Study On Financial Performance Interpretation: Chapter-1 Introduction To Bank
Study On Financial Performance Interpretation: Chapter-1 Introduction To Bank
Study On Financial Performance Interpretation: Chapter-1 Introduction To Bank
MEANING OF BANK
A bank is an establishment which makes to individuals such advance of money as may be required and safely made and to which individuals entrust money when not needed by them for use. -Prof Kinlay
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The origin of modern financial institutions can be traced to antiquity, where the individuals used to accept money in the form of deposit and lend it to people who needed for meeting their requirements which may be economic or social. As time advanced, the character of economic transactions also changed. Old order of borrowing and lending underwent metamorphic changes. Finance became a powerful instrument for any change. In fact, the innovations in the field of transport and communication, development of energy and manufacturing have resulted in innovations in the sphere of banking.
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civilization and with the development of social and economic institutions, money transactions also were revived. It was the 12th century that some banks were established in Venice and Genoa. These banks were simply receiving deposit and lending money to the people. The origin of modern banking may be traced to money dealers in Florence who received money in the form of deposits and lend it to business people. At that time Florence was the centre of money market in Europe.
MODERN BANKING
Modern Banking as a service institution is a large corporate giant with large resources and multi-faceted activities. Since, the nationalization of some big commercial banks in India, there has been a great surge in the banking industry throughout the world with a growing number of banking offices. The banking business today has become highly critical and competitive between various classes of banks in offering a greater variety of services nationally and internationally. With the growth of trade and commerce, banks are also modernizing operations with a view to satisfy their customers. Modern banking institutions have resorted to automation by means of introducing computers and other equipment as well as the wealth of Information Technology (IT).
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The main aim of modernizing banking system is to improve bank operations with a view to maintain high standards in banking. This involves applications of better management techniques. In India, class banking has given way to mass banking, thereby bringing in its fold a large number of customers. Banks are now looked upon as development agents instead of purveyors of credit to the large industries and big business companies. The banks apart from providing credit to agriculture, trade industry and commerce are offering a good number of services to the customers such as making pension payments to retired government servants and collection of water and electricity bills, telephone bills, taking buy and sell decisions of behalf of their customers, managing public issues, etc.
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Co-operative Bank:
Co-operative Banks are promoted to meet the banking requirements of customers not only in urban areas but also in rural areas. They provide short and medium term loans. They are more service oriented than profit.
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increased considerably, since then the progress has been maintained. Today an Indian Cooperative movement has become one of the larger voluntary movements in the world. This movement has no doubt record impressive progress in various segments of its activities. Weaker sections have been the focus of attention of Co-operatives. State Development Co-operative, Finery Societies have helped in providing organized support for economic development of weaker section. Thanks to keen interest shown by RBI in the Cooperative credit movement.
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types of banks are working on par with the nationalized and commercial banks and functioning by and large, self supplying and not dependent on outside progress.
acts showed the right path of development to urban co-operative banks in poor country. Since, then urban co-operative banks had 5 steady growths.
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Business Finance:
The term business finance is very comprehensive. It implies finances of business activities. The term, business can be categorized into three groups: commerce, industry and service. It is a process of raising, providing and managing of all the money to be used in connection with business activities.
Corporate Finance:
Corporate finance deals with the financial problems of a corporate enterprise. These problems include the financial aspects of the promotion of new enterprises and their administration during their early period; the accounting problems connected with the distinction between capital and income, the administrative problems arising out of growth and expansion, and finally, the financial adjustments which are necessary to booster up to rehabilitate a corporation which has run into financial difficulties. The term corporate finance includes, apart from the financial environment, the different strategies of financial planning. It includes problems of public deposits, intercompany loans and investments, organized markets such as the stock exchange, the capital market, the money market and the bill market. Corporate finance also covers capital formation and foreign capital and collaborations
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Financial analysis:
Financial analysis is the process of identifying the financial strength and weakness of the Bank by properly establishing relationships between the items of the balance sheet and the profit and loss account.
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They are the means to present the Banks financial situation to the users. As these statements, are used by investors and financial analyst and examine the Banks performance in order to make investment decisions. Two basic financial statements are prepared for the purpose of external reporting to owners, investors and creditors are: Balance sheet or statement of financial position Profit and loss account or income statement.
