SUBMITTED TO : Mr.

ATIN GARG

SUBMITTED ON: 4 NOV 2010

SUBJECT : ACCOUNTING FOR MANAGERS

SUBMITTED BY:

NAME > JARMANJIT SINGH

[Link]. > 11001985

Roll no. > A03

> MBA(HHM)

1
SNO. INDEX PAGE NO.

1. Introduction to canara bank ------------------------------ 3 to 5

2. Introduction of common,comparative,trend &
Ratio analysis --------------------------------------------------- 6 to 22
3. Interpretation of comparative statement---------------- 23
4. Trend analysis & its interpretation ------------------------ 24 to 28
5. Ratio analysis and its interpretation ----------------------- 29 to 30
6. Schedule & fund from operation---------------------------- 31
7. Fund flow statement & cost sheet-------------------------- 32
8. Cash flow statement-------------------------------------------- 33
9. References -------------------------------------------------------- 33

2
 INTRODUCTION
 
As a premier commercial bank in India, Canara Bank has a distinct track record
in the service of the nation for over 100 years. Today, Canara Bank has a strong
pan India presence with 3057 branches and over 2000 ATMs, catering to all
segments of an ever growing clientele base of over 37.5 million. We are
recognized as a leading financial conglomerate in India, with as many as nine
subsidiaries/sponsored institutions/joint ventures in India and abroad. As we
step into the second century, we aspire to emerge as a Global Bank with Best
Practices.
 

A Brief Profile of the Bank:

Widely known for customer centricity, Canara Bank was founded by Shri
Ammembal Subba Rao Pai, a great visionary and philanthropist, in July
1906, at Mangalore, then a small port in Karnataka. The Bank has gone
through the various phases of its growth trajectory over hundred years of
its existence. Growth of Canara Bank was phenomenal, especially after
nationalization in the year 1969, attaining the status of a national level
player in terms of geographical reach and clientele segments. Eighties was
characterized by business diversification for the Bank. In June 2006, the
Bank completed a century of operation in the Indian banking industry. The
eventful journey of the Bank has been characterized by several memorable
milestones. Today, Canara Bank occupies a premier position in the comity
of Indian banks. With an unbroken record of profits since its inception,
Canara Bank has several firsts to its credit. These include:

 Launching of Inter-City ATM Network

 Obtaining ISO Certification for a BranchSr

 Commissioning of Exclusive Mahila Banking Branch

 Launching of Exclusive Subsidiary for IT Consultancy

3
  Issuing credit card for farmers

 Providing Agricultural Consultancy Services

Over the years, the Bank has been scaling up its market position to emerge
as a major 'Financial Conglomerate' with as many as nine
subsidiaries/sponsored institutions/joint ventures in India and abroad.  As
at June 2010, the Bank has further expanded its domestic presence, with
3057 branches spread across all geographical segments.  Keeping customer
convenience at the forefront, the Bank provides a wide array of alternative
delivery channels that include over 2000 ATMs- one of the highest among
nationalized banks- covering 732 centres, 2681 branches providing
Internet and Mobile Banking (IMB) services and 2091 branches offering
'Anywhere Banking' services.  Under advanced payment and settlement
system, all branches of the Bank have been enabled to offer Real Time
Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT)
facilities.

Not just in commercial banking, the Bank has also carved a distinctive
mark, in various corporate social responsibilities, namely, serving national
priorities, promoting rural development, enhancing rural self-employment
through several training institutes and spearheading financial inclusion
objective. Promoting an inclusive growth strategy, which has been formed
as the basic plank of national policy agenda today, is in fact deeply rooted
in the Bank's founding principles. "A good bank is not only the financial
heart of the community, but also one with an obligation of helping in
every possible manner to improve the economic conditions of the
common people". These insightful words of our founder continue to
resonate even today in serving the society with a purpose. The growth
story of Canara Bank in its first century was due, among others, to the
continued patronage of its valued customers, stakeholders, committed staff
and uncanny leadership ability demonstrated by its leaders at the helm of
affairs. We strongly believe that the next century is going to be equally
rewarding and eventful not only in service of the nation but also in helping
the Bank emerge as a "Global Bank with Best Practices". This
justifiable belief is founded on strong fundamentals, customer centricity,
enlightened leadership and a family like work culture.

