Академический Документы
Профессиональный Документы
Культура Документы
Finance plays a vital role in the survival of any industry. It is the life
blood of business. As far as the banking sector is concerned finance
management has an important role. To have a clear understanding of the
profitability and financial position of a business, the financial statements will
have to be analyzed and interpreted.
PRIMARY OBJECTIVE:
The primary objective of the study conducted at the KDC Bank Ltd. is given
below.
SCOPE OF STUDY
The main source of information required for the analysis is the annual
report of the Bank, The annual report comprises the Income and Expenditure
Statement, the Balance Sheet. Report to the Directors and Auditors report.
The period of analysis is for a period of five years (2007-08). The different
tools used for analysis of financial statements are Ratio Analysis, Trend
Analysis. Comparative Analysis and Common size statements.
RESEARCH METHODOLOGY
NATURE OF RESEARCH
This research is a diagnostic study geared to solve the specific
problems relating to financial performance by the discovery of the relevant
variables that are associated with financial statement.
RESEARCH DESIGN
The research is by and large a desktop analysis and it involves
scanning and absorbing tools and ideas from the standard texts, journals,
websites and other related materials to get a hold on the theories of financial
control.
SOURCE OF DATA
The study is based on the data published in the annual reports and
other documents provided by the bank.
PRIMARY DATA
Primary data originally collected by researches through personal
interview with the financial officials in Kannur District Co-operation.
SECONDARY DATA
ANALYTICAL TOOLS
1) Ratio Analysis
2) Trend Analysis
3) Comparative Financial Statement
4) Common size statement
REVIEW OF LITERATURE
Financial statements
1. Trade creditor
They are interested in firm's ability to meet their claims over a very short
period of time. Their analysis will, therefore, confine to the evaluation of the
firm's liquidity position.
<>
2. Suppliers of long-term debt
They are on the other hand, are concerned with the firm's long solvency and
survival. They analyses the firm's profitability over time, its ability to
generate cash to be able to pay interest and repay principal and the
relationship between various sources of funds. Long term creditors do
analyses the historical financial statements, built they place more emphasis
on the firm's projected or pro forma, financial statements, to make analysis
about its future solvency and profitability.
3. Investors
They are who have invested their money in the firm's shares, arc most
concerned about tufts firm's earnings. They restore more confidence in those
firm that show steady growth in earnings. As such, they concentrate on the
analysis of the firm's present and future profitability. They are also interested
Sharaf arts and Science college 7 Kannur
University
Kannur District Co-operative Bank
in the firm's financial structure to the extent it influences the firm's earnings
ability and risk.
4. Management
The management of the firm would be interested in every aspect of the
financial analysis. It is their over all responsibility to see that the resources
of the firm are used most effectively and efficiently. And that the firm's
financial condition is sound.
Standards of comparison
The ratio analysis involves comparison for useful interpretation of the
financial statements. A single ratio in itself does not indicate favorable or
unfavorable condition. It should be compare with the same standard.
Standards of comparison may consist of:
a. Horizontal Analysis
Analysis of changes in different components of the financial statements for
certain number of years is known as Horizontal Analysis, e.g., study of
profitability trends for a period of five or ten years. It is also known as
dynamic analysis because it shows the changes that have taken place.
h. Vertical Analysis
This refers to the analysis of the quantitative relationships of the various
items in the statements at a particular date, e.g., comparison of current assets
to current liabilities for one point of time or one accounting period. Vertical
analysis is also known as static analysis.
TOOLS OK FINANCIALANALYSIS
A number of techniques or devices are used to undertake financial analysis.
The fundamental objective of any analytical method is to simplify the data to
more understandable terms. The following are the important tools of
financial analysis.
1. Comparative Financial Statement
2. Trend Analysis
3. Common size statements
4. Ratio Analysis
5. Fund Flow Analysis
6. Cash Flow Analysis-Comparative Financial Statements
The Financial in the financial data over a period can be understood if
the statements of two or more years are placed side by side to
facilitate comparison. Such statements are called comparative Financial
statements. There are two types of financial statements namely, Comparative
balance sheet and Comparative income statement.
b.Trend Analysis
Comparing the past data over a period of time with a base year is
called trend analysis. Under this technique, information for a number of
years is (taken up and one year (usually the first year) is taken as the base
year. Each itme of the base year is taken as 100 and on that basis the
Sharaf arts and Science college 10 Kannur
University
Kannur District Co-operative Bank
percentage for other years are calculated^.,. The object of calculating the
trend percentage is to show the direction of the change upward or
downward. The trend percentages are generally computed for major items in
the statement.
