LIQUIDITY & PROFITABILITY ANALYSIS

OF

BANK OF KATHMANDU LTD, NEPAL

A Project Work Report

By:

Akhilish Kurmi

T.U.Reg. No: 7-2-1029-2-2016

Bhairahawa Namua Campus

Submitted to

The Faculty of Management

Tribhuvan University

kathmandu

In partial fulfillment of the requirement for the degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Bhairahawa

Feb, 2020

i
 DECLARATION

I hereby declare that the project work entitled “LIQUIDITY AND PROFITABILITY
ANALYSIS OF BANK OF KATHMANDU LTD NEPAL” submitted to the faculty of
management, Tribhuvan University, Kathmandu in an original piece of works under the
supervision of Assistant Lecturer Mr. RAKESH KUMAR YADAV, Faculty Member of
BHAIRAHAWA NAMUNA CAMPUS, BHAIRAHAWA, and is submitted in partial fulfillment
of the requirements for the award of the degree of Bachelor of Business Studies(BBS). This
project work report has not been submitted to any other university or institution for the award
any degree or diploma.

………………………..

AKHILISH KURMI

Date………………….......

ii
 SUPERVISIOR'S RECOMMENDATION

The project work report entitled “LIQUIDITY&PROFITABILITY ANALYSIS OF BANK OF

KATHAMANDU” submitted by AKHILESH KURMI of BHAIRAHAWA
NAMUNACAMPUS, BHAIRAHAWA, is prepared under my supervision as per the procedure
and format requirements laid by the faculty of Management, Tribhuvan University, as partial
fulfillment of the requirements for the award of the degree of Bachelor of Business Studies
(BBS). I, therefore, recommend the project work report for evaluation.

………………………..

BHAIRAHAWA NAMUNA CAMPUS

BHAIRAHAWA

Date ………………….

iii
 ENDROSEMENT

We here by endorse the project work report entitled “LIQUIDITY& PROFITABILITY

ANALYSIS OF BANK OF KATHAMANDU” submitted by AKHILESH KURMI of
BHAIRAHAWA NAMUNA CAMPUS, BHAIRAHAWA, in partial fulfillment of the
requirements forward of the Bachelor Of Business Studies (BBS) for external evaluation.

....................................... .......................................

MADHUSUDAN POKHERAL TUMNATH ARYAL

Chairman, Research Committee Campus Chief

BHAIRAHAWA NAMUNA CAMPUS

Date: 2076/10/

iv
 ABSTRACT

This study examined liquidity and profitability of BOK. The major aims of the study were to
find empirical evidence of the degree to which effective liquidity management affects
profitability in BOK and how BOK can enhance their liquidity and profitability positions.
Considering the nature of the survey, quantitative methods of research were applied. In attempt
to achieve the objectives of the study, several findings were made through the analysis of both
the structured and unstructured questionnaire on the management of banks and the financial
reports of the BOK. The data obtained from the Primary and Secondary sources were analyzed
through collection, sorting and grouping of the data in tables of percentages and frequency
distribution. We formulated a hypothesis, which were statistically tested through Pearson
correlation data analysis. Findings from the testing of this hypothesis indicate that there is
significant relationship between liquidity and profitability. That means profitability in
commercial banks is significantly influenced by liquidity and vice versa.

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 ACKNOWLEDGEMENT

The project work report titled “LIQUIDITY AND PROFITABILITY ANALYSIS OF BANK
OF KATHMANDU LTD.” has been undertaken solely for the purpose for the partial fulfillment
of the requirements for the Bachelor of Business Studies (BBS).

I would like to express my gratitude to all supporters who provided me very informative and
precious as well as proper information on penmanship this report. I would like to thank
BHAIRAHAWA NAMUNA CAMPUS for providing a chance and allowing for this study. I am
highly appreciative to Lecturers Mr. Madhusudhan Pokheral and Principal Tumnath Aryal for
this assignment and proper instruction without his help my assignment would not complete at the
time.

Besides, I would like to show appreciation to the related Name of the person of the Name of
researched Company, who provided the data and enlightened the historic background of
company. I also indebted to Mr. Suman Panta who provided me the data and the valuable
information. I cannot entire this assignment without giving thanks to the Branch Manager of the
BANK OF KATHMANDU LTD.

Thank you!

AKHILISH KURMI

BHAIRAHAWA NAMUNA CAMPUS

BHAIRAHAWA

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 TABLE OF CONTENTS
Title Page i
Declaration ii
Supervisor’s Recommendation iii
Endorsement iv
Abstract v
Acknowledgement vi
Table of Content vii
List of Tables ix
List of Figures x
Abbreviations xi

CHAPTER I: INTRODUCTION 1-4

1.1. Back ground of the study 1
1.2. Statement of problem 2
1.3. Objective of study 3
1.4. Rational of study 3
1.5. Report Structure 4

CHAPTER II: LITERATURE REVIEW 5-8

2.1 Conceptual Review 5
2.2 Review of Previous Works 7
2.3 Research Gap 8

CHAPTER III: METHODOS 9-11

3.1. Type of Research 9
3.2 Population and sample 9
3.3 Types of Data 9
3.4 Data collection procedure 10

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3.5 Instruments 10
3.6 Techniques of Analysis 11
3.7 Limitations of the Study 11

CHAPTER IV: RESULTS AND FINDINGS 12-24

4.1 Presentation of Data in Tables and Figures and their Analysis 12
4.2 Findings 24

CHAPTER V: DISCUSSIONS, CONCLUSION 25-26

5.1 Conclusion 25
5.2 Conclusion and Implementations 25

REFERENCE 27

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 LIST OF TABLES

Table No. Titles Page No.

1 Net return from interest in different years 13

2 Liquid ratio of BOK 15

3 Return on assets of BOK 16

4 Return on equity of BOK 17

5 Earnings per share of BOK 29

6 Debt equity ratio of BOK 21

7 Debt assets ratios of BOK 22

8 Total deposit and lending of BOK 23

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 LIST OF FIGURES

Figure No. Titles Page No.

1 Net return from interest in different years 13

2 Trend line for Liquidity Ratio 15

3 Trend line for ROA of BOK 17

4 Trend line for ROE of BOK 18

5 Trend line for EPS of BOK 19

6 Total debt and equity capital of BOK 21

7 Total debt and assets of BOK 22

8 Total deposit and lending of BOK 23

x
 LIST OF ABBREVIATIONS

% Percentage

BOK Bank of Kathmandu

CA Current Assets

CL Current Liabilities

DA Debt Assets

DE Debt Equity

DL Debt to Lending

EPS Earning Per Share

Fig Figure

Gov. Government

ICR Interest Coverage Ratio

i.e. That is

No. Number

NRB Nepal Rastrya Bank

QA Quick Assets

QR Quick Ratio

Ltd Limited

ROA Return on Assets

ROE Return on Equity

Rs. Rupees

TD Total Debt

TU Tribhuwan University

LR Liquid Ratio
xi