LIST OF CONTENT

CHAPTER TITLE PAGE NO.

INTRODUCTION

INTRODUCTION OF STUDY 4-5

STATEMENT OF PROBLEM 6

OBJECTIVES OF STUDY 6
1
SCOPE OF STUDY 6

SIGNIFICANCE OF STUDY 7

RESEARCH METHODOLOGY 7

LIMITATIONS OF STUDY
2 REVIEW OF LITERATURE 9 - 12

INDUSTRY PROFILE 13 - 19
3
4 DATA ANALYSIS AND
20 - 30
INTERPRETATION
FINDINGS,SUGGESTION AND
CONCLUSION
32
5 FINDINGS
33
SUGGESTIONS
34
CONCLUSION
APPENDIX

BIBLIOGRAPHY 37

1
 LIST OF TABLES

Table
no. Title Page no.

CURRENT RATIO 21
4.1

TOTAL DEBT EQUITY

22
4.3 RATIO

PROPRIETORY RATIO 23
4.4

CASH RATIO 24
4.5

QUICK RATIO 25
4.6

LIQUID ASSETS TO
26
4.7 TOTAL ASSETS RATIO

FIXED ASSETS TO NET

27
4.8 WORTH RATIO

4.9 SOLVENCY RATIO 28

RETURN ON ASSETS
4.10 29
RATIO

RETURN ON EQUITY
4.11 30
RATIO

2
 LIST OF CHARTS

Table
no. Title Page no.

CURRENT RATIO 21
4.1

TOTAL DEBT EQUITY

22
4.3 RATIO

PROPRIETARY RATIO 23
4.4

CASH RATIO 24
4.5

QUICK RATIO 25
4.6

LIQUID ASSETS TO
26
4.7 TOTAL ASSETS RATIO

FIXED ASSETS TO NET

27
4.8 WORTH RATIO

4.9 SOLVENCY RATIO 28

RETURN ON ASSETS
4.10 29
RATIO

RETURN ON EQUITY
4.11 30
RATIO

3
 CHAPTER-1
INTRODUCTION

4
1.1 INTRODUCTION

A financial statement is a formal record of the financial activities, and

position of a business, person, or an entity. It is presented in a structured
form.

In the preparation of final accounts of a firm, the financial statements

display the net results for the given year. Financial statement include four
main statements they are balance sheet or statement of financial position,
An income statement or profit and loss report, a statement of changes in
equity, or equity statement and a cash flow statement.

Financial statements should be understandable, relevant, reliable and

comparable. Financial statements may be used by owners and managers,
employees, investors, financial institutions.

Consolidated financial statements are defined as financial statements

of a group in which the assets, liabilities, equities, income, expenses, and
cash flow of the company and its subsidiaries are presented as those of a
single economic entity. According to IAS 27 “consolidated and separate
financial statement and IFRS 10 “consolidated financial statement”.

Applicable accounting frame work such as GAAP or IFRS. If a

business plans to issue financial statements to outside uses such as
investors and lenders the financial statements should be formatted in
accordance with one of the major accounting framework. So statements
issued by different firms even in the same industry are likely to have
somewhat different appearances.

Financial statements that are being issued to outside parties may be

audited to verify their accuracy. These are guidelines other than
command usage for hour the statements are to be presented at the

5
minimal level of business is expected to issue and income statement and
balance sheet to document its monthly results and ending financial
condition. The full set of financial statements is expected when a business
is reporting the results for a financial year.

1.2 STATEMENT OF PROBLEMS

Co-operative bank has been established with many objectives they are
suffering from various problems and as a result their financial
performance is very cautious if is necessary to assess the financial
performance of the bank. In the background the present study intends to
focus on the analysis of financial performance of co-operative society in
„Vatanappally,Thrissur‟. The problem is stated as financial performance
with special reference to „co-operative society vatanappally, Thrissur‟.

1.3 OBJECTIVES OF THE STUDY

• To evaluate efficiency of the institution.

