010 and 2011. Data is obtained from the Balance
sheet, Profit and Loss a/c and other statements.

TOOLS FOR DATA ANALYSIS:-

The treatment of cash flows from some peculiar items for data analysis is
discussed below:

Extraordinary Items: The cash flows associated with extraordinary items

should be classified as arising from operating, investing or financing as
appropriate and separately disclosed in the cash flow statement to enable users
to understand that nature and effect on the present and future cash flows of the
enterprise.

Interest and Dividends: Cash flows from interest and dividends received
and paid should be disclosed separately. Further, the total amount of interest
paid during the period should be disclosed in the cash flow statement whether it has
been recognized as an expense in the statement of Profit and Loss or capitalized.

The treatment of interest and dividends received and paid depends upon
the nature of the enterprise. For this purpose, the enterprises are classified as
(i) financial enterprises, and (ii) other enterprises.

(i) Financial Enterprises. In the case of financial enterprises, cash flows arising
from interest paid and interest and dividend received should be classified as
cash flows arising from operating activities.

(ii)Other Enterprises. In the case of other enterprises, cash flows arising from
interest paid should be classified as cash flows from financing activities
while interest and dividends received should be classified as cash flows
from investing activities.

3) Taxes on Income: Cash flows arising from taxes on income should be

separately disclosed and should be classified as cash flows from operating
activities unless they can be specifically identified with financing and
investing activities.
 Taxes on income arise on transaction's that give rise to cash flows that
are classified as operating, investing or financing activities in a cash
flow statement. While tax expense may be readily identifiable with
investing or financing activities,

FORMAT OF CASH FLOW STATEMENT:-

Any specific format for preparing cash flow statement has not been
provided. However, an idea of the suggested format can be inferred from the
illustration appearing in the appendices to the accounting standard. The
Cash flow statement should report cash flows during the period classified
by operating, investing and financing activities. A widely used format of cash
flow statement (DIRECT METHOD) is given below:
COMPANY PROFILE

INTRODUCTION:-

Honda Motor Co., Ltd. operates under the basic principles of "Respect
for the Individual" and "The Three Joys" - commonly expressed as The Joy of
Buying, The Joy of Selling and The Joy of Creating. "Respect for the
Individual" reflects our desire to respect the unique character and ability of
each individual person, trusting each other as equal partners in order to do
our best in every situation. Based on this, "The Three Joys" expresses our
belief and desire that each person working in, or coming into contact with our
company, directly or through or products, should share a sense of joy through
that experience. In line with these basic principles, since its
establishment in 1948, Honda has remained on the leading edge by
creating new value and providing products of the highest quality at
a reasonable price, for worldwide customer satisfaction. In addition,
the company has conducted its activities with a commitment to protecting the
environment and enhancing safety in a mobile society

HISTORY OF HONDA MOTORS:-

The history of the Honda Motor Company began with an autophile and
his dream. Japanese entrepreneur Soichiro Honda had loved- motor vehicles
almost since birth. When he was fifteen, he became part of an auto repair shop, and
the passion grew. His greatest dream was to become a world-renowned car racer,
and it was an ambition which he would fulfill in time. But first, the auto lover
found himself employed as a technician. During his free time, he nurtured his
growing interest in motor vehicles by building race cars and tooling with his
Harley motorcycle.

Honda possessed a natural talent for anything motorized, and his skills
allowed him to open the doors of his very own repair shop in 1928. As his
curiosity grew, he attended technical school in order to discover the perfect
way to manufacture a piston ring. Honda combined his inborn knowledge with
his new technical knowledge to take the first tentative steps toward
entrepreneurial success. He utilized what he had learned about piston rings to
form the Tokai Seiki Company.

In 1928, he secured his first of many patents (for automobile wheel

spokes). Then, as World War II ravaged Japan, Honda cornered the market on
badly needed generator motors. His growing capital allowed him to break
ground on the Honda Technical Research Laboratory in 1946. Just two short
years later, the Honda Motor Company, Ltd. would open its doors in Hamamatsu.
The motor world would never be the same:

The company initially found its niche in the manufacture of motorcycles.

Following the launch of the company's first success-the "C" model motorcycle-
Honda and his then-twenty employees launched themselves into motor history
with the three horsepower, two-speed transmission "D" model. The motorcycle
was aptly named the "Dream D" after jubilant employees allegedly shouted "It's
like a dream!" upon its completion. And a dream it was. The "Dream 0" was like a
dream come true for the war-recovering Japanese society: it was inexpensive;
it conserved valuable fuel; and. perhaps most importantly, it provided a
temporary escape from the surrounding troubles. The overwhelming success of
the "ID" model and the later "E" model helped Honda build a reputation for
quality and design supremacy, even when an early-1950s economic depression
threatened to dim the company's shining star.

MANAGEMENT OF THE COMPANY:-

Management Policy:-

The company has omitted its management policy since there are no
significant changes from the management policy disclosed on May 22, 2007.

Medium- and long-term management strategy and Management target:-

Honda aims to achieve global growth by further encouraging and

strengthening innovation and creativity and creating quality products that
please the customers and exceed their expectations.

Therefore, in order to improve the competitiveness of its products,

Honda will endeavor to enhance its R&D, production and sales capabilities.

Honda recognizes that further enhancing the following specific areas is

essential to its success:

Research and Development:-

 In connection with its efforts to develop the most effective safety and
environmental technologies, Honda will continue to be innovative in
advanced technology and products.

Honda aims to create and introduce new value-added products to quickly

respond to specific needs in various markets around the world. Honda will also
continue its efforts to conduct research on experimental technologies for
the future.

Production Efficiency:-

Honda will establish and enhance efficient and flexible production

systems at its global production bases and supply high quality products, with
the aim of meeting the needs of its customers in each region.

Sales Efficiency

Honda will remain proactive in its efforts to expand product lines

through the innovative use of IT and will show its continued commitment to
different customers throughout the world by upgrading its sales and
service structure.

4. Continuing to Enhance Honda's Social Reputation and Communication with

the Community.

In addition to continuing to provide products incorporating Honda's

advanced safety and environmental technologies, Honda will continue
striving to enhance its social reputation by, among other things.
strengthening its corporate governance, compliance, and risk management as well
as participating in community activities and making philanthropic
contributions. Through these Company-wide activities, Honda will strive to
become a company whose presence is welcomed by our shareholders,
customers and society.

PRODUCTS:-

Honda Shine 125cc an inspiring piece in the 125 cc motorcycle

segment, the Honda Shine delivers excellent power, superior
technology, and awesome looks.

Honda Unicorn (Spoke Wheel) is the first motorcycle developed by

Honda Motorcycle and Scooters India Pvt. Ltd.
 Eterno India's first 150cc scooter, Honda Eterno has revolutionized the
concept of scooters in its segment.

Honda Dio is named after Dionysian' or Cupid, the Greek god of love
a-z son of Venus.

Honda Activa is a family two-wheeler and features a higher load carry

capacity than similar scooters.