A PROJECT REPORT

ON
A Comprehensive Study On
Financial Analysis
OF H.D.F.C. BANK
LUCKNOW
Submitted by
Priyanka Agarwal
Lucknow University in partial fulfillment of the requirement
for the award of the degree
Of
MBA
IN
FINANCE
INSTITUTE OF MANAGEMENT AND SCIENCES,
LUCKNOW UNIVERSITY, LUCKNOW
(2011-2013)
ACKNOWLEDGEMENT
I, PRIYANKA AGARWAL, stu!nt "# $ast!r "# %usin!ss a$inistrati"n #r"$ L&
!'(r!ss $y gratitu! an t)anks t" "ur C"ll!g! #"r (r"*iing $! )is *alua%l! guian+! in
un!rtaking t)is (r",!+t-
I w"ul als" lik! t" !'t!n $y sin+!r! r!gars t" $y #a+ulty gui! un!r w)"$ I
)a*! "n! $y su$$!r training (r",!+t an w)" )as %!!n t)! s"ur+! "# $y ins(irati"n
an )!l(! t)r"ug)"ut t)! w"rking "# t)is (r",!+t-

PRIYANKA AGARWAL
.
REFACE
&sing a n!w (att!rn %as! "n (r"(!r int!grati"n "# #"r$al t!a+)ing
an a+tual (ra+ti+! t)! M-B-A- (r"gra$ "# L&CKNOW &ni*!rsity,
L&CKNOW )as it +"urs! #"r si' w!!ks inustrial training, a#t!r t)! s!+"n
s!$!st!r, s" as t)! stu!nts +"ul %!gin t" )a*! t)! #!!ling "# %usin!ss
!n*ir"n$!nt rig)t in t)! %!ginning- Pra+ti+al training +"nstitut!s an int!gral
(art "# $anag!$!nt stui!s- Training gi*!s an "(("rtunity t" t)! stu!nts t"
!'("s! t)!$s!l*!s t" t)! inustrial !n*ir"n$!nt, w)i+) is /uit! i##!r!nt
#r"$ t)! +lassr""$ t!a+)ing- T)! (ra+ti+al kn"wl!g! is an i$("rtant su##i'
t" t)! t)!"r!ti+al kn"wl!g!- On! +ann"t r!ly $!r!ly u("n t)!"r!ti+al
kn"wl!g!- Is )as t" %! +"u(l! wit) (ra+ti+al #"r it t" %! #ruit#ul- T)!
training als" !na%l!s t)! $anag!$!nt stu!nts t" t)!$s!l*!s s!! t)!
w"rking +"niti"ns un!r w)i+) t)!y )a*! t" w"rk in t)! #utur!-
A#t!r Li%!rali0ati"n "# Inian !+"n"$y s!ns! is +)ang! %!+aus! "# Multi
Nati"nal C"$(ani!s +"ntinu"usly +"$ing wit) t)!ir t!+)ni+al !'(!rtis! an
i$(r"*! $anag!$!nt +"n+!(ts- Inustrial a+ti*ity in Inia )as %!+"$! a
t)ing t" wat+) an I r!ally want! t" %! a (art "# it an it is !ss!ntial #"r $!
%!ing a #inan+! stu!nt-
I +"nsi!r $ys!l# lu+ky t" g!t $y su$$!r training in 123C BANK
L&CKNOW- I un!rw!nt si' w!!ks "# training- It r!ally )!l(! $! t" g!t a
(ra+ti+al insig)t int" t)! a+tual %usin!ss !n*ir"n$!nt an (r"*i! $! an
"(("rtunity t" $ak! $y 3inan+ial Manag!$!nt +"n+!(ts $"r! +l!ar- T)!
a*antag! "# t)is s"rt "# int!grati"n w)i+) (r"$"t!s gui! a,ust$!nt t"
4
+"r("rat! +ultur!, #un+ti"nal, s"+ial an "t)!r n"r$s wit) #"r$al t!a+)ing
ar!5
T" %rig! t)! ga( %!tw!!n t)!"ry an (ra+ti+!
T" install #!!ling "# %!l"ngingn!ss an a++!(tan+!
T" +ulti*at! (r"(!r t!$(!ra$!nt 6 t" g!n!rat! $u+) $"ral!
T" )!l( stu!nts i!nti#y t)!ir str"ng 6 w!ak ("ints in t)! #"ll"wing
6 a((r!+iating "rgani0ati"n a+ti*iti!s
T" a+/uaints stu!nts wit) ,"% (!r#"r$an+! stanars I %!li!*! t)at
t)is kn"wl!g!a%l! !n!a*"r "# $in! )as (r!(ar! $! sl"wly %ut
sur!ly #"r taking u( n!w +)all!nging "(("rtuniti!s in #utur!-
7
EXECUTIVE SUMMARY
Undertake something is difficult,
It will do you good,
Unless you try to do something
Beyond what you have already mastered
You will never grow.
RONALDE. OSBORN
I i $y training in 123C BANK L&CKNOW-
T)! +"n+!(t "# t)is (r",!+t is t" +)!+k w)!t)!r 123C BANK is (!r#"r$ing
w!ll y!ar a#t!r y!ar "r la+king in (!r#"r$an+!- T)! (!r#"r$an+! +an %!
!*aluat! %y "ing 3inan+ial Analysis "# 3inan+ial 8tat!$!nts "# Bank- T)!
(ur("s! "# t)is (r",!+t is t" !*aluat! t)! (!r#"r$an+! "# 123C BANK- It
(ri$arily ai$s at l!arning t)! *ari"us #a+t"rs t)at +an )!l( I !*aluati"n
(r"+!ss- I )a*! tri! t" #in "ut t)! r!as"ns "r gr"un w)!r! it is la+king- I
)a*! als" tri! t" #in "ut t)! ar!as "# i$(r"*!$!nt-
In "r!r t" " #inan+ial analysis "# +"- t)! *ari"us t""ls lik! RATIO
ANALYSIS, COMPARATIVE FINANCIAL STATEMENT AND
TREND PERCENTAGES )a*! %!!n us!- In statisti+al t""ls, I9*! us!
CORRELATION, TIME SERIES ANALSIS (TREND VALUES) -In
1y("t)!sis t!sting, I9*! us! ANO:A TE8T- T)! (r",!+t als" in+lu!s
"%,!+ti*! "# stuy, R!s!ar+) M!t)""l"gy, Analysis an Int!r(r!tati"n,
#inings r!+"$$!nati"ns li$itati"n "# stuy +"n+lusi"n %i%li"gra()y an
ann!'ur!-
;
INTRODUCTION OF BANKING
MEANING AND DEFINITION:
Bank is an instituti"n t)at !als in $"n!y an its su%stitut!s an
(r"*i!s +ru+ial #inan+ial s!r*i+!s- T)! (rin+i(al ty(! "# %aking in t)!
$"!rn inustrial w"rl is +"$$!r+ial %anking 6 +!ntral %anking-
Banking M!ans <A++!(ting 2!("sits #"r t)! (ur("s! "# l!ning "r
In*!st$!nt "# !("sits "# $"n!y #r"$ t)! (u%li+, r!(aya%l! "n !$an "r
"t)!rwis! an wit)raw %y +)!/u!, ra#t "r "t)!rwis!-<
-Banking Companies (Regulation) Act,1949
T)! +"n+is! "'#"r i+ti"nary )as !#in! a %ank as <Esta%lis)$!nt
#"r +ust"y "# $"n!y w)i+) it (ays "ut "n +ust"$!rs "r!r-< In#a+t t)is is
t)! #un+ti"n w)i+) t)! %ank (!r#"r$! w)!n %anking "riginat!-
<Banking in t)! $"st g!n!ral s!ns!, is $!ant t)! %usin!ss "#
r!+!i*ing, +"ns!r*ing 6 utili0ing t)! #uns "# +"$$unity "r "# any s(!+ial
s!+ti"n "# it-<
-By H.Wills & 1. Bogan
=
<A %ank!r "# %ank is a (!rs"n, a #ir$, "r a +"$(any )a*ing a (la+! "#
%usin!ss w)!r! +r!its ar! "(!n! %y !("sits "r +"ll!+ti"n "# $"n!y "r
+urr!n+y "r w)!r! $"n!y is a*an+! an wan!-
-By Findlay Sheras
T)us
A Bank :
A++!(t !("sits "# $"n!y #r"$ (u%li+,
Pays int!r!st "n $"n!y !("sit! wit) it-
L!ns "r in*!sts $"n!y
R!(ays t)! a$"unt "n !$an,
All"w t)! $"n!y !("sit! t" %! wit) rawn %y +)!/u! "r ra#t-
ORIGIN OF WORD BANK:
T)! "rigin "# t)! w"r %ank is s)r"u! in $yst!ry- A++"ring t" "n!
*i!w ("int t)! Italian %usin!ss )"us! +arrying "n +ru! #r"$ "# %anking
w!r! +all! %an+)i %an+)!ri< A++"ring t" an"t)!r *i!w("int %anking is
!ri*! #r"$ G!r$an w"r <Bran+k< w)i+) $!an )!a( "r $"un- In
Englan, t)! issu! "# (a(!r $"n!y %y t)! g"*!rn$!nt was r!#!rr! t" as a
raising a %ank-
>
ORIGIN OF BANKING :
Its "rigin in t)! si$(l!st #"r$ +an %! tra+! t" t)! "rigin "# aut)!nti+
)ist"ry- A#t!r r!+"gni0ing t)! %!n!#it "# $"n!y as a $!iu$ "# !'+)ang!,
t)! i$("rtan+! "# %anking was !*!l"(! as it (r"*i!s t)! sa#!r (la+! t"
st"r! t)! $"n!y- T)is sa#! (la+! ulti$at!ly !*"l*! in t" #inan+ial
instituti"ns t)at a++!(ts !("sits an $ak! l"ans i-!-, $"!rn +"$$!r+ial
%anks-
?
BANKING SYSTEM IN INDIA
A HISTORICAL PERSPECTIVE :
W! +an i!nti#y t)!r! istin+t ()as!s in t)! )ist"ry "# Inian %anking5
@- Early ()as! #r"$ @>?=A@B=B-
.- Nati"nali0ati"n "# %anks an u( t" @BB@ (ri"r t" %anking s!+t"r
r!#"r$s-
4- N!w ()as! "# Inian %anking wit) t)! a*!nt "# #inan+ial %anking-
Banking in Inia )as its "rigin as !arly "r :!i+ (!ri"- It is %!li!*!
t)at t)! transiti"ns #r"$ $any l!ning t" %anking $ust )a*! "++urr!
!*!n %!#"r! Manu, t)! gr!at 1inu #urri!st, w)" )as !*"t! a s!+ti"n
"# )is w"rk t" !("sit an a*an+!s an lai "wn rul!s r!lating t" t)!
rat! "# int!r!st- 2uring t)! $"gul (!ri", t)! inig!ni"us %ank!r
(lay! a *!ry i$("rtant r"l! in l!ning $"n!y an #inan+ing #"r!ign
tra! an +"$$!r+!-
2uring t)! ays "# t)! East Inia C"$(any it was t)! turn "# ag!n+y
)"us! t" +arry "n t)! %anking %usin!ss- T)! G!n!ral Bank "# Inia
was t)! #irst ,"int st"+k %ank t" %! !sta%lis)! in t)! y!ar @>?=- T)!
"t)!r w)i+) #"ll"w! was t)! Bank "# 1inustan an B!ngal Bank-
T)! Bank "# 1inustan is r!("rt! t" )a*! +"ntinu! till @BC=- W)il!
B
"t)!r tw" #ail! in t)! $!anti$!- In t)! #irst )al# "# t)! @Bt) +!ntury
t)! East Inia C"$(any !sta%lis)! t)!r! %anks, T)! %ank "# B!ngal
in @?CB, t)! Bank "# B"$%ay in @?7C an t)! Bank "# B"$%ay
in@?74- T)!s! t)r!! %anks als" kn"wn as t)! Pr!si!n+y %anks w!r!
t)! in!(!n!nt units an #un+ti"n! w!ll- T)!s! t)r!! %anks w!r!
a$alga$at! in @B.C an n!w %ank, t)! I$(!rial Bank "# Inia was
!sta%lis)! "n .>t) January, @B.@-
Wit) t)! (assing "# t)! 8tat! Bank "# Inia A+t in @B;; t)!
un!rtaking "# t)! I$(!rial Bank "# Inia was tak!n "*!r %y t)! n!wly
+"nstitut! 8BI- T)! R!s!r*! Bank "# Inia DRBIE w)i+) is t)! C!ntral %ank
was !sta%lis)! in A(ril, @B4; %y (assing R!s!r*! %ank "# Inia a+t @B4;-
T)! C!ntral "##i+! "# RBI is in Mu$%ai an it +"ntr"ls all t)! "t)!r %anks in
t)! +"untry-
In t)! wak! "# 8wa!s)i M"*!$!nt, nu$%!r "# %anks wit) t)! Inian
$anag!$!nt w!r! !sta%lis)! in t)! +"untry na$!ly, Pun,a% Nati"nal Bank
Lt-, Bank "# Inia Lt-, Bank "# Bar"a Lt-, Canara Bank- Lt- "n @Bt)
July @B=B, @7 $a,"r %anks "# t)! +"untry w!r! nati"nali0! an "n @;t)
A(ril @B?C, = $"r! +"$$!r+ial (ri*at! s!+t"r %anks w!r! tak!n "*!r %y t)!
g"*!rn$!nt-
@C
FUNCTIONS OF BANKS
PRIMARY FUNCTIONS
A++!(tan+! "# 2!("sits
Making l"ans 6 a*an+!s
L"ans
O*!rra#t
Cas) Cr!it
2is+"unting "# %ills "# !'+)ang!
SECONDARY FUNCTIONS
Ag!n+y #un+ti"ns
C"ll!+ti"n "# +)!/u!s 6 Bills !t+-
C"ll!+ti"n "# int!r!st an i*i!ns-
Making (ay$!nt "n %!)al# "# +ust"$!rs
Pur+)as! 6 sal! "# s!+uriti!s
3a+ility "# trans#!r "# #uns
T" a+t as trust!! 6 !'!+ut"r-
@@
UTILITY FUNCTIONS :
8a#! +ust"y "# +ust"$!rs *alua%l! arti+l!s 6 s!+uriti!s-
&n!rwriting #a+ility
Issuing "# tra*!ll!rFs +)!/u! l!tt!r "# +r!it
3a+ility "# #"r!ign !'+)ang!s
Pr"*iing tra! in#"r$ati"n
Pr"*i! in#"r$ati"n r!garing +r!it w"rt)in!ss "# t)!ir +ust"$!r-
@.
CLASSIFICATION ON BASIS OF OWNERSHIP
On t)! %asis "# "wn!rs)i( %anks ar! "# t)! #"ll"wing ty(!s 5
1. PUBLIC SECTOR BANK
Pu%li+ s!+t"r %anks ar! t)"s! %anks w)i+) ar! "wn! %y t)!