• To evaluate liquidity position of the institute.

• To determine the profitability.

1.4 SCOPE OF THE STUDY

Scope of this study is to understand the financial system;this study will
help the employees to know the methods and functions of the
organization study. In order to manage effectively within the boundaries

6
to change the culture. This study will help workers and managers to
identify the type of study with which they are working.

1.5 SIGNIFICANCE OF THE STUDY

Financial statement analysis is a significant business activity because
corporation‟s financial statements provide useful information on its
economic standing and profit levels and it allow a corporation to review
operating data and evaluate periodic business performance.

1.6 RESEARCH METHODOLOGY

It is collective format structured process of conducting research. These
much different methodology used in various types of research and the
term is usually considered to include research design, data gathering, and
data analysis.

METHOD OF DATA COLLECTION

The study was based on the secondary data collected from
vatanappally co operative bank, Thrissur. The functioning and other
related aspects were collected from published reports as from bank
records. Finance management is attempted by applying the ratio analysis
methods in collected data.

SOURCE OF DATA
Secondary data like annual reports, websites, and various published
books were used as source of data.

7
PRIMARY DATA

Primary data is the data that is observed and collected directly from
firsthand experience. It is most reliable and accurate form of data

SECONDARY DATA

Secondary data is the source of data already been published in any

form. The most used secondary data are books, articles, websites etc.

TOOLS OF ANALYSIS

Ratio analysis is used for data analysis; table, charts and diagram are
used for presentation of analyzed data

1.7 LIMITATIONS

• Some ratio‟s were not applicable in the calculation.

• The study restricted for a period of 5 years.

• Lack of information provided by the bank.

8
 CHAPTER-2
REVIEW OF LITERATURE

9
2.1 REVIEW OF LITERATURE
A number of studies related to performance of co-operative banking
service sector in India have been conducted. Here, an attempt is being
made to provide an overview of various aspects and issues of this study
through the review of existing literature. Some of the main studies
selected for review have been discussed well.

• Shah Deepak (2007) : He conducted a case study of single and

bandana district central co-operative bank titled evaluating financial
health of credit of co-operatives in Maharashtra state of India and found
NPA or over dues as the main culprit for the deterioration in the health of
the banks. The study revealed that both banks showed a decline in their
financial health and economic viability during the late nineties as against
the early nineties period

•Ramesh.D (2004) : He has analyzed economic liability of DCCB in

mahabub nagar in district of Andhra Pradesh. He has come to a
conclusion that the maintaining over-dues can jeoparadizethe country‟s
agriculture credit structure designed to accelerate the agricultural
development. He has further stated that co-operative can‟t survive in the
present commercial and economic war front if it fails to make full use of
mass media.

• G Sudashana Reddy (2003) conducted a study relating to the

financial Performance of some selected paper mills in Andhra Pradesh.
The objective of the study was to evaluate the financing methods and

10
practices of sample paper mill and analysis the investment pattern and
utilization of fixed assets.

• K Sriram (2001) : In his study a financial performance analysis of

Chennai petroleum corporation ltd suggested that to measure operational
efficiency profitability analysis is considered as one of the best technique.

• Anand (2001) : In his book titled co-operative agricultural and rural

development banks examined the role of banks in meeting the long term
credit requirements of the rural areas in the state of Kerala. It is also
examined the impact of lending and utilization of recovery patterns of the
loans advanced. The study made a brilliant exposition of all these issues
and highlighted the real problems prevailing at the beneficiary level.

• Hariprasad P (2000) : Recommends a through financial re-

engineering to improve the efficiency and effectiveness of the
organization while conducting a study of financial performance of
Keralastate handloom weavers co-operative society ltd.

• Vasan Desai (1997) : While examines the role of financial

institutions catering to the varied needs the industry as well as the
entrepreneurs to has shown how the institution meet the challenges of
providing an integrated package of lending technical assistance economic
analysis and management counseling that address the needs of individual
industry.

