MBA Finance project

BANK OF BARODA

-INDUSTRY PROFILE INTRODUCTION A bank is a financial institution that accepts deposits and channels those deposits into lending activities. Banks primarily provide financial services to customers while enriching investors. Government restrictions on financial activities by banks vary over

Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

time and location. Banks are important players in financial markets and offer services such as investment funds and loans.

DEFINITION: According to Banking Regulation Act 1949, Sector 5 (b) 66 Banking means “the accepting for the purpose of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, drafts, order and otherwise”.


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The main operations of the bank as the above definition states that •

Banks accepts deposits from the public.

•

Banks advances loans to needy businessman.

Origin of bank Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet


BANK OF BARODA

new challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process.


BANK OF BARODA

The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dials a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. Appa Institute of Engineering &Technology P. G. Department of Management Studies,

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They are as mentioned below: •

Phase I (1786- 1969) - Initial phase of banking in India when many small banks were set up

•

Phase II (1969- 1991) - Nationalization, regularization and growth

•

Phase III (1991 onwards) - Liberalization and its aftermath


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With the reforms in Phase III the Indian banking sector, as it stands today, is mature in supply, product range and reach, with banks having clean, strong and transparent balance sheets. The major growth drivers are increase in retail credit demand, proliferation of ATMs and debit-cards, decreasing NPAs due to Securitization, improved macroeconomic conditions, diversification, interest rate spreads, and regulatory and policy changes (e.g. amendments to the Banking Regulation Act).


BANK OF BARODA

Certain trends like growing competition, product innovation and branding, focus on strengthening risk management systems, emphasis on technology have emerged in the recent past. In addition, the impact of the Basel II norms is going to be expensive for Indian banks, with the need for additional capital requirement and costly database creation and maintenance processes. Larger banks would have a relative advantage with the incorporation of the norms.


BANK OF BARODA

Types of bank Retail banking, dealing directly with individuals and small businesses; •

business banking, providing services to mid-market business;

•

corporate banking, directed at large business entities;

•

private banking, providing wealth management services to high net worth individuals and families; and

•

Investment banking, relating to activities on the financial markets.


BANK OF BARODA

Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations. Central banks are normally governmentowned and charged with quasi-regulatory responsibilities, such as supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as the lender of last resort in event of a crisis.

MAJOR PLAYER IN INDIA 1. HDFC BANK LTD Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

2. ICICI BANK LTD 3. STATE BANK OF INDIA LTD 4. PUNJAB NATOINAL BANK LTD 5. BANK OF BARODA LTD 6. FEDERAL BANK LTD 7. AXIS BANK LTD 8. ING VYSYA BANK LTD 9. IDBI BANK LTD Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

10. INDUSIND BANK LTD 11. YES

INDIAN BANKING SYSTEM


BANK OF BARODA

Reserve Bank of India

Schedule Banks

Non-Schedule Banks

Central co-op Banks and Primary Cr. Societies Appa Institute of Engineering &Technology P. G. Department of Management Studies, State co-op Banks

Commercial Banks

Commercial Banks

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Indian

Foreign


BANK OF BARODA

Public Sector Banks

State Bank of India and its Subsidiaries

Private Sector Banks

Other Nationalized Banks


Regional Rural Banks

BANK OF BARODA

COMPANY PROFILE A. BACKGROUND AND INCEPTION:


BANK OF BARODA

•

Established on July 20, 1908 by Maharaja of Baroda Sir Sayajirao Gaekwad III, in the princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial banks of India, was nationalized on 19th July, 1969, by the Government of India.


BANK OF BARODA

•

Bank of Baroda is the fifth largest bank in India. It has total assets in excess of Rs. 1.78 lakh crores, or Rs. 1,780 bn., a network of over 2800 branches and offices, and about 1000+ ATMs. Bank of Baroda offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, credit cards and asset management.

ORIGIN OF BANK Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Prior to independence from the British Rule, the ancient India was ruled by princely states, scattered over the width and breadth of the large Indian nation. The Maharajas of the inner States of colonial India contributed to the welfare of their respective regions as well as the Indian nation as a whole. Their vision and foresight in founding various financial, charitable, social and philanthropic organizations during their time is still cherished by any one going into the history of modern India and its achievements in every walk of life.


