CASH FLOW VOLATILITY AND TREASURY CONTROLS AT ADITYA BIRLA GROUP

Abstract

This paper looks into the Aditya Birla Group's treasury controls and cash flow volatility. It focuses on the relationship between profitability, liquidity, and financial risk. The analysis shows that there were significant differences between actual cash flows and accounting earnings over the paper period. The Group's operating cash flows were negative, indicating that it struggled to manage its working capital despite its significant revenue. Cash flow volatility is mostly caused by fluctuations in operating operations and reliance on short-term borrowing. The paper concludes that financing operations are becoming increasingly important for maintaining high levels of liquidity. Treasury controls helped manage cash shortages by leveraging cash holdings and borrowing money. Nonetheless, the company faces increased financial risk as a result of excessive leverage and low interest coverage ratios. In the absence of dividend payments, the company's strong policy of keeping earnings to sustain liquidity is clearly visible. Although liquidity indicators are dropping, ratio analysis indicates that assets are being used more efficiently. The article emphasizes the importance of connecting operational cash flow creation and treasury strategy. Improving your ability to forecast, monitor your finances, and manage debt is critical. The findings highlight the importance of comprehensive treasury controls in preventing excessive cash flow volatility.