CHAPTER 6 FINDINGS, SUGGESTIONS ANDCONCLUSION Findings from Financial Analysis KSFC has huge accumulated losses in its Balance

ce Sheet. The liquidity position of KSFC has been found to be very satisfactory as represented
by Current Ratio and Super Quick Ratio.

KSFC is heavily relying on debt as a source of funds as represented by Debt-Equity

Ratio.

KSFC strengthened its capital structure recently by issuing more shares which allows
it to operate flexibly.

The Corporation has not been able to earn sufficient profit to provide a margin of
safety to the lenders.

The investment made in the tangible assets is not justified by the amount of income
that KSFC is able to generate.

The amount of earnings available to the equity shareholders is very meagre. SUGGETIONS
KSFC should upgrade its system/technique of credit appraisal by imparting training to its staff. In KSFC interest rates are high compared to the other commercial banks. They should be revised. The government control should be minimized and working should be done as in a private company. Targets should be set to the recovery officers and a special incentive should be provided to those officers who achieve their targets. It was observed that Current Ratio and Super Quick Ratio in certain years were found to be above the standard ratio. Hence, it is recommended that KSFC should try to reduce working capital and keep it at the required level. The EPS is much below the desirable ratio. Hence, there is an urgent need to raise the earnings so that equity shareholders are suitability rewarded.

Conclusion
Karnataka State Financial Corporation which was established in 1959has significantly contributed to the growth of SMEs backward are development and promotion of first generation entrepreneurs. It has assisted more than 1.60lakh units with cumulative sanction more than Rs. 10,064crore. KSFC offers a number of schemes to serve the different needs of its clients. It has introduced more than 30 loan assistance schemes for extending assistance to all sections of the society. It has branches all over the state. There are branches in every district so that the people can have a better access to the corporation and avail the assistance they need. To assess the financial performance and financial condition of KSFC, its financial statements were studied and analyzed with the help of ratios. It was observed that KSFC maintained current assets more than what are usually considered as standard during the study period. As far as its solvency position is concerned, it was found that KSFCs assets were insufficient to honour its long term obligations. However, a close observation of the figures of the last years of the study period reveals that it made a good progress. With regard to its profitability, it can be said that revenue or income generated by the KSFC was not sufficient to justify the amount of investment made in the business. The earnings available to the equity shareholders were also too marginal. On the whole, it can be concluded that though the financial results were not appreciable in the initial years of the study period, it was able to improve upon its performance over the subsequent years. But, it still needs to raise its performance standards so that obligations of lenders are met as and when they become due for payment and equity shareholders are suitably are rewarded