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There are various methods or techniques used in analyzing and interpreting the financial statements such as, Common size financial statement. Comparative financial statements. Trend analysis. Break-even analysis. Fund flow analysis. Cash flow analysis. Ratio analysis. All these techniques are one of the powerful tools of financial analysis. These methods are used to review the financial performance of any company. With the help of these techniques
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that financial statements can be analyzed more clearly and decision can be made from such analysis. The methods or techniques used for the financial analysis are: Trend analysis. Ratio analysis.
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Chapter-2 DESIGN OF STUDY TITLE OF THE STUDY: THE STUDY ON FINANCIAL PERFORMANCE OF BANGALORE CITY CO-OPERATIVE BANK LIMITED. STATEMENT OF THE PROBLEM:
Analysis of financial performance is one of the major requirements for planning. BCCB being a government enterprise, it is very crucial to analyze its performance because, it is required by shareholders, bank, management, creditors and employees, government and financial institutions as they are interested to know the financial soundness of the Bank.
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SCOPE OF THE STUDY: The study was taken up to know the financial activities in BCCB relating to their business
activities and performance of the corporation only. The study is being done to know the financial activities of the corporation and study is limited to BCCB only. Study is being done to ascertain the financial status of the Bank. The study of financial performance comprise of trend analysis, ratio analysis, and comparative statement analysis.
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PRIMARY DATA:
Primary data may be described as those data that have been observed by the researchers for the first time. Primary data are collected from: General discussions with officers of BCCB. An Unstructured informal interview was followed with high officials of the Bank. Annual reports of BCCB
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SECONDARY DATA:
Secondary data are those data that have been compiled already before conducting the research. Secondary data may be internal as well as external. Internal data are collected from the banks records. External data are collected from outside the bank. The various sources of secondary data are: Corporations previous records Various publications and manuals of BCCB Books, magazines and news papers Bank website
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RESEARCH INSTRUMENTS:
The analysis interpretation of the financial statement is used to determine the financial position and result and operation as well. A number of methods and devices are used to study the relationship between different statements. The statistical tools adopted for the study are: Financial Ratio Trend analysis
METHOD OF STUDY:
Discussion with the management of the bank to get general information about their activities in bank. Study of the classification of items adopted in profit and loss account and balance sheet and the accounting policies of the concern. Study of the annual reports of 3 years from 2008-2010 for collecting data. Analysis of their adopted techniques and methods available. The study was made to analyze the financial performance with reference to financial statements like profit and loss account and balance sheet with the help of tables, ratios,
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and graphs. Providing suggestions for improving the methods and procedures followed by the bank.
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LIMITATIONS OF THE STUDY: The effort has been made to study completely and as exhaustively as possible. However the following problems were faced during the study is as follows: 1. The confidentiality of some facts and figures has acted as a limitation, does not include competition from commercial bank, nationalized, foreign banks for which time was a constraint. 2. The study is based on the data given by the officials and reports of the bank. It was not possible to study day-to-day problems faced by the bank. 3. The comparison and analysis are limited only for the past 3 years.
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Recently the bank has also adjudged as best Urban Co-operative Bank by the Government of Karnataka in the year 2001-02 and 2003-04 and received the meritorious certificate and rolling shield. Received award for completion of 100 years of banking service from the Government of Karnataka in centenary celebration of Co-operative Movement. Initially bank started with the share capital of 2727/- by 150 members and deposits of Rs. 2265/Apart from administrative office the bank has already opened 12 branches in prestigious locality of Bangalore and now it has applied for 2 additional branches In order to give better customer service to the members, depositors and general publics the bank has already computerized its administrative office as well as entire 12 branches of the bank. Apart from banking business the bank has generously conducted/donated Conduct free eye camp to the members and general public with the assistance of Lions Eye Hospital, Bangalore. Conduct free medical check up to the members and general public.
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Donate Rs. 1 lakh to Kidwai Institute of Oncology Bangalore to build the ward in the name of the bank.
Donate Rs. 50,000/- to Regional Institute of Co-operative Management, Bangalore to renovate the class room of MBA.
Donate Rs. 2 lakh to Karnataka State Co-operative Urban Bank Federation for the construction of the building.
The Board of Management has contributed generously Rs. 50,000/along with one day salary of staff members to the following occasions:
Rehabilitation of Kargil Victims. Educational incentives to the meritorious students of members. The bank has appointed highly qualified and experienced persons to provide better banking services to the members, depositors and customers.
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The bank is governed by the Veteran Co-operators who are dedicated in the field of Co-operation.
Shortly the bank is reaching to attain the scheduled Co-operative Banking status prescribed by the Reserve Bank of India.
