A PROJECT REPORT ON

“ Financial Analysis of Bank Services with reference to HDFC BANK”

Submitted to
School Of Commerce And Management
Yashwantrao Chavan Maharashtra Open University, Nashik

As partial fulfilment for the award of

Master Of Business Administration (MBA)

Submitted by
Miss. SHINDE AKSHADA PRAMOD
PRN NO: 2023017001149371
GROUP: FINANCE

Under the Guidance of

PROF. ROHAN ANDHARE

MBA Project Cordinator

DR. G. S. GAIKWAD
CKNOWLEDGEMENT
 INDEX

[Link]. Particulars Page No

1. INTRODUCTION 6-10

1.1 Financial Statement Analysis 11-26

2. COMPANY PROFILE 27-39

2.1 HDFC Bank

3. LITRATURE REVIEW 40-43

4. RESEARCH METHODOLOGY 44-46

4.1 Scope Of The Study 47

4.2 Need Of The Study 48

4.3 Objectives Of The Study 49

4.4 Hypothesis Of The Study 50

4.5 Limitations Of The Study 51

5. DATA ANALYSIS & INTERPRETATION 52-58

6. FINDINGS & SUGGETIONS 59-61

7. CONCLUSION 62-63

8. REFERENCE 64

9. ANNEXURE 65-67
 CHAPTER -1

INTRODUCTION
INTRODUCTION :

Financial statement analysis is the process of identifying financial strengths and

weaknesses of the firm by properly establishing relationship between the
balance sheet and the profit and loss account.
There are various methods or techniques that are used in analyzing financial
statements, such as comparative statements, schedule of changes in working
capital, common size percentages, funds analysis, trend analysis, and ratios
analysis.
Financial statements are prepared to meet external reporting obligations and
also for decision making purposes. They play a dominant role in setting the
framework of managerial decisions.
But the information provided in the financial statements is not an end in itself
as no meaningful conclusions can be drawn from these statements alone.
However, the information provided in the financial statements is of immense
use in making decisions through analysis and interpretation of financial
statements.
DEFINITION :

The financial statements provide a summary of the accounts of a business

enterprise, the balance sheet reflecting the asses, liabilities and capital as on a
certain data and the income statement showing the results of operations during
a certain period.

John N. Myer

Define financial statements as, the end product of financial accounting in a set
of financial statements prepared by the accountant of a business enterprise.
That purport to reveal the financial position of the enterprise the result of it is
recent activities, and an analysis of what has been done with earnings.
Smith and Asburne

Financial statements, essentially, are interim reports presented annually and

reflect a division of the life of an enterprise into more or less arbitrary
accounting period-more frequently a year.
Anthony
Development of accounting standards involves a process, and the
implementation of any processed quire safe w guide lines. Taking this into
perspective, the Accounting Standards Board (ASB) of Institute of Charted
Accountants of India(ICAI), which is the nation’s most accomplished accounting
body, came up with frame work which provides the fundamental basis for the
development of new standards and appraisal of the existing ones. In this article,
we review some of the fundamental concepts based on which financial
statements are prepared and presented.

Components of Financial Statements :

Financial statements usually consist of the following:
1. Balance Sheet–
A balance sheet depicts the value of economic resources controlled by an
enterprise, as well as the liquidity and solvency of an enterprise. This is used to
estimate the ability of the enterprise in meeting its financial commitments.
2. Statement of Profit and Loss-
Portrays the outcome of the functioning of the organization.
3. Cash Flow Statement–
Outlines the way of determination of income, as well assist usage.
4. Notes and Schedules–
Provides supplementary information explaining different modules of
financial statements. A few examples can be risks and uncertainties affecting an
enterprise, accounting policies etc.
Financial Statement Analysis is a method of reviewing and analyzing a company’
accounting reports (financial statements) in order to gauge its past, present or
projected future performance.
This process of reviewing the financial statements allows for better economic
decision making. Globally, publicly listed companies are required by law to file
their financial statements with their Levant authorities.
For example, publicly listed firms in America are required to submit their
financial statements to the Securities and Exchange Commission (SEC). Firms are
also obligated to provide their financial statements in the annual report that
they share with their stakeholders.
As financial Statements are prepared in order to meet requirements, the second
step-in the process is to analyze them effectively so that future profitability and
cash flows can before casted. Another important purpose of the analysis of
financial statements is to identify potential problem areas and troubleshoot
those.
1.1 - FINANCIAL STATEMENT ANALYSIS
MEANING OF FINANCE:
“Finance is the Provide of money when is required” “Finance is the
process of accumulated funds to productive funds to productive use”.
“Finance has aptly been called the science of money”. “Finance may be
defined as that administrative area or set of administrative functions in An
organization which relate with the arrangement cash and credit, so that the
organization May have the means to carry out its objective as satisfactory as
possible.