11
•Shankhayan and Pankaj (1996) : While analyzing the
performance of central co-operative bank had examined the viability
aspects of such as credit deposed ratio profit and loss return on
shareholder‟s equity.

• Sreelekha (1993) : Has evaluated the working KSIDC ltd has

brought out efficiency of the institution

• Ganesh (1993) : Studied and compared the working of KFC of four

southern states namely Kerala, Karnataka, Andhra Pradesh, and Tamil
Nadu. The working of KFC was studied in detail by taking the care of
KFC aided and unaided.

12
 CHAPTER-3
INDUSTRY AND COMPANY PROFILE OR
THEORETICAL FRAMEWORK

13
3.1 INDUSTRY PROFILE

HISTORY OF BANKING

The earlier bankers were called smiths the first bank were probably the
religious temple at ancient worlds and were probably established
something during the third millennium B.C probably predate the
invention of money.

EVOLUTION OF BANKING IN INDIA

Banking in India, in the modern sense originated in the last decade of the
15th century among the first banks were the bank of Hindustan, which
was established in 1770 and liquidated in 1829-32; and the general bank
at India, established in 1786 but failed in 1791.

CO-OPERATIVE BANKS

Co-operative banks are financial entity which belongs to its members,

who are the same time owners and customers of their bank. Co-operative
banks are often created by person belonging to the same or professional
community or sharing a common interest.

Co-operative banking includes retail banking as carried out by credit

unions, mutual savings and loan associations by manual organization to
co-operative business a state co-operative bank works at the apex level.
The central co operative bank works at intermediate level, primary co-
operative credit societies at base level.

14
COMPANY PROFILE

No.R.391 Vatanappallykarshaka Co-operative society ltd was registered

as co-operative society under no.21Act of 1969.

AREA OF OPERATION

The working area of vatanappallykarshakaco-operative society is

limited to the area of vatanappallypanchayath in thrissur district.

OBJECTIVES

1) To borrow or raise fund

2) To collect and transit money
3) To grand short term and medium term loans to farmers

LIABILITIES

The liability of members in the society is limited to the value of share

taken by them.

15
ORGANIZATION PROFILE

Name and Address : Vatanappally karshaka Co-operative

Society, P.oVatanappally,Thrissur,

Pin; 680614.

Post office: Vatanappally

Thaluk: Chavakkad

District: Thrissur

Liability:Limited

Location: Near Vatanappally bagavathi temple

Area of operation: Vatanappally panchayath

Head office:Vatanappally
Type of audit: Regular

MEMBERSHIP
• Those who had covered age 18 with mental stability and are resident in
operation area of society can become a member in this co-operative
society

16
SOURCE OF FUND

Funds are collected by the following sources:

1) Shares
2) Loans and deposits
3) Reserves
4) Undistributed profits

GENERAL BODY

It consists of members of the society who has full right on all matters to
administrator of the society.

17
ORGANIZATIONALSTRUCTUREOFVATANAPALLY
KARSHAKA CO-OPERATIVE SOCIETY

General body

Board of directors

President

Vice president

Secretary

Accountant

Clerk

Customer or person

18
BOARD OF DIRECTORS

 Francis C.A (president)

 Jayaprakash P.R (vice president)
 Lohithakshan M
 Nazim A Nazar
 Shiva Prasad
 P.S Mani
 Christy Louis
 Lakshmikutty M
 Shantha Antony
 SeenaHaridas

ESTABLISHMENTS UNDER THE SOCIETY

1) Co-operative bank
2) Neethi medicals
3) Neethi medical lab

19
 CHAPTER-4
DATA ANALYSIS AND INTERPRETATION

20
4.1 CURRENT RATIO
4.1 Table showing current ratio
YEAR CURRENT CURRENT CURRENT
ASSETS LIABILITIES RATIO
2013-14 407400.17 600000.03 0.67
2014-15 425600.76 607420.84 0.70
2015-16 1480800.48 539800.67 2.70
2016-17 1712600.38 842100.18 2.03
2017-18 191300.6 570680.23 0.34
Source – Secondary data
4.1 Chart showing current ratio

CURRENT RATIO
3

2.5

1.5
CURRENT RATIO
1

0.5

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION
Ideal current ratio is 2:1. Here we can see that during 2015-16 current
ratio is high. Thus no greater variance in current ratio, so the society will
not find it much difficult in meeting its short term debts.