Late Sri Ammembal Subbarao Pai

 

4
Our Beloved Founder
Founded as 'Canara Bank Hindu Permanent
Fund' in 1906, by late Sri. Ammembal
Subba Rao Pai, a philanthropist, this small
seed blossomed into a limited company as
'Canara Bank Ltd.' in 1910 and became
Canara Bank in 1969 after nationalization.
 
"A good bank is not only the financial heart of the community,
but also one with an obligation of helping in every possible
manner to improve the economic conditions of the common
people"   - A. Subba Rao Pai.

Founding Principles

1. To remove Superstition and ignorance.

2. To spread education among all to sub-serve the first
principle.
3. To inculcate the habit of thrift and savings.
4. To transform the financial institution not only as the
financial heart of the community but the social heart as
well.
5. To assist the needy.
6. To work with sense of service and dedication.
7. To develop a concern for fellow human being and
sensitivity to the surroundings with a view to make
changes/remove hardships and sufferings.

Sound founding principles, enlightened leadership, unique work

culture and remarkable adaptability to changing banking
environment have enabled Canara Bank to be a frontline
banking institution of global standards.

Vision:

To emerge as a ‘Best Practices Bank’ by pursuing global

benchmarks in profitability, operational efficiency, asset quality,
risk management and expanding the global reach.

Mission:

To provide quality banking services with enhanced customer

5
orientation, higher value creation for stakeholders and to
continue as a responsive corporate social citizen by effectively
blending commercial pursuits with social banking.

INTRODUCTION ABOUT ANALYSIS

Common size statement:

A financial statement displaying all items as a percentage of a

common base figure. Such a statement may be useful for noting
changes in the relative size of the various elements.

Comparative statement:

Comparative statements are financial statements that cover a

different time frame, but are formatted in a manner that makes
comparing line items from one period to those of a different
period an easy process. This quality means that the comparative
statement is a financial statement that lends itself well to the
process of comparative analysis. Many companies make use of
standardized formats in accounting functions that make the
generation of a comparative statement quick and easy.

Trend analysis:

The term "trend analysis" refers to the concept of collecting

information and attempting to spot a pattern, or trend, in the
information. In some fields of study, the term "trend analysis" has
more formally-defined meanings.

Although trend analysis is often used to predict future events, it

could be used to estimate uncertain events in the past, such as
how many ancient kings probably ruled between two dates, based
on data such as the average years which other known kings
reigned.

6
What Does Ratio Analysis Mean?
A tool used by individuals to conduct a quantitative analysis of
information in a company's financial statements. Ratios are calculated from
current year numbers and are then compared to previous years, other
companies, the industry, or even the economy to judge the performance of
the company. Ratio analysis is predominately used by proponents of
fundamental analysis

Ratio analysis is one of the techniques of financial analysis to evaluate the

financial condition and performance of a business concern. Simply, ratio
means the comparison of one figure to other relevant figure or figures.

According to Myers, " Ratio analysis of financial statements is a

study of relationship among various financial factors in a
business as disclosed by a single set of statements and a study of
trend of these factors as shown in a series of statements."

Advantages and Uses of Ratio Analysis

There are various groups of people who are interested in analysis

of financial position of a company. They use the ratio analysis to
workout a particular financial characteristic of the company in
which they are interested. Ratio analysis helps the various groups
in the following manner: -

1. To workout the profitability: Accounting ratio help to

measure the profitability of the business by calculating the
various profitability ratios. It helps the management to
know about the earning capacity of the business concern.

7
 In this way profitability ratios show the actual
performance of the business.
2. To workout the solvency: With the help of solvency ratios,
solvency of the company can be measured. These ratios
show the relationship between the liabilities and assets. In
case external liabilities are more than that of the assets of
the company, it shows the unsound position of the
business. In this case the business has to make it possible
to repay its loans.
3. Helpful in analysis of financial statement: Ratio analysis
help the outsiders just like creditors, shareholders,
debenture-holders, bankers to know about the
profitability and ability of the company to pay them
interest and dividend etc.
4. Helpful in comparative analysis of the performance: With
the help of ratio analysis a company may have
comparative study of its performance to the previous
years. In this way company comes to know about its weak
point and be able to improve them.
5. To simplify the accounting information: Accounting ratios
are very useful as they briefly summarise the result of
detailed and complicated computations.
6. To workout the operating efficiency: Ratio analysis helps
to workout the operating efficiency of the company with
the help of various turnover ratios. All turnover ratios are
worked out to evaluate the performance of the business

8
 in utilising the resources.
7. To workout short-term financial position: Ratio analysis
helps to workout the short-term financial position of the
company with the help of liquidity ratios. In case short-
term financial position is not healthy efforts are made to
improve it.
8. Helpful for forecasting purposes: Accounting ratios
indicate the trend of the business. The trend is useful for
estimating future. With the help of previous years’ ratios,
estimates for future can be made. In this way these ratios
provide the basis for preparing budgets and also
determine future line of action.