G"*!rn$!nt- T)! G"*t- runs t)!s! Banks- In Inia @7 %anks w!r!
nati"nali0! in @B=B 6 in @B?C an"t)!r = %anks w!r! als"
nati"nali0!- T)!r!#"r! in @B?C t)! nu$%!r "# nati"nali0! %ank .C-
But at (r!s!nt t)!r! ar! B %anks ar! nati"nali0!- All t)!s! %anks ar!
%!l"nging t" (u%li+ s!+t"r +at!g"ry- W!l#ar! is t)!ir (rin+i(l!
"%,!+ti*!-
2. PRIVATE SECTOR BANKS
T)!s! %anks ar! "wn! an run %y t)! (ri*at! s!+t"r- :ari"us %anks in
t)! +"untry su+) as ICICI Bank, 123C Bank !t+- An ini*iual )as
+"ntr"l "*!r t)!r! %anks in (r!(arati"n t" t)! s)ar! "# t)! %anks )!l
%y )i$-
@4
3. CO-OPERATIVE BANKS
C"A"(!rati*! %anks ar! t)"s! #inan+ial instituti"ns- T)!y (r"*i! s)"rt
t!r$ 6 $!iu$ t!r$ l"ans t" t)!r! $!$%!rs- C"A"(!rati*! %anks ar!
in !*!ry stat! in Inia- Its %ran+)!s at istri+t l!*!l ar! kn"wn as t)!
+!ntral +"A"(!rati*! %ank- T)! +!ntral +"A"(!rati*! %ank in turn )as its
%ran+)!s %"t) in t)! ur%an 6 rural ar!as- E*!ry stat! +"A"(!rati*!
%ank is an a(!' %ank w)i+) (r"*i!s +r!it #a+iliti!s t" t)! +!ntral +"A
"(!rati*! %ank- It $"%ili0! #inan+ial r!s"ur+!s #r"$ ri+)!r s!+ti"n "#
ur%an ("(ulati"n %y a++!(ting !("sit an +r!ating t)! +r!it lik!
+"$$!r+ial %ank an %"rr"wing #r"$ t)! $"n!y $kt- It als" g!ts
#uns #r"$ RBI-
@7
ii ACCORDING TO RESERVE BANK OF INDIA ACT 1935
Banks ar! +lassi#i! int" #"ll"wing tw" +at!g"ri!s s"n t)! %asis "#
r!s!r*! %ank A+t- @B47-
1. SCHEDULED BANK
T)!s! %anks )a*! (ai u( +a(ital "# at l!ast Rs- ; la+ks- T)!s! ar! lik!
a ,"int st"+k +"$(any- It is a +"A"(!rati*! "rgani0ati"n- T)!s! %anks
#in t)!ir $!nti"n in t)! s!+"n s+)!ul! "# t)! r!s!r*! %ank-
2. NON SCHEDULED BANK
T)!s! %anks ar! n"t $!nti"n! in t)! s!+"n s+)!ul! "# r!s!r*! %ank
(ai u( +a(ital "# t)!s! %anks is l!ss t)!n Rs-; la+s- T)! n"- su+) %ank
is graually t"lling in Inia-
iii CLASSIFICATION ACCORDING TO FUNCTION
On t)! %asis "# #un+ti"ns %anks ar! +lassi#i! as un!r 5A
1. COMMERCIAL BANKS
T)! +"$$!r+ial %anks g!n!rally !'t!n s)"rtAt!r$ l"ans t"
%usin!ss$!n 6 tra!rs- 8in+! t)!ir !("sits ar! #"r a s)"rtA(!ri"
"nly- T)!y +ann"t l!n $"n!y #"r a l"ng (!ri"- T)!s! %anks r!#"r$
*ari"us ty(!s "r ag!n+y ,"% #"r t)!ir +ust"$!rs- T)!s! %anks ar! n"t in
a ("siti"n t" grant l"ngAt!r$ l"ans t" inustri!s %!+aus! t)!ir !("sits
@;
ar! "nly #"r a s)"rt (!ri"- T)! $a,"rity "# ,"int st"+k %anks in Inia
ar! +"$$!r+ial %anks w)i+) #inan+! tra! 6 +"$$!r+! "nly-
2. SAVING BANKS
T)! (rin+i(l! #un+ti"n "# t)!s! %anks is t" +"ll!+t s$all sa*ing a+r"ss
t)! +"untry an (ut t)!$ int" (r"u+ti*! us!- T)!s! %anks )a*!
s)"wn $ark! !*!l"($!nt in G!r$any 6 Ja(an- T)!s! %anks ar!
!sta%lis)! in 1AMB&RG City "# G!r$any in @>=;- In Inia a
!(art$!nt "# ("st "##i+!s #un+ti"ns as a sa*ing %anks-
3. FOREIGN EXCHANGE BANKS
T)!s! ar! s(!+ial ty(!s "# %anks w)i+) s(!+iali0! in #inan+ing #"r!ign
tra!- T)!ir $ain #un+ti"n is t" $ak! int!rnati"nal (ay$!nts t)r"ug)
(ur+)as! 6 sal! "# !'+)ang! %ills- As it w!ll kn"wn, t)! !'("rt!rs "# a
+"untry (r!#!r t" r!+!i*! t)! (ay$!nts #"r !'("rts in t)!ir "wn
+urr!n+y- T)us t)!s! %anks +"n*!rt )"$! +urr!n+y int" #"r!ign
+urr!n+y an *i+! *!rsa- It is "n t)is a++"unt t)at t)!s! %anks )a*! t"
k!!( wit) t)!$s!l*!s st"+k "# t)! +urr!n+y "# *ari"us +"untri!s-
Al"ng wit) t)at, t)!y )a*! t" "(!n %ran+)!s in #"r!ign +"untri!s t"
+arry "n t)!ir %usin!ss-
@=
4. INDUSTIRAL BANKS
T)! inustrial %anks !'t!ns l"ng t!r$ l"ans t" inustri!s- In #a+t,
t)!y als" )!l( inustrials #ir$s t" s!ll t)!ir !%!ntur!s an s)ar!s-
8"$! ti$!s, t)!y !*!n un!rwrit! t)! !%!ntur!s 6 s)ar!s "# %ig
inustrial +"n+!rns-
5. INDIGENIOUS BANKS
T)!s! %anks #"un t)!ir "rigin in Inia- T)!s! %anks $a! a
signi#i+ant +"ntri%uti"n t" t)! !*!l"($!nt "# agri+ultural an
inustri!s %!#"r! in!(!n!n+!- Ma)a,ans, rural $"n!yl!n!rs )a*!
%!!n t)! #"r!runn!r "# t)!s! %anks in Inia-
6. CENTRAL BANK
T)! +!ntral %ank "++u(i!s a (i*"tal ("siti"n in t)! $"n!tary an
%anking stru+tur! "# t)! +"untry- T)! +!ntral %ank is t)! unis(ut!
l!a!r "# t)! $"n!y $ark!t- As su+) it su(!r*is!s +"ntr"ls an
r!gulat!s t)! a+ti*iti!s "# +"$$!r+ial %anks a##iliat! wit) it- T)!
+!ntral %ank is als" t)! )ig)!r $"n!tary instituti"n in t)! +"untry
+)arg! wit) t)! uty 6 r!s("nsi%ility "# +arrying "ut t)! $"n!tary
@>
("li+y #"r$ulat! %y t)! g"*!rn$!nt- IniaFs +!ntral %ank kn"wn as
t)! r!s!r*! %ank "# Inia was s!t u( in @B4;-
7. AGRICULTURAL BANK
T)! +"$$!r+ial an t)! inustrial %anks ar! n"t in a ("siti"n t" $!!t
t)! +r!it r!/uir!$!nts "# agri+ultur!- 1!n+!, t)!r! aris!s t)! n!! #"r
s!tting u( s(!+ial ty(! "# %anks "# #inan+! agri+ultur!- T)! +r!it
r!/uir!$!nt "# t)! #ar$!rs ar! tw" ty(!s- 3irstly t)! #ar$!rs r!/uir!
s)"rt t!r$ l"ans t" %uy s!!s, #!rtili0!rs, (l"ug)s an "t)!r in(uts-
8!+"nly, t)! #ar$!rs r!/uir! l"ngAt!r$ l"ans t" (ur+)as! lan, t"
!##!+t (!r$an!nt i$(r"*!$!nts "n t)! lan t" %uy !/ui($!nt an t"
(r"*i! #"r irrigati"n w"rks- T)!r! ar! tw" ty(!s "# agri+ultur! %anks-
@- Agri+ultur! +"A"(!rati*! %anks, an
.- Lan $"rtgag! %anks- T)! #ar$!r (r"*i! s)"rtAt!r$ +r!it, w)il! t)!
l!tt!r !'t!n l"ngAt!r$ l"ans t" t)! #ar$!rs-
@?
PROFILE OF THE ORGANISATION
HOUSING DEVELOPMENT FINANCE CORPORATION
(HDFC BANK)
INTRODUCTION
T)! )"using !*!l"($!nt #inan+! +"r("rati"n li$it! D123CE was
a$"ngst t)! #irst t" r!+!i*! an<inA(rin+i(l!< a((r"*al #r"$ t)! r!s!r*!
%ank "# Inia DRBIE t" s!t u( a %ank in t)! (ri*at! s!+t"r, as (art "#
RBI li%!rali0ati"n "# Inian %anking inustry in @BB7- T)! %ank was
in +"r("rat! in Aug- @BB7 in t)! na$! "# 123C Bank Lt- Wit) its
r!gist!r! "##i+! in Mu$%ai, Inia, 123C Bank +"$$!n+!
"(!rati"ns as s+)!ul! +"$$!r+ial %ank in January @BB;-
PROMOTOR
123C is IniaFs (r!$i!r )"using #inan+! +"$(any an !n,"ys an
i$(!++a%l! tra+k r!+"r in Inia as w!ll as in int!rnati"nal $ark!ts-
8in+! its in+!(ti"n in @BB>, t)! +"r("rati"n )as $aintain! a
+"nsist!nt an )!alt)y gr"wt) in its "(!rati"ns t" r!$ain a $ark!t
l!a!r in $"rtgag!- Its "utstaning l"an ("rt#"li" +"*!rs w!ll "*!r a
@B
$illi"n w!lling units- 123C )as !*!l"(! signi#i+ant !'(!rtis! in
r!tail $"rtgag! l"ans t" i##!r!nt $ark!t s!g$!nts an als" )as a larg!
+"r("rat! +li!nt %as! #"r its )"using r!lat! +r!it #a+iliti!s- Wit) its
!'(!ri!n+! in t)! #inan+ial $ark!ts, a str"ng #ran+)is!, 123C was
i!ally ("siti"n! t" (r"$"t! a %ank in t)! Inian !n*ir"n$!nt-
BUSINESS FOCUS
123C %ankFs $issi"n is t" %! a w"rl +lass Inian %ank- T)! %ank )as
ai$ t" %uil s"un +ust"$!r #ran+)is!s a+r"ss istri+t %usin!ss s" as
t" %! t)! (r!#!r (r"*i!r "# %anking s!r*i+!s in t)! s!g$!nt t)at t)!
%ank "(!rat!s in an t" a+)i!*! )!alt)y gr"wt) in (r"#ita%ility,
+"nsist!nt wit) t)! %ankFs risk a((!tit!- T)! %ank is +"$$itt! t"
$aintain t)! )ig)!st l!*!l "# !t)i+al stanars, (r"#!ssi"nal int!grity
an r!gulat"ry +"$(lian+!- 123C %ankFs %usin!ss ()il"s"()y is
%as! "n #"ur +"r! *alu!s5
@- O(!rati"nal E'+!ll!n+!
.- Cust"$!r 3"+us
4- Pr"u+t L!a!rs)i(
7- P!"(l!-
.C
CAPITAL STRUCTURE
T)! aut)"ri0! +a(ital "# 123C %ank is Rs- 7;CCC Lak)s- T)! issu!,
su%s+ri%! an (aiAu( +a(ital is i*i! int" ?4=,7= la+ks !/uity
s)ar!s G Rs-@CHA !a+)-
TIMES BANKS AMALGAMATION
In a $il! st"n! transa+ti"n in Inian %anking inustry, Ti$!s %ank
li$it! Dan"t)!r n!w (ri*at! s!+t"r %ank (r"$"t! %y B!nn!tt,
C"l!$an 6 C"- ti$!s gr"u(E was $!rg! wit) 123C %ank lt-,
!##!+ti*! 3!%ruary .=, .CCC- As (!r t)! s+)!$! "# a$alga$ati"n
a((r"*! %y t)! s)ar! )"l!rs "# %"t) %anks an R!s!r*! %ank "#
Inia-
DISTRIBUTION NETWORK
123C %ank )as its 1!a/art!rs in Mu$%ai- T)! %ank at (r!s!nt )as
an !n*ia%l! n!tw"rk "# ;4;%ran+)!s s(r!a "*!r 4@. +iti!s a+r"ss t)!
+"untry- All %ran+)!s ar! link! "n an "nlin! r!al ti$! %asis-
Cust"$!r in @?B l"+ati"ns ar! als" s!r*i+! t)r"ug) ()"n! %anking-
T)! %anks !'(ansi"n (lans tak! int" a++"unt t)! n!! t" )a*! a
(r!s!n+! in all $a,"r inustrial an +"$$!r+ial +!nt!rs w)!r! its
.@
+"r("rat! +ust"$!rs ar! l"+at! as w!ll as t)! n!! t" %uil a str"ng
r!tail +ust"$!r %as! #"r %"t) !("sits an l"ans (r"u+ts- B!ing a
+l!aring s!ttl!$!nt %ank t" *ari"us l!aing st"+k !'+)ang!s, t)! %ank
)as %ran+)!s in +!nt!rs w)!r! t)! N8EHB8E )a*! a str"ng an a+ti*!
$!$%!r %as!-
T)! %ank als" )a*! a n!tw"rk "# @4.4ATMFs a+r"ss t)!r! +iti!s-
TECHNOLOGY
123C %ank "(!rat!s in a )ig)ly aut"$at! !n*ir"n$!nt in t!r$s "#
in#"r$ati"n t!+)n"l"gy an +"$$uni+ati"n syst!$s- All t)! %ankFs
%ran+)!s )a*! +"nn!+ti*ity w)i+) !na%l!s t)! %ank t" "##!r s(!!y
#uns trans#!r #a+ility t" its +ust"$!rs- Multi %ran+) a++!ss is als"
(r"*i! t" r!tail +ust"$!rs t)r"ug) t)! %ran+) n!tw"rk an
aut"$at! t!ll!r $a+)in!s DATMsE
T)! %ank )as $a! su%stantial !##"rts an in*!st$!nts in a+/uiring
t)! %!st t!+)n"l"gy a*aila%l! int!rnati"nally t" %uil t)! in#rastru+tur!
#"r a w"rl +lass %ank )as (ri"riti0! its !ngag!$!nt in t!+)n"l"gy
an t)! int!rn!t as "n! "# its k!y g"als an )as alr!ay $a!
signi#i+ant (r"gr!ss in w!% !na%ling its +"r! %usin!ss- In !a+) "##i+!