21
4,2 TOTAL DEBT EQUITY RATIO
4.2 Table showing total debt equity ratio
YEAR TOTAL TOTAL DEBT
DEBT EQUITY EQUITY
RATIO
2013-14 3235651.09 17413083.63 0.19
2014-15 3034821.71 17954697.11 0.17
2015-16 3362700.53 18476200.33 0.18
2016-17 2852300.72 19864766.94 0.14
2017-18 4050190.13 16520010.07 0.25
Source – Secondary data
4.2 Graph showing total debt equity ratio

TOTAL DEBT EQUITY RATIO

0.3

0.25

0.2

0.15
TOTAL DEBT EQUITY RATIO
0.1

0.05

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION
It measures the relative proportion of debt and equity. The ideal debt
equity ratio is 1:1. The graph shows high ratio in 2017-18. Some experts
suggest 2:1 as ideal ratio.

22
4.3 PROPRIETORY RATIO

4.3 Table showing proprietary ratio

YEA SHAREHOLD TOTAL PROPRIETA
R ERS FUND ASSETS RY RATIO
2013- 18414551.35 22552402.53 X 81.7
14 100
2014- 18992081.35 22862923.25 X 83.1
15 100
2015- 19534500.85 23724602.06 X 82.3
16 100
2016- 21058100.62 25191291.52 X 83.6
17 100
2017- 17521811.00 22463883.36 X 78.0
18 100
Source – Secondary data
4.3 Graph showing proprietary ratio

PROPRIETARY RATIO 1
85
84
83
82
81
80
PROPRIETARY RATIO 1
79
78
77
76
75
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION
It reflects the financial strength of the firm. The ideal ratio is 0.5:1.
The diagram shows that, there is high ratio in 2016-17 and very low in
2017-18. So it reveals a low proprietary ratio. It indicates a risk and
danger to creditors.

23
4,4 CASH RATIO
4.4 Table showing cash ratio
YEAR CASH CURRENT CASH
EQUIVALENTS LIABILITIES RATIO
2013-14 1423801.02 555000.09 2.56
2014-15 1273701.19 574700.19 2.21
2015-16 1518001.20 521400.68 2.91
2016-17 2504901.35 815100.18 3.07
2017-18 129101.05 555800.23 0.23
Source – Secondary data
4.4 Graph showing cash ratio

CASH RATIO
3.5

2.5

1.5 CASH RATIO

0.5

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION
The cash ratio indicates to creditors, analysts, and investors the
percentage of company current liabilities. Here cash ratio is very low in
current previous year 2017-18. Thus liquid current asset capability of
firm is very low. This will result in shortage of meeting cash needs of
firm

24
4.5 QUICK RATIO
4.5 Table showing quick ratio
YEAR QUICK CURRENT QUICK
ASSETS LIABILITIES RATIO
2013-14 1423801.02 555000.09 2.56
2014-15 1273701.19 574700.19 2.21

2015-16 1518001.20 521400.68 2.91

2016-17 2504901.35 815100.18 3.07

2017-18 129101.05 555800.23 0.23

Source – Secondary data

4.5 Graph showing quick ratio

QUICK RATIO
3.5

2.5

1.5 QUICK RATIO

0.5

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION
The ideal quick ratio is 1:1 indicates the firm can meet its current
financial obligations with available quickfunds. In above chart 2016-17
shows high ratio and 2017-18 shows low ratio thus in 2017-18 quick ratio
is very low thus it may result in difficulty of paying firm current financial
obligations