Ownership
The bank is completely controlled by the President, Vice president and the Directors. Only RBI can interfere in the rules and regulations of the bank. The bank consists of a president, a vice president and 15 directors.
Board of Directors
President Vice president Directors Sri.Avalahalli chandrappa Dr. Devraj T.M Sri Dr. T.P Yoga
Dr. Devraj .T.M Sri B.K. Ashwata Narayana Sri Dayashankar G.S. Rajendra Sri T.D. Dhananjaya Sri K. Krishnappa Sri Anjanappa Sri M. Hanumanayya Sri N. Thimayya Page 26
Sri U.P Puranik Sri k. Krishna Murthy Sri Basavaraju Smt. L Bhgyalakshmi
ABOUT FOUNDATION:
Branches structure of the Bangalore City Co-operative Bank Ltd .The following 12 branches along with one administration office and all the branch have been computerized under the jurisdiction of Bangalore City Corporation, Bangalore Development Authority and Bangalore Urban and Peripheral areas .
Notes On Formation, Growth And Achievement Of The Bangalore City co-operative bank Ltd., Bangalore-18
The twentieth century of the Indian history has seen two people movements, of which one was the freedom struggle against the British to free the nation from the foreign rule and the other was the Co-operative movement against capitalists with aim to improve the economic condition of the poor and economically backward ones. The Co-operative Community institute of commerce and management studies Page 27
movement was started in India with the introduction of Co-operative societies Act, 1907 and during the initial stages of Co-operative movement, our bank The Bangalore City Cooperative Bank Ltd,. Bangalore came in to existence as credit Co-operative Society during the year 1905 and later converted as urban Co-operative Bank on 06-04-1907 as first urban co-operative bank of the then Mysore province. The Bangalore City Co-operative Bank Ltd ,.with its main objective of promoting thrift and saving habit among its member and to free the members from the clutches of money lenders was formed under the leadership of Sri K Ramaswamaiah ,Head Master ,London Mission School . During the year 1907, our bank has mobilized share capital of Rs.2727/-from 150 members and deposit of Rs.2265/- and also lent Rs.4036/- to its members. The bank has made a profit of Rs.156/- and declared a dividend of 13.02% in the first year. Since the date of inception, the bank never had a setback in mobilization of share capital/deposits and in grant of loans and advances and in its net profit
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Financial year ending 1907 1917 1927 1937 1947 1957 1967 1977 1987 1997 2007 2008 2009 2010 2011
No. of members 156 1110 1535 2545 2172 3348 5360 5496 13579 30980 39912 42191 44518 45500 46000
Share capital
Deposits
Loans advances 4,036 2,36,725 6,06,756 17,40,913 12,26,099 23,13,176 28,16,749 48,69,489 4,15,38,926 35,05,87,887
&
Net profit
2,727 1,26,922 1,77,980 3,65,277 3,51,783 3,79,109 4,10,266 8,95,904 44,45,525 2,76,23,080 11,41,64,541 13,94,22,103 17,33,63,267 20,35,48,167 28,71,12,907 4,003 14,095 15,223 21,257 4,66,337 9,82,631 33,55,252 44,50,551 38,53,63,257 41,57,51,667 44,98,27,118 47,96,00,052 54,26,10,058
2,265 1,17,318 1,15,079 17,07,660 17,57,738 21,00,049 24,87,795 37,58,839 5,42,64,904 53,48,55,407 224,43,62,150 289,10,54,009 378,63,09,868 461,29,68,093 597,62,10,335
156 9,892 20,737 42,216 26,313 36,187 22,054 1,48,615 11,53,581 1,18,83,787 3,55,49,263 4,27,23,786 5,17,00,057 5,34,00,000 7,95,66,288
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Aims:
As per the laws if the bank the following are the aims of the Co-operative Bank; Accepting the deposits for the purpose of promoting saving habits in the minds of public and members. Providing the various types of loan facilities to members and associate members. To open new branches with the permission from the RBI and Registrar of Co-
operative Societies.
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Following are some of the Rules and Regulations provided by the bank for the benefit of Customers:
Avail nomination facilities at A/C holders including saving bank A/C current A/C holders. Bank will exchange mutilated currency notes as per RBI guidelines. Bank will give standing instruction for the payment of bills, rents, interests, insurance etc Bank provides required and important guidelines to the locker holders. and
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CORPORATE MISSION
To meet the growing aspiration of the customers of the bank in particular and others in general in the changing environment. To bring about total customer satisfaction by providing quality service. To promote socio economic development and employment as national and social objectives. To meet the economic and career aspirations of the society and employees. Generating the deposits from the customers to increase profit and goodwill.