..
its %usin!ss, t)! Bank )as su++!!! in l!*!raging its $ark!t ("siti"n,
!'(!rtis! an t!+)n"l"gy t" +r!at! a +"$(!titi*! a*antag! an %uil
$ark!t s)ar!-
BUSINESS PROFILE
123C Bank +at!rs t" wi! rang! "# %anking s!r*i+!s +"*!ring %"t)
+"$$!r+ial an in*!st$!nt %anking "n t)! w)"l!sal! si! an
transa+ti"nal %ran+) %anking "n t)! r!tail si!- T)! %ank t)r!! k!y
%usin!ss ar!as
1. WHOLESALE BANKING SERVICES
T)! BankFs targ!t is (ri$ary larg! %lu!A+)i( $anu#a+turing +"$(ani!s
in t)! Inian +"r("rat! s!+t"r an t" a l!ss!r !'t!nt, !$!rging $i
si0! +"r("rat!- 3"r t)!s! +"r("rat! t)! Bank (r"*i!s a wi! rang! "#
+"$$!r+ial an transa+ti"nal Banking s!r*i+!s in+luing w"rking
+a(ital #inan+! tra! s!r*i+!s, transa+ti"nal s!r*i+!s, +as)
$anag!$!nt !t+- T)! Bank is als" a l!aing (r"*i!r "# stru+tur!
s"luti"n w)i+) +"$%in! +as) $anag!$!nt s!r*i+!s wit) *!n"rs an
istri%ut"r #inan+! #"r #a+ilitating su(!ri"r su((ly +)ain $anag!$!nt
#"r its +"r("rat! +ust"$!rs- Bas! "n its su(!ri"r (r"u+t !li*!ry
.4
s!r*i+! l!*!ls an str"ng +ust"$!r "ri!ntati"n, t)! Bank )as $a!
signi#i+ant in r"as int" t)! Banking +"ns"rtia "# a nu$%!r "# l!aing
Inia +"r("rat! in+luing Multinati"nals, C"$(ani!s #r"$ t)!
"$!sti+ %usin!ss )"us! an (ri$! (u%li+ s!+t"r +"$(ani!s- It is
r!+"gni0! as a l!aing (r"*i!r "# +as) $anag!$!nt an
transa+ti"nal Banking s"luti"ns t" +"r("rat! +ust"$!rs, Mutual
3uns, 8t"+k E'+)ang! M!$%!rs an Bank-
2. RETAIL BANKING SERVICES:
T)! "%,!+ti*! "# r!tail %ank is t" (r"*i! its targ!t $ark!t +ust"$!r a
#ull rang! "# #inan+ial (r"u+ts an %anking s!r*i+!, gi*ing t)!
+ust"$!r a "n!Ast"( win"w #"r all )isH)!r %anking r!/uir!$!nts- T)!
(r"u+ts ar! %a+k! %y w"rlA+lass s!r*i+!s an !li*!r! t" t)!
+ust"$!rs t)r"ug) t)! gr"wing %ran+) n!tw"rk as w!ll as t)"ug)
alt!rnati*! !li*!ry +)ann!ls lik! ATMs, ()"n! %anking, n!t %anking
an $"%il! %anking- T)! 123C %ank (r!#!rr! (r"gra$s #"r )ig) n!t
w"rt) ini*iuals, t)! 123C %ank (lus an t)! in*!st$!nt a*is"ry
s!r*i+!s (r"gra$ )a*! %!!n !sign! k!!(ing in $in )!as "#
+ust"$!rs w)" s!!k istin+t #inan+ial s"luti"ns in#"r$ati"n an
a*i+! "n *ari"us in*!st$!nt a*!nu!s- T)! als" )a a wi! array "#
.7
r!tail %an (r"u+ts in+luing aut" l"ans, l"ans against $ark!ta%l!
s!+uriti!s, (!rs"nal l"ans an l"ans #"r tw" w)!!l!rs- It is als" a
l!aing (r"*i!r "# !("sit"ry s!r*i+! t" r!tail +ust"$!rs "##!ring
+ust"$!rs t)! #a+ility t" )"l t)!ir in*!st$!nts in !l!+tr"ni+ #"r$-
123C Bank was t)! #irst %ank in Inia t" laun+) an int!rnati"nal
!%it +ar in ass"+iati"n wit) :I8A D :isa !l!+ti"nE an issu! t)!
$ast!r +ar Ma!str" !%it +ar as w!ll- T)! !%it +ar all"ws t)! us!
t" ir!+tly !%it )is a++"unt at t)! ("int "# (ur+)as! at a $!r+)ant
!sta%lis)$!nt, in Inia an "*!rs!as- T)! %ank laun+) its +r!it +ar
in ass"+iati"n wit) :I8A in N"*!$%!r .CC.- T)! %ank is als" "n! "#
t)! l!aing (lay!rs in t)! <$!r+)ant a+/uiring< %usin!ss wit) .=,7CC
("int "# sal! D("sE t!r$inals #"r !%itH+r!it +ars a++!(tan+! at
$!r+)ant !sta%lis)$!nts- T)! %ank is w!ll ("siti"n! as a l!a!r in
*ari"us n!t %as! B.C "(("rtuniti!s in+luing a wi! rang! "# int!r!st
%anking s!r*i+!s #"r #i'! !("sit, l"ans, %ill (ay$!nts !t+-
3. TREASURY OPERATIONS
Wit)in t)is %usin!ss t)! %ank )as t)r!! $ain (r"u+t ar!as #"r!ign
!'+)ang! an !ri*ati*!, l"+al +urr!n+y, $"n!y $ark!t 6 !%t
s!+uriti!s an !/uiti!s- Wit) t)! li%!rali0ati"n "# t)! #inan+ial $ark!t
.;
in Inia, +"r("rat! n!! $"r! s"()isti+at! risk $anag!$!nt
in#"r$ati"n a*i+! an (r"u+t stru+tur!- T)!s! an #in (ri+ing "n
*ari"us tr!asury (r"u+t ar! (r"*i! t)r"ug) t)! %ank tr!asury t!a$-
.=
BOARD OF DIRECTOR
Mr- Jagis) ka(""r, DC)air$anE
Mr- Aitya Puri, DManaging 2ir!+t"rE
Mr- K!ki Mistry
2r- :!nkat Ra" Gawal
2r- :in!!t Jain
Mrs- R!nu Karna
Mr- Ar*in Pan!
Mr- Ran,an Ka(""r DR!sign! w-!-#- .B
t)
Mar+), .CC=E
Mr- B"%%y Parik) Dw-!-#- Jan- B, .CC7E
Mr- As)i$ 8a$anta
VICE PRESIDENT AND COMPANY SECRETARY
Mr- 8an,any 2"ngr!
AUDITOR
MHs P-C 1ans"tia 6 C"-
C)art!r! A++"untant
REGISTERED OFFICE
123C BANK 1O&8E
8!na(ati Ba(at Mart,
L"w!r Par!l,
Mu$%ai 7CC@4
T!l- N"- ==;.@CCC
3a' N"- .7B=C>4>
W!%sit! 5 www- )#+%ank-+"$
.>
SWOT ANALYSIS
STRENGHTS :
I It )as an !'t!nsi*! istri%uti"n n!tw"rk +"$(rising "# 4@B %ran+)!s in
@== +iti!s 6 "n! int!rnati"nal "##i+! in 2u%ai t)is (r"*i!s a
+"$(!titi*! !g! "*!r t)! +"$(!titi"ns-
I T)! Bank )as a str"ng r!tail !("sit"ry %as! 6 )as $"r! t)an $illi"n
+ust"$!rs-
I Bank %"asts "# a str"ng %ran !/uity-
I I8O BCC@ +!rti#i+ati"n #"r its !("sit"ry 6 +ust"y "(!rati"ns 6 #"r
its %a+k!n (r"+!ssing "# r!tail "(!rati"n 6 ir!+t %anking "(!rati"sn-
I T)! %ank )as a n!ar +"$(!titi*! !g! in ar!a "# "(!rati"ns-
I T)! %ank )as a $ark!t l!a!r in +as) s!ttl!$!nt s!r*i+! #"r t)! $a,"r
st"+k !'+)ang!s in its +"untry-
I 123C Bank is "n! "# t)! larg!st (ri*at! s!+t"r %ank w"rking in Inia-
I It )as a )ig)ly aut"$at! !n*ir"n$!nt in t!r$s "# in#"r$ati"n
t!+)n"l"gy 6 +"$$uni+ati"n syst!$-
I In#rastru+tur! is %!st-
I It )as $any inn"*ati*! (r"u+ts lik! kis A*antag! s+)!$!, NRI
s!r*i+!s-
.?
WEAKNESS :
I A++"unt "(!ning an !li*!ry "# +)!/u! %""k tak! +"$(arati*!ly
$"r! ti$!-
I La+k "# a*aila%ility "# i##!r!nt +r!it (r"u+ts lik! CC Li$it, Bill
is+"unting #a+iliti!s-
OPPORTUNITY :
I Bran+) !'(ansi"n
I 2""r st!( s!r*i+!s
I Gr!at!r li%!rali0ati"n in #"r!ign "wn!rs)i( *ia 32I in Inian P*t-
8!+t"r Banks-
I CCH O3 3a+iliti!s-
I In#rastru+tur! i$(r"*!$!nts 6 %!tt!r syst!$s #"r traing 6 s!ttl!$!nt
in t)! g"*t- s!+uriti!s 6 #"r!ign !'+)ang! $ark!ts-
THREATS:
I T)! %ank )as start! #a+ing +"$(!titi"n #r"$ (lay!rs lik! 8BI, PNB
Bank in t)! #inan+! $ark!t its!l#- T)is r!u+! t)! (r"#it $argins in t)!
#utur!-
I 8"$! P*t- Banks )a*! > ays %anking-
.B
OB1ECTIVE OF THE STUDY
O%,!+ti*!s ar! t)! !ns t)at stat!s s(!+i#i+ally )"w g"al %! a+)i!*!-
E*!ry stuy $ust )a*! an "%,!+ti*! #"r w)i+) all t)! !##"rts )a*! %!!n "n!-
Wit)"ut "%,!+ti*! n" r!s!ar+) +an %! +"nu+t! an n" r!sult +an %!
"%tain!- On t)! %asis "# "%,!+ti*! all t)! r!s!ar+) (r"+!ss is #"ll"w!-
O%,!+ti*!s ar! t)! $ain as(!+t "# !*!ry stuy- T)! "%,!+ti*! "# t)! stuy
gi*!s ir!+ti"n t" g" t)r"ug) t)! r!s!ar+) (r"%l!$- It gui!s t)! r!s!ar+)!r
an k!!(s )i$ "n tra+k-
I )a*! tw" "%,!+ti*!s r!garing $y r!s!ar+) (r",!+t- T)!s! ar! s)"wn
%!l"w 5A
@- Pri$ary "%,!+ti*!
.- 8!+"nary "%,!+ti*!
1. Primary objective :-
@E T" stuy t)! s"#twar! us! in 123C Bank
.E T" analys! t)! #inan+ial stat!$!nts "# t)! +"r("rati"n t" it9s
tru! #inan+ial ("siti"n %y t)! us! "# rati"s
2. Secondary objective :-
@E T" #in "ut t)! s)"rt+"$ings in 123C Bank
.E T" s!! w)!t)!r 123C is g"ing w!ll "r n"t in i##!r!nt ar!as
4E T" in#"r$ t)! $anag!$!nt a%"ut t)! #inan+ial +"niti"n "#
123C
7E T" in#"r$ t)! in*!st"r, !na%ling t)!$ t" tak! t)! in*!st$!nt
!+isi"n-
4C
INTRODUCTION OF THE TOPIC
MEANING OF FINANCIAL STATEMENTS:-
3inan+ial stat!$!nts r!#!r t" su+) stat!$!nts w)i+) +"ntains #inan+ial
in#"r$ati"n a%"ut an !nt!r(ris!- T)!y r!("rt (r"#ita%ility an t)! #inan+ial
("siti"n "# t)! %usin!ss at t)! !n "# a++"unting (!ri"- T)! t!a$ #inan+ial
stat!$!nt in+lu!s at l!ast tw" stat!$!nts w)i+) t)! a++"untant (r!(ar!s at
t)! !n "# an a++"unting (!ri"- T)! tw" stat!$!nts ar!5 A
1. The Balance Sheet
2. Profit And Loss Account
T)!y (r"*i! s"$! !'tr!$!ly us!#ul in#"r$ati"n t" t)! !'t!nt t)at
%alan+! 8)!!t $irr"rs t)! #inan+ial ("siti"n "n a (arti+ular at! in t!r$s "#
t)! stru+tur! "# ass!ts, lia%iliti!s an "wn!rs !/uity, an s" "n an t)! Pr"#it
An L"ss a++"unt s)"ws t)! r!sults "# "(!rati"ns uring a +!rtain (!ri" "#
ti$! in t!r$s "# t)! r!*!nu!s "%tain! an t)! +"st in+urr! uring t)! y!ar-
T)us t)! #inan+ial stat!$!nt (r"*i!s a su$$ari0! *i!w "# #inan+ial
("siti"ns an "(!rati"ns "# a #ir$-
MEANING OF FINANCIAL ANALYSIS
T)! #irst task "# #inan+ial analysis is t" s!l!+t t)! in#"r$ati"n r!l!*ant t" t)!
!+isi"n un!r +"nsi!rati"n t" t)! t"tal in#"r$ati"n +"ntain! in t)!
#inan+ial stat!$!nt- T)! s!+"n st!( is t" arrang! t)! in#"r$ati"n in a way t"
)ig)lig)t signi#i+ant r!lati"ns)i(- T)! #inal st!( is int!r(r!tati"n an rawing
"# in#!r!n+! an +"n+lusi"ns- 3inan+ial stat!$!nt is t)! (r"+!ss "# s!l!+ti"n,
r!lati"n an !*aluati"n-
4@
Features of Financial Analysis
A T" (r!s!nt a +"$(l!' ata +"ntain! in t)! #inan+ial stat!$!nt in
si$(l! an un!rstana%l! #"r$-
A T" +lassi#y t)! it!$s +"ntain! in t)! #inan+ial stat!$!nt in
+"n*!ni!nt an rati"nal gr"u(s-
T" $ak! +"$(aris"n %!tw!!n *ari"us gr"u(s t" raw *ari"us
+"n+lusi"ns-
Purpose of Analysis of financial statements
T" kn"w t)! !arning +a(a+ity "r (r"#ita%ility-
T" kn"w t)! s"l*!n+y-
T" kn"w t)! #inan+ial str!ngt)s-
T" kn"w t)! +a(a%ility "# (ay$!nt "# int!r!st 6 i*i!ns-
T" $ak! +"$(arati*! stuy wit) "t)!r #ir$s-
T" kn"w t)! tr!n "# %usin!ss-
T" kn"w t)! !##i+i!n+y "# $gt-
T" (r"*i! us!#ul in#"r$ati"n t" $gt
Procedure of Financial Statement Analysis
T)! #"ll"wing (r"+!ur! is a"(t! #"r t)! analysis an int!r(r!tati"n "#
#inan+ial stat!$!nts5A
4.