25
4.6 LIQUID ASSETS TO TOTAL ASSETS RATIO
4.6 Table showing Liquid assets to total assets ratio

YEAR LIQUID TOTL LIQUID ASSETS TO

ASSETS ASSETSTOTAL ASSETS
RATIO
2013-14 1433801.02 22552402.53 0.06
2014-15 1273701.19 22862923.25 0.05

2015-16 1518001.20 23724602.06 0.06

2016-17 2504901.35 25191291.52 0.09

2017-18 129101.05 22463883.36 0.01

Source – Secondary data

4.6 Graph showing Liquid assets to total assets ratio

LIQUID ASSETS TO TOTAL ASSETS RATIO

0.1
0.09
0.08
0.07
0.06
0.05
LIQUID ASSETS TO TOTAL
0.04 ASSETS RATIO
0.03
0.02
0.01
0
2013-14 2014-15 2015-16 2016-17 2018-18

INTERPRETATION
It indicates the ratio between liquid assets of a firm to its total assets. It
shows the proportion of cash or liquid assets to total assets of a firm. In
above figure 2016-17 shows high ratio and low ratio in 2017-18. Thus
current stability of firm to meet its liquid assets to total assets ratio is low.

26
4.7 FIXED ASSETS TO NET WORTH RATIO
4.7 Table showing fixed assets to net worth ratio
YEAR FIXED PROPRIETA FIXED ASSETS TO
ASSETS RY FUND NET WORTH
RATIO
2013-14 46500.59 18414551.35 0.002
2014-15 52600.42 18992081.35 0.002

2015-16 59799.68 19534500.85 0.003

2016-17 62798.86 21058100.62 0.002

2017-18 9750219.50 17521811.00 0.556

Source – Secondary data

4.7 Graph showing fixed assets to net worth ratio

0.6 FIXED ASSETS TO NETWORTH RATIO

0.5

0.4

0.3
FIXED ASSETS TO
0.2 NETWORTH RATIO

0.1

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION

It indicates solvency of firm. the ideal ratio is 0.4:1,here 2013-16 show

lower ratio thus it shows better debt ratio but in 2018 it has been raised
little higher thus it may result in a slight risk.

27
4.8 SOLVENCY RATIO
4.8 Table showing solvency ratio
YEAR TOTAL TOTAL SOLVENCY
ASSETS DEBTS RATIO
2013-14 22552402.53 3235651.09 6.96
2014-15 22862923.25 3034821.71 7.53

2015-16 23724602.06 3362600.53 7.05

2016-17 25191291.52 2852300.72 8.83

2017-18 22463883.36 4050190.13 5.54

Source – Secondary data

4.8 Graph showing solvency ratio

SOLVENCY RATIO
10
9
8
7
6
SOLVENCY
5
RATIO
4
3
2
1
0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION

In general a solvency ratio measures the size of the company‟s

profitability and compares it to its obligations. A solvency ratio greater
than 20% is considered as financially health. Here ratios are comparably
higher thus the firm is financially sound to meet its obligations.

28
4. 9 RETURN ON ASSETS RATIO
4.9 Table showing return on assets ratio
YEAR NET PROFIT TOTAL ASSETS ROA

2013-14 302200.00 22552402.53 0.013

2014-15 228600.00 22862923.25 0.009

2015-16 287700.00 23724602.06 0.012

2016-17 438790.00 25191291.52 0.017

2017-18 321202.00 22463883.36 0.14

Source – Secondary data

4.9 Graph showing return on assets ratio

ROA RATIO
0.16
0.14
0.12
0.1
0.08
ROA RATIO
0.06
0.04
0.02
0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION

The return on assets ratio measures how effectively a company can earn a
return on its investment in assets. The higher ROA ratio, the better
company earns thus in above figure from 2013-16 the ROA is lower and
in 2017 it has been increased highly thus in current situation firm earning
capacity is higher