RATIO ANALYSIS
The ratio analysis is one of the most power full tools of financial
analysis. An analysis of financial statement on the basis of ratios is known as
ratio analysis. It is the systematic use o! Accounting ratios in order to weigh
and evaluate the operating performance of a firm. It involves the process of
computing, determining and presenting the relationship of items in the
Imuncial statement. It also embraces the comparison and interpretation of
these ratios and use of them for further projections. Ratio analysis is being
used as devise to diagnose the financial health of a business concern.
figures. Thus limes, percentage and proportion arc the three ways of
expressing ratio.
a
Ratio is not conclusion themselves. They arc only means to draw
conclusions.
• Ratio relates to last data. A financial analyst is more concerned with
probable happenings in the future rather than the past.
• Ratio became helpful to the management only when they are compared to
ratio of previous periods or that of similar firms.
• Ratio do not reveal the non-monetary aspects of the organizational
environment; e.g., morale and loyalty of employees, quality of supervision,
human relations etc.
« Financial statement can easily be window dressed to present a better
picture of the firm's financial position and profitability, hence one has to be
very careful in making a decision on the basis of ratios calculated from such
financial statements.
« Price level changes make the ratio analysis difficult,
If too many ratios are calculated, it will be difficult to draw precise and
meaningful conclusions.
Ratio analysis only out the symptoms and cannot indicates the forces which
are responsible for these symptoms.
INDUSTRY PROFILE
reach a size of US$ 15 billion. While banks cater to short and medium term
financing.
Industrial Profile
Co-operative banks have a history of almost 100 years. The Co-
operative banks are an important constituent of the Indian financial system,
judging by the role assigned to them. The expectation they are supposed to
fulfill their member and the number of offices they operate. The co-
operative movement originated in the west, but the importance that such
banks have assumed in India is rarely paralleled anywhere else in the world.
Their role in rural Financing continues to be important even today and their
business in the urban areas also has increased and resulting in increase of
number of primary co-operative bank.
Kerala can claim to have an elaborate and efficient rural credit system
administered through primary Co-operative Bank, Central Co-operative
Banks and Apex Co-operative Bank. The Co-operative credit structure in
Kerala comprises of 2 parts namely,
The idea of co-operation has spread all over the world within a short
period of time. The forerunners of co-operative movement in Italy were
Lougi Luzzatle organize Urban Co-operative Credit Societies known as
"Banca popuair means "People banks' they were organized in line with the
urban banks in Germany. They are formed to provide cheap credit for non-
agricultural purpose. Dr.Wollenburge formed 'Gassu Ruralit' in rural areas to
provide cheap credit to farmers. They arc also known as farmers in due
course, the popularity of co-operative movement spread all over Italy.
Thus the vine cooperation planted by the English Flannel Weavers in
the soil of Rockdale has an unusual growth.
three-tier ground floor; the central co-operative banks the top floor as the
apex institutions.
Co-operative banks mobilize the savings of* the members and non-
members by inculcating the habit of thrift and self-held and lend the funds so
raised to those who can profit by them. These 'two broad functions coupled
with a few others make them look like commercial banks. Their line of
action is also roughly the same in that they aim at earning profit, but this
again makes the main point of distinction. To co-operative banks profit
motive is subordinate to service, while the reverse is true of commercial
banks. Strictly speaking, is the central, state and urban co-operative banks
which should be taken as co-operative hanks since their deposits are
withdrawal from by cheque. This explains the extension of the Banking
companies Act 1949 to certain co-operative societies in terms of the Banking
Laws Act, 1965 with effect from March 1, 1966, the date on which this came
in to force, these state co-operative societies in terms of the Banking Laws
Act, 1965 with effect from March 1, 1966, the date on which this Act came
in to 1965, these state cooperative bank, central co-operative banks and
primary non-agricultural credit societies which have a paid up capital and
reserves of not less than Ks. 1 lakh have been brought within the regulatory
frame work of the Reserve Bank. Accordingly, the name of the Banking
Companies Act charged in to Banking Regulation Act.
