Faculty of Management Pokhara University RECOMMENDATION This to certify that the summer project report:
Submitted By Muna G.C Exam Roll No: 11031597 P.U Registration no: 2010-2-03-0742
Entitled WORKING CAPITAL OF SIDDHARTHA BANK LIMITED has been prepared as approved by this department. This fieldwork report is forwarded for examination.
Supervisor Date:
Head of Department Faculty of Management Citizen College Satdobato, Lalitpur Date: ……………..
ACKNOWLEDGEMENT
This report is written as a part of the completion of forth semester Bachelor in Business Administration (BBA) course of the Pokhara University. This kind of work provides us an opportunity to have practical experience on collecting, processing, analyzing information and draw some conclusion on a particular subject. In this respect, I have chosen my topic on"Working Capital Position" of Siddhartha Bank Limited. First of all, I would like to thank Pokhara University for providing us chance and allowing me for this study. I feel this kind of work is essential for BBA students that give us an opportunity to get exposed to practical knowledge on subject of interest. While carrying out fieldwork and preparation of the report, number of people helped me in many respect. I would like to extend my sincere thanks to my teachers Mr. R.M.Bajracharya and Mr. Baibhav Adhakari for their valuable guidance in writing this report. I also wish to express my thanks to Mr. Madan Pandit (management trainee of SBL) and his group for their support and full co-operation in providing information required for the study. I am also grate for their valuable suggestions. Finally, I appreciate the co-operation extended by members of the bank who provided me information on reading materials and reference books that greatly helped me to complete this work. Thank you,
Muna G.C. EXECUTIVE SUMMARY
This report has been prepared as a part of summer project carried out at Siddhartha Bank Limited (SBL), Kumaripati, Lalitpur, Banking office, for the degree of Bachelors in Business Administration at Citizen College, Satdobato, Lalitpur, affiliated to Pokhara University. This report describes about the various types of banking activities and analyzes various aspects of it. The objective of this study is to present and analyze the Working Capital Position of Siddhartha Bank Limited and the position of the bank over
last 5 years. Siddhartha Bank Limited (SBL) was established in 24 th Dec. 2002, SBL has been steadily growing in its size and operations ever since its inception and today it has established as a leading Private Sector Bank of the Nation, reckoned as one of the fastest growing Commercial Bank of the Country. The mission of SBL is to be leading financial intuition of country providing a sound environment where depositors continue to have faith in the security of t their funds and receive reasonable returns. All the services are directed to meet various customers’ needs. While learning and observing the subject, we had faced problems related with financial observation and information collection. The framework of learning methodology was so effective that, we were able to collect required information through direct interviews with employees of SBL, it made us easier to spend our time at work and which would be effective for our further prospect. The main reason behind carrying out this project is to see how well the SBL is providing the interest of the saving of the customer and how the manager and employee of the bank is devoting their service towards the customer’s satisfaction, and to develop a comprehensive report about the contribution of interest bearing deposit to total capital of the SBL. The presentation and analysis part of our report is based upon brief identification and evaluation of departments related our subject matter. The analysis depends on the factual data rather than compromised information therefore, the presentation of our analysis only incorporate real and accurate data. The data and information for us regarding interest bearing deposit were very limited due to safeness and confidentiality, though we were able to gather information with the help of staffs of SBL. Besides this we used various TQM tools for the visual view of presentation including bar diagrams, pie chart and tables. After the analysis of the overall data, we came to conclusion that SBL is doing a good job regarding Interest Bearing Deposits. Therefore, it can be said that SBL’s interest bearing deposit trend are good and the return regarding it, is also reasonable. The
bank is likely to increase its profit by increasing the investment & loan facilities from the funds of Interest Bearing Deposits by decreasing its cash & bank balance to the minimum requirement. From the deposit trend of SBL, it shows that’s the customers are loyal to the bank. By the help of questionnaires and other surveys we were able found additional information about the services provided by the bank. During this project at SBL we learned a lot of valuable knowledge about the tasks and activities of various departments. With the completion of the project, we just did not provide solutions but also got an opportunity of being surrounded by a network of people and divisions who have direct and indirect contribution to the economy of the country. This allows us to gain ideas and options that we have never before considered and help develop new ways of thinking. During research in SBL we got various skills like being professional, enthusiastic, inquisitive, developing professional relationships, developing communication skills, trying to figure out problem and providing remedies. These skills that we acquired while working at SBL will definitely help in strengthening our career in near future. So, we can say that the experience that we had during our project at SBL was outstanding, interesting and amazing and the knowledge and skills that we have acquired will definitely help to shape our career in near future.