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IMPORTANT DECLARATION
Bank declares and undertakes: To provide professional, efficient, courteous, diligent and speedy services on the matter of retail deposits. Not to discriminate on the basis of religion, caste, sex, descent or any of them. To be fair and honest in advertisement and marketing of deposit products. To provide customer with accurate and timely disclosure of terms, costs, rights and liabilities as regard deposit transactions. If sought, to provide such assistance or advice to customers. To attempt a good faith to resolve any disputes or differences with customers by setting up complaint redress cells within the organizations. To comply with all regulatory requirements in good faith. To spread general awareness about potential risks contracting deposits and encourages customers to take up independent financial advice and not act only on representation from the bank.
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It is the most significant financial statement. It indicates the financial conditions or the state of affairs of a business at a particular moment of time; balance sheet contains information about resources and obligations of a business entity and about its bankers interest in the business at a particular point in time.
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Assets:
Assets represent economic resources. These are the valuable possessions owned by the Bank. These possessions should be capable of being measured in monetary terms. Assets are the future benefits fixed assets are used in business for more than an accounting period of one year, while current assets are converted into cash with an accounting period
Liabilities:
Are the amount payable by the Bank to the outsiders liabilities are payable within an accounting period are called current liabilities and those payable after a year or so are called long term liabilities.
Revenues:
Revenue is the value of amount supplied to the customers, more specifically; revenue is the gross inflow of assets or the gross decrease in liabilities that result from a Banks activities that change bankers equity.
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Expenses:
Expenses occur when assets are consumed or liabilities are increased in order to produce revenue, more specifically expenses represent a gross decrease in assets or gross increase in liabilities.
Profit:
The difference between the revenue and expenses
Ratio Analysis:
In financial analysis, ratios as a bench mark for evaluating the financial position and performance of a Bank. Is a process of identifying the financial strength and weaknesses of the Bank.
Capital employed:
Is equal to total of fixed assets are reduced by current liabilities.
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Fund: The term fund can be defined in 3 ways, it may mean cash, and working capital and financial resources fund flow statement provide an analysis of changes in the Banks working capital position. Profit and loss account:
Profit and loss account presents the summary of revenue, expenses and net income (or net loss) of a Banks profitability.
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Meaning
Ratio analysis is a powerful tool of financial analysis a ratio is defined as the indicated quotient of two mathematical expressions and as the relationship between two or more things. In financial analysis a ratio is used as a bench mark for evaluating financial positions and performances of a bank the absolute accounting figures respected in the financial statement do not provide a meaningful understanding of a performance and position of a bank. The relationship between two or more accounting figures groups is called a financial ratio. Ratio helps to summarize large quantities of financial data and to make qualities judgment about the banks financial performance
Types of ratios:
Several ratios calculated from the accounting data, can be grouped into various classes according to financial activity or functions to be evaluated. As stated earlier, the parties interested in the financial analysis are short and long terms creditors, owners and management. Short-term creditors main interest in the liquidity position or the short-term solvency of the bank. Long term creditors on the other hand, are more interested in the bank profitability and financial conditions.
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Management is interested in evaluating every aspect of the bank performance. They have to protect the interest of all parties and see that the bank grows profitability. In view of the requirement of ratios, we may classify them into the following four important categories: Liquidity ratios Leverage ratios Activity ratios Profitability ratios
LIQUIDITY RATIO:
Liquidity ratios measure the ability of the firm to meet its current obligation. In the fact, analysis of liquidity needs the preparation of cash and fund flow statements: but liquidity ratios, by establishing a relationship between cash and others current assets to current obligations, provide a quick measure of liquidity. A bank should ensure that it does not suffer from lack of liquidity, and also that it does not have excess liquidity , will result in a poor creditworthiness, loss of creditors confidence or even in legal tangles resulting in the closer of the bank. A very high degree of liquidity is also bad ideal assets earn nothing. The firms fund will be unnecessary tied up in current asset. Therefore, it is necessary to strike a proper balance between high liquidity and lack of liquidity.
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The most common ratios that indicate the extent of liquidity or lack of it are: (1) current ratio and (2) Quick ratio. Other ratios include cash ratio, interval measures and net working capital ratio.