T)! analyst s)"ul a+/uaint )i$s!l# wit) (rin+i(l!s an ("stulat! "#
a++"unting- 1! s)"ul kn"w t)! (lans an ("li+i!s "# t)! $anag!$!nt
s" t)at )! $ay %! a%l! t" #in "ut w)!t)!r t)!s! (lans ar! (r"(!rly
!'!+ut! "r n"t-
T)! !'t!nt "# analysis s)"ul %! !t!r$in! s" t)at t)! s()!r! "# w"rk
$ay %! !+i!- I# t)! ai$ is #in "ut- Earning +a(a+ity "# t)!
!nt!r(ris! t)!n analysis "# in+"$! stat!$!nt will %! un!rtak!n- On
t)! "t)!r )an, i# #inan+ial ("siti"n is t" %! stui! t)!n %alan+! s)!!t
analysis will %! n!+!ssary-
T)! #inan+ial ata %! gi*!n in stat!$!nt s)"ul %! r!+"gni0! an
r!arrang!- It will in*"l*! t)! gr"u(ing si$ilar ata un!r sa$!
)!as- Br!aking "wn "# ini*iual +"$("n!nts "# stat!$!nt
a++"ring t" natur!- T)! ata is r!u+! t" a stanar #"r$-
A r!lati"ns)i( is !sta%lis)! a$"ng #inan+ial stat!$!nts wit) t)! )!l(
"# t""ls 6 t!+)ni/u!s "# analysis su+) as rati"s, tr!ns, +"$$"n si0!,
#un #l"w !t+-
T)! in#"r$ati"n is int!r(r!t! in a si$(l! an un!rstana%l! way-
T)! signi#i+an+! an utility "# #inan+ial ata is !'(lain! #"r )!l( in
!+isi"n $aking-
T)! +"n+lusi"ns rawn #r"$ int!r(r!tati"n ar! (r!s!nt! t" t)!
$anag!$!nt in t)! #"r$ "# r!("rts-
44
TYPES OF FINANCIAL ANALYSIS
A) Classification on the basis of natural used
a) External Analysis
Outsi!rs, w)" "n9t )a*! a++!ss t" t)! !tail! int!rnal
a++"unting r!+"rs "# t)! %usin!ss #ir$, " t)is analysis- T)!s!
"utsi!rs (arti!s ar! ("t!ntial in*!st"r, +r!it"rs, g"*!rn$!nt
ag!n+i!s, +r!it ag!n+i!s 6 g!n!ral (u%li+-
%E Internal Analysis5
T)! analysis +"nu+t! %y (!rs"n w)" )as a++!ss t" t)! int!rnal
a++"unting r!+"rs "# a %usin!ss #ir$ is kn"wn as int!rnal analysis-
BE On the basis of modus operand5
a) Horizontal Analysis:
1"ri0"ntal analysis r!#!rs t" t)! +"$(aris"n "# #inan+ial ata "# a
+"$(any #"r s!*!ral y!ars- T)! #igur!s "# t)is ty(! "# analysis ar!
(r!s!nt! )"ri0"ntally "*!r a n"- "# +"lu$ns- T)is ty(! "# analysis
is als" +all! J2yna$i+ AnalysisK-
b) Vertical Analysis:
47
T)is analysis r!#!rs t" t)! stuy "# r!lati"ns)i( "# t)! *ari"us it!$s
in t)! #inan+ial stat!$!nts, "# "n! a++"unting (!ri"- It is als"
kn"wn as J8tati+ analysisK-
FUNCTIONS OF FINANCE DEPARTMENT
T)! #un+ti"ns "# #inan+! !(art$!nt in+lu! t)! #"ll"wing ar!as5
@E E##!+ti*! $anag!$!nt "# #inan+ial r!s"ur+!s "# t)! +"$(any-
.E C""rinat!s 6 M"nit"rs t)! #un+ti"ns "# a++"unts a+ti*iti!s in t)!
unitsH$ark!ting "##!rs-
4E Esta%lis) an $aintain syst!$s "# #inan+ial +"ntr"l, int!rnal +)!+k an
r!n!r a*i+! "n #inan+ial 6 a++"unting $att!rs in+luing
!'a$inati"n "# #!asi%ility r!("rt an !tail! (r",!+t r!("rts-
7E Esta%lis) an $aintain (r"(!r syst!$ "# %ug!tary +"ntr"l, +"st
+"ntr"l an $anag!$!nt r!("rting-
;E Maintain #inan+ial a++"unts an +"$(il! annual (!ri"i+al a++"unts in
a++"ran+! wit) t)! +"$(ani!s A+t, @B;=, !nsuring t)! auit "#
a++"unts as (!r lawHG"*t- ir!+ti"ns-
=E L""ks a#t!r "*!rall #uns $anag!$!nt an arrang!s #uns r!/uir! #"r
t)! +a(ital s+)!$!s an w"rking +a(ital #"r$ g"*t-, %anks an
#inan+ial instituti"ns !t+-
>E Ti$!ly (ay$!nt "# all ta'!s, l!*i!s 6 uti!s un!r t)! Law,
Maint!nan+! "# r!+"rs an #iling r!turns stat!$!nts +"nn!+t! wit)
4;
su+) ta'!s, l!*i!s an uti!s wit) t)! a((r"(riat! aut)"riti!s , as (!r
law-
All t)! ("w!r in*"l*ing #inan+ial i$(li+ati"ns ar! t" ! !'!r+is! in (ri"r
+"nsultati"n wit) )!a "# +"n+!rn! #inan+! !(art$!nt- In t)! !*!nt "# any
i##!r!n+! "# "(ini"n %!tw!!n t)! G!n!ral Mang!r an t)! 1!a "# 3inan+!
2!(t-, t)! $att!r s)all %! r!#!rr! t" Managing 2ir!+t"r w)" a#t!r +"nsulting
2ir!+t"r D3inan+!E s)all issu! a((r"(riat! instru+ti"n a#t!r #"ll"wing t)!
(r!s+ri%! (r"+!ur!s-
METHODS OF FINANCIAL ANALYSIS
A nu$%!r "# $!t)"s +an %! us! #"r t)! (ur("s! "# analysis "# #inan+ial
stat!$!nts- T)!s! ar! als" t!r$! as t!+)ni/u!s "r t""ls "# #inan+ial
analysis- Out "# t)!s!, an !nt!r(ris! +an +)""s! t)"s! t!+)ni/u!s w)i+) ar!
suita%l! t" its r!/uir!$!nts- T)! (rin+i(al t!+)ni/u!s "# #inan+ial analysis
ar!5
1. Comparative Financial Statements.
2. Common - size Statements
3. Trend Analysis
4. Funds Flow statements
;- Cash Flow Statement
COMPARATIVE FINANCIAL STATEMENTS
W)!n #inan+ial stat!$!nts #igur!s #"r tw" "r $"t! y!ars ar! (la+! si!Asi!
t" #a+ilitat! +"$(aris"n, t)!s! ar! +all! L+"$(arati*! 3inan+ial 8tat!$!nts9-
4=
8u+) stat!$!nts n"t "nly s)"w t)! a%s"lut! #igur!s "# *ari"us y!ars %ut als"
(r"*i! #"r +"lu$ns t" ini+at! t" in+r!as! "rt !+r!as! in t)!s! #igur!s #r"$
"n! y!ar t" an"t)!r- In aiti"n, t)!s! stat!$!nts $ay als" s)"w t)! +)ang!
#r"$ "n! y!ar t" an"t)!r "n (!r+!ntag! #"r$- 8u+) +""(!rati*! stat!$!nts
ar! "# gr!at *alu! in #"r$ing t)! "(ini"n r!garing t)! (r"gr!ss "# t)!
!nt!r(ris!-
PURPOSE OR UTILITY OR IMPORTANCE OF
COMPARATIVE STATEMENTS
@- T" $ak! t)! 2ata si$(l!r an $"r! un!rstana%l!
.- T" ini+at! t)! Tr!n
4- T" ini+at! t)! str"ng ("ints w!ak ("ints "# t)! +"n+!rn
7- T" +"$(ar! t)! #ir$s (!r#"r$an+! wit) t)! a*!rag! (!r#"r$an+! "#
t)! inustry
;- T" )!l( in #"r!+asting
4>
FORMS OF PRESENTING COMPARATIVE STATEMENTS
@- T" s)"w "nly t)! a%s"lut! ata "# *ari"us it!$s "r in "t)!r w"rs t"
s)"w "nly ru(!! a$"unts "# *ari"us it!$s-
.- T" s)"w t)! in+r!as!s an !+r!as!s in ata in t!r$s "# $"n!y *alu!s
4- T" s)"w t)! in+r!as!s an !+r!as!s in ata in t!r$s "# (!r+!ntag!s
7- C"$(aris"n !'(r!ss! in rati"s
;- &s! "# +u$ulati*! #igur!s an a*!rag!s
COMPARATIVE BALANCE SHEET
T)! C"$(arati*! Balan+! 8)!!t as "n tw" "r $"r! i##!r!nt at!s +an %!
(r!(ar! t" s)"w t)! in+r!as! "r !+r!as! in *ari"us ass!ts, lia%iliti!s an
+a(ital- 8u+) a +"$(arati*! Balan+! 8)!!t is *!ry us!#ul in stuying t)!
tr!ns in a %usin!ss !nt!r(ris!-
ADVANTAGES OF COMPARATIVE BALANCE SHEET
@- 1!l(#ul #"r +"$(aris"n-
.- 1!l(#ul in kn"wing +)anging in t)! si0! "# it!$s-
4- 1!l(#ul in kn"wing tr!ns-
7- Link %!tw!!n in+"$! stat!$!nt an Balan+! s)!!t
4?
COMPARATIVE PROFIT & LOSS ACCOUNT
Pr"#it an l"ss a++"unt s)"ws t)! n!t (r"#it "r n!t l"ss "# a (arti+ular y!ar
w)!r!as +"$(arati*! (r"#it an l"ss a++"unt #"r a nu$%!r "# y!ars (r"*i!s
t)! #"ll"wing in#"r$ati"n
@- Rat! "# in+r!as! "r !+r!as! in gr"ss (r"#it-
.- Rat! "# in+r!as! "r !+r!as! in "(!rating (r"#it-
4- Rat! "# in+r!as! "r !+r!as! in +"st "# g""s sal!s
7- Rat! "# in+r!as! "r !+r!as! in n!t (r"#it
;- Rat! "# in+r!as! "r !+r!as! in sal!s-
TREND ANALYSIS
Tr!n (!r+!ntag! ar! *!ry us!#ul is $aking +"$(arati*! stuy "# t)!
#inan+ial stat!$!nts #"r a nu$%!r "# y!ars- T)!s! ini+at! t)! ir!+ti"n "#
$"*!$!nt "*!r a l"ng tin! an )!l( an analyst "# #inan+ial stat!$!nts t"
#"r$ an "(ini"n as t" w)!t)!r #a*"ra%l! "r un#a*"ra%l! t!n!n+i!s )a*!
!*!l"(!- T)is )!l(s in #utur! #"r!+asts "# *ari"us it!$s-
3"r +al+ulating tr!n (!r+!ntag!s any y!ar $ay %! tak!n as t)! L%as! y!ar9-
Ea+) it!$ "# %!as! y!ar is assu$! t" %! !/ual t" @CC an "n t)at %asis t)!
(!r+!ntag! "# it!$ "# !a+) y!ar +al+ulat!-
4B
RATIO ANALYSIS
MEANING :
A%s"lut! #igur!s !'(r!ss! in #inan+ial stat!$!nts %y t)!$s!l*!s ar!
$!aning#uln!ss- T)!s! #igur!s "#t!n " n"t +"n*!y $u+) $!aning unl!ss
!'(r!ss! in r!lati"n t" "t)!r #igur!s-
T)us, it + an %! say t)at t)! r!lati"ns)i( %!tw!!n tw" #igur!s, !'(r!ss! in
arit)$!ti+al t!r$s is +all! a rati"-
According to R.N. Anthony.
A ration is simply one number expressed in terms of
another. It is found by dividing one number into the other.
TYPES OF RATIOS
Pr"("rti"n "r Pur! Rati" "r 8i$(l! rati"-
Rat! "r s" $any Ti$!s-
P!r+!ntag!
3ra+ti"n-
OB1ECTS AND ADVANTAGES OR USES OF RATIO
ANALYSIS
1!l(#ul in analysis "# #inan+ial stat!$!nts-
8i$(li#i+ati"n "# a++"unting ata-
7C
1!l(#ul in +"$(arati*! stuy-
1!l(#ul in l"+ating t)! w!ak s("ts "# t)! %usin!ss-
1!l(#ul in #"r!+asting
Esti$at! a%"ut t)! tr!n "# t)! %usin!ss
3i'ati"n "# i!al stanars
E##!+ti*! +"ntr"l
8tuy "# #inan+ial s"unn!ss-
LIMITATION OF RATIO ANALYSIS
3als! a++"unting ata gi*!s #als! rati"s
C"$(aris"ns n"t ("ssi%l! "# i##!r!nt #ir$s a"(t i##!r!nt
a++"unting ("li+i!s-
Rati" analysis %!+"$!s l!ss !##!+ti*! u! t" (ri+! l!*!l
+)ang!
Rati"s $ay %! $isl!aing in t)! a%s!n+! "# a%s"lut! ata-
Li$it! us! "# a singl! Rati"-
Win"wA2r!ssing
La+k "# (r"(!r stanars-
Rati" al"n! ar! n"t a!/uat! #"r (r"(!r +"n+lusi"ns
E##!+t "# (!rs"nal a%ility an %ias "# t)! analyst-
7@
CLASSIFICATION OF RATIOS
In *i!w "# t)! #inan+ial $anag!$!nt "r a++"ring t" t)! t!sts satis#i!,
*ari"us rati"s )a*! %!!n +lassi#i!s as %!l"w
I- Liquidity Ratios : T)!s! ar! t)! rati"s w)i+) $!asur! t)! s)"rtAt!r$
s"l*!n+y "r #inan+ial ("siti"n "# a #ir$- T)!s! rati"s ar! +al+ulat! t"
+"$$!nt u("n t)! s)"rtAt!r$ (aying +a(a+ity "# a +"n+!rn "r t)! #ir$9s
a%ility t" $!!t its +urr!nt "%ligati"ns-
II- Long -Term Solvency and Leverage Ratios : L"ngAt!r$
s"l*!n+y rati"s +"n*!y a #ir$9s a%ility t" $!!t t)! int!r!st +"st an
r!(ay$!nt s+)!ul!s "# its l"ngAt!r$ "%ligati"n !-g- 2!%it E/uity Rati"
an Int!r!st C"*!rag! Rati"n- L!*!rag! Rati"s-
III- Activity Ratios: A+ti*ity rati"s ar! +al+ulat! t" $!asur! t)!