. The most disturbing aspect of the working of co-operative banks has
been their mounting over dues, Along with the increase in the quantum of
advances, there has been a corresponding rise in over dues showing that the
banking have it has not yet developed among the borrowers, On the
average over dues to outstanding advances are as 44 percent. Then, a large
number of PACS still remain non-viable even after their re-organization.
Their expenses exceed their incomes and overdue loans are mounting.
However, the program of intensive development of PACS for transforming
Sharaf arts and Science college 19 Kannur
University
Kannur District Co-operative Bank
The result that the reliance on Reserve Bank funds has been
historically substantial in recent years, however, the Reserve Bank has been
stressing the need for co-operative banks to increase their self-reliance and
limit their resource facilities. Simultaneously, steps have been taken to
improve the ability of co-operatives to augment their own resource by
extending to them certain concession such as allowing them to offer slightly
higher rates of interest on deposits and the extension of insurance cover to
their deposits.
land to the members. These societies from the base of the movement and
provide direct access to the people. So as the stability and strength and
strength of a building mainly depends on its foundation. The soundness of
three tier credit structure depends upon primaries. If they are weak we
cannot expect the sound working at the District Co-operative Banks or State
Co-operative Bank.
Objectives
Funds
There are two types of shares i.e. A class and B class shares. A class
shares are intended for the member societies and its share value is usually
Rs. 100/-. The ‘B’ class shares are reserved for the state government and its
share value is normally fixed at Rs. 1000/-. The funds of the Central Co-
operative Bank include share capital from member societies, government
deposits from members, non-members, reserve fund and other reserves and
loans from State Co-operative Bank, State Bank of India and State
Government.
Working
The central co-operative bank advances two types of loan i.e. short
term loans and middle term loans to its member societies for agricultural
purpose. The district bank also advances ordinary loans which are to meet
the non-agricultural needs of the members. Ordinary loans are advanced out
of its own resources. The rate of interest of the ordinary loans will be higher
than the agricultural loan.
Principle Function
5) Receiving Deposits
6) Lending Money
7) Investment of Funds
8) Creation of Money
9) Other Function.
COMPANY PROFILE
KANNUR DISTRICT CO-OPERATIVE BANK LTD
Kannur District Co-operative Bank Ltd. the pioneer bank in the Co-
operative sector was registered on 22nd May 1963 and came into existence on
1st July 1963 and plays a vital role in the over all development of the district.
CORPORATE MISSION
MANAGEMENT
STAFF STRUCTURE
SECTIONS
The bank has seven sections through which the bank carrying out its
various operations. The various sections are as follows.
A Section – Account
Sharaf arts and Science college 31 Kannur
University
Kannur District Co-operative Bank
Share Capital
Objectives
Objective
Eligible Institutions
I. The bank has prepared a specific policy for providing financial services
to women. A copy of such policy approved by the Board may be
submitted along with the application to the concerned RD of NABARD.
II. The bank has put in place appropriate Management Information System
(MIS) for collecting, collating and maintaining gender disaggregated
data on its business.
III. The bank is required to submit an Action Plan giving the targets of
Quantum of Assistance
a) Refinance.
100% refinance to cover the loans for investment credit given to women,
both for Farm and Non-farm sectors.
b) Grant
One time grant assistance not exceeding Rs. 30,000/- p.a., if the bank has
introduced a computerized MIS for collection and maintenance of gender
Sharaf arts and Science college 34 Kannur
University
Kannur District Co-operative Bank
disaggregated data, provided the bank has not earlier availed of the same
from NABARD.
Mobility allowance @ Rs. 20,000/- per district, covered by the bank with
a ceiling of Rs. 1,00,000/- p.a. for the bank as a whole. The allowance will
be provided for undertaking visit by the identified officer (s) of the WDC for
facilitating activities like awareness creation, credit ramps, counseling,
training etc. which will help in increasing the credit flow to women.
1) Vanithanidhi
2) Mangalya Suthra
3) Mangalya Nidhi
4) Vidyajyothi
5) Kanaka Nidhi
6) Sangadeepthi
7) Mahilamithra
Ratio Analysis
Chart 1
60000
Current Asset is greater than current liabilities ie it satisfies idle ratio is 2:1
50000
which indicates the current financial position of the company.