BANK OF BARODA

The Maharaja of Baroda, a princely state of British India, by name Sir Sayyajirao Gaekwad III, had the same vision in establishing a bank for servicing the public at large and the citizens of Baroda State, a Gujarathi population in particular. On 20th July 1908, Bank of Baroda was established under the rules of Companies Act 1897, in a small building at Baroda, by the Maharaja with a paid up capital of Rs.10 lakhs. The guidelines set by the Maharaja for the bank was to serve the people of the State of Baroda as well as the neighboring regions with money lending, saving, transmission and encouraging the development of arts, science, commerce and trade for the people. Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Even during the worst financial disaster caused by the First World War, during the period 1913 to 1917, when as many as 87 banks closed their shutters, Bank of India survived the turbulence with its clear vision, ethical standards and financial prudence to grow from strength to strength. There were heroes to sustain the development of this bank to its present glory, from ordinary people as customers and the heirs of the Royal family of Baroda.


BANK OF BARODA

The success story of the Bank of Baroda is studded with many a leaps and strides it made in the International presence, apart from establishing branches all over the Indian nation, by acquisition of already popular banking entities, as also commencing new commercial banking establishments, in the unique Gujarathi style. During the years of 1908 to 2007 (and the century year being round the corner) Bank of Baroda’s growth owes to the excellence in rendering financial products and services to the national and international population. Countries beginning from America to Zambia, in the alphabetical order have been enjoying the services of Bank of Baroda as of today. Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

A brief statistics will reveal the magnitude of growth Bank of India has achieved today : fifth largest bank in India; total assets over 1,78,000 crores; number of offices and branches 2800; more than 1000 ATMs, notwithstanding affiliates, subsidiaries and delivery channels all over the world.


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Management Team Mr. M D Mallya Chairman & Managing Director Bank of Baroda Mr. R K Bakshi


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Executive Director Bank of Baroda


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Mr. N S Srinath Executive Director Bank of Baroda Mr. S S Mundra Chief Executive Bank of Baroda European Operations Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

B. NATURE OF THE BUSINESS CARRIED Bank of Baroda, a premier Public Sector Bank from India, commenced its operations in Singapore on September 19, 2006, as an Offshore Branch.


BANK OF BARODA

Bank of Baroda, which celebrated its centenary year, has over 3000 branches across the length and breadth of India and has its footprints in 25 countries across 78 offices across the globe. Its Offshore Branch in Singapore offers a wide variety of products and services to individuals as well as institutional customers, which include acceptance of deposits in major currencies, syndicated loan, trade finance and other allied services in foreign exchange and corporate finance.


BANK OF BARODA

C. VISSION, MISSION AND QUALITY POLICY MISSION Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

“Our mission is to be a top ranking National Bank of International Standards committed to augmenting stake-holders' value through concern, care and competence”. VISSION •

To evolve as a Retail organization.

•

To evolve as a retail banker of preferred choice in the chosen markets.


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•

To permeate sale and service culture across the organization.

•

To meet the life cycle and life style needs of consumers matching with their rising aspirations.

QUALITY POLICY


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To provide loan and be competitive in area where bank operates as per quality system of ISO 9001:2000 certification for 15 branches. By end of the current financial, the Bank is targeting 54 more branches for this quality certification.

D. PRODUCT/SERVICES PROFILE •

Retail Banking

•

Rural/Agri Banking


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•

Wholesale Banking

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SME Banking

•

Wealth Management

•

Demat

•

Product Enquiry

•

Internet Banking

•

NRI Remittances


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•

Baroda e-Trading

•

Interest Rates

•

Deposit Products

•

Loan Products

•

ATM / Debit Cards

Personal Services


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•

Deposits

•

Gen-Next

•

Loans

•

Credit Cards & Debit Cards

•

Services

•

Lockers

Corporate Services


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•

Wholesale Banking

•

Deposits

•

Loans

•

Advances

•

Services

International Services


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•

NRI Services

•

FGN Currency Credits (Foreign Currency Credits)

•

ECB (External Communication Borrowings)