Limitations of Ratio Analysis

In spite of many advantages, there are certain limitations of

the ratio analysis techniques and they should be kept in
mind while using them in interpreting financial statements.
The following are the main limitations of accounting ratios:

1. Limited Comparability: Different firms apply different

accounting policies. Therefore the ratio of one firm can
not always be compared with the ratio of other firm.
Some firms may value the closing stock on LIFO basis while
some other firms may value on FIFO basis. Similarly there
may be difference in providing depreciation of fixed assets
or certain of provision for doubtful debts etc.
2. False Results: Accounting ratios are based on data drawn
from accounting records. In case that data is correct, then

9
 only the ratios will be correct. For example, valuation of
stock is based on very high price, the profits of the
concern will be inflated and it will indicate a wrong
financial position. The data therefore must be absolutely
correct.
3. Effect of Price Level Changes: Price level changes often
make the comparison of figures difficult over a period of
time. Changes in price affects the cost of production, sales
and also the value of assets. Therefore, it is necessary to
make proper adjustment for price-level changes before
any comparison.
4. Qualitative factors are ignored: Ratio analysis is a
technique of quantitative analysis and thus, ignores
qualitative factors, which may be important in decision
making. For example, average collection period may be
equal to standard credit period, but some debtors may be
in the list of doubtful debts, which is not disclosed by ratio
analysis.
5. Effect of window-dressing: In order to cover up their bad
financial position some companies resort to window
dressing. They may record the accounting data according
to the convenience to show the financial position of the
company in a better way.
6. Costly Technique: Ratio analysis is a costly technique and
can be used by big business houses. Small business units
are not able to afford it.
7. Misleading Results: In the absence of absolute data, the

10
 result may be misleading. For example, the gross profit of
two firms is 25%. Whereas the profit earned by one is just
Rs. 5,000 and sales are Rs. 20,000 and profit earned by the
other one is Rs. 10,00,000 and sales are Rs. 40,00,000.
Even the profitability of the two firms is same but the
magnitude of their business is quite different.

 Type of Ratios:

1 liquidity ratio
2 solvency ratio
3 activity ratio
4 profitability ratio

 Liquidity ratio
it is used to determine a company's ability to pay off
its short-terms

debts obligations. Generally, the higher the value of the ratio,

the larger the margin of

safety that the company possesses to cover short-term debts. A

company's ability to

turn short-term assets into cash to cover debts is of the utmost

importance when

creditors are seeking payment. Bankruptcy analysts and mortgage

originators

frequently use the liquidity ratios to determine whether a company will

be able to

continue as a going concern. There are following type of liquidity

ratio.

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Current ratio, quick ratio, cash ratio, interval measure ratio, net
working capital ratio

 current ratio
It is a measure of general liquidity and is most widely used to
make the

analysis for short term financial position or liquidity of a firm. It is

calculated by

dividing the total of the current assets by total of the current liabilities.

Formula:

Following formula is used to calculate current ratio:

Current Ratio = Current Assets / Current Liabilities

   

The two basic components of this ratio are current assets and
current liabilities.

Current assets include cash and those assets which can be easily
converted into

cash within a short period of time, generally, one year, such as

marketable securities

or readily realizable investments, bills receivables, sundry debtors,

(excluding bad

debts or provisions), inventories, work in progress, etc. Prepaid 

expenses should

also be included in current assets because they represent payments

made in

advance which will not have to be paid in near future. Current

liabilities are those

obligations which are payable within a short period of tie generally

one year and

include outstanding expenses, bills payable, sundry creditors, bank

overdraft,

accrued expenses, short term advances, income tax payable,

12
dividend payable, etc

 Acid Test or Quick Ratio:

It is the ratio of liquid assets to current liabilities. The true liquidity

refers to the ability

of a firm to pay its short term obligations as and when they become
due.