Profitability Ratio
2) Profit as % total ratio/profit margin
Net profit x 100
Total income
Table:2
Year Profit Total Income Ratio
2004-2005 338.06 6410.61 5.273
3
2005.2006 396.53 8039.32 4.93
40000
2006-2007 410.07 9365.77 4.38
Chart:2
14000
12000
Total profit to total income ration is declining from 2003 – 04 to 2007 – 08.
But total income was increasing year by year.
Table:3
Year Profit Total Interest Ratio
10000 2004-2005
2005.2006
338.063 6249.79
396.53 5797.9
5.41
6.84
Chart:3
10000
9000
Ratio of profit to interest earned is rate decreasing from 2003 – 04 to 2007
– 08
4) Solvency Ratio
Cash as a % of deposit
8000
= Total cash x 100
Deposit
Table:4
7000
6249.79
Sharaf arts and Science college 41 Kannur
University
Kannur District Co-operative Bank
Chart:4
100000
90000
Here it shows there is a increasing tendency of cash to deposit ratio.
Expenditure Ratio.
80000
Interest paid x 100
Gross income
Table:5
70000
12000
10000
Sharaf arts and Science college 44 Kannur
University
Kannur District Co-operative Bank
Interest paid to gross income ratio is at high during the year 2005-06. and the
lowest rate was in the year 2007-08
Chart:6
14000
12000
Sharaf arts and Science college 45 Kannur
University
Kannur District Co-operative Bank
Chart:7
14000
12000
Sharaf arts and Science college 46 Kannur
University
Kannur District Co-operative Bank
Management cost to total expenditure ratio increased during the years 2005-06 and
2006-07.And in the year 2007-08 to 2008-09 it has decreased.
Table:8
Chart:8
14000
12000
Total expenditure to gross income ratio is highest in the year 2008
&2009, with 96.75% and 98.76% Except in the year 2006, it shows an increasing
trend.
10000
Chart:9
14000
12000
In the year 2005 interest on investment to year’s income in 97.49%.During
the year2006 and 07interest on investment to gross income ratios are 72.12 % and
65.94 % respectively.
10) Other income to gross income = Other income x100
Gross income
Table:10
Chart:10
14000
12000
During the years 2005 other income to gross income ratio was 2.5 and in
the next -4 sequent years it increased tremendously.
Table:11
Chart:11
16000
14000
Gross income to owner fund ratio during the year 2005 is 83.5% and the
highest is in the year 2009 by 96.18%
10000
Sharaf arts and Science college 52 Kannur
University
Kannur District Co-operative Bank
Chart:12
16000
14000
Net profit to owned fund ratio decreased from 2005 to 2009. During the year 2005
Net profit to owned fund ration was 4.41% and during the year 2009it has reached
to 1.19%.
13) Net profit to working fund ratio
= Net Profit____x 100
Working Fund
Table:13
12000
Sharaf arts and Science college 53 Kannur
University
Kannur District Co-operative Bank
Chart: 13
140000
University
120000
Sharaf arts and Science college 54 Kannur
Kannur District Co-operative Bank
In the year 2004 – 05 Net Profit to working Fund ratio was 51% and in 2006 ratio
increased to 53%. After it shows a dealing trend. In the year 2007 ratio was 52%
and in 2008and 09 it reaches its lowest ratio of 14%
Chart:14
9000
8000 7769.45
Net profit to NPA shows a declining tread. Highest ratio was in the year 2007with
and 6.07% the lowest ratio was in the year 2008and 09with 1.54% and 1.90%.
Table:15
7000 Owned fund
6000
2008 – 2009 8550.82 13592.01 62.91
Chart:15
16000
14000
NPA to owned fund ratio. Show a declining trend it declare from 101.2 to
77.89 in the year 2005 – 06 and in 2006 – 07it decreases to 55.12 and in the year
2007.08 the ratio was 66.99% and 62.91% respectively.
= NPA
Share capital + Reserves
12000
Sharaf arts and Science college 57 Kannur
University
Kannur District Co-operative Bank
16000
14000
Sharaf arts and Science college 58 Kannur
University
Kannur District Co-operative Bank
NPA to total equity shows a declining tread. During the year 2004 – 05 it
was 95% and in the year 2008 – 09it reaches to 62%.
Chart:17
100000
90000
In the year 2004 – 05& 2005 – 06 CDR is 98%. During the year 2006 – 07
& 2007 – 08CDR is declined to 92% and in the year 2008 – 09it reaches to 88%.