FINANCE FUNCTION :
“Finance function is the procurement of funds and their effective utilization
for Business”.
 Establishing asset management politics.
 Determining the allocation of net profit.
 Establishing and controlling cash flows and outside financing.
 Deciding upon needs and sources of new outside financing.
 Checking upon financial performance.
FINANCIAL ANALYSIS :
“Financial analysis is the process of evaluating the relationship between
component parts of financial statements to obtain a better understanding of the
firms position and performance” “Financial analysis is the identifying strength
and weakness of the firm by properly establishing relationship between the
items of balance sheet and the profit and loss account.

FINANCIAL STATEMENT :
“A financial statement is an organized collection of data according to logical and
consistent accounting its purpose is to convey an understanding of some
financial Aspects of a business firm. It may show a position at a movement of
time as in the case of A balance sheet or may reveal a series of activity over a
given period of times, as in the case of an income statement.

TYPES OF FINANCIAL STATEMENT

➢ Income statement: -
It explains what has happened to a business as a result of Operations
between two balance sheet dates.
➢ Balance sheet: -
It is a statement of financial position of a business at a specified Moment of
time.

➢ Statement of retained earrings: -

The term retained earning means the accumulated excess of earnings over
losses and dividend.

STATEMENT OF SHOWING CHANGES IN FINANCIAL POSITION:-

➢ Changes in the firms working capital

➢ Changes in the firms cash position

➢ Changes in the firms total financial position.

METHOD OR DEVICES OF FINANCIAL ANALYSIS:-

The analysis and interpretation of financial statement is used to determine the
financial Position and results of operations as well. A number of methods or
devices are used to Study the relationship between different statements. An
effort is made to use those devices which clearly analyze the position of the
enterprise.
The following methods of analysis are generally used:
 Comparative statements.
 Income statement
 Common-size statements
 Trend analysis
 Ratio
OBJECTIVE OF FINANCIAL ANALYSIS :
These future ratios are compared with the actual ratios to find
variance, if any such variance helping interpreting and taking corrective
actions. The main objectives of financial analysis are to assess:
 The present and future earning capacity of the concern.
 The operational efficiency of the concern as a whole and of its various
parts.
 The short term and long term solvency of the concern for the benefit of
debenture holders and trade creditors.
 To compare the performance of the company with that of another
company or of the same company with previous performance.

TYPES OF THE FINANCIAL ANALYSIS MAY BE

 The nature of the analyst and the material used by him.
 The objective of analysis and
 The modus operandi of the analysis.
Internal Analysis:-
The people who have assessed to the books of accounts make the
internal analysis. They are members of the analysis. Analysis of the financial
statement or other financial data for managerial is the internal type of analysis.
The internal analyst can give more reliable result than the external analyst
because every type of analysis. The internal type of analysis can give more
reliable than the external analyst because every type of information is at his
disposal.

External Analysis:-
It is made by those persons who aren’t connected with the
enterprise’s they don’t have the assess to the detailed record of the company
and have to depend mostly on published statements such analysis is made by
investors, credit agencies, agencies, government agencies and research
scholars.
ACCORDING TO THE OBJECTIVE OF THE ANALYSIS:-

➢ Long Term Analysis –

The analysis is made in order to study the long-term financial
stability, solvency, profitability and earning capacity of a company. The
purpose of making such type of analysis is to know whether in the long run the
company will be able to earn a minimum amount, which will be sufficient to
maintain a reasonable rate of return of the investment of the company and to
meet it cot of capital. This type of analysis help the long term financial planning
which essential which essential for the continued success of the company.

➢ Short Term Analysis –

This is made to determine the short-term solvency and liquidity of
the company. The purpose of this analysis is to know whether in the short run
a company will have adequate funds readily available to meet its short term
requirements and sufficient borrowing capacity to meet contingencies in the
near future. This analysis is made with reference to items of current assets and
current liabilities (working capital analysis) to have fairly sufficient knowledge
about the company’s position which maybe helpful short-term financial
planning.
KEY FINANCIAL RATIO / POSITION OF HDFC BANK:-