The two components of acid test ratio or quick ratio are liquid

assets and liquid

liabilities. Liquid assets normally include cash, bank, sundry debtors,

bills receivable

and marketable securities or temporary investments. In other words

they are current

assets minus inventories (stock) and prepaid expenses. Inventories

cannot be

termed as liquid assets because it cannot be converted into cash

immediately

without a loss of value. In the same manner, prepaid expenses are

also excluded

from the list of liquid assets because they are not expected to be
converted into

cash. Similarly, Liquid liabilities means current liabilities i.e., sundry

creditors, bills

payable, outstanding expenses, short term advances, income tax

payable, dividends payable.

Formula

Quick ratio = current asset – inventory/ current liabilities

importance

The perfect ratio should be 1 :1 .The quick ratio/acid test ratio is very

13
useful in

measuring the liquidity position of a firm. It measures the firm's

capacity to pay off

current obligations immediately and is more rigorous test of liquidity

than the current

ratio.

 Cash ratio

Cash ratio is useful to measure the amount of only liquid the

company have. So, it is

the most liquid asset. It is also useful to find out the company’s ability
to pay its debt.

Formula

Cash ratio = cash + marketable securities / current asset

 Net working capital ratio

This ratio is the ratio between net working capital and total asset.

Formula

Nwc ratio = net working capital/ total asset

 Interval measure ratio

It is the ratio which can be calculated to asses a firms ability to meet
its regular cash

outgoings, is interval measure. It relates liquid asset with average

daily operating

asset

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Formula

Interval measure ratio = current asset – inventory/average

daily operating expenses.

 Leverage ratio

These ratio indicate mix of fund provided by owners and leaders.

The short term

creditors, like bankers and suppliers of raw materials are more

concerned with the

firms current debt paying capacity. On the other hand long term
creditors are more

concerned with the firms long term financial strength. They are of
following type.

 Debt to Equity Ratio:

Debt-to-Equity ratio indicates the relationship between the external

equities or

outsiders funds and the internal equities or shareholders funds.

importance

Debt to equity ratio indicates the proportionate claims of owners and

the outsiders

against the firms assets. The purpose is to get an idea of the cushion
available to

outsiders on the liquidation of the firm.

Formula

Debt to equity ratio = total debt/ net worth

15
  Total debt ratio

Formula

Total debt ratio = total debt/ capital employed

 Coverage ratio
It is use to test the firms debt servicing capacity.

Formula

Coverage ratio = Ebit/interest

 Activity ratio

 Inventory Turnover Ratio or Stock Turnover Ratio (ITR):

Stock turn over ratio and inventory turn over ratio are the same.

This ratio is a

relationship between the cost of goods sold during a particular period

of time and the

cost of average inventory during a particular period. It is expressed in

number of

times. Stock turn over ratio / Inventory turn over ratio indicates

the number of

time the stock has been turned over during the period and evaluates
the efficiency

with which a firm is able to manage its inventory. This ratio indicates
whether

investment in stock is within proper limit or not.

Formula

Inventory Turnover Ratio = Cost of goods sold / Average

inventory 

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Importance

Inventory turnover ratio measures the velocity of conversion of stock

into sales.

Usually a high inventory turnover/stock velocity indicates efficient

management of

inventory because more frequently the stocks are sold, the lesser
amount of money

is required to finance the inventory. A low inventory turnover ratio

indicates an

inefficient management of inventory.

 Debtors Turnover Ratio

Debtors turnover ratio indicates the velocity of debt collection of a

firm. In simple

words it indicates the number of times average debtors (receivable)

are turned over

during a year.

Formula :

[Debtors Turnover Ratio = Credit Sales / Average Debtors]

Importance

debtors turnover ratio indicates the number of times the debtors are
turned over a

year. The higher the value of debtors turnover the more efficient is
the management

of debtors or more liquid the debtors are. Similarly, low debtors

turnover ratio implies

inefficient management of debtors or less liquid debtors.

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  Fixed Assets Turnover Ratio:

Fixed assets turnover ratio is also known as sales to fixed assets

ratio. This ratio

measures the efficiency and profit earning capacity of the concern.

Formula :

Fixed assets turnover ratio turnover ratio is calculated by the

following formula:

Fixed Assets Turnover Ratio = Sales / Fixed Assets

Higher the ratio, greater is the intensive utilization of fixed assets.

Lower ratio means under-utilization of fixed assets.