Increase in the total deposit has result in decrease in the current Deposit ratio.
80000
COMMON SIZE BALANCE SHEET as on 31st March 2004 – 2005
70000
Borrowings 7116.22 10.48 8971.56 11.46
Other liabilities 9162.49 13.49 10890.28 13.91
67907.77 100 78264.96 99.98
Assets
Cash & balance with banks 16513.7 24.3 20340.9 25.99
Investment 1825.3 2.68 1362.72 1.74
Advance 44683.5 65.80 50130.39 64.05
Fixed asset 90.264 .132 112.69 .14
Interpretation
Reserve fund Borrowings has increased in the year 2006. During the year
2005 cash and balance with bank was 16513.7 and during the year 2006 it has
increased.
9 8
Assets
Cash & balance with banks 30419.7 32.85 33904.99 30.65
5
Investment 1373.19 1.48 1366 1.234
Advance 56975.0 61.53 69922.22 63.21
2
Fixed asset 138.48 .14 154.85 .14
Other asset 3681.26 3.198 5272.05 4.77
92587.7 99.19 110620.1 100.004
8 1
Advances of bank have increased from 61.53% to 63.21% during the year
2007-2008. But borrowing and Reserve fund has decreased from 2007 to 2008.
Deposit has increased from the year 2008 to 2009. Contribution of reserve
fund, borrowings and other liabilities to total capital & liabilities has decreased
during the year 2009.
Interpretation
In the year 2006 financial cost have been decreased from 4077.39 to
3581.72 but Transactional cost increases from 968.79 to 1009.05. net profit of
2005 is 338.06 and of 2006 is 396.53 which is increased from 2006 profit.
Net profit earned during the year 2007 has increased. There is an increase
in the financial cost during the year 2007. Miscellaneous income had tremendous
increase in the year 2007 it has increased from 38.66% to 51.66% in the year
2007.
During the year 2008 Netprofit has decreased from 6.64 to 1.84.
Miscellaneous income has decreased during this period. It has decreased from
51.66% to 47.71%.
During the year 2009_ financial cost has in creased. FC has increased from
68.94 to 71.97. But transaction cost has decreased from 21.25% to 18.29%. And
there is 1.79% of increase in net profit.
Deposit in the year 2006, has increased by 21.04%. Other liability shows a
negative charge of -17.069%. Borrowing and Reserves has increased by 56.35%
and 6.77%
Cash and balance with bank has increased to 32.47% and there is a
decrease of -11.83% and -19.58% in investment and other asset reserve fund,
Deposit and Borrowing have an increase of 6.04%, 25.88% and 27.86%
respectively.
Financial return has decreased from the year 2005 to 2006. Financial cost
also has decreased during the yea. Miscellaneous income had a tremendous
increase in the year 2006.
Financial return has increased by 6.5% during the year 2007. Financial cost
and transaction cost has increased by 8.83% and 66.96%. There is an increase in
the Net profit.
In the year 2006 there is 14.85% increase in financial return. And miscellaneous
income increased at 6.08%. During the year 2006 Financial cost and other
expenses has increased b 25.44% and 14.80% so that Net Profit has decreased by
68.14%.
Amt of
increase or
Particulars 2008 2009 % change
decrease in
2008
Financial return 7092.55 9122.38 2029.83 28.62
Less Financial Cost 4889.79 6565.37 1675.58 34.27
Financial Margin 2206.76 2557.01 350.25 15.87
Less Transactional cost 1506.99 1668.72 161.73 10.73
Operating Margin 695.76 888.29 192.53 27.67
Add miscellaneous 3384.2 3945.29 561.09 16.58
income
4080.02 4833.58 753.56 18.47
Less other expense 3949.39 4670.92 721.53 18.27
Netprofit 130.63 162.66 32.03 24.52
Findings
Suggestion
Bank has to take necessary steps to improve the effective utilization of
available resources.
Bank should take appropriate action to reduce its NPA to the minimum
possible limit.
Bank has to improve the earning asset or value of asset.
Bank has to invest its fund in more productive way.
In order to overcome the declining trend of financial margin bank should
take necessary action.
Bank can introduce ATM facility to its customer.
LIMITATIONS
The study is limited only on the head office of the bank. No branches of
the bank are taken in the consideration.
The duration given for the project was not sufficient to do an elaborate
study.