Leverage ratio:
Financial leverage refers to the use of debit finance while doubt capital is a chapter source of financial it is a riskier source of financial leverage ratios help in assessing the risk arising from the rise of debit capital. The important leverage ratios are: Debit Asset Ratio Debit Equity Ratio
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Activity/efficiency/turnover ratio:
Activity ratios are employed to evaluate the efficiency with which the bank managers and utilize its assets these ratios are also called turnover ratios because they indicates the speed with which into sales. Activity ratios thus involve a relationship between sale and assets generally reflect that assets are managed well. Important activity ratios are: Inventory turnover ratios Debtors turnover ratio
PROFITABELITY RATIOS:
Profitability reflects the final result of business operations profitability rate on are calculates operations efficiency of the bank. Important profitability ratios are: Gross profit margin ratio Net profit margin ratio
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1. Current Ratio
It may be defined as the relationship between current assets and current liabilities. It shows a banks ability to cover its current liabilities with its current assets. It can be expressed as follows;
Current ratio =
Table showing current ratio Year Current assets (Rs) 2008-09 2009-10 2010-11 26,68,70,523 31,70,74,391 38,04,63,029 Current Liabilities (Rs) Ratio
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1.75 1.7 1.65 1.6 1.55 1.5 1.45 1.4 1.35 1.3 17,98,43,972 21,25,71,023 21,66,40,367 (Rs) 26,68,70,523 31,70,74,391 38,04,63,029 2008-09 2009-10 2010-11
Ratio
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2.Cash Ratio
Cash is the most liquid asset a financial analysis may examine cash ratio and its equivalent to current liabilities. Trade investments or marketable securities are equivalent of cash therefore they may be included in the computation of cash ratio. It can be calculated as
Cash+ Marketable securities Cash Ratio = Current Liabilities Table showing Cash Ratio Year Cash+Securities Current (Rs) 2008-09 2009-10 2010-11 3,43,68,746 3,12,62,897 3,35,90,290 Liabilities Ratio(%)
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0.19 0.2 0.14 0.15 0.1 0.05 0 17,98,43,972 21,25,71,023 21,66,40,367 (Rs) 3,43,68,746 2008-09 3,12,62,897 2009-10 Ratio(%) 3,35,90,290 2010-11 0.16
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Total debt Debt equity ratio = Net worth Table showing debt equity ratio Year 2008-09 2009-10 2010-11 Debt (Rs) 259,99,96,639 92,90,02,709 82,73,41,790 Equity (Rs) 62,31,90,385 70,10,31,633 75,25,62,573 Ratio (%) 4.17 1.32 1.09
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Ratio (%)
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 debt equity ratio
Ratio (%)
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Total debt Total Debt Ratio = Total debt + net worth Table showing total debt ratio Year Total Debt (Rs) Total Debt + Net Ratio(%) worth 2008-09 2009-10 2010-11 277,98,40,611 114,15,73,732 82,73,41,790 340,30,30,996 184,26,05,365 152,81,73,423 0.79 0.61 0.54
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Ratio(%)
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 340,30,30,996 277,98,40,611 2008-09 184,26,05,365 114,15,73,732 2009-10 152,81,73,423 82,73,41,790 2010-11
Ratio(%)
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Shareholders fund Proprietary Ratio = Total assets Table Showing Proprietary Ratio Year Share Holders Fund 2008-09 2009-10 2010-11 62,31,90,385 70,10,31,633 75,25,62,573 624,83,35,122 9.97 793,07,52,606 8.83 957,92,34,219 7.85 Total Assets Ratio (%) 100
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10 8 6 4 2 0 624,83,35,122 62,31,90,385 2008-09 Ratio (%) 793,07,52,606 70,10,31,633 2009-10 Axis Title 957,92,34,219 75,25,62,573 2010-11
Equity ratio
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Cash in hand and bank + short-term marketable securities A L RATIO = Current Liabilities
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Table Showing Absolute Liquid Ratio Year Cash in hand and bank Current liabilities Ratio (%)
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Ratio (%)
1.2 absolute liquid ratio 1 0.8 0.6 0.4 0.2 0 17,98,43,972 13,44,81,798 2008-09 21,25,71,023 16,26,36,709 2009-10 21,66,40,367 20,85,98,232 2010-11 Ratio (%), 0.96
Table showing Return on capital employed Year Operating profit 2008-09 2009-10 2010-11 5,17,00,057 4,27,23,786 7,95,66,288 Capital employed 63,44,95,854 59,96,36,953 54,26,10,058 8.14 7.12 14.66 Ratio (%)
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Ratio (%)
5,17,00,057 4,27,23,786 7,95,66,288
2010-11
54,26,10,058
2009-10
59,96,36,953
Ratio (%)
2008-09
63,44,95,854
10
15
20