!##i+i!n+y wit) w)i+) t)! r!s"ur+! "# a #ir$ )a*! %!!n !$(l"y!- T)!s!
rati"s ar! als" +all! turn"*!r rati"s %!+aus! t)!y ini+at! t)! s(!!
wit) w)i+) ass!ts ar! %!ing turn! "*!r int" sal!s !-g- !%t"rs turn"*!r
rati"-
I:- Profitablity Ratios: T)!s! rati"s $!asur! t)! r!sults "# %usin!ss
"(!rati"ns "r "*!rall (!r#"r$an+! an !##!+ti*! "# t)! #ir$ !-g- gr"ss
(r"#it rati", "(!rating rati" "r +a(ital !$(l"y!- G!n!rally, tw" ty(!s "#
(r"#ita%ility rati"s ar! +al+ulat!-
(a) In relation to Sales, and
(b)In relation in Investment
7.
FUNCTIONAL CLASSIFICATION IN VIEW OF
FINANCIAL
MANAGEMENT OR CLASSIFICATION
ACCORDING TO TESTS
Liquidity Ratios Long-term
Solvency and
Leverage Ratios
Activity Ratios Profitability Ratios
DAE @- Curr!nt
Rati"n
.- Li/ui Rati"n
DA+iE T!st "r
Mui+k Rati"-
4- A%s"lut! li/ui "r
Cas) Rati"-
7- Int!rnal M!asur!
D%E @- 2!%t"rs
Turn"*!r Rati"
.- Cr!it"rs Turn"*!r
Rati"
4- In*!nt"ry Turn"*!r
Rati"
3inan+ial O(!rating
C"$("sit!
@- 2!%t- E/uity
Rati"
.- 2!%t t" T"tal
Ca(ital Rati"
4- Int!r!st
C"*!rag!s
7- Cas) 3l"wH
2!%t
;- Ca(ital
G!aring
@- In*!nt"ry
Turn"*!r Rati"-
.- 2!%t"rs
Turn"*!r
4- 3i'! Ass!ts
Turn"*!r Rati"
7- T"tal Ass!t
Turn"*!r Rati"
;- W"rking Ca(ital
Turn"*!r Rati"-
=- Paya%l!s
Turn"*!r Rati"
>- Ca(ital
E$(l"y!
Turn"*!r
DAE In R!lati"n t"
8al!s-
@- Gr"ss Pr"#it Rati"-
.- O(!rating Rati"-
4- O(!rating Pr"#it
Rati"-
7- N!t Pr"#it Rati"-
;- E'(!ns!s Rati"
DBE In r!lati"n t"
in*!st$!nts
@- R!turn "n
In*!st$!nts-
.- R!turn "n +a(ital-
4- R!turn "n E/uity
Ca(ital-
7- R!turn "n t"tal
R!s"ur+!s
;- Earning (!r s)ar!-
=- Pri+! Earning Rati"-
8)"w t)! (r"("rti"ns "# !%t an !/uity in #inan+ing "# t)! #ir$- T)!s!
rati"s $!asur! t)! +"ntri%uti"n "# #inan+ing %y "wn!r as +"$(ar! t"
#inan+ing %y "utsi!rs- T)! l!*!rag! rati"s +an #urt)!r %! +lassi#i! as5 DiE
3inan+ial L!*!rag!s, DiiE O(!rating L!*!rag!, DiiiE C"$("sit! L!*!rag!s
74
CASH-FLOW STATEMENT
A +as) N #l"w stat!$!nt is a stat!$!nt s)"wing in#l"ws Dr!+!i(tsE an
"ut#l"ws D(ay$!ntsE "# +as) uring a (arti+ular (!ri"- In "t)!r w"rs, it is a
su$$ary "# s"ur+!s an a((li+ati"ns "# !a+) uring a (arti+ular s(an "#
ti$!-
Objectives of Cash Flow Statement :
&s!#ul #"r 8)"rtAT!r$ 3inan+ial Planning-
&s!#ul in Pr!(aring t)! Cas) Bug!t-
C"$(aris"n wit) t)! Cas) Bug!t-
8tuy "# t)! Tr!n "# Cas) R!+!i(ts an Pay$!nts-
It !'(lains t)! 2!*iati"ns "# Cas) #r"$ Earnings-
1!l(#ul in As+!rtaining Cas) 3l"w #r"$ *ari"us 8!(arat!ly-
1!l(#ul in Making 2i*i!n 2!+isi"ns-
77
RESEARCH METHODOLOGY
T)! (r"+!ur! a"(t! #"r +"nu+ting t)! r!s!ar+) r!/uir!s a l"t "# att!nti"n
as it )as ir!+t %!aring "n a++ura+y, r!lia%ility an a!/ua+y "# r!sults
"%tain!- It is u! t" t)is r!as"n t)at r!s!ar+) $!t)""l"gy, w)i+) w! us!
at t)! ti$! "# +"nu+ting t)! r!s!ar+), n!!s t" %! !la%"rat! u("n-
R!s!ar+) M!t)""l"gy is a way t" syst!$ati+ally stuy an s"l*! t)!
r!s!ar+) (r"%l!$s- I# a r!s!ar+)!r wants t" +lai$ )is stuy as a g"" stuy,
)! $ust +l!arly stat! t)! $!t)""l"gy aa(t! in +"nu+ting t)! r!s!ar+) t)!
r!s!ar+) s" t)at it way %! ,ug! %y t)! r!a!r w)!t)!r t)! $!t)""l"gy "#
w"rk "n! is s"un "r n"t-
The Research Methodology here includes.
1. Meaning of Research.
2. Research Problem.
3. Research Design.
4. Sampling Design.
5. Data Collection method.
6. Analysis and interpretation of Data.
Meaning Research:
R!s!ar+) is !#in! as Ja scientific and systematic search for pertinent
information on a specific topic. R!s!ar+) is an art "# s+i!nti#i+
in*!stigati"n- R!s!ar+) is a syst!$ati0! !##"rt t" gain n"w kn"wl!g!- It is
a +ar!#ul in*!stigati"n "r in/uiry !s(!+ially t)r"ug) s!ar+) #"r n!w #a+ts in
any %ran+) "# kn"wl!g!- R!s!ar+) is an a+a!$i+ a+ti*ity an t)is t!r$
7;
s)"ul %! us! in a t!+)ni+al s!ns!- R!s!ar+) +"$(ris!s !#ining an
r!!#ining (r"%l!$s, #"r$ulating )y("t)!sis "r sugg!st! s"luti"ns- Making
!u+ti"ns an r!a+)ing +"n+lusi"ns t" !t!r$in! w)!t)!r t)!y i# t)!
#"r$ulating )y("t)!sis- R!s!ar+) is t)us, an "riginal +"ntri%uti"n t" t)!
!'isting st"+k "# kn"wl!g! $aking #"r its a*an+!$!nt- T)! s!ar+) #"r
kn"wl!g! t)r"ug) "%,!+ti*! an syst!$ati+ $!t)" "# #ining s"luti"ns t"
a (r"%l!$ is r!s!ar+)-
Research Problem
T)! #irst st!( w)il! +"nu+ting r!s!ar+) is +ar!#ul !#initi"n "# R!s!ar+)
Pr"%l!$- JT" ERR I8 T1E 1&MANK is a (r"*!r% w)i+) ini+at!s t)at n"
"n! is (!r#!+t in t)is w"rl- E*!ry r!s!ar+)!r )as t" #a+! $any (r"%l!$s
w)i+) +"nu+ting any r!s!ar+) t)at9s w)y (r"%l!$ stat!$!nt is !#in! t"
kn"w w)i+) ty(! "# (r"%l!$s a r!s!ar+)!r )as t" #a+! w)il! +"nu+ting any
stuy- It is sai t)at,
Problem well defined is problem half solved.
Basi+ally, a (r"%l!$ stat!$!nt r!#!rs t" s"$! i##i+ulty, w)i+) r!s!ar+)!r
!'(!ri!n+!s in t)! +"nt!'t "# !it)!r a t)!"r!ti+al "r (ra+ti+al situati"n an
wants t" "%tain t)! s"luti"n #"r t)! sa$!-
T)! (r"%l!$ stat!$!nt )!r! is5
To make a Financial Analysis of Financial statements of HDFC BANK
LUCKNOW.
7=
Research Design
A r!s!ar+) !signs is t)! arrang!$!nt "# +"niti"ns #"r +"ll!+ti"n an
analysis ata in a $ann!r t)at ai$s t" +"$%in! r!l!*an+! t" t)! r!s!ar+)
(ur("s! wit) !+"n"$y in (r"+!ur!- R!s!ar+) 2!sign is t)! +"n+!(tual
stru+tur! wit) in w)i+) r!s!ar+) in +"nu+t!- It +"nstitut!s t)! %lu!(rint #"r
t)! +"ll!+ti"n $!asur!$!nt an analysis "# ata- R!s!ar+) 2!sign in+lu!s
an "utlin! "# w)at t)! r!s!ar+)!r will " #"r$ writing t)! )y("t)!sis an it
"(!rati"nal i$(li+ati"n t" t)! #inal analysis "# ata- A r!s!ar+) !sign is a
#ra$!w"rk #"r t)! stuy an is us! as gui! in +"ll!+ti"n an analy0ing t)!
ata- It is a strat!gy s(!+i#ying w)i+) a((r"a+) will %! us! #"r gat)!ring
an analy0ing t)! ata- It als" in+lu! t)! ti$! an +"st %ug!t sin+! $"st
stui!s ar! "n! un!r t)!s! tw" +"st %ug!t sin+! $"st stui!s ar! "n!
un!r t)!s!s t"w +"nstraints-
T)! !sign is su+) stui!s $ust %! rigi an n"t #l!'i%l! an $"st #"+us
att!nti"n "n t)! #"ll"wing-
@- W)at is t)! stuy a%"utO
.- W)y is t)! stuy %!ing $a!O
4- W)!r! will t)! stuy %! +arri! "utO
7- W)at ty(! "# ata is r!/uir!O
;- W)!r! +an %! r!/uir! ata %! #"unO
=- W)at (!ri" "# ti$! will t)! stuy in+lu!O
>- W)at will %! sa$(l! !signO
?- W)at t!+)ni/u!s "# ata +"ll!+ti"n will %! us!O
B- 1"w will t)! ata %! analy0!O
@C-In w)at styl! will t)! r!("rt %! (r!(ar!O
7>
TYPES OF RESEARCH DESIGN :
EXPERIMENTAL RESEARCH DESIGN
EXPLORATORY RESEARCH DESIGN
DESCRIPTIVE& DIAGNOSTIC RESEARCH
Exploratory Research Design: T)is r!s!ar+) !sign is (r!#!rr! w)!n
r!s!ar+)!r )as a *agu! i!a a%"ut t)! (r"%l!$ t)! r!s!ar+)!r )as t" !'(l"r!
t)! su%,!+t-
Experimental Research Design - T)! r!s!ar+) !sign is us! t" (r"*i! a
str"ng %asis #"r t)! !'ist!n+! "# +asual r!lati"ns)i( %!tw!!n tw" "r $"r!
*aria%l!s-
Descriptive Research Design - It s!!ks t" !t!r$in! t)! answ!rs t" w)",
w)at, w)!r!, w)!n an )"w /u!sti"ns- It is %as! "n s"$! (r!*i"us
un!rstaning "# t)! $att!r-
Diagnostic Research Design It !t!r$in!s t)! #r!/u!n+y wit) w)i+)
s"$!t)ing "++urs "r its ass"+iati"n wit) s"$!t)ing !ls!-
Research Design Used in this Project
R!s!ar+) 2!sign +)"s!n #"r t)is stuy is 2!s+ri(ti*! R!s!ar+) 2!sign-
2!s+ri(ti*! stuy is %as! "n s"$! (r!*i"us un!rstaning "# t)! t"(i+-
R!s!ar+) )as g"t a *!ry s(!+i#i+ "%,!+ti*! an +l!ar +ut ata r!/uir!$!nts-
7?
Sampling Design
8a$(ling is n!+!ssary %!+aus! it is al$"st i$("ssi%l! t" !'a$in! t)! !ntir!
(ar!nt ("(ulati"n Di-!- t)! !ntir! uni*!rs!E *ari"us #a+t"rs su+) as ti$!
a*aila%l! +"st, (ur("s! "# stuy !t+- $ak! it n!+!ssary #"r t)! r!s!ar+)!rs t"
+)""s! a sa$(l!- It s)"ul n!it)!r %! t"" s$all n"r t"" %ig- It s)"ul %!
$anag!a%l!- T1E sa$(l! si0! "# (ast 4 y!ars is tak!n #"r (r!s!nt stuy u!
t" ti$! li$itati"n-
DATA COLLECTIONS
T)! (r"+!ss "# ata +"ll!+ti"n %!gins a#t!r a r!s!ar+) (r"%l!$ )as %!!n
!#in! an r!s!ar+) !sign a)s %!!n +)alk! "ut- T)!r! ar! tw" ty(!s "#
ata N
METHODS OF PRIMARY DATA
OBSERVATION METHOD
INTERVIEW METHODS
QUESTIONAIRE METHOD
SCHEDULE METHOD
PRIMARY DATA -
It is #irst )an ata, w)i+) is +"ll!+t! %y r!s!ar+)!r its!l#- Pri$ary ata is
+"ll!+t! %y *ari"us a((r"a+)!s s" as t" g!t a (r!+is!, a++urat!, r!alisti+ an
r!l!*ant ata- T)! $ain t""l in gat)!ring (ri$ary ata was in*!stigati"n an
7B
"%s!r*ati"n- It was a+)i!*! %y a ir!+t a((r"a+) an "%s!r*ati"n #r"$ t)!
"##i+ials "# t)! +"$(any-
SECONDARY DATA - it is t)! ata w)i+) is alr!ay +"ll!+t! %y s"$!"n!
!ls!- R!s!ar+)!r )as t" analy0! t)! ata an int!r(r!ts t)! r!sults- It )as
always %!!n i$("rtant #"r t)! +"$(l!ti"n "# any r!("rt- It (r"*i!s r!lia%l!,
suita%l!, a!/uat! an s(!+i#i+ kn"wl!g!-
I t""k ata +"$(ris! annual r!("rts an ("st r!+"rs- Bank )as (r"*i! $!
annual r!("rts #r"$ .CC7AC; t" .CC>AC? %y )!l( "# w)i+), I (r!(ar! $y
r!("rt-
T)! *alua%l! +""(!rati"n !'t!n! %y sta## $!$%!rs +"ntri%ut! a l"t t"
#ul#ill t)! r!/uir!$!nts in t)! +"ll!+ti"n "# ata in "r!r t" +"$(l!t! t)!
(r",!+t- :ari"us statisti+al t""ls ar! a((li! !(!ning "n t)! r!s!ar+)
(r"%l!$- In t)is stuy rati" analysis, +"$(arati*! #inan+ial stat!$!nts
analysis, +"$$"n si0! stat!$!nts an Tr!n Analysis )as %!!n us! #"r
analy0ing an int!r(r!ting t)! r!sult-
;C
Banks ar! +lassi#i! int" #"ll"wing tw" +at!g"ri!s s"n t)! %asis "# r!s!r*!