 Profitability ratio

These are as follows

 Gross Profit Ratio (GP Ratio):

Gross profit ratio (GP ratio) is the ratio of gross profit to net
sales expressed as a percentage. It expresses the relationship
between gross profit and sales.

Formula:

Following formula is used to calculate gross profit ratios:

Gross Profit Ratio = (Gross profit / Net sales) × 100

Importance

gross profit ratio may be indicated to what extent the selling prices of
goods per unit

18
may be reduced without incurring losses on operations. It reflects
efficiency with

which a firm produces its products. As the gross profit is found by

deducting cost of

goods sold from net sales, higher the gross profit better it is. There is
no standard

GP ratio for evaluation. It may vary from business to business

 Net Profit Ratio (NP Ratio):

Net profit ratio is the ratio of net profit (after taxes) to net sales. It is
expressed as

percentage.

Formula:

Net Profit Ratio = (Net profit / Net sales) × 100

Importance:

NP ratio is used to measure the overall profitability and hence it is

very useful to

proprietors. The ratio is very useful as if the net profit is not sufficient,
the firm shall

not be able to achieve a satisfactory return on its investment. This

ratio also

indicates the firm's capacity to face adverse economic conditions

such as price

competition, low demand, etc. Obviously, higher the ratio the better is
the profitability

19
  Operating expenses ratio
This is another type of ratio which indicate the expense in relation to
net sales

Formula

Operating expense ratio = operating expenses/net sales

Importance

This indicate the percentage of sale is consume by expenses.

 Return on net asset Ratio:

It is the ratio of net profit to share holder's investment. It is the

relationship between

net profit (after interest and tax) and share holder's/proprietor's fund.

Formula

Return on net asset = profit after tax/ net asset

This ratio is one of the most important ratios used for measuring the
overall

efficiency of a firm. As the primary objective of business is to

maximize its earnings,

this ratio indicates the extent to which this primary objective of

businesses being

achieved.

 Return on total asset

This ratio find out the return the company getting on their total asset.

Formula

20
 Return on total asset = profit after tax/ total asset

This ratio is also helpful for owners and outsiders to know the return
of company for

their interest.

 Earnings Per Share (EPS) Ratio:

Earnings per share ratio (EPS Ratio) is a small variation of return on

equity capital

ratio and is calculated by dividing the net profit after taxes and

preference dividend

by the total number of equity shares.

Formula :

The formula of earnings per share is:

Earnings per share (EPS) Ratio = (Net profit after tax −

Preference dividend) / No. of equity shares (common shares)

 Dividend per share

This ratio find out the earning per dividend

Formula

Dividend per share = dividend paid/ number of outstanding

share

 Fund flow statement

“A statement of Sources and Application of Funds is a

technical device designed to analyse the changes in the
financial condition of a business enterprises between two

21
dates.”
The funds-flow-statement is a report on financial
operations

changes, flow or movements during the period. It is a

statement which shows

the sources an application of funds or it shows how the

activities of a business

is financed in a particulate period. In other words, such a

statement shows

how the financial resources have been used during a particular

period of time.

It is, thus, a historical statement showing sources and

application of funds

between the two dates designed especially to analyse the

changes in the

financial conditions of an enterprise

Funds Flow Statement is not an income
statement .

Income statement shows the items of income and expenditure

of a particular

period, but the Funds flow statement is an operating statement

as it

summaries the financial activities for a period of time. It covers

all movements

that involve an actual exchange of assets. Various titles are

used for this

statement such as 'Statement of sources and Application of

Funds', 'Summary

of Financial operations,' 'Changes in Financial Position', 'Fund

received and

22
 Disbursed', 'Funds Generated and Expended', Changes in
Working Capital”,

“Statement of Fund' etc. Title of Funds Flow Statement has

been modified

from time to time.

 Statement of changes in working capital 

It is the changes that happen in working capital measure by
Comparing

Current asset with current liabilities. So, we can know the

actual increase or

decrease in working capital.

 Fund from operation

In fund from operation i will find out the actual change in fund.
In fund from

operation we add the item which are not related to business

and had minus

from net profit. We also minus the item which are not operating
and had add

in net profit.

 Fund flow statement

This statement helps to find out the use of money and

application on money.