KEY FINANCIAL MAR MAR 23 MAR 22 MAR 21

RATIONS OF HDFC 24
BANK(in [Link].)
PER SHARE
RATIONS

Basic EPS(Rs.) 85.83 79.25 66.80 56.58

Diluted EPS (Rs.) 85.44 78.89 66.35 56.32
Cash EPS (Rs.) 80.05 83.07 69.54 58.81
Book Value 576.02 502.17 432.95 369.54
([Link]
Reserve)/share
Book Value (Incl. 576.02 502.17 432.95 369.54
Reval Reserve)/
Share
Operating 340.06 289.59 230.37 219.23
Revenue/Share (Rs.)
Net Profit/Share (Rs.) 80.05 79.05 66.65 56.44
PER EMPLOYEE
RATIOS
Interest 0.00 9,328,234.10 9,023,451.15 10,063,719.49
Income/Employee
(Rs.)
Net 0.00 2,546,368.33 2,610,652.37 2,591,035.71
Profit/Employee(Rs.)

Business 0.00 201,128,063.77 206,813,042.29 205,498,809.49

Employee(Rs.)
PER BRANCH
RATIOS
Interest 0.00 206,604,701.02 201,439,796.77 215,510,389.68

Income/Branch(Rs.)
Net Profit/Share(Rs.) 0.00 56,397,777.01 58,280,282.56 55,485,957.92
Business/Branches 0.00 4,454,648,441.76 4,616,900,671,989.8 4,400,671,989.
(Rs.) 7
VALUATION
RATIONS
Enterprise Value 1,963,439.1 2,871,198.57 2,429,205.8 2,196,567.4
([Link]) 9 1 7
EV Per Net Sales 15.34 17.77 19.01 18.17
(X)
Price To Book 2.51 3.21 3.40 4.04
Value(X)
Price To Sales (X) 4.26 5.56 6.38 6.81
Retention 100.00 100.00 100.00 100.00
Ratios(%)
Earnings Yield(X) 0.06 0.05 0.05 0.04
PROFIT &. LOSS ACCOUNT OF HDFC BANK
BALANCE SHEET OF HDFC BANK
TYPES OF RATIOS:-

HDFC Bank, like any other financial institution, uses various financial
ratios to analyze its performance and financial health.
Here are some of the key types of ratios typically used:
➢ Profitability Ratios-

 Net Interest Margin (NIM): Measures the difference between the interest
income generated and the interest paid out relative to the amount of their
interest-earning assets.
 Return on Assets (ROA): Indicates how profitable a bank is relative to its
total assets.
 Return on Equity (ROE): Measures the profitability relative to
shareholders’ equity.


➢ Efficiency Ratios-
 Cost to Income Ratio: Measures the costs of running a bank as a
percentage of its income.

 Operating Efficiency Ratio: Reflects how efficiently a bank is operating. 

➢ Liquidity Ratio-
 Current Ratio: Indicates the bank’s ability to pay short-term obligations.

 Loan to Deposit Ratio: Measures the bank’s loans relative to its deposits.

 Liquidity Coverage Ratio (LCR): Ensures that the bank has an adequate
stock of unencumbered high-quality liquid assets (HQLA) that can be


easily converted into cash to meet its liquidity needs for a 30 calendar
day liquidity stress scenario.
➢ Asset Quality Ratios-
 Gross Non-Performing Assets (GNPA) Ratio: Indicates the proportion of
non-performing assets to total loans.

 Net Non-Performing Assets (NNPA) Ratio: Measures the net non

performing assets after subtracting provisions.

 Provision Coverage Ratio (PCR):Indicates the proportion of provisions

(reserves) made for NPAs.

➢ Capital Adequacy Ratios –

Capital Adequacy Ratio (CAR) or Capital to Risk (Weighted) Assets Ratio (CRAR):
Measures a bank’s capital in relation to its risk-weighted assets.

Tier 1 Capital Ratio: Focuses on core capital, which includes equity capital and
disclosed reserves.

➢ Leverage Ratios-

Debt to Equity Ratio: Measures the bank’s financial leverage.

Equity Multiplier: Indicates the proportion of a bank’s assets that are financed
by shareholders’ equity.
➢ Market Ratios-

 Earnings Per Share (EPS): Indicates the portion of a company’s profit

allocated to each outstanding share of common stock.

 Price to Earnings (P/E) Ratio: Measures the current share price relative to
its per-share earnings.

 Price to Book (P/B) Ratio: Compares a firm’s market value to its book
value.

