Tech Mahindra Cash Flow Interpretation & Analysis .

1. MANAGEMENT ACCOUNTING
CIA 3
5 BBA C
DIVYAE MOHAN SHERRY (1620313)
RISHAB GARG (1620328)

2. Tech Mahindra
About TechMahindra
Tech Mahindra Limited is an Indian multinational provider of information technology (IT),
networking technology solutions and Business Process Outsourcing (BPO) to various industry
verticals and horizontals. Anand Mahindra is the Chairman of Tech Mahindra, which is
headquartered at Pune and has its registered office in Mumbai.
Part of the Mahindra Group, Tech Mahindra is a US$4.7 billion company with over 113,550
employees across 90 countries. Tech Mahindra was ranked #5 in India's software services (IT)
firms and overall #111 in Fortune India 500 list for 2012. Tech Mahindra, on 25 June 2013,
announced the completion of a merger with Mahindra Satyam.
Tech Mahindra has 926 active clients as of March 2018.

3. What is a Cash Flow?
A cash flow statement is a financial statement that provides aggregate data regarding all cash
inflows a company receives from its ongoing operations and external investment sources, as well
as all cash outflows that pay for business activities and investments during a given period.
Cash Flows From Operations
This is the first section of the cash flow statement and includes transactions from all operational
business activities. The cash flows from operations section begins with net income and then
reconciles all noncash items to cash items involving operational activities. For example, accounts
receivable is a noncash account. If accounts receivable go up during a period, it means sales are
up, but no cash was received at the time of sale. The cash flow statement deducts receivables
from net income because it is not cash. The cash flows from operations section can also include
accounts payable, depreciation, amortization and numerous prepaid items booked as revenue or
expenses but with no associated cash flow.
Cash Flows From Investing
This is the second section of the cash flow statement and can include cash spent on property,
plant and equipment. This is where analysts look to find changes in capital expenditures
(CAPEX). While positive cash flows within this section can be considered good, investors would
prefer companies that generate cash flow from business operations, not investing and financing
activities. Companies can generate cash flow within this section by selling equipment or
property.
Cash Flows From Financing
Cash flows from financing is the last section of the cash flow statement. The section provides an
overview of cash used in business financing. Analysts use the cash flows from financing section
to determine how much money the company has paid out via dividends or share buybacks. Cash
obtained or paid back from capital fundraising efforts, such as equity or debt, is listed here, as are
loans taken out or paid back.

4. Full Cash Flow Statement

6. Interpretation (inCrs)
The profit before tax of Tech Mahindra had increased 4,906 to 3,878 in 2017-2018.
Operational Activities:
Cash flow from operational activities has a positive cash inflow worth of Rs. 3,358.30 in 2018
and Rs. 3,332.20 in 2017. This shows that the company is solvent and can provide for the normal
outflows for investment and financial activities.
In the working capital there has been a decrease in trade receivables, inventories, loans and other
financial assets however the increase in current liabilities is much higher putting the company in
a bad position for the short term.
Investment activities:
Under cash flow from investment activities shows a negative cash inflows worth of Rs -2,271.10
in 2018 and -2,586.40 in 2017, where the company has done a purchase of fixed asset,
investments and the repayment of loans.
This resulted in a huge net outflow of approximately. Another major source of cash flow under
this activity is the interest from dividends received from other investments.
Finance activities:
 Cash flow from finance activities shows that there was a decrease in financial activities
from Rs. -1,209.50 in 2018 -1,478.80 in 2017.
 Tech Mahindra was regular in the repayment of its non-current borrowings, finance lease
liability and its current borrowings for the years 2017-2018.
 Tech Mahindra had a stable dividend policy, it had paid its dividend worth of rs 10,361 in
2018 13,78 in 2017 to its shareholders.
Conclusion
For concluding the above analysis and interpretation we can say that Tech Mahindra has as
satisfactory cash flow statement. The company has always focused more on providing the
highest possible dividend and profits to its investors and shareholders, as we can see from the
above cash flow that shows us the amount of dividend company have distributed.