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What is Cash flow?:

What is Cash flow? A financial statement that reflects the inflow of revenue and the outflow of expenses during a specific time. The cash flow statement does not show whether the business will be profitable, but it does show the cash position of the business at any time. The cash flow statement should be prepared on a monthly basis for the first year, on a quarterly basis for the second year, and annually for the third year.

Importance of Cash Flow:

Importance of Cash Flow Cash flow for a business is simply the flow of cash through the organization over time.  Cash flows are necessary for the firm to survive and prosper. There is a significant importance of cash flow to a business. The following are some advantages of cash flow. Income Assurance Ensures Timely Payment Return Ratio Keeps You Out of Debt Saves Unnecessary Expenditure

Practical study of HBL:

Practical study of HBL 5

Introduction of HBL:

Introduction of HBL It was established in 1941 having a head office in Karachi. It was nationalized in 1974, but on 26 th February 2004, it has been privatized by government of Pakistan. It is one of the largest banks of Pakistan Quaid-e-azam was the first person to open his personal account in HBL. 6

Vision of HBL::

Vision of HBL: “Enabling people to advance with confidence and success”. Mission statement: “To make our customers prosper, our staff excel and create value for shareholders”. 7

PowerPoint Presentation:

Cash flow for operating activities 2010 2009 2008 Profit before taxation 78% 41% 45% Dividend income 52% 66% 0% Loss on sale 4% 45% 38 44% 64% 55% Adjustments depreciation 46% 48% 38% Provision against non performing loans 8% 6% 27% Gain on sale of property 66% 43% 20% Miscellaneous expenses 37% 52% 73% 46% 48% 45% Operating expenses Lendings to financial institutions 7% 17% 8% Advances 70% 17% 97% Other assets 21% 16% 76% 26% 17% 97%

Operating liability:

Operating liability Operating liability Depoists 10% 19% 9% Bills payable 10% 4% 8% Other liabilities 19% 17% 27% Income tax paid 14% 93% 76% 25% 42% 68% Cash flow from investing liabilities Net investment in security 34% 43% 41% Dividend received 27% 44% 72% Fixed capital 67% 36% 13% Proceeds from sale of fixed assets 47% 5% 3% 35% 38% 40%

PowerPoint Presentation:

Cash flow from financing activities Minority interest exchange 10% 12% 29% Dividend paid 19% 24% 98% Cash and cash equivalent beginning year 50% 12% 6% Effects of exchange rate changes 10% 28% 21% Cas h and cash equivalent at end of year 44% 46% 16%

SWOT Analysis:

SWOT Analysis STRENGTHS: H.B.L. has very effective Network all over the country. Every 10 th Pakistani is A/C holder of H.B.L. HBL has made huge investment in almost all the important economic sectors of Pakistan. HBL has introduced monthly income scheme that provides highest interest rate. WEAKNESS: Centralization of all decisions. Wide span of control. Using old ideas in advertising. Managers have all the powers that delay the communication .


OPPORTUNITY: The improvement in communication channels can attract the customers. The upward and downward communication improves the environment of bank H.B.L. is investing almost 18% of its total investment on cotton business; it should also invest in other cash crops, i.e. Rice, Sugar Cane, Tobacco, Wheat etc THREATS: The competitor banks like Standard chattered and MCB are advertising well, which is the main threat for HBL. The Managers of HBL do not delegate the authority to their juniors due to which juniors can move to other banks.


Conclusion From the report concluded that the three years cash flows statements of the HBL shows that the financial position of the bank is good and bank is growing every year. HBL was rated among first 500 banks of the world but now it is in among 1000 banks in the world. The HBL should prevail the system of delegation and narrow the span of control. If these drawbacks have removed then it will be rated among world top ten banks.


RECOMMENDATIONS HBL should prevail the system of delegation. Decentralization should prevail in all branches. HBL should narrow the span of control. Now a day, they are not advertising properly therefore they should focus on the advertisements.



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