These ratios provide insights into various aspects of HDFC Bank’s

performance, including profitability, efficiency, liquidity, asset quality, capital
adequacy, leverage, and market valuation. Each ratio helps stakeholders to
make informed decisions about the bank’s financial health and operational
performance.
2- COMPANY PROFILE

2.1- HDFC BANK

 COMPANY PROFILE :

INTRODUCTION :

The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an ‘in principle’ approval from the Reserve Bank of India (RBI) to
set up a bank in the private sector, as part of the RBI’s liberalization of the Indian
Banking Industry in 1994.
The bank was incorporated in August 1994 in the name of ‘HDFC Bank Limited’,
with its registered office in Mumbai, India. HDFC Bank commenced operations
as a Scheduled Commercial Bank in January 1995. HDFC is India’s premier
housing finance company and enjoys an impeccable track record in India as well
as in international markets.
Since its inception in 1977, the Corporation has maintained a consistent and
healthy growth in its operations to remain the market leader in mortgages. Its
outstanding loan portfolio covers well over a million dwelling [Link] has
developed significant expertise in retail mortgage loans to different market
segments and also has a large corporate client base for its housing related
credit facilities.
With its /experience in the financial markets, a strong market reputation, large
shareholder base and unique consumer franchise,HDFC was ideally positioned
to promote a bank in the Indian [Link] Bank began operations in
1995 with a simple mission: to be a “World Class Indian Bank.” We realized
that only a single minded focus on product quality and service excellence
would help us get there.
Today, we are proud to say that we are well on our way towards that goal. HDFC
Bank Limited (the Bank) is an India-based banking company engaged in providing
a range of banking and financial services, including commercial banking and
treasury operations. The Bank has a network of 1412 branches and
3295automated teller machines (ATMs) in 528 cities and total employees are
52687.
HISTORY OF HDFC BANK :

HDFC BANK LTD was incorporated in August 1994 in the name of ‘HDFC Bank
Limited’, with its registered office in Mumbai, India. HDFC Bank commenced
operations as a Scheduled Commercial Bank in January 1995.
HDFC is India’s premier housing finance company and enjoys an impeccable
track record in India as well as in international markets. Since its inception in
1977, the Corporation has maintained a consistent and healthy growth in its
operations to remain the market leader in mortgages. Its outstanding loan
portfolio covers well over a million dwelling units.
HDFC has developed significant expertise in retail mortgage loans to different
market segments and also has a large corporate client base for its housing
related credit facilities. With its experience in the financial markets, a strong
market reputation, large shareholder base and unique consumer franchise,
HDFC was ideally positioned to promote a bank in the Indian environment.
In a milestone transaction in the Indian banking industry, Times Bank was
merged with HDFC Bank Ltd., effective February 26, 2000.
MISSION :
World Class Indian Bank. Benchmarking against international
standards. To build sound customer franchises across distinct businesses. Best
practices in terms of product offerings, technology, service levels, risk
management and audit &compliance

VISION :
The HDFC Bank is committed to maintain the highest level of ethical
standards, professional integrity and regulatory compliance. HDFC Bank’s
business philosophy is based on four core values such as:-
1. Operational excellence.
2. Customer Focus.
3. Product leadership
4. People MANAGEMENT
MANAGEMENT OF HDFC BANK:
BUSINESS SEGMENT:

HDFC Bank offers a wide range of commercial and transactional banking

services and treasury products to wholesale and retail customers. The bank has
three key business segments.

WHOLESALE BANKING SERVICES :

The Bank’s target market ranges from large, blue-chip manufacturing

companies in the Indian corporate to small & mid-sized corporate and agri-
based businesses. For these customers, the Bank provides a wide range of
commercial and transactional banking services, including working capital
finance, trade services, transactional services, cash management, etc. The bank
is also a leading provider of structured solutions, which combine cash
management services with vendor and distributor finance for facilitating
superior supply chain management for its corporate customers. Based on its
superior product delivery / service levels and strong customer orientation, the
Bank has made significant inroads into the banking consortia of a number of
leading Indian corporate including multinationals, companies from the
domestic business houses and prime public sector companies. It is recognized
as a leading provider of cash management and transactional banking solutions
to corporate customers, mutual funds, stock exchange members and banks.

RETAIL BANKING SERVICES :

The objective of the Retail Bank is to provide its target market customers
a full range of financial products and banking services, giving the customer a
one-stop window for all his/her banking requirements. The products are backed
by world-class service and delivered to the customers through the growing
branch network, as well as through alternative delivery channels like ATMs,
Phone Banking, Net Banking and Mobile Banking.
The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank
Plus and the Investment Advisory Services programs have been designed
keeping in mind needs of customers who seek distinct financial solutions,
information and advice on various investment avenues. The Bank also has a wide
array of retail loan products including Auto Loans, Loans against marketable
securities, Personal Loans and Loans for Two-wheelers. It is also a leading
provider of Depository Participant (DP) services for retail customers, providing
customers the facility to hold their investments in electronic form.
HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the Master card Maestro debit
card as well. The Bank launched its credit card business in late 2001. By
September 30,2005, the bank had a total card base (debit and credit cards) of
5.2 million cards. The Bank is also one of the leading players in the “merchant
acquiring” business with over50,000 Point-of sale (POS) terminals for debit /
credit cards acceptance at merchant establishments.