January 2013
TABLE OF CONTENTS Recommendation
i
Acknowledgement
ii
List of Table
vii
List of Figure
vii
Abbreviations
viii Page No
CHAPTER 1 1 INTRODUCTION
1
1.1 Background of Study
1
1.1.1 Definition and Importance of Working capital
4
1.1.2 Capital Structure of Siddhartha Bank Ltd
4
1.1.3 Organizational Structure of SB
5
1.1.4 Management Committee
5
1.1.5 Corporate Social Responsibility
6
1.1.6 Performance of SB
7
1.1.7 Priorities of SB
8
1.2 Objective of the Study of SB
9
1.3 Need and Significant of the Study
9
1.4 Review of Literature
10
1.4.1 Net Working Capital
10
I) Net Working Capital Ratio 1.4.2 Liquidity Ratio
11
I) Current Ratio II) Quick Ratio 1.4.3 Correlation Analysis
12
(I) Karl Pearson’s Correlation Coefficient (II) Probable Error 1.4.4 Trend Analysis
13
1.5 Fieldwork procedure
14
1.6 Research methodology
14
1.6.1 Research Design 1.6.2 Source of Data 1.6.3 Tools of Analysis 1.7 Limitation of the Study
17
1.8 Plan of the Study
17
CHAPTER 2 2. Research Mehodology
2.1 Research design
18
2.2 Types of methodology in research
18
2.3 Data processing technique
19
2.4 Diagrammatic Representation of data
20
CHAPTER 3 3 PRESENTATION AND ANALYSIS OF DATA
21
3.1 Net working capital of SBL
21
3.2 Current Ratio of SBL
22
3.3 Quick ratio of SBL
23
3.4 Computation of correlation between WC and CA
24
3.5 Computation of correlation coefficient between WC and CL
26
3.6 Calculation of trend values of working capital (Rs. In millions)
28
3.7 Study Result
30
CHAPTER 4 4 SUMMARY AND CONCLUSION
33
4.1 Summary
33
4.2 Conclusion
34
4.3 Recommendation
34
REFRENCES List of Tables
Table No. 1.1
Page No.
Name , year of establishment and head office of existing commercial banks
2
3.1
Net Working Capital of Siddhartha Bank Ltd.
21
3.2
Current Ratio of SBL
22
3.3
Quick Ratio of SBL
23
3.4
Correlation between WC and CA
24
3.5
Correlation between WC and CL
26
3.6
Computation of Trend Value of WC
28
3.7
Comparative study for year 2004 to 2011
30
3.8
Group Performance
31
3.9
income statement
32
List of Figures
Figure No.
Page No.
3.1
Trend Line showing NWC
22
3.2
Trend Line showing CR of Siddhartha Bank
23
3.6
Trend Line showing the Trend Value of the WC
29
ABBREVIATIONS
SBL
:
Siddhartha Bank Ltd.
WC
:
Working Capital
CA
:
Current Assets
CL
:
Current Liabilities
PE
:
Probable Error
r
:
Karl Pearson’s Correlation Coefficient
Ltd
:
Limited
%
:
Percentage
N
:
Number of Year
NWC
:
Net Working Capital
B.S.
:
Bikram Sambat