 Cash flow statement

The Statement of Cash Flows is basically divided into 3 major

categories: operating

23
activities, investing activities, and financing activities.  The statement
is a basic

summary of these activities for a given period of time, usually 1

month, or quarterly

or annually. The format for reporting cash flow activity may be either
direct or

indirect. I will use the direct method of reporting, as it is the most

common format used.

>> INTERPRETATION OF COMPARATIVE STATEMENT OF

BANK:

 BALANCE SHEET:

1. Reserves and surplus: Reserve are increasing , bank

may be in profit or customer deposit their cash more in
the bank.

2. Deposits: Are increase , more customer deposits their

cash in the canara bank.

3. Other liabilities and provisions: Increasing , bank

increased the provision for tax.

4. Total liabilities: Increasing , bank take loan from RBI.

5. Investments:Are increasing , bank invest money in

new technology or in purchasing new furniture.

6. Advances: Increasing , bank give advances or loans to

the customer.

7. Other assets:Are decrease , bank do not purchase any

machinery or machinery go with depreciation.

8. Total assets: Increased, bank purchase furniture or

machinery or land for its new branch.

 PROFIT AND LOSS ACCOUNT:

1. Interest earned: Are increased bank in the

profit.

2. Other income: Other income also will be

24
 increasing.

3. Total income:Incresed , bank give loans more or

customer deposite more cash in the bank.

4. Operating expencses: Are increasing , bank

invest more in operating machinery.

5. Total expences: Increased , bank invest more

for its modification & expences will be increase.

6. Net profit: Increased , because total income is

more than the total expences . bank go with
profit.

>> TREND ANALYSIS OF FIVE YEARS OF

CANARA BANK

Total Share Capital

500
400
300 Total Share Capital
200
100
0
1 2 3 4 5

Interpretation: Total share capital may constant, bank do not give its share
to any other.

25
 Equity Share Capital
500
400
Equity Share
300 Capital
200
100
0
1 2 3 4 5

Interpretation: Equity share capital also constant through out the five years

Reserves
14,000.00
12,000.00
10,000.00
Reserves
8,000.00
6,000.00
4,000.00
2,000.00
0.00
1 2 3 4 5

Interpretation: Reserve are increase every year , customer deposites more cash in
the canara bank.

26
 Net Worth
16,000.00
14,000.00
12,000.00
10,000.00 Net Worth
8,000.00
6,000.00
4,000.00
2,000.00
0.00
1 2 3 4 5

Interpretation: Net worth will be increase every year.

Deposits
250,000.00

200,000.00

150,000.00 Deposits

100,000.00

50,000.00

0.00
1 2 3 4 5

Interpretation: Deposites are increase year by year , there are more customer to
deposite cash in the bank.

27
 Total Liabilities
300,000.00
250,000.00
200,000.00
Total Liabilities
150,000.00
100,000.00
50,000.00
0.00
1 2 3 4 5

Interpretation: Total liabilities are Increased, may be bank take loans from the RBI.

Cash & Balances with RBI

18,000.00
16,000.00
14,000.00
12,000.00 Cash & Balances with
10,000.00 RBI
8,000.00
6,000.00
4,000.00
2,000.00
0.00
1 2 3 4 5

28
 Advances
180,000.00
160,000.00
140,000.00
120,000.00
Advances
100,000.00
80,000.00
60,000.00
40,000.00
20,000.00
0.00
1 2 3 4 5

INTERPRETATION: Advances are increased , bank give advances or loans to the

customer.

Total Assets
300,000.00
250,000.00
200,000.00
Total Assets
150,000.00
100,000.00
50,000.00
0.00
1 2 3 4 5

Interpretation: Total assets are increasing every year , bank purchase furniture or
machinery for the bank.

29
 Total Income
25,000.00

20,000.00

15,000.00 Total Income

10,000.00

5,000.00

0.00
1 2 3 4 5

Interpretation: Total income are increased ,customer deposite more cash in the
canara bank.

Net Profit for the Year

3,500.00
3,000.00
2,500.00
Net Profit for the
2,000.00 Year
1,500.00
1,000.00
500.00
0.00
1 2 3 4 5

Interpretation: Net profit are increasing every year , the total income is more than
the total expences every year.

>>RATIO ANALYSIS OF THE BANK

FOR 2010 :

30
CURRENT ASSETS: 39337458+696769522+32169178 = 768276158

CURRENT LIABILITIES: 69772989

NET WORTH: 4100000+142617834 = 146717834

NOTE:

 IN THE CASE OF BANK, CASH WILL BE TAKEN AS A SALES.