PRODUCT OF HDFC BANK :

Account & Deposits Service
Banking should be effortless. With HDFC Bank, the efforts are rewarding. No
matter what a customer’s need and occupational status, we have a range of
solutions that are second to none. Whether you’re employed in a company
and need a simple Savings account or run your own business and require a
robust banking partner, HDFC Bank not only has the perfect solution for you,
but also can recommend products that can augment your planning for the
future.

It includes these services:

 Saving accounts.
 Current accounts.
 Fix deposits.
 Demate account
 Safe Depositor Locker.
➢ Savings Accounts –
These accounts are primarily meant to inculcate a sense of saving for the
future, accumulating funds over a period of time. Whatever person’s
occupation, bank have confident that person will find the perfect banking
solution.

There some saving accounts like: -

➢ Regular Saving Account –

An easy-to-operate savings account that allows you to issue cheques,
draw Demand Drafts and withdraw cash. Check up on your balances from the
comfort of your home or office through Net Banking, Phone Banking and Mobile
Banking. If you need money urgently then you can take money from the ATM
machine. There are 1977ATM centers across the country.

➢ Saving plus Account –

Introducing the best banking option for you with HDFC Bank Savings plus
Account. Now you can get access to some of the finest banking facilities with
HDFC Bank’s Savings plus Account. All you have to do is maintain an Average
Quarterly Balance of Rs. 10,000/-.

➢ Saving Max Account –

Welcome to a world of convenience. Presenting Savings Max account,
loaded with maximum benefits to make your banking experience a pleasure. By
maintaining an average quarterly balance of just Rs. 25,000/- you get a host of
premium services from HDFC Bank absolutely free.

➢ Senior Citizen Account –

HDFC Bank appreciates your needs and endeavors, which is why, they
present an account especially dedicated to customer, which like a dutiful child
will help you fulfill your needs in the best manner possible.
➢ No frills Account –
In an effort to make banking simpler and more accessible for
customers, bank has introduced the ‘No Frills’ Savings Account, which offers
customer all the basic banking facilities. Customer can even avail of services like
Net Banking, Mobile banking free of cost. In this customer can put Zero Initial
Pay-in and a Zero Balance account .

➢ Kid’s advantage account –

Start saving for your child today and secure his/her future a sentence
tells by the Hdfc bank. Open a Savings Account and transfer money every month
into customer’s Kids Advantage Account and watch the savings grow as
customer’s child grows. The accumulated savings in the Kids Advantage Account
can over the years help in meeting customer child’s needs.
Main features and benefits of this account are as follow:-

➢ Current accounts –
HDFC Bank Current Account gives the power of inter-city banking with a
single account and access to more than cities. From special cheques that get
treated at par with local ones in any city where branch, faster collection of
outstation cheques(payable at branch locations), free account to account
funds transfer between HDFCBank accounts to Free inter-city clearing of up to
100 lakhs per month, bank’s priority services have become the benchmark for
banking efficiency. Supper saver facility.

➢ Safe deposit locker –

A Safe Deposit Locker with HDFC Bank is the solution to person’s fear.
Located at select branches in cities all over the country, bank’s lockers ensure
the safe keeping of valuables. Eligibility An individual (not minor), firms, limited
company, associations, clubs, trusts, societies, etc may hire a locker.
➢ Loan Services :
In today’s competitive world every thing happens only with the help of
money or through the money every person need money. But some time a person
has not cash on hand at that time he needs lone either from any friend or from
any financial institute. Lone dose not mean that only lower class person needs it
but also upper class person it is needed.
As per the requirement of the every person there are much type of loans
are there in the HDFC bank.

➢ Personal loan :
A person has so many dreams but some time due to scarcity of money a
dream can’t be satisfy. So, here one solution for that person this is personal loan.
From this he/she can fulfill their needs or requirement. It can be any thing either
a dream of vacation or son/daughter’s admission to college or any wedding, so
personal loan can be helpful in this entire requirement. AS person ordered in the
hotel for tea or coffee and it is immediately came fast, same over here any
person want to get a personal loan with the nominal documents he can get the
loan.