%ank A+t- @B47-
1. SCHEDULED BANK
T)!s! %anks )a*! (ai u( +a(ital "# at l!ast Rs- ; la+ks- T)!s! ar! lik!
a ,"int st"+k +"$(any- It is a +"A"(!rati*! "rgani0ati"n- T)!s! %anks
#in t)!ir $!nti"n in t)! s!+"n s+)!ul! "# t)! r!s!r*! %ank-
2. NON SCHEDULED BANK
T)!s! %anks ar! n"t $!nti"n! in t)! s!+"n s+)!ul! "# r!s!r*! %ank
(ai u( +a(ital "# t)!s! %anks is l!ss t)!n Rs-; la+s- T)! n"- su+) %ank
is graually t"lling in Inia-
iii CLASSIFICATION ACCORDING TO FUNCTION
On t)! %asis "# #un+ti"ns %anks ar! +lassi#i! as un!r 5A
1. COMMERCIAL BANKS
T)! +"$$!r+ial %anks g!n!rally !'t!n s)"rtAt!r$ l"ans t"
%usin!ss$!n 6 tra!rs- 8in+! t)!ir !("sits ar! #"r a s)"rtA(!ri"
"nly- T)!y +ann"t l!n $"n!y #"r a l"ng (!ri"- T)!s! %anks r!#"r$
*ari"us ty(!s "r ag!n+y ,"% #"r t)!ir +ust"$!rs- T)!s! %anks ar! n"t in
a ("siti"n t" grant l"ngAt!r$ l"ans t" inustri!s %!+aus! t)!ir !("sits
ar! "nly #"r a s)"rt (!ri"- T)! $a,"rity "# ,"int st"+k %anks in Inia
ar! +"$$!r+ial %anks w)i+) #inan+! tra! 6 +"$$!r+! "nly-
;@
2. SAVING BANKS
T)! (rin+i(l! #un+ti"n "# t)!s! %anks is t" +"ll!+t s$all sa*ing a+r"ss
t)! +"untry an (ut t)!$ int" (r"u+ti*! us!- T)!s! %anks )a*!
s)"wn $ark! !*!l"($!nt in G!r$any 6 Ja(an- T)!s! %anks ar!
!sta%lis)! in 1AMB&RG City "# G!r$any in @>=;- In Inia a
!(art$!nt "# ("st "##i+!s #un+ti"ns as a sa*ing %anks-
3. FOREIGN EXCHANGE BANKS
T)!s! ar! s(!+ial ty(!s "# %anks w)i+) s(!+iali0! in #inan+ing #"r!ign
tra!- T)!ir $ain #un+ti"n is t" $ak! int!rnati"nal (ay$!nts t)r"ug)
(ur+)as! 6 sal! "# !'+)ang! %ills- As it w!ll kn"wn, t)! !'("rt!rs "# a
+"untry (r!#!r t" r!+!i*! t)! (ay$!nts #"r !'("rts in t)!ir "wn
+urr!n+y- T)us t)!s! %anks +"n*!rt )"$! +urr!n+y int" #"r!ign
+urr!n+y an *i+! *!rsa- It is "n t)is a++"unt t)at t)!s! %anks )a*! t"
k!!( wit) t)!$s!l*!s st"+k "# t)! +urr!n+y "# *ari"us +"untri!s-
Al"ng wit) t)at, t)!y )a*! t" "(!n %ran+)!s in #"r!ign +"untri!s t"
+arry "n t)!ir %usin!ss-
4. INDUSTIRAL BANKS
;.
T)! inustrial %anks !'t!ns l"ng t!r$ l"ans t" inustri!s- In #a+t,
t)!y als" )!l( inustrials #ir$s t" s!ll t)!ir !%!ntur!s an s)ar!s-
8"$! ti$!s, t)!y !*!n un!rwrit! t)! !%!ntur!s 6 s)ar!s "# %ig
inustrial +"n+!rns-
5. INDIGENIOUS BANKS
T)!s! %anks #"un t)!ir "rigin in Inia- T)!s! %anks $a! a
signi#i+ant +"ntri%uti"n t" t)! !*!l"($!nt "# agri+ultural an
inustri!s %!#"r! in!(!n!n+!- Ma)a,ans, rural $"n!yl!n!rs )a*!
%!!n t)! #"r!runn!r "# t)!s! %anks in Inia-
6. CENTRAL BANK
T)! +!ntral %ank "++u(i!s a (i*"tal ("siti"n in t)! $"n!tary an
%anking stru+tur! "# t)! +"untry- T)! +!ntral %ank is t)! unis(ut!
l!a!r "# t)! $"n!y $ark!t- As su+) it su(!r*is!s +"ntr"ls an
r!gulat!s t)! a+ti*iti!s "# +"$$!r+ial %anks a##iliat! wit) it- T)!
+!ntral %ank is als" t)! )ig)!r $"n!tary instituti"n in t)! +"untry
+)arg! wit) t)! uty 6 r!s("nsi%ility "# +arrying "ut t)! $"n!tary
("li+y #"r$ulat! %y t)! g"*!rn$!nt- IniaFs +!ntral %ank kn"wn as
t)! r!s!r*! %ank "# Inia was s!t u( in @B4;-
;4
7. AGRICULTURAL BANK
T)! +"$$!r+ial an t)! inustrial %anks ar! n"t in a ("siti"n t" $!!t
t)! +r!it r!/uir!$!nts "# agri+ultur!- 1!n+!, t)!r! aris!s t)! n!! #"r
s!tting u( s(!+ial ty(! "# %anks "# #inan+! agri+ultur!- T)! +r!it
r!/uir!$!nt "# t)! #ar$!rs ar! tw" ty(!s- 3irstly t)! #ar$!rs r!/uir!
s)"rt t!r$ l"ans t" %uy s!!s, #!rtili0!rs, (l"ug)s an "t)!r in(uts-
8!+"nly, t)! #ar$!rs r!/uir! l"ngAt!r$ l"ans t" (ur+)as! lan, t"
!##!+t (!r$an!nt i$(r"*!$!nts "n t)! lan t" %uy !/ui($!nt an t"
(r"*i! #"r irrigati"n w"rks- T)!r! ar! tw" ty(!s "# agri+ultur! %anks-
@- Agri+ultur! +"A"(!rati*! %anks, an
.- Lan $"rtgag! %anks- T)! #ar$!r (r"*i! s)"rtAt!r$ +r!it, w)il! t)!
l!tt!r !'t!n l"ngAt!r$ l"ans t" t)! #ar$!rs-
;7
RATIO ANALYSIS
MEANING :
A%s"lut! #igur!s !'(r!ss! in #inan+ial stat!$!nts %y t)!$s!l*!s ar!
$!aning#uln!ss- T)!s! #igur!s "#t!n " n"t +"n*!y $u+) $!aning unl!ss
!'(r!ss! in r!lati"n t" "t)!r #igur!s-
T)us, it + an %! say t)at t)! r!lati"ns)i( %!tw!!n tw" #igur!s, !'(r!ss! in
arit)$!ti+al t!r$s is +all! a rati"-
According to R.N. Anthony.
A ration is simply one number expressed in terms of
another. It is found by dividing one number into the other.
TYPES OF RATIOS
Pr"("rti"n "r Pur! Rati" "r 8i$(l! rati"-
Rat! "r s" $any Ti$!s-
P!r+!ntag!
3ra+ti"n-
OB1ECTS AND ADVANTAGES OR USES OF RATIO
ANALYSIS
1!l(#ul in analysis "# #inan+ial stat!$!nts-
;;
8i$(li#i+ati"n "# a++"unting ata-
1!l(#ul in +"$(arati*! stuy-
1!l(#ul in l"+ating t)! w!ak s("ts "# t)! %usin!ss-
1!l(#ul in #"r!+asting
Esti$at! a%"ut t)! tr!n "# t)! %usin!ss
3i'ati"n "# i!al stanars
E##!+ti*! +"ntr"l
8tuy "# #inan+ial s"unn!ss-
LIMITATION OF RATIO ANALYSIS
3als! a++"unting ata gi*!s #als! rati"s
C"$(aris"ns n"t ("ssi%l! "# i##!r!nt #ir$s a"(t i##!r!nt
a++"unting ("li+i!s-
Rati" analysis %!+"$!s l!ss !##!+ti*! u! t" (ri+! l!*!l
+)ang!
Rati"s $ay %! $isl!aing in t)! a%s!n+! "# a%s"lut! ata-
Li$it! us! "# a singl! Rati"-
Win"wA2r!ssing
La+k "# (r"(!r stanars-
Rati" al"n! ar! n"t a!/uat! #"r (r"(!r +"n+lusi"ns
;=
E##!+t "# (!rs"nal a%ility an %ias "# t)! analyst-
CLASSIFICATION OF RATIOS
In *i!w "# t)! #inan+ial $anag!$!nt "r a++"ring t" t)! t!sts satis#i!,
*ari"us rati"s )a*! %!!n +lassi#i!s as %!l"w
:- Liquidity Ratios : T)!s! ar! t)! rati"s w)i+) $!asur! t)! s)"rtAt!r$
s"l*!n+y "r #inan+ial ("siti"n "# a #ir$- T)!s! rati"s ar! +al+ulat! t"
+"$$!nt u("n t)! s)"rtAt!r$ (aying +a(a+ity "# a +"n+!rn "r t)! #ir$9s
a%ility t" $!!t its +urr!nt "%ligati"ns-
:I- Long -Term Solvency and Leverage Ratios : L"ngAt!r$
s"l*!n+y rati"s +"n*!y a #ir$9s a%ility t" $!!t t)! int!r!st +"st an
r!(ay$!nt s+)!ul!s "# its l"ngAt!r$ "%ligati"n !-g- 2!%it E/uity Rati"
an Int!r!st C"*!rag! Rati"n- L!*!rag! Rati"s-
:II- Activity Ratios: A+ti*ity rati"s ar! +al+ulat! t" $!asur! t)!
!##i+i!n+y wit) w)i+) t)! r!s"ur+! "# a #ir$ )a*! %!!n !$(l"y!- T)!s!
rati"s ar! als" +all! turn"*!r rati"s %!+aus! t)!y ini+at! t)! s(!!
wit) w)i+) ass!ts ar! %!ing turn! "*!r int" sal!s !-g- !%t"rs turn"*!r
rati"-
:III- Profitablity Ratios: T)!s! rati"s $!asur! t)! r!sults "# %usin!ss
"(!rati"ns "r "*!rall (!r#"r$an+! an !##!+ti*! "# t)! #ir$ !-g- gr"ss
(r"#it rati", "(!rating rati" "r +a(ital !$(l"y!- G!n!rally, tw" ty(!s "#
(r"#ita%ility rati"s ar! +al+ulat!-
(a) In relation to Sales, and
(b)In relation in Investment
;>
FUNCTIONAL CLASSIFICATION IN VIEW OF
FINANCIAL
MANAGEMENT OR CLASSIFICATION
ACCORDING TO TESTS
Liquidity Ratios Long-term
Solvency and
Leverage Ratios
Activity Ratios Profitability Ratios
DBE @- Curr!nt
Rati"n
.- Li/ui Rati"n
DA+iE T!st "r
Mui+k Rati"-
4- A%s"lut! li/ui "r
Cas) Rati"-
7- Int!rnal M!asur!
D%E @- 2!%t"rs
Turn"*!r Rati"
.- Cr!it"rs Turn"*!r
Rati"
4- In*!nt"ry Turn"*!r
Rati"
3inan+ial O(!rating
C"$("sit!
=- 2!%t- E/uity
Rati"
>- 2!%t t" T"tal
Ca(ital Rati"
?- Int!r!st
C"*!rag!s
B- Cas) 3l"wH
2!%t
@C- Ca(ital
G!aring
?- In*!nt"ry
Turn"*!r Rati"-
B- 2!%t"rs
Turn"*!r
@C-3i'! Ass!ts
Turn"*!r Rati"
@@- T"tal Ass!t
Turn"*!r Rati"
@.-W"rking Ca(ital
Turn"*!r Rati"-
@4-Paya%l!s
Turn"*!r Rati"
@7-Ca(ital
E$(l"y!
Turn"*!r
DCE In R!lati"n t"
8al!s-
=- Gr"ss Pr"#it Rati"-
>- O(!rating Rati"-
?- O(!rating Pr"#it
Rati"-
B- N!t Pr"#it Rati"-
@C-E'(!ns!s Rati"
D2E In r!lati"n t"
in*!st$!nts
>- R!turn "n
In*!st$!nts-
?- R!turn "n +a(ital-
B- R!turn "n E/uity
Ca(ital-
@C-R!turn "n t"tal
R!s"ur+!s
@@- Earning (!r s)ar!-
@.-Pri+! Earning Rati"-
8)"w t)! (r"("rti"ns "# !%t an !/uity in #inan+ing "# t)! #ir$- T)!s!
rati"s $!asur! t)! +"ntri%uti"n "# #inan+ing %y "wn!r as +"$(ar! t"
#inan+ing %y "utsi!rs- T)! l!*!rag! rati"s +an #urt)!r %! +lassi#i! as5 DiE
3inan+ial L!*!rag!s, DiiE O(!rating L!*!rag!, DiiiE C"$("sit! L!*!rag!s
;?
CASH-FLOW STATEMENT
A +as) N #l"w stat!$!nt is a stat!$!nt s)"wing in#l"ws Dr!+!i(tsE an
"ut#l"ws D(ay$!ntsE "# +as) uring a (arti+ular (!ri"- In "t)!r w"rs, it is a
su$$ary "# s"ur+!s an a((li+ati"ns "# !a+) uring a (arti+ular s(an "#
ti$!-
Objectives of Cash Flow Statement :
&s!#ul #"r 8)"rtAT!r$ 3inan+ial Planning-
&s!#ul in Pr!(aring t)! Cas) Bug!t-
C"$(aris"n wit) t)! Cas) Bug!t-
8tuy "# t)! Tr!n "# Cas) R!+!i(ts an Pay$!nts-
It !'(lains t)! 2!*iati"ns "# Cas) #r"$ Earnings-
1!l(#ul in As+!rtaining Cas) 3l"w #r"$ *ari"us 8!(arat!ly-
1!l(#ul in Making 2i*i!n 2!+isi"ns-
;B
RESEARCH METHODOLOGY
T)! (r"+!ur! a"(t! #"r +"nu+ting t)! r!s!ar+) r!/uir!s a l"t "# att!nti"n
as it )as ir!+t %!aring "n a++ura+y, r!lia%ility an a!/ua+y "# r!sults
"%tain!- It is u! t" t)is r!as"n t)at r!s!ar+) $!t)""l"gy, w)i+) w! us!
at t)! ti$! "# +"nu+ting t)! r!s!ar+), n!!s t" %! !la%"rat! u("n-
R!s!ar+) M!t)""l"gy is a way t" syst!$ati+ally stuy an s"l*! t)!
r!s!ar+) (r"%l!$s- I# a r!s!ar+)!r wants t" +lai$ )is stuy as a g"" stuy,
)! $ust +l!arly stat! t)! $!t)""l"gy aa(t! in +"nu+ting t)! r!s!ar+) t)!
r!s!ar+) s" t)at it way %! ,ug! %y t)! r!a!r w)!t)!r t)! $!t)""l"gy "#
w"rk "n! is s"un "r n"t-
The Research Methodology here includes.