 THERE IS NO STOCK IN THIS CASE.

1. LIQUIDITY RATIO

# CURRENT RATIO: Current assets/Current liabilities

= 768276158/69772989

=11.0

# QUICK RATIO: Current assets – inventory/ Current liabilities

= 768276158 – 0/ 69772989

= 11.0

# CASH RATIO: Cash+Marketable Securities/ Current liabilities

= 157194642 / 69772989

= 2.2

# NET WORKING CAPITAL RATIO:

NWC = CA – CL

= 768276158 – 69772989

= 761303169

NET WORKING RATIO :

= 761303169/28593722+768276158

= 761303169/796869880

= 0.9

2. LEVERAGE RATIO

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 TOTAL DEBT RATIO:

= TOTAL DEBT/ CAPITAL EMPLOYED

= 2647410828/796869880

= 33.2 %

 DEBT EQUITY RATIO:

= TOTAL LIABILITIES/NET WORTH

= 2647410828/ 146717834

= 1.80 %

3. ACTIVITY RATIO

 ASSETS TURNOVER RATIO:

= SALES/ASSETS

= 157194642/2647410828

= 0.05

4. PROFITABILITY RATIO

 GROSS PROFIT RATIO:

= GROSS PROFIT/ SALES

= 13071426/ 157194642

= 0.083

 NET PROFIT RATIO:

= NET PROFIT/ SALES

= 30214304/157194642

= 0.19%

 OPERATING EXPENSES RATIO:

= OPERATING EXPENSE/SALES

32
 = 34776235/157194642

= 0.22 %

 FUND FLOW STATEMENT:

 SCHEDULE OF CHANGES IN WORKING CAPITAL:

2009 2010 Inc. in [Link]

Current assets working working
capital capital
Cash & 100367922 157194642 56826720 -------------
balance with
reserve bank
of india
Balance with 66229898 39337458 ------------- 26892440
banks &
money at call
Other assets 40602558 32169178 ------------ 8433380
Total 207200378 228701278
Current
liabilities
Borrowings 140009498 84405573 55603925 -----------
Other liabilities 65445771 69772989 ------------ 4327218
& provision
Total 205455269 154178562
Wc(ca – cl) 1745109 74522716 39653038
Inc. in wc 72777607
72777607
Total 74522716 74522716 112430645 112430645

 FUND FROM OPERATION:

30214304
NET PROFIT
(+) DEPRECIATION 1551324

(+ )PROPOSED DIVIDEND 4100000

33
 (+) TRANSFER TO 7600000
STATUTORY RESERVE
(-)OTHER INCOME 28579024
FUND FROM OPERATION 14886604

 FUND FLOW STATEMENT:

Rs APPLICATIONS Rs
SOURCES
Deposites 2346514432 Other provision 69772989
& liabilities

Borrowing 84405573 Cash & balance 157194642

s with RBI
Capital 4100000 Balance with 39337458
bank & money
at call
Reserve 142617834 Advances 1693346306

FFO 14886604 Investments 696769522

Inc. in wc 72777607 Other assets 32169178

Total 2665302050 Total 2688590095

 COST SHEET:

PRIME COST
EMPLOYEE COST 21936999
OPERATING EXPENSES 34776235
TOTAL 56713234
BANK OVERHEAD
INTEREST EXPENDED 130714284
DEPRICIATION 1551324

34
 TOTAL 132265608
SALES EXPENSES
OTHER EXPENSES 3588554

 CASH FLOW STATEMENT:

RS
OPERATING ACTIVITIES
NET PROFIT 30214304
CASH FLOW FROM
OPERATING ACTIVITIES
INTEREST EARNED 187519623
OTHER INCOME 28579024 216098647

INTEREST EXPENDED 130714284

EMPLOYEE COST 21936999
OPERATING EXPENSES 34776235 187427518
NET CASH FLOW FROM 403526165
OPERATING ACTIVITIES
INVESTING ACTIVITIES
PURCHASE OF FIXED ASSETS 28593722
DIVIDEND FROM 1042840
SUBSIDIARIES
CASH FLOW FROM 29636562
INVESTING ACTIVITIES
 REFERENCES:
 [Link]
 [Link]
 [Link]
 I M PANDEY ,the book of Accounting for
management,

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