AN ANALYSIS OF FINANCIAL PERFORMANCE OF

BHARGAV BIKAS BANK LIMITED

A Project Proposal

Submitted by
URUSHA KUSHATHA
TU Registration No: 7-2-0927-0284-2015
Shwoyambhu International College

Submitted To
The Faculty of Management
Tribhuvan University
Kathmandu

In Partial Fulfillment of Requirement for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Kathmandu, Nepal
February,2019
 INTRODUCTION
1.1 Background of the Study
Financial sector is the backbone of economy of a country. It works as a facilitator for achieving
sustained economic growth through providing efficient monetary intermediation.

Financial Analysis is structural and logical way to present overall financial performance of
financial institution. It also helps to evaluate and decision making of business operation. In
financial analysis process, ratio analysis is the most dominant and logical structure to help
business related stakeholder. Financial analysis consists of comparison for the same company
over periods of time and comparison of different companies either in the same industry or in
different industries. It may be done for a variety of purpose, which may range from a simple
analysis of the short term liquidity position of the firm to a comprehensive assessment of the
strength and weakness of the firm in various areas. The financial analysis can be performed by
analysts who work for the firm or by outsiders like investors, creditors, lenders, suppliers,
environmental protection organization, government and other regulatory bodies and so on.

This study aims to analyze the financial performance of Bhargav Bikas Bank Limited. This study
is done using recent data which will be helpful not only to the shareholder but also to the
customers as well as management. Both private as well as public sector play vital role for the
growth of the economy of any country. Therefore all the economic activities of each and every
country are greatly influenced by the banking business. Thus this study attempts to show the
clear picture of the profitability productivity, growth etc.
1.2 Statement of Problem

A problem is a situation that needs a solution. It is a description of an issue currently existing

which needs to be addressed. It provides the context for the research study and generates the
questions which the researcher aims to answer. The statement of the problem is the focal point of
any research. At present we have 33 development banks. In spite of rapid growth, some
indicators show performance is not much encouraging towards the service coverage. In such a
situation, this study tries to analyze the present performance of the bank, which would give the
answer of the following queries:

 What are the factors affecting financial performance of Bhargav Bikas Bank Limited?
 What is solvency position of Bhargav Bikas Bank Limited?

1.3 Objectives of Study

The overall objectives of study are given below:

 To study the financial performance of Bhargav Bikas Bank Limited.

 To find out the factors affecting financial performance.
 To analyze the financial change over a period of five years.

1.4 Statement of hypothesis

There is significant impact of solvency ratio on the performance of the Bhargav Bikas Bank
Limited.
1.5 Theoretical Framework

Theoretical Framework of solvency ratio like Debt-to-Equity Ratio, Total Debt-to-Total Assets
Ratio, Interest-coverage Ratio on performance of Bhargav Bikas Bank Limited is shown as
below:

Debt-to-Equity

Total Debt-to-Total Assets Performance of bank

Interest Coverage Ratio

Independent variable Dependent variable

1.6 Definition of Terminology

A key part of financial performance, Bhargav Bikas bank's solvency ratio determines whether it
has sufficient cash flow to manage it’s debts as they come due. It consist of :

 Debt-to-Equity: This ratio measure total debt as compared to shareholder equity.

 Total Debt-to-Total Assets: It refers to the ratio of long term and short term liabilities
compare to total holdings.
 Interest Coverage Ratio : This ratio measure firm's ability to keep up with the interest
payment,which rise along with the outstanding debt.

1.7 Significance of Study

Earlier different financial studies have been done by different people about Bhargav Bikas Bank
Limited but this is a totally different from others because it is simple and easy to understand. In
this study there is no use of vast language. The tools which are used are very clear and clarify the
financial position of bank. So it is very useful to everyone who are related with this bank. This
study is also significant to the researcher:

 This study will help to get the depth knowledge of the bank.
  This study will also help to get valuable findings of research.
This report has build up to gain information about financial performance (weakness and strength)
which needs to improvement. Furthermore, it gives insight about the current situations and
performance of bank to the regulatory body, shareholders, investors and manager. Besides, it will
be used as a reference to researchers that area of study.

1.8 Research Methodology

1.8.1 Research Design

Research design is blue print of research, road map of research, strategy of research which shows
the overall plan of actions of the research. The types of research design are:- Exploratory
Research Design, Causal comparative Research Design, Experimental Research Design and
Descriptive Research Design. Among them this research paper uses a descriptive financial ratio
analysis to measure, describe and analyze the performance of Bhargav Bikas Bank Limited
during the period 2013-2017.

1.8.2 Population and Sample

The population refers to the industries of the same nature and its services and products in
general. Thus, the total number of development bank constitutes the population of data and the
bank under study constitutes the sample for the study. So from the population of 33 development
banks operating in the country, Bhargav Bikas Bank Limited has been selected as the sample
bank for the study.

1.8.3 Instrument

For data collection different instruments are used. Instruments are selected as according to nature
of data as well as subject matter. The major instruments that are used are financial tools and
statistical tools. The researchers have been used tools like mean, percentage, bar diagram and
ratios.
1.8.4 Data Collection Strategy

For achieving the specific objective of the study data will be gathered entirely from secondary
source.

Secondary sources

 Website of Bhargav Bikas Bank Limited.

 Annual reports, Brochures, manuals and publication of Bhargav Bikas Bank Limited.
 Manual published by Bhargav Bikas Bank Ltd.

Using collected data as raw sample to make this research project. Bhargav Bikas Bank Limited
last five years financial history are used as per require of this study. Most of the data are used in
financial ratio analysis of bank. The data was obtained from bank scope and the banks financial
statements and websites.

1.8.5 Analysis of Data

For the performance analysis of the Bhargav Bikas Bank, I have used financial tools like ratio
analysis, trend analysis, horizontal analysis, vertical analysis.

Limitation of the Study

Following are the limitations of this study:

 The whole study is based on secondary data such as financial statement and financial
report.
 Time and resource constraint may limit the area cover by study.
 This study has analyzed and evaluated the data of last few years only.
 In this study, only selected financial tools and techniques were used.
1.9 Chapter Plan

CHAPTER I- INTRODUCTION

This first chapter of this study includes general background, statement of the problem, objectives
of the study, statement of hypothesis, theoretical framework, definition of terminology,
significances of the study and limitations of the study, organizations of the study.

CHAPTER II- RESULT AND ANALYSIS

In this chapter the study has done data analysis and presentation about the collected data by using
statistical and financial analysis. It includes pictures, graphs, presentation, tables and hypothesis
testing.

CHAPTER III- SUMMARY AND CONCLUSION

This chapter comprises summary and major conclusion of prevailing issues to the organization.
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Adhikari, D.R&Pandey D.L.(2016); Business Research Methods, Kathmandu: Asmita

Publications.
Gautam K.G & Gautam K.P (2017);Business Research Methods, Kathmandu: Januka
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Shrestha, M.k&Bhandari D.B (2008); Financial Markets and Institutions, Kathmandu: Asmita
publications.
ThapaKiran (2016); Fundamentals of Corporate Finance; Kathmandu: Januka Publications.