Interpretation of Return on Share Capital Employed This ratio is considered to be the most important because it reflects the overall efficiency with which capital is used. In the above ratio there is a increase in the year 2010- 11 as compared to 2009 and 2008, as both indicates decrease in ratio,
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Net profit after interest and tax Return On Share Holders Fund= Share holders fund *100
Table Showing Return On Share Holders Fund Year Net profit Share holders Ratio (%) fund 2008-09 2009-10 2010-11 5,17,00,057 5,33,77,802 7,95,66,288 48,28,49,830 53,44,02,390 75,25,62,573 10.70 9.98 10.57
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Ratio (%)
5,17,00,0 5,33,77,8 7,95,66,2 57 02 88 2010-11
75,25,62,573
2009-10
53,44,02,390
Ratio (%)
2008-09
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9. SOLVENCY RATIO
Solvency ratio is the ratio between the total assets and that total liabilities of the concern this ratio measures the ability of the concern to meet its total liabilities out of its total assets. It is expressed as following;
Table Showing Solvency Ratio Year Total assets Total liabilities 2008-09 2009-10 2010-11 624,83,35,122 619,66,35,064 1.00 477,92,91,939 473,65,68,152 1.00 957,92,34,219 949,96,67,930 1.00 Ratio (%)
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Ratio (%)
624,83,3 477,92,9 957,92,3 5,122 1,939 4,219 2010-11
949,96,67,930
2009-10
473,65,68,152
Ratio (%)
2008-09
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10 LIQUID RATIO.
This is a ratio of liquid assets and current (liquid) liabilities. It shows the firms ability to meet current liabilities with its most liquid assets.
Table 10 Showing Liquid Ratio Year Liquid assets Current liabilities 2008-09 2009-10 2010-11 16,67,57,510 18,57,00579, 19,20,37,009 17,98,43,972 21,25,71,023 21,66,40,367 0.92 0.87 0.89 Ratio (%)
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Ratio (%)
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FINDINGS
Their has been fluctuating trend for a current year liquidity pointing i.e., 0.89% The banks current ratio is satisfactory compared to cash ratio of the bank from past 3 years i.e., 1.48 in 2009, 1.49 in 2010 and 1,75 in 2011. The total debt ratio of the bank is in good condition without loss. The proprietary ratio of the bank is seen to be slightly decreasing trend in the past 3 years i.e., in 2009 it was increased by 9.97% and in 2010 and 2011 it was increased by 8.83%, 7.85 respectively. The returns on share holders fund is increasing in past 3 years. i.e. 10.70% in 2009 , 9.98% in 2010 and 10.57% in 2011. The banks solvency ratio is in break-even point means where no profit and no loss. The banks ability in creating return on capital employed is satisfactory. It is increased by 8.14% to 14.66% when comparison made between 2009 to 2011.
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SUGGESTIONS:
The management must achieve the targets by managing both current assets and current liabilities in a proper way. It is suggested that bank should decrease its liabilities and more concentrate on managing its current assets. The bank should utilize the cash resource to the optimum; else the liquidity position will be affected. It can do well if those resources are utilized effectively. The banks total assets should be utilized to optimum. It should concentrate more on utilizing its available assets, so as to avoid expenses. The bank should maintain its overall profitability position in order to retain current deposits.
Fixed assets used for long term of time must be sold off changing with less deprecation to increase the value of assets to meet the expected liability. The bank should put much emphasis on modern advertising media in order to improve the banks transactions to attract its customers.
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CONCLUSION The investment and deposits shall be proportionate to loans and advances and the liability of interest payable shall be reduced which increased net profit. The bank should see the improvement of balance in cash and with bank deposit. To gain competitive edge over the competition in the market, the bank must minimize the default and should be in contact with the customer to know about their specification. The bank may introduce new products to complete with other bank and adopt suitable procedure for obtaining details from the borrowers in order to facilitate faster disbursement of
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advances and regulatory repayments as done in other banks before sanctioning credit. The bank must be more professional in credit collections and allocation. The mobilization of deposit and investment decision shall be thoroughly analyzed by the financial manager to gain maximum return with minimum risk.
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