The researcher’s inadequacy of experience also might have influenced the
study to an extent.
The data used for analysis and interpretation is secondary data of last five
years.
As the data, ratio, averages all are based on year ending figure it shall not
reflect the real position due to abnormal increase in deposits, loans and
advances, cash and bank balance etc.
CONCLUSION
BIBLIOGRAPHY
Books
Web Sites
http://osufacts.okstate.edu
http://www.rbi.com
http://www.netmba.com/finance/financial/ratios/
http://en.wikipedia.org/wiki/Financial_statements
Findings
1Current asset to current liability shows a satisfactory level which states that the
company has a satisfactory financial level.
2) Profit to total income shows a decreasing trend even though total income is
increasing expenditure also increases.
3) Interest paid to gross income ratios show a decreasing trend. It is found that
interest paid as were gross income increased.
4) Management cost have come down from 2006 – 07. It has a low raio in the
year 2004 – 05 and next 2 year management cost was high and then it started
declining.
5) Mgt cost to total expenditure ratio not changes in every year. In the fest year it
was low ratio and the next 2 year it increases and then it starts declining.
6) Interest on investment constitute a major income to the bank be During the
year 2003 – 04 interest ratio was 97.49% and in the year 2007 – 08 it is 69.8%
7) Other income has increased in every year which helps in improving the income
earned.
8) Gross income to owned fund ratio is 96.14% is the year 2008 – 09. It shows an
increasing trend from 2004 – 05 to 2008 – 09.
9) Net profit to owned fund was decreasing. During the year 2004 – 05it was
4.41% and low it reaches to 1.03.
10) Net Profit to working fund ratio was declining compared to 2005. It had a
small increase in the year 2006.
11) In the common size balance sheet during the year 2005 – 06 borrowings has
increased from 10.48% to 11.46%. Cash and balance with banks has in
increased from 24.3% to 25.99%.
12) During the year 2007cash and balance with bank increased to 32.85%
13) In the year 2008 Deposit has increased to 68.06% from 66.61. Which shows
the financial sounders of the bank?
14) Financial return of the bank is increasing year by year. It shows that the bank
receive a high rate of interest from loans and advances.
15) Transaction cost increased during the year 2005 – 06 and has decrease during
the 2007– 08.
16) Interest on deposit and borrowings increased year by year.
17) Reserves and surplus, Deposit and borrowings were increasing every year.
Cash advances, fixed assets also increases tremendously.
LIMITATIONS
The study is limited only on the head office of the bank. No branches of
the bank are taken in the consideration.
The duration given for the project was not sufficient to do an elaborate
study.
The researcher’s inadequacy of experience also might have influenced the
study to an extent.
The data used for analysis and interpretation is secondary data of last five
years.
As the data, ratio, averages all are based on year ending figure it shall not
reflect the real position due to abnormal increase in deposits, loans and
advances, cash and bank balance etc.
Annexure
Balance sheet For the year 2003 – 2004 in lakhs
Suggestion
Findings
Ratio Analysis
Year CA CL Ratio
2003 – 21308.6 9162.49 232
2004
2004 – 26659.1 10890.2 244
2005 9 8
2005 – 34101.0 9031.45 377
2006 1
2006 – 39177.0 10719.4 365
2007 4
2007 – 49152.3 10434.9 471
2008 5
Profitability Ratio
3) Profit as % total ratio/profit margin
Net profit x 100
Total income
4) Solvency Ratio
Cash as a % of deposit
= Total cash x 100
Deposit
Year Profit Total Ratio
2003-2004 16513.7 45143.0 36.58
4
2008.2005 20340.9 50954.4 39.92
2005-2006 30419.7 61673.1 49.32
Year Interest
5 paid 5Gross income Ratio
2006
2003-04 –6249.79
33904.9 75295.4
6410.61 45.0 97.44
2007 9
2004-05 5797.9 8039.32 72.12
2007
2005-06 –6175.61
44912.4 94781.6
9365.76 47.3865.99
2008
2006-07 7092.55 710476.81 67.81
Here it
shows there is a increasing tendency of cash to deposit ratio.
Expenditure Ratio.
10) Interest paid to gross income ratio
Interest paid x 100
Gross income
Interest paid to gross income ratio is at high during the year 2003-
04. and the lowest rate was in the year 2005-06
During the years 2004 other income to gross income ratio was 2.5 and
in the next -4 sequent years it increased tremendously.