➢ Home loan :
HDFC Bank brings, HDFC home loans to doorstep. With over 30 years of
experience, a dedicated team of experts and a complete package to meet all
housing finance needs, HDFC Home Loans, help people realize dream.

➢ Vehicles loan :
Nowadays the life is being so fast, time value is becoming more important
so to reach at the destination of any business related occasion or for a boy to
reach college or any20. Where at the fix time there are so many requirement
of vehicles. But every people have no capacity to purchase vehicles with cash
so for that here in the HDFC bank vehicles loan is available. There are many
types of vehicles loan.

CARD SERVICES:

▪ Credit cards
▪ Debit card
▪ Kisan Card.
▪ Prepaid card
▪ Prepaid Travel Card.
▪ Gift plus Cards
▪ Prepaid Gift Card.
▪ Food plus Cards
▪ Prepaid Food Plus card.
▪ Money plus Card
▪ The Corporate Payment card
AWARDS & RECOGNITION:
 CHAPTER 3-

LITERATURE REVIEW
LITERATURE REVIEW –

DEFINITION :

A literature review is a comprehensive summary and analysis of the existing

research and scholarly articles on a particular topic. It involves critically
evaluating, synthesizing, and summarizing the findings and arguments of various
sources to provide a coherent narrative about what is known, what gaps exist,
and what future research directions might be needed.

Literature reviews serve several purposes, including providing context for a

research project, demonstrating the researcher’s knowledge of the field, and
identifying trends, conflicts, and key insights within the existing body of work.
They are commonly found in research papers, theses, dissertations, and grant
proposals.

➢ Nagalekshmi V.S, Vineetha [Link]

Found that the positive impact of merger Kotak Mahindra Bank Ltd with
ING-Vysya Bank. It also found that momentous increment in various budgetary
like operating profit, net profit, earnings per share, interest earned, return on
assets, equity share capital, income on investment etc.,

➢ K. Dinesh Kumar and G. Venugopal

Revealed that ICICI Bank good performance of balance sheet ratios and
Debt coverage ratios and next position of HDFC Bank. SBI and Kotak Mahindra
Bank performance is good in profitability ratios.
➢ Murad Mohammad Galif Al-Kaseasbah and Abdel KarimSalimIssaAlbkour
in their paper entitled, financial performance of Indian Banking sector: A
Case Study of SBI and ICICI Bank. To examine the financial performance of
SBIandICICI Bank. During the study, it was found that the SBI recorded
fluctuating trend on the other hand ICICI failed to manage the increasing trend.

➢ Vinoth Kumar and BhawnaMalhothra ,

attempted has been made evaluate the performance &financial soundness
of selected private sector banks in India for the period 2007 2017 CAMEL
approach has been used. This study concluded that the Axis Bank is ranked first
under the CAMEL analysis followed by ICICI Bank. Kotak Mahindra Bank
occupied the third position. The fourth position occupied by HDFC Bank and the
last position is occupied by Induslndbank amongst all the selected banks.

➢ SuruchiSatsangiPrem Das Saini

analyzed financial performance of Kotak Mahindra Bank merger with ING
Vysya Bank. The findings of the study showed the high growth rate which is
observed in the financial performance of the Kotak Mahindra Bank after the
mergers and acquisitions.

➢ PriyankaJha

analyzed financial performance of Public Sector Banks (Punjab National

Bank) and Private Sector Banks (ICICI) in India. The researcher concludes her
research PNB has lower operational efficiency comparatively than ICICI Bank.
➢ Jaiswal and Jain
entitled a comparative study of financial performance SBI and ICICI Bank
in India. This study examines the financial performance of Indian Banks with the
help of CAMEL. This Study compares a financial performance of SBI and ICICI .
The authors suggested that the SBI is performing well as compare to the ICICI.
Furthermore it was found that the market position of SBI is better than ICICI in
terms to earning per share, price ratio per share and dividend payout ratio. On
the other hand ICICI Bank performing well in terms of NPA and provision for NPA
in comparison of SBI bank.

➢ Gupta
entitled an empirical study of financial performance of ICICI bank a
comparative analysis focused on operational control profitability and solvency
etc., this research paper aimed to analysis and compare the financial
performance of ICICI bank and offer suggestions for the improvement of
efficiency in the bank. This study suggested that NPAs of the ICICI Bank is more
than 1percent. Therefore ICICI should control NPAs.