29
4.10 RETURN ON EQUITY RATIO
4.10 Table showing return on equity ratio
YEAR NET PROFIT TOTAL ROE
EQUITY
2013-14 302200.00 17413083.63 0.017
2014-15 228600.00 17954697.11 0.012
2015-16 287700.00 18476200.33 0.015
2016-17 438790.00 19864766.94 0.022
2017-18 322202.00 16520010.07 0.019
Source – Secondary data

4.10 Graph showing return on equity ratio

ROE RATO
0.025

0.02

0.015

0.01 ROE RATO

0.005

0
2013-14 2014-15 2015-16 2016-17 2017-18

INTERPRETATION

It is a profitability ratio that measures the ability of a firm to generate

profits from its shareholders investments, thus higher ratio may result in
higher profit generation. Here ratio is comparatively higher thus income
generating capacity of firm from shareholders investment is higher. Thus
the firm is financially sound.

30
 CHAPTER-5
FINDINGS, SUGGETIONS AND CONCLUSION

31
5.1 FINDINGS

 Current ratio shows an ideal ratio thus it is satisfactory and the

bank will not find much difficulty in meeting its short term
solvency
 Total assets to debt ratio of the firm are financially sound,
because assets are sufficient to meet the liabilities.
 Proprietary ratio is very low
 Quick ratio and cash ratio is very low thus it may find difficulty
in meeting firms short term obligations
 solvency ratio is comparably higher thus it may not find much
risk in meeting liquidity needs of affirm
 Total debt equity was not satisfactory ratio
 Cash ratio is very low in the year 2018-19,thus liquid assets
capability of firm is very low
 Liquid assets to total assets ratio is low in previous years. So
current stability of firm to meet its liquid assets to total assets is
very low

32
5.2 SUGGESTION

 The profitability ratios must be maintained in stable level.

 The bank has to increase its shareholders fund by strengthen its
membership and improving its performance
 The bank has to increase its deposits by attractive interest rates.
Purchase of fixed assets must be maintained at the stable level.
 Stock position must be maintained at the stable level.
 The firm must take steps to improve the leverage ratios.
 Profitability can increase through better utilization of owner‟s
fund, effective use of resources and high productivity.

33
5.3 CONCLUSION

CO-Operative bank plays an important role in the economic

development banks are the main participant in the financial system of
India. A study on the financial performance of co-operative ltd for a
period of five years from 2013-18 is almost good. Finance of the bank
mobilized fund in different portfolio. Banks would need to adopt
innovative customer friendly approach to increase their effective
performance. So that the share of organized finance increases. The
present study reveals that Vatanappally karshaka co-operative society has
effectively utilized the mobilized funds and turnover. The liquidity and
profitability position of the bank is satisfactory and should give
importance to the solvency and activity position. The society has more
opportunities for development if it can undertake expansion and
diversification activities. Employees and executive at each level should
understand the great level of each activity and keep financial discipline.

34
APPENDIX

35
BIBLIOGRAPHY

36
BOOKS

• Management accounting : R.S.N Pillai Bagavathi

• Management accounts : M.Y khan, P.K jain

JOURNALS

 S.P Jain, K.L, Narang „Financial Management and accounting‟,

Kalyani publishers, New Delhi, 1999.
 Dr. S.N Maheshwari, „Principle of Management Account‟,
Sulthan Chand and Son, New Delhi, 1996.
 Prasanna Chandhra, „ Financial Management Tata MC Graw.
Hill Publishing Company ltd, New Delhi, 2001.
 “K.V.N Prasad and Dr. A.A Chari (2001)”. Relative Financial
performance of public sector banks the india, journal commerce
vol.5, no.11

WEBSITES

 www.investopedia.com
 www.slideshare.com
 www.rbi.org.in
 www.bankrate.com

37