7. Meaning of Research.
8. Research Problem.
9. Research Design.
10.Sampling Design.
11. Data Collection method.
12.Analysis and interpretation of Data.
Meaning Research:
R!s!ar+) is !#in! as Ja scientific and systematic search for pertinent
information on a specific topic. R!s!ar+) is an art "# s+i!nti#i+
in*!stigati"n- R!s!ar+) is a syst!$ati0! !##"rt t" gain n"w kn"wl!g!- It is
a +ar!#ul in*!stigati"n "r in/uiry !s(!+ially t)r"ug) s!ar+) #"r n!w #a+ts in
any %ran+) "# kn"wl!g!- R!s!ar+) is an a+a!$i+ a+ti*ity an t)is t!r$
=C
s)"ul %! us! in a t!+)ni+al s!ns!- R!s!ar+) +"$(ris!s !#ining an
r!!#ining (r"%l!$s, #"r$ulating )y("t)!sis "r sugg!st! s"luti"ns- Making
!u+ti"ns an r!a+)ing +"n+lusi"ns t" !t!r$in! w)!t)!r t)!y i# t)!
#"r$ulating )y("t)!sis- R!s!ar+) is t)us, an "riginal +"ntri%uti"n t" t)!
!'isting st"+k "# kn"wl!g! $aking #"r its a*an+!$!nt- T)! s!ar+) #"r
kn"wl!g! t)r"ug) "%,!+ti*! an syst!$ati+ $!t)" "# #ining s"luti"ns t"
a (r"%l!$ is r!s!ar+)-
Research Problem
T)! #irst st!( w)il! +"nu+ting r!s!ar+) is +ar!#ul !#initi"n "# R!s!ar+)
Pr"%l!$- JT" ERR I8 T1E 1&MANK is a (r"*!r% w)i+) ini+at!s t)at n"
"n! is (!r#!+t in t)is w"rl- E*!ry r!s!ar+)!r )as t" #a+! $any (r"%l!$s
w)i+) +"nu+ting any r!s!ar+) t)at9s w)y (r"%l!$ stat!$!nt is !#in! t"
kn"w w)i+) ty(! "# (r"%l!$s a r!s!ar+)!r )as t" #a+! w)il! +"nu+ting any
stuy- It is sai t)at,
Problem well defined is problem half solved.
Basi+ally, a (r"%l!$ stat!$!nt r!#!rs t" s"$! i##i+ulty, w)i+) r!s!ar+)!r
!'(!ri!n+!s in t)! +"nt!'t "# !it)!r a t)!"r!ti+al "r (ra+ti+al situati"n an
wants t" "%tain t)! s"luti"n #"r t)! sa$!-
T)! (r"%l!$ stat!$!nt )!r! is5
To make a Financial Analysis of Financial statements of HDFC BANK
LUCKNOW.
=@
Research Design
A r!s!ar+) !signs is t)! arrang!$!nt "# +"niti"ns #"r +"ll!+ti"n an
analysis ata in a $ann!r t)at ai$s t" +"$%in! r!l!*an+! t" t)! r!s!ar+)
(ur("s! wit) !+"n"$y in (r"+!ur!- R!s!ar+) 2!sign is t)! +"n+!(tual
stru+tur! wit) in w)i+) r!s!ar+) in +"nu+t!- It +"nstitut!s t)! %lu!(rint #"r
t)! +"ll!+ti"n $!asur!$!nt an analysis "# ata- R!s!ar+) 2!sign in+lu!s
an "utlin! "# w)at t)! r!s!ar+)!r will " #"r$ writing t)! )y("t)!sis an it
"(!rati"nal i$(li+ati"n t" t)! #inal analysis "# ata- A r!s!ar+) !sign is a
#ra$!w"rk #"r t)! stuy an is us! as gui! in +"ll!+ti"n an analy0ing t)!
ata- It is a strat!gy s(!+i#ying w)i+) a((r"a+) will %! us! #"r gat)!ring
an analy0ing t)! ata- It als" in+lu! t)! ti$! an +"st %ug!t sin+! $"st
stui!s ar! "n! un!r t)!s! tw" +"st %ug!t sin+! $"st stui!s ar! "n!
un!r t)!s!s t"w +"nstraints-
T)! !sign is su+) stui!s $ust %! rigi an n"t #l!'i%l! an $"st #"+us
att!nti"n "n t)! #"ll"wing-
@@- W)at is t)! stuy a%"utO
@.-W)y is t)! stuy %!ing $a!O
@4-W)!r! will t)! stuy %! +arri! "utO
@7-W)at ty(! "# ata is r!/uir!O
@;-W)!r! +an %! r!/uir! ata %! #"unO
@=-W)at (!ri" "# ti$! will t)! stuy in+lu!O
@>-W)at will %! sa$(l! !signO
@?-W)at t!+)ni/u!s "# ata +"ll!+ti"n will %! us!O
@B-1"w will t)! ata %! analy0!O
.C-In w)at styl! will t)! r!("rt %! (r!(ar!O
=.
TYPES OF RESEARCH DESIGN :
EXPERIMENTAL RESEARCH DESIGN
EXPLORATORY RESEARCH DESIGN
DESCRIPTIVE& DIAGNOSTIC RESEARCH
Exploratory Research Design: T)is r!s!ar+) !sign is (r!#!rr! w)!n
r!s!ar+)!r )as a *agu! i!a a%"ut t)! (r"%l!$ t)! r!s!ar+)!r )as t" !'(l"r!
t)! su%,!+t-
Experimental Research Design - T)! r!s!ar+) !sign is us! t" (r"*i! a
str"ng %asis #"r t)! !'ist!n+! "# +asual r!lati"ns)i( %!tw!!n tw" "r $"r!
*aria%l!s-
Descriptive Research Design - It s!!ks t" !t!r$in! t)! answ!rs t" w)",
w)at, w)!r!, w)!n an )"w /u!sti"ns- It is %as! "n s"$! (r!*i"us
un!rstaning "# t)! $att!r-
Diagnostic Research Design It !t!r$in!s t)! #r!/u!n+y wit) w)i+)
s"$!t)ing "++urs "r its ass"+iati"n wit) s"$!t)ing !ls!-
Research Design Used in this Project
R!s!ar+) 2!sign +)"s!n #"r t)is stuy is 2!s+ri(ti*! R!s!ar+) 2!sign-
2!s+ri(ti*! stuy is %as! "n s"$! (r!*i"us un!rstaning "# t)! t"(i+-
R!s!ar+) )as g"t a *!ry s(!+i#i+ "%,!+ti*! an +l!ar +ut ata r!/uir!$!nts-
=4
Sampling Design
8a$(ling is n!+!ssary %!+aus! it is al$"st i$("ssi%l! t" !'a$in! t)! !ntir!
(ar!nt ("(ulati"n Di-!- t)! !ntir! uni*!rs!E *ari"us #a+t"rs su+) as ti$!
a*aila%l! +"st, (ur("s! "# stuy !t+- $ak! it n!+!ssary #"r t)! r!s!ar+)!rs t"
+)""s! a sa$(l!- It s)"ul n!it)!r %! t"" s$all n"r t"" %ig- It s)"ul %!
$anag!a%l!- T1E sa$(l! si0! "# (ast 4 y!ars is tak!n #"r (r!s!nt stuy u!
t" ti$! li$itati"n-
DATA COLLECTIONS
T)! (r"+!ss "# ata +"ll!+ti"n %!gins a#t!r a r!s!ar+) (r"%l!$ )as %!!n
!#in! an r!s!ar+) !sign a)s %!!n +)alk! "ut- T)!r! ar! tw" ty(!s "#
ata N
METHODS OF PRIMARY DATA
OBSERVATION METHOD
INTERVIEW METHODS
QUESTIONAIRE METHOD
SCHEDULE METHOD
PRIMARY DATA -
It is #irst )an ata, w)i+) is +"ll!+t! %y r!s!ar+)!r its!l#- Pri$ary ata is
+"ll!+t! %y *ari"us a((r"a+)!s s" as t" g!t a (r!+is!, a++urat!, r!alisti+ an
r!l!*ant ata- T)! $ain t""l in gat)!ring (ri$ary ata was in*!stigati"n an
=7
"%s!r*ati"n- It was a+)i!*! %y a ir!+t a((r"a+) an "%s!r*ati"n #r"$ t)!
"##i+ials "# t)! +"$(any-
SECONDARY DATA - it is t)! ata w)i+) is alr!ay +"ll!+t! %y s"$!"n!
!ls!- R!s!ar+)!r )as t" analy0! t)! ata an int!r(r!ts t)! r!sults- It )as
always %!!n i$("rtant #"r t)! +"$(l!ti"n "# any r!("rt- It (r"*i!s r!lia%l!,
suita%l!, a!/uat! an s(!+i#i+ kn"wl!g!-
I t""k ata +"$(ris! annual r!("rts an ("st r!+"rs- Bank )as (r"*i! $!
annual r!("rts #r"$ .CC7AC; t" .CC>AC? %y )!l( "# w)i+), I (r!(ar! $y
r!("rt-
T)! *alua%l! +""(!rati"n !'t!n! %y sta## $!$%!rs +"ntri%ut! a l"t t"
#ul#ill t)! r!/uir!$!nts in t)! +"ll!+ti"n "# ata in "r!r t" +"$(l!t! t)!
(r",!+t- :ari"us statisti+al t""ls ar! a((li! !(!ning "n t)! r!s!ar+)
(r"%l!$- In t)is stuy rati" analysis, +"$(arati*! #inan+ial stat!$!nts
analysis, +"$$"n si0! stat!$!nts an Tr!n Analysis )as %!!n us! #"r
analy0ing an int!r(r!ting t)! r!sult-
=;
COMPARATIVE PROFIT AND LOSS
OF HDFC BANK
FOR THE YEAR ENDED 31
ST
MARCH, 2007
COMPERATIVE INCOME
STATEMENT
for the year ended 31st march 2008
PARTICULARS 2007 2008 INC/DEC INC/DEC
INT INCOME ?4C4-47 @.4;7-7@ 7C;@-C> 7?->?
DAEC"st "# sal!s .4>@-C= 4==4-;= @.B.-; ;7-;@
G-PDAE ;B4.-.? ?=BC-?; .>;?-;> 7=-;
OPERATING EPP
8!lling E'( >7-?? @@7->4 4B-?; ;4-.@
A$ EPP @;@B-4. ..7>-7? >.?-@= 7>-B.
T"tal O(!rating E'(DBE @;B7-. .4=.-.@ >=?-C@ 7?-@>
O(!rating in+"$!DAABE 744?-C? =4.?-=7 @BBC-;= 7;-??
DQEO-In+"$! .?;;->B 4?7=->> BBC-B? 47->
T-In+ >@B4-?> @C@>;-7@ .B?@-;7 7@-77
DAEO-E'( 4B;=-4@ =@??-7> ..4.-@= ;=-7.
N!t in+"$! 4.4>-;= 4B?=-B7 >7B-4? .4-@7
DAETa' 7B>-> =BC-B @B4-. 4?-?@
N!t Pr"#it .>4B-?= 4.B=-C7 ;;=-@? .C-.B

INTERPRETATION
8in+! t)! (r"#it "# t)! %ank )as %!!n in+-%y .C-.BR uring last #is+al s" #inan+ial "# %ank is satis#a+t"ry-
==
RATIO ANALY8I8
VARIOUS CALCULATED RATIOS OF NLL
Current Ratio
Curr!nt rati" $ay %! !#in! as t)! r!lati"ns)i( %!tw!!n +urr!nt ass!ts
an +urr!nt lia%iliti!s-
Current ratio Current assets/current liabilities
Y!ar .CC= .CC> .CC?
Curr!nt Rati" @-@C @-C> @-C?
Interpretation
I# t)! C-R- is l!ss t)an . 5 @, it ini+at!s la+k "# li/uiity an s)"rtag!
"# w"rking +a(ital- But a $u+) )ig)!r rati", !*!n t)"ug) it is
%!n!#i+ial t" t)! s)"rtAt!r$ +r!it"rs, is n"t n!+!ssarily g"" #"r t)!
+"$(any- A $u+) )ig)!r rati" t)an . 5 @ $ay ini+at! t)! (""r
in*!st$!nt ("li+i!s "# t)! $anag!$!nt- 8" li/uiity "# Bank is
satis#a+t"ry-
=>
C.R
1.10
1.07
1.08
1.05
1.06
1.07
1.08
1.09
1.10
1.11
2006 2007 2008
Y!"#$
C
.
R
C.R
Interest coverage/debt service ratio
Net profit (before interest and taxes)/ Fixed interest
charge
Interpretation :
8in+! t)is Rati" ini+at!s t)! int!r!st (aying +a(a%ility "# #ir$ an
i!al Rati" is = t" > ti$!s- 8" int!r!st (aying +a(a+ity "# t)! #ir$ is
$"!rat!-
=?
Operating ratio (Operating cost / Net income )`100
Interpretation :
O(!rating Rati" is a $!asur!$!nt "# t)! !##i+i!n+y an (r"#ita%ility "#
t)! %usin!ss !nt!r(ris!- T)! rati" ini+at! t)! !'t!nt "# sal!s t)at is
a%s"r%! %y t)! +"st "# g""s s"l an "(!rating !'(!ns!s- L"w!r t)!
"(!rating rati", t)! %!tt!r it is , %!+aus! it will l!a*! )ig)!r $argin "#
(r"#it "n sal!s-
=B
Return on gross capital employed(Net profit / Gross capital
employed) ` 100
Gross capital employed fixed assets + current assets
Interpretation :
8in+! (r"#it is t)! "*!rall "%,!+ti*! "# a %usin!ss !nt!r(ris!, t)is rati"
is a %ar"$!t!r "# t)! "*!rall (!r#"r$an+! "# t)! !nt!r(ris!- It $!asur!s )"w
!##i+i!ntly t)! +a(ital !$(l"y! in t)! %usin!ss is %!ing us!-
>C
Return on gross capital eplo!e"#$%
26
28
2&
22
2'
2&
25
26
27
28
29
2005(06 2006(07 2007(08
Y!"#$
R
!
%
&
#
'

(
'

)
#
(
$
$

*
"
+
,
%
"
-

!
.
+
-
(
/
!
0
Return on gross
capital eplo!e"#$%
Return on shareholders(Net profit / Shareholders funds) `100
Interpretation :
T)is Rati" ini+at!s w)at a$"unt "# r!turn )as %!!n gi*!n t" t)!
8)ar! )"l!rs "# t)! #ir$ w)i+) )!l( in %uiling t)! g"" will #ir$-
>@
Interest expense ratio (Interest expense / income) ` 100
Interpretation :
T)is Rati" ini+at!s t)at w)at is t)! Rati" "# T"tal Int!r!st E'(!ns!s
t" t)! In+"$!- 8" t)at w! +an kn"w a%"ut (r"#ita%ility "# #ir$-
>.