➢ Tirkeyi and Salem

analyzed a comparative study financial statement of ICICI and HDFC through
ratio analysis examined the financial position with the use of different ratios. It
was found that financial position of ICICI is much better than HDFC.
 CHAPTER 4 –

RESEARCH METHODOLOGY
RESEARCH METHODOLOGY

A research methodology describes the techniques and procedures used

to identify and analyze information regarding a specific research topic. It is a
process by which researchers design their study so that they can achieve their
objectives using the selected research instruments.
It includes all the important aspects of research, including research
design, data collection methods, data analysis methods, and the overall
framework within which the research is conducted. While these points can
help you understand what is research methodology, you also need to know
why it is important to pick the right methodology.

RESEARCH DESIGN

Research design is a comprehensive plan for conducting research. It

outlines the steps and procedures necessary to collect, measure, and analyze
data systematically. The primary goal of a research design is to ensure that the
study addresses the research problem effectively, providing reliable and valid
results.

RESEARCH APPROACH

The research approach outlines the strategy and methods to

systematically collect, analyze, and interpret data for the study. For a financial
statement analysis of HDFC Bank, a quantitative research approach is most
suitable as it involves numerical data analysis to evaluate financial
performance.
RESEARCH INSTRUMENT

Interviewing the customers personally and studying the response from

the questionnaires field.

DATA COLLECTION :

In research methodology, data collection refers to the systematic process

of gathering and measuring information on variables of interest. This process
allows researchers to obtain a complete and accurate dataset, which can then
be analyzed to answer research questions, test hypotheses, and evaluate
outcomes.
Data collection methods can be qualitative or quantitative and include
techniques such as surveys, interviews, observations, and experiments. The
choice of method depends on the research objectives, the nature of the
variables, and the study design.

➢ PRIMARY DATA –
It is the information collected directly. In the study, it was mainly
interviews with concerned officer and staffs individually or collectively. This
study does not include any primary data.
➢ SECONDARY DATA –

The secondary data was collected from already published sources such as
Pamphlets. Annual reports and internal records.

The data includes:

1. Collection of required data from annual reports of “The HDFC BANK”,

2. Reference from text books and journals relating to financial management and
articles published in business dairies like the Economic times, business line etc.

4.1- SCOPE OF THE STUDY

The current study only moves around the financial statement analysis of
the HDFCBank. The present study concentrates only on the financial
department of the HDFCBank with the use of comparative income statement
and ratio analysis.
4.2- NEED OF THE STUDY

➢ The project work is done for analyzing the financial position of the HDFC
Bank.

➢ The analysis of the financial position gives a better picture of the financial
position of the organization in order to take better decisions.

➢ Financial management is very important for both individuals and

organizations because it deals with managing the funds.

➢ It guides a company and individual to make optimum use of money to achieve

maximum returns. ➢ Financial analysis helps to an individual / organization to
save more and thus invest more.
4.3- OBJECTIVES OF THE STUDY

➢ To study the financial position of the HDFC Bank .

➢ To compare the profitability position of the company.

➢ To analyze the liquidity position of the HDFC Bank.

➢ To know the credit worthiness position of the HDFC Bank.

➢ To observe the operating efficiency of the HDFC Bank.

➢ To give the suitable conclusions , suggestions for the better improvement of

the HDFC Bank.
4.4- HYPOTHESIS OF THE STUDY

1. Null Hypothesis- H(o)

HDFC Bank’s profitability, as measured has not changed over the past
years.

1. Alternate Hypothesis – H(1)

HDFC Bank’s profitability, as measured has changed over the past years.

1. Null Hypothesis- H(o)

HDFC Bank’s Loan Growth Rate is consistent with industry growth rates.

1. Alternate Hypothesis – H(1)

HDFC Bank’s Loan Growth Rate is higher than industry growth rates.
4.5- LIMITATIONS OF THE STUDY

Limitation faced during the preparation of this project report on

financial statement analysis of HDFC bank as follows :

➢ Time available for the completion of the project is very short ,hence much
information could not be undertaken.

➢ The information collected through secondary data .

➢ The report is based on the analysis of the last 5 years data which may not be
sufficient in some cases.

➢ The analysis and conclusion made is as per my limited understanding for this
concern subject .

➢ Only comparative, common-size statement and ratios analysis has been

taken for the study as a tool of financial and no techniques is used.
 CHAPTER 5

DATA ANALYSIS & INTERPRETATION

DATA ANALYSIS :

This chapter deals with data analysis and interpretation. The outcome of the
present study yields significant findings of HDFC Bank.
Some of the major ratio has been evaluated and interpreted for the purpose of
understanding the financial performance of the bank. The following analysis
shows the company’s performance.
This analysis will help to understand the HDFCs financial position.

