A STUDY ON FINANCIAL STATEMENTS ANALYSIS AT ICICI PRUDENTIAL LIFE INSURANCE CHENNAI. Faculty Guide M.

Mohan Associate Professor& HOD Annamacharya Institute of Technology & Science Tirupati. P.Padmanabha Reddi 09AK1E0023 A.I.T.S Tirupati.

Introduction Financial Statements Financial statements, as used in corporate business house refer to a set of report and schedule, which accounts prepare at the end of the period of the time for a business enterprise. The financial statement is the means with the help of which the accounting system perform its main function of providing summarized information about the financial affair of the business. This statement comprises balance sheet or position statement and profit and loss account or income statement. India, every company has to presents its financial statement. India, every company has to present its financial statement in the form and contents as prescribed under section 211 of the companies Act, 1956. Industry Profile Prudential Public Limited Company is British financial services company. The company has a 21 million customers world wide. ICICI Prudential Life Insurance Company was founded on 30 May 1848 in Hatton Garden in London as the Prudential Mutual Assurance Investment and loan Association providing loans to professional and working people. Company Profile ICICI Prudential Life Insurance company is a joint venture between ICICI bank, which is one of India's foremost financial services companies, and prudential public limited company, which is a leading international financial services group headquartered in the United Kingdom. ICICI Prudential began the operations in DEC 2000.Today; this company has over 2100 branches, which include 1116 micro offices, over 2, 90,000 advices and 18 bank assurance partners. ICICI Prudential has been voted as India's Most Trusted private life insurance company has various insurance plans that have been designed for different individuals, as every individual has different insurance needs. 1

Life Insurance Plans

Education Insurance Plans Wealth Creation Plans Premium Guarantee Plans Protection Plans OBJECTIVES OF THE STUDY To estimate the earning capacity of the firm.

Retirement Solutions Health Coverage Plans Rural Plans Micro Insurance Plans

To analyze financial performance of the firm. To decide about the future prospects of the company.

NEED FOR THE STUDY Main purpose of this study is to analyze the past financial performance. SCOPE OF THE STUDY The current study is under taken for the purpose of the analysis only with regard to financial statements provided by the company. To a study covering five years performance of the ICICI prudential life insurance that is 2006-2011. LIMITATIONS OF THE STUDY The survey is restricted only to the ICICI prudential life insurance Chennai. This analysis indicates only the performance of the company over period 20062007 to 2010-2011 but does not predict the future. This study is also subject to the limitations of accuracy of the data provided in the balance sheet and profit and loss account by ICICI prudential life insurance. METHODOLOGY The study depends on Secondary Data. It is collected from the annual reports, schedules and other statements provided by the ICICI Prudential Life Insurance.

DATA ANALYSIS TOOLS The following methods of analysis are generally used: Comparative Statements Common size Statements Trend Analysis Ratio Analysis RATIO ANALYSIS Current Ratio This ratio is the measure of general liquidity and is almost widely used to make the analysis of a shorter financial position or liquidity of a firm. The higher ratio indicates that the firm is liquid and has the ability to pay its current obligations.
Current Ratio = Curretn Assetss Current Liabilitie s

Proprietary Ratio:

This ratio establishes the relationship between shareholders funds and total assets of the firm. This ratio is important to determine the long term solvency of a firm. The higher ratio indicates that the better long term solvency position of the company. Shareholders funds Proprietary Ratio = ---------------------------Total assets Reserves and Surplus to Capital Ratio: Reserves and Surplus Reserves and Surplus to Capital Ratio: = ------------------------------Capital

Fixed Assets to Total Capital Ratio: Fixed Assets Fixed Assets to Total Capital Ratio = -----------------Total Capital

FINDINGS Comparative Balance Sheet In 2006-07 increased trend, due to increased in cash and bank balances (96.17), fixed assets (13.02), advances and other assets (110.45). In 2007-08 increased trend, due to increased in cash and bank balances (27.80), differed tax assets (214.60) , provisions(163.58), reserves and surplus (212.27), total liabilities and capital(81.20). In 2008-09 increased trend, due to increased in share holders fund (26.65), total assets (16.82). In 2009-10 increase trend, due to increased in share capital (0.06), reserves and surplus (0.18), total assets (64.73). In 2010-2011 increase trend, due to increased in total current assets (10.27), total assets (16.40). Common Size Balance Sheet In 2006-07 increased trend, due to increased in total current assets (4.15), share capital (7.59). In 2007-08 increased trend, due to increase in cash and bank balances (1.97), policy holders (11.01). In 2008-09 decreased trends, due to decreased in cash and bank balances (0.97), share holders (1.81). In 2009-10 decreased trend, due to decreased in loans (0.02), cash and bank balances (0.51). In 2010-11 increased trend, due to increase in cash and bank balance (0.48), policy holders (10.28). Trend Percentage Reserve and surplus has increased (312) in 2007-08 and advances & other assets have increased (210) in 2006-07. Reserve and surplus to capital ratio increased (110) in 2009-10, due to increased in reserve and surplus. Increase of policy holders 2009-10 (130.45) and maintained an uptrend in 20102011 (161.94). Fixed Assets has been decreased in 2009-10 (79.53) and remained low in 20102011 (75.37) Ratio Analysis During the period 2006-2011, the calculated current ratio of the concern was less than the standard norm (2:1).

SUGGESTIONS ICICI Prudential Life Insurance should create awareness about health schemes to the customers to increase their profitability. The company should maintain continuous relation ship with the policy holders for the betterment of future policy and performance of the company. Provide update statements regarding policies to policy holders for making regularly without any delay.