11) Gross income to owner Fund Ratio
Gross income x100
Owner Fund
Gross income to owner fund ratio during the year 2008 is 83.5% and
the highest is in the year 2008 by 96.18%
Net profit to owned fund ratio decreased from 2004 to 2008. During
the year 2004 Net profit to owned fund ration was 4.41% and during the year
2008 it has reached to 1.19%.
13) Net profit to working fund ratio
= Net Profit____x 100
Working Fund
Year Net profits Owner Fund Ratio
2004 338.06 65615.11 .51
2005 396.52 74921.18 .53
2006 410.07 79153.56 .52
2007 130.63 94848.65 .14
2008 162.67 118825.69 .14
In the year 2003 – 04 Net Profit to working Fund ratio was 51% and
in 2005 ratio increased to 53%. After it shows a dealing trend. In the year
2006 ratio was 52% and in 2007 and 08 it reaches its lowest ratio of 14%
14) Net Profit to NPA ratio = Net profit x 100
NPA
Net profit to NPA shows a declining tread. Highest ratio was in the
year 2006 with and 6.07% the lowest ratio was in the year 2007 and 08 with
1.54% and 1.90%.
15) NPA to owned fund ratio
= NPA x 100
Owned fund
Year Net profits Owner Fund Ratio
2003 – 2004 7769.45 7673.2 101.2
2004 – 2005 8133.30 10441.48 77.89
2005 – 2006 6750.86 12247.97 55.12
2006 – 2007 8466.13 12637.15 66.99
2007 – 2008 8550.82 13592.01 62.91
= NPA
Share capital + Re
NPA to total equity shows a declining tread. During the year 2003 –
04 it was 95% and in the year 2007 – 08 it reaches to 62%.
17) Credit Deposit Ratio (CDR)
= Total loan of advanced x 100
Total Deposit
In the year 2003 – 04 & 2004 – 05 CDR is 98%. During the year
2005 – 06 & 2006 – 07 CDR is declined to 92% and in the year 2007 – 08 it
reaches to 88%. Increase in the total deposit has result in decrease in the
current Deposit ratio.
Findings
the year 2003 – 04 and next 2 year management cost was high and then it
started declining.
22) Mgt cost to total expenditure ratio not changes in every year. In the
fest year it was low ratio and the next 2 year it increases and then it starts
declining.
23) Interest on investment constitute a major income to the bank be
During the year 2003 – 04 interest ratio was 97.49% and in the year 2007
– 08 it is 69.8%
24) Other income has increased in every year which helps in improving
the income earned.
25) Gross income to owned fund ratio is 96.14% is the year 2007 – 08. It
shows an increasing trend from 2003 – 04 to 2007 – 08.
26) Net profit to owned fund was decreasing. During the year 2003 – 04
it was 4.41% and low it reaches to 1.03.
27) Net Profit to working fund ratio was declining compared to 2004. It
had a small increase in the year 2005. But in the next thjj
28) In the common size balance sheet during the year 2004 – 05
borrowings has increased from 10.48% to 11.46%. Cash and balance
with banks has in increased from 24.3% to 25.99%.
29) During the year 2006 cash and balance with bank increased to
32.85%
30) In the year 2007 Deposit has increased to 68.06% from 66.61. Which
LIMITATIONS
The study is limited only on the head office of the bank. No branches
of the bank is taken in the consideration.
The duration given for the project was not sufficient to do an elaborate
study.
The researcher’s inadequacy of experience also might have influenced
the study to an extent.
The data used for analysis and interpretation is secondary data of last
five years.
As the data, ratio, averages all are based on year ending figure it shall
not reflect the real position due to abnormal increase in deposits, loans
and advances, cash and bank balance etc.
Annexure
Balance sheet For the year 2003 – 2004 in lakhs
Suggestion
Findings
1. Bank have a social financial position.
2. Bank enjoyed high profitability during the period 2005 – 2006.
3. It was fund that the bank have high rate of NPA.
4. co-operative Bank provides high interest rate compared to other
banks.
5. Deposit rate of the bank was increasing year by year. It shows
credibility of its customers towards the bank.
6. Assets such as cash and balance with other bank also shows an
increasing trend.
7. Bank have a good liquidity position.
8. increase in the deposit and loans and advances teach to a high
rate of increase in the market share.