LIQUIDITY OR SHORT TERM SOLVENCY RATIO :

➢ INTERPRETATION –

From the above calculated current ratio of HDFC it is observed that the
current ratios of the HDFC Bank is 9.15 in 2007-08, and increased to 12.45 in
the year [Link] the HDFC Bank is maintaining the average current ratio
as around11, is more than the standard of current ratio.

2) QUICK RATIO :
➢ INTERPRETATION –

From the above calculated quick ratio of HDFC it is observed that the quick
ratios of the HDFC Bank are 9.14 in 2007-08, and increased to 12.34 in the year
2011-12. and the HDFC Bank is maintaining the average quick ratio as around
10.33,which is more than the standard of current ratio.
3) ABSOLUTE LIQUID RATIO / SUPER QUICK RATIO:
➢ INTERPRETATION –

From the above calculated absolute liquid ratio of HDFC it is observed

that the absolute ratio of the HDFC Bank is 0.314 in 2007-08, and increased to
1.547 in the year 2011-12. And the HDFC Bank is maintaining the average
absolute ratio as around 0.6914, which is more than the standard of current
ratio.

4) DEBT EQUITY RATIO :

➢ INTERPRETATION –
From the above calculated debt equity ratio of HDFC it is observed that the
debt equity ratio of the HDFC Bank is 2.317 in 2007-08, and decreased to 0.572
in the year 2011-12. And the HDFC Bank is maintaining the average debt equity
ratio as around 1.44, which is more than the standard of debt-equity ratio.
5) PROFIT ABILITY RATIOS :
➢ INTERPRETATION –

The gross profit ratio of the HDFC Bank is 0.211 in 2007-08, and decreased
to0.202 in the year 2007-08. And increased to 0.316 in the year 2011-12. And
the HDFC Bank is maintaining the working capital turnover ratio as averagely
around0.
CHAPTER 6

FINDINGS & SUGGESTIONS

FINDINGS :

From the project study the following conclusions are drawn :

➢ The HDFC Bank is earning satisfactory level i.e., 2.56%

➢ The overall financial performance growth rs13000 i.e,,1.89%

➢ The absolute liquid assets (cash & HDFC Bank balance) has registered a
growth of 11.11% which shows the healthy credit worthiness position of the
HDFC Bank.

➢ Gross profit increased from 70,000 to 1,00,000 and in current 157.13%

➢ The profit available to the shareholders increased to 52.89%

➢ The current ratio has displayed a stable trend, consistently maintaining a

healthy level of 0.35 over the past few years.

➢ The calculated of HDFC it is observed that the quick ratios of the HDFC Bank
is increased .

➢ The above calculated of HDFC it is observed that the debt equity ratio of the
HDFC Bank is decreased.

➢ The gross profit ratio of the HDFC Bank is decreased to increased.

SUGGESTIONS :

➢ To increase the profit of HDFC Bank, HDFC Bank should decrease their
operating expenses and increase their income.

➢ The HDFC Bank should change the capital structure in order to strengthen
the long term solvency position of the HDFC Bank.

➢ The HDFC Bank should try to reduce the operating and non operating
expenses in order to increase the profitability position of the HDFC Bank.

➢ The current ratio of the HDFC Bank is very high in comparison with the
general rule. It indicates that the HDFC Bank holds more current assets than
required. It should reduce it, so that there will profitable use of this amount.

➢ Unnecessarily much amount has been blocked in current assets, HDFC Bank
should take necessary steps to make productive use of this.
CHAPTER 7

CONCLUSION
CONCLUSION :
➢ The HDFC Bank is maintaining the current ratio above, then the standard
during the study period.

➢ The HDFC Bank is not utilizing the capital funds in fixed assets.

➢ The HDFC Bank is investing the huge funds in the current assets which leads
to idle funds.

➢ The long term solvency position of the HDFC Bank is not satisfactory.

➢ The profitability position of the HDFC Bank is not satisfactory during the study
period.
CHAPTER 8

BIBIOGRAPHY
8- BIBIOGRAPHY:

WEBSITES:

 [Link]
financial- statement-analysis-of-HDFC-doc

 [Link]

 [Link]
DY_ ON_FINANCIAL_ANALYSIS_AND_PERFORMANCE_OF_HD
FC_BANK

 [Link]

BOOKS AUTHORS :

 Marketing Management (10th Edition)Philip Kotler

 Marketing Management (3rd Edition)V.S. Ramaswamy
 Research Methodology (2nd Edition) C.R. Kothary
 Research Methodology [Link]

NEWS PAPERS:

 Economics Times
 Financial Express
CHAPTER 9

ANNEXURE