Net profit ratio (Net profit / Net income) ` 100
Interpretation :
T)is Rati" $!asur!s t)! rat! "# n!t (r"#it !arn! "n sal!s- It )!l(s in
!t!r$ining t)! "*!rall !##i+i!n+y "# t)! %usin!ss "(!rati"ns- An
in+r!as! in t)! rati" "*!r t)! (r!*i"us y!ar s)"ws i$(r"*!$!nt in t)!
"*!rall !##i+i!n+y an (r"#ita%ility "# t)! %usin!ss-
>4
Net pro)it ratio#$%
20.58
17
15.72
0
5
10
15
20
25
2005(06 2006(07 2007(08
Y!"#$
N

R
Net pro)it ratio#$%
Operating profit ratio (Operating profit / Income) ` 100
Interpretation :
O(!rating Rati" an O(!rating Pr"#it Rati" ar! int!rAr!lat! an t"tal
"# %"t) t)!s! Rati" is @CC- B"t) Rati"s ini+at! t)! (r"#ita%ility "#
#ir$-
>7
Return on net capital employed (Net profit / Net capital
employed) ` 100
Net capital employed Total assets- Current liability
Interpretation :
T)is Rati" ini+at!s )"w w!ll t)! Ca(ital !$(l"y! is %!ing us! in
%usin!ss- E*!n t)! (!r#"r$an+! "# tw" 2issi$ilar #ir$s $ay %!
+"$(ar! wit) t)! )!l( "# t)is Rati"-
>;
Operating expenses ratio (Operating Expenses /Income)
*100
Interpretation :
T)is Rati" ini+at!s t)! )"w $u+) !'(!ns!s )as %!!n s(!nt "n
s!lling an a$inistrati"n us! "# "rgani0ati"n-
>=
Operating e*penses ratio#$%
'9.98
'6.&1
'7.0'
'&
'5
'6
'7
'8
'9
&0
&1
2005(06 2006(07 2007(08
Y!"#$
O
E
ROperating e*penses
ratio#$%
EPS Net profit after interest, tax & preference dividend /
No. of equity shares
Interpretation :
T)is rati" is )!l(#ul in t)! !t!r$inati"n "# t)! $ark!t (ri+! "# t)!
!/uity s)ar! "# t)! +"$(any- T)! rati" is als" )!l(#ul in !sti$ating t)!
+a(a+ity "# t)! +"$(any t" !+lar! i*i!ns "n !/uity s)ar!s-
>>
DPS Dividend paid to equity shareholders / No. of equity
shares
Interpretation :
T)is Rati" ini+at!s )"w $u+) (r"#it )as %!!n gi*!n in )an t" t)!
!/uity s)ar! )"l!rs- T)is r!(r!s!nts )ig)!r t)! rati" $"r! is t)! g"" will "#
t)! #ir$-
>?
P.E Ratio Market price per share / Earning per share
Interpretation :
T)is rati" s)"ws )"w $u+) is t" %! in*!st! in t)! $ark!t in t)is
+"$(any9s s)ar!s t" g!t !a+) ru(!! "# !arning "n its s)ar!s- T)! rati" is us!
t" $!asur! w)!t)!r t)! $ark!t (ri+! "# a s)ar! is )ig) "r l"w-
>B
STATISTICAL TOOLS
Introduction:
An !u+at! +iti0!n n!!s an un!rstaning "# %asi+
statisti+al t""ls t" #un+ti"n in a w"rl t)at is %!+"$ing in+r!asingly
!(!n!nt "n /uantitati*! in#"r$ati"n-
Statistics means numerical description to most people
In #a+t t)! t!r$ statisti+s is g!n!rally us! t" $!an nu$!ri+al #a+ts
an #igur!s su+) as agri+ultural (r"u+ti"n uring a y!ar, rat! "# in#lati"n
an s" "n- 1"w!*!r as a su%,!+t "# stuy, statisti+s r!#!rs t" t)! %"y "#
(rin+i(l!s an (r"+!ur!s !*!l"(! #"r +"ll!+ti"n, +lassi#i+ati"n,
su$$ari0ati"n an int!r(r!tati"n "# nu$!ri+al ata an #"r t)! us! "# su+)
ata-
Meaning : Br"aly s(!aking t)! t!r$ statisti+s )as %!!n g!n!rally us! in
tw" s!ns!s5
Singular Sense
Plural sense
T)! t!r$ statisti+s in its PLURAL SENSE, r!#!rs t" t)! nu$!ri+al ata
"r statisti+al ata- In its SINGULAR SENSE, t)! t!r$ r!#!rs t" a s+i!n+!
in w)i+) w! !al wit) t)! t!+)ni/u!s "r $!t)"s "# +"ll!+ting, +lassi#ying,
(r!s!nting, analy0ing an int!r(r!ting t)! ata- In "t)!r w"rs, t)! +"n+!(t
in its singular s!ns!, r!#!rs t" statisti+al $!t)"s-
Purpose
Wit)"ut t)! assistan+! "# statisti+al $!t)"s an "rgani0ati"n w"ul #in it
i$("ssi%l! t" $ak! a s!ns! "# )ug! ata-
T)! (ur("s! "# statisti+s is t"A
AMani(ulat!
A8u$$ari0!
AIn*!stigat!
T)! ata s" t)at us!#ul $aking in#"r$ati"n r!sults +"ul %! #"un "ut- In
#a+t !*!ry %usin!ss $anag!r n!!s a s"un %a+kgr"un "# statisti+s-
?C
8tatisti+s is a s!t "# 2!+isi"n Making T!+)ni/u!s, W)i+) ais %usin!ss$!n
in rawing in#!r!n+!s #r"$ t)! a*aila%l! ata
STATISTICAL TOOLS
8tatisti+al t""ls ar! t)! %asi+ $!asur!s, w)i+) )!l( in !#ining t)! r!lati"n
%!tw!!n i##!r!nt it!$s, (r!s!nt, (ast an #utur! tr!n "# (arti+ular %usin!ss
!t+- A wi! *ari!ty "# statisti+al t""ls ar! a*aila%l! an %usin!ss$!n
!(!ning u("n t)! natur! "# )is tra! +an us! any "# t)!$- :ari"us
statisti+al t""ls ar!A
1. Correlation
2. Time series
3. Factor analysis
4. Principal component analysis
10.Multiple regressions
1!r! I a$ using +"rr!lati"n statisti+al t""l t" !#in! t)! r!lati"ns)i( %!tw!!n
sal!s an (r"#it "# +"$(any, Tr!n analysis in "r!r t" (r",!+t #utur! tr!n
*alu!s an ANO:A TE8T as 1y("t)!sis t!sting- 8", %!#"r! using t)! t""l
"n! s)"ul )a*! t)! kn"wl!g! a%"ut t)at statisti+al t""l- T)!r!#"r! t)is t""l
is !#in! as un!rA
CORRELATION
C"rr!lati"n analysis is %asi+ally us! t" !t!r$in! t)! !gr!! "# r!lati"ns)i(
%!tw!!n i##!r!nt *aria%l!s- It r!#!rs t" t)! statisti+al t!+)ni/u! t)at is us!
in $!asuring t)! +l"s!n!ss "# r!lati"ns)i( %!tw!!n tw" "r $"r! *aria%l!s,
wit) t)! )!l( "# +"rr!lati"n analysis w! +an $!asur!A
AT)! !gr!! "# r!lati"ns)i( in "n! #igur!
AT)! $utual r!lati"ns)i( %!tw!!n tw" *aria%l!s-
AE+"n"$i+ r!lati"ns)i( %!tw!!n !$an an su((ly
AT)! !sti$ati"n "# +"sts, sal!s, (ri+!s !t+- is ("ssi%l! #"r a tra!r wit)
t)! )!l( "# +"rr!lati"n-
?@
TYPES OF CORRELATION
Positive and negative correlation
W)!n tw" *aria%l!s P an Y $"*! in sa$! ir!+ti"n i-!- ("siti*! +"rr!lati"n
an w)!n %"t) *aria%l!s $"*! in "(("sit! ir!+ti"n, w)i+) is n!gati*!
+"rr!lati"n-
Linear and Curvy-linear Correlation
W)!n t)! rati" "# +)ang! "# tw" *aria%l!s P an Y r!$ains +"nstant
t)r"ug)"ut, t)!n t)!y sai t" %! lin!arly +"rr!lat! an w)!n t)! rati" "#
+)ang! %!tw!!n t)! tw" *aria%l!s is n"t +"nstant %ut +)anging, t)!n
+"rr!lati"n is sai t" %! +ur*yAlin!ar-
Simple, Partial and Multiple Correlation
W)!n w! stuy t)! r!lati"ns)i( u( t" *aria%l!s "nly, t)!n it is +all! si$(l!
+"rr!lati"n-
W)!n t)r!! "r "r! *aria%l!s ar! tak!n %ut r!lati"ns)i( %!tw!!n any tw" "#
t)! *aria%l!s as +"nstant, t)!n it is +all! (artial +"rr!lati"n an w)!n w!
stuy t)! r!lati"ns)i( a$"ng t)r!! "r $"r! *aria%l!s, it is +all! $ulti(l!
+"rr!lati"n-
DEGREE OF CORRELATION
Sr. No. Degree of correlation Positive Negative
@- P!r#!+t +"rr!lati"n Q@ A@
.- 1ig) !gr!! "# +"rr!lati"n B!tw!!n QC->; t"
Q@
B!tw!!n AC->; t"
A@
4- M"!rat! !gr!! "#
+"rr!lati"n
B!tw!!n QC-.; t"
QC->;
B!tw!!n AC-.; t"
AC->;
7- L"w !gr!! "# +"rr!lati"n B!tw!!n CQ t"
QC-.;
B!tw!!n C t"
AC-.;
;- A%s!n+! "# +"rr!lati"n C C
WHY TO USE CORRELATION
2i##!r!nt ty(!s "# statisti+al t""ls ar! a*aila%l! %ut #"r using s(!+i#i+ally
+"rr!lati"n is "# )a*ing a $a,"r r!as"n i-!- "nly t)is statisti+al t""l was
gi*ing t)! satis#a+t"ry r!sults- I )a*! t" s)"w t)! r!lati"ns)i( %!tw!!n sal!s
an (r"#its, w)i+) +an %! (ur!ly !#in! wit) t)! )!l( "# t)is statisti+al t""l
?.
"nly- 3urt)!r$"r!, wit) t)! )!l( "# ti$! s!ri!s analysis w! +an !#in! t)!
#urt)!r tr!ns "# %usin!ss %y using tr!n analysis-
CORRELATION BETWEEN INTEREST INCOME
AND INTEREST EXPENSES OF HDFC BANK.
+,-R .-L,.#/% 0-1#+%
200& 21'& 1'7
2005 2207 1&9
2006 287' 280
2007 &652 '58
1O1-L 11866 92&
Pearson's correlation coefficient test
(parametric test):
O1$!#2!0 2"-&! 0.341
T5(-%",-!0 +-2"-&! 0.013
A-+6" 0.07
?4
DECISION
At the level of significance Alpha0.050 the decision is to reject the null
hypothesis of absence of correlation.
In other words, the correlation
is significant.
Interpretation:
@- T)!r! is a )ig) !gr!! "# +"rr!lati"n %!tw!!n sal!s 6 (r"#it "# NLL-
.- T)!r! is a ("siti*! +"rr!lati"n %!tw!!n sal!s 6 (r"#it "# NLL-
T)is s)"ws t)at as t)! sal!s "# NLL in+r!as!s (r"#it als" $"*!s in t)! sa$!
ir!+ti"n-
TREND ANALYSIS
TREND ANALYSIS OF NET PROFIT AFTER TAX OF NLL
+,-R 0RO231#4N% +
5,63-13ON
2RO4 2005 / /+ /7
200& 1'7 1 1'7 1
2005 1&9 2 298 &
2006 280 ' 8&0 9
2007 '58 & 1&'2 16
1O-1L 92& 10 2707 '0
T)! !/uati"n "# t)! straig)t lin! is
Y S a Q %P
8in+! TY S Na Q %TP
TPY S aTP Q %TPU
8u%stituting t)a *alu!s, ww! g!t
?7
a S =;H; S @4, % S ?;BH@C S ?;-B
T)us t)! straig)t lin! tr!n is
Y S @4Q?;-B, Origin S .CC4, P unit S @ y!ar
YEAR ACT&AL :AL&E TREN2 :AL&E
.CC7 @4> @4;->
.CC; @7B @B4-4
.CC= .?C .;C-B
.CC> 4;? 4C?-;
.CC? 4==-@
TREND ANALYSIS
Interpretation:
@- T)! (r",!+ti"n "# (r"#it #"r t)! y!ar .CC>AC? is 4==-@ $n-
.- In t)! y!ar .CC4AC7 an .CC7AC;, +"$(any was n"t a%l! t" a+)i!*! its
!'(!+t! (r"#its-
4- In t)! y!ar a#t!r .CC;, +"$(any was a%l! t" a+)i!*! $"r! t)an its
!'(!+t! (r"#its-
7- T)! (r"#its "# t)! +"$(any s)"w an in+r!asing tr!n-
?;
SUGGESTIONS
18ese suggestions represent t8e general opinion o) t8e sur9e!e" group
regar"ing t8e :ualit! an" o"e o) presentation.
;an<s s8oul" )urnis8 ne=s an" not scoops =8ic8 =oul" ipro9e t8e
oralit! =ell as nationalit!.
Repetition o) t8e sae ne=s s8oul" >e a9oi"e" in or"er to aintain t8e
interest o) t8e 9ie=ers.
Ne=s ?ea"lines s8oul" >e to t8e point an" s8oul" contain enoug8
aterial to >rie) t8e topic.
Content o) t8e ne=s s8oul" >e a9aila>le on t8eir =e>site.
18ere s8oul" >e a custoer care an" online custoer coplain@)ee">ac<
)acilit! so t8at t8e :ualit! an" ser9ices o) t8e ne=s can >e en8ance".
?=
CONCLUSIONS
3 8a9e anal!ses alost all t8e )inancial coponent o) ?52C ;an<
18e anal!sis is "one ainl! on t8e )ollo=ing pointA=8ic8 is gi9en >elo=.
-n! coent inclu"ing suggestion A3 8a9e gi9en =8ic8 =ill >e rele9ant an"
suita>le separatel! in anal!sis report o) a>o9e point
18ere )ore it is a"9ise" >! e to copan! to gi9e consis"eration an"
suggestionA=8ic8 are t8e part o) eac8 separate anal!sis report in a>o9e point
4ore attracti9e "iscount polic! a! a<e spee"! collection )ro "e>t
4ost o) t8e custoers =ill partl! agree t8at )loo"ing o) ne=s paper actuall!
"ilutes its cre"i>ilit!.
?>
BIBLIOGRAHY
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3nternet ===.=i<ipe"ia.co
Financial ratios Dion Global Solutions Limited
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