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FCNR (B) Loans

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Offshore Banking

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Finance in Export and Import

•

Correspondent Banking Facility

•

International Treasury


BANK OF BARODA

Treasury service of Bank of Baroda includes Domestic operations and Forex operations. Domestic Services •

Deposits

•

Priority Sector Advances

•

Services

•

Lockers


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Priority Sector Advances •

Small Scale Industries

•

Small Business

•

Retail Loans

•

Schemes sponsored by the GOI (Government of India)

•

Baroda General Credit Card Scheme (BGCC)

•

Agriculture related Loans


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E. AREA OF OPERATION Bank of Baroda had a worldwide network of over 3000 branches, out of which 637 were located in Metro cities, 540 in urban areas, 649 in Semi-Urban locations, 1100 in Rural areas and 74 outside India.


BANK OF BARODA

F. OWNERSHIP PATTERN Share Holding Pattern Bank of Baroda share holding pattern Entity Govt of India

Percentage 53.80%


BANK OF BARODA

Domestic Institutions

22.10%

Foreign Institutional Investors

14.2%

Others

9.90%

G) COMPETITORS INFORMATION


BANK OF BARODA

•

State Bank of India

•

Punjab National Bank

•

Bank of India

•

Canara Bank

•

Union Bank

•

IDBI Bank

•

Oriental Bank


BANK OF BARODA

•

Central Bank

H. INFRASTRUCTURAL FACILITIES •

Fully Computerized Bank

•

Core banking

•

Mobile banking


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•

Training Institutions

•

Internet Facility.

I. ACHIEVEMENTS/AWARDS AWARD •

"Association of Business Communicators of India (ABCI) Awards (2006)"


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•

Bank of Baroda is adjudged one of the top 10 Marketers

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Bank of Baroda awarded the Outlook Money NDTV Profit Awards 2007.

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AMITY Leadership Award for Sectoral Excellence in Banking

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SKOCH Challenger Award for Change Management

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IMC Ramakrishna Bajaj National Quality Award

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SPJIMR Marketing Impact Awards (SMIA) 2007

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The Employer Branding Awards 2007


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•

Association of Business Communicators of India (ABCI) Awards

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Bank of Baroda bags three Awards of ABCI for the year 2008

•

Bank awarded for its "Global Business Development"

Milestones we have achieved The Bank has provided around a dozen CEOs to the industry – men who went on to build


BANK OF BARODA

other great institutions. People initiatives were blended with IR initiatives to create an effectively harmonious workplace, where everyone prospered.

J. WORKFLOW MODEL (END TO END) Customers, who are interested in depositing or in need of the various types of loans, would approach the near by Branch of BOB for their requirements. Since the bank Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

has numerous Branches all over the country, the customers are able to approach the nearby branch easily. Once the proposal of the customer has been accepted and if it is within the powers of Branch manager, he will render the requisite services by according sanction. If not, he will send the proposal to the appropriate delegated authority i.e. Regional Office or Circle Office as the case may be. Finally, if the credit amount is more than the limits of Circle Office, then Head Office will be approached for sanction.


BANK OF BARODA

K. FUTURE GROWTH AND PROSPECTS The Bank will emerge stronger, more resilient and positioned to become India's first bank of truly global standards. The relocation to the imposing Baroda Corporate Centre is a true reflection of the Bank's resolve to move ahead of the times. It will not be out of place now, as it stands on the threshold of a digital era, to echo the same sentiments that guided the Bank in its platinum jubilee year - 'a promising future is the sequel to a glorious past'.


BANK OF BARODA

3. MCKENSY’s 7s FRAME WORK Mckensy’s frame work got its birth from the system’s Management approach, where the system’s approach is based on the view that an organization is an open system composed of inter –related and independent element.


BANK OF BARODA

Where as Mckensy’s frame work is a frame work where there are 7 organizational factors which are interdependent factors have to be managed harmoniously for the effective and efficient functioning of the organization. The frame work’s 7s are:1. Structure


BANK OF BARODA

2. Skill 3. Style 4. Strategy 5. Systems


BANK OF BARODA

6. Staff 7. Shared value

PICTORAL REPRESENTATION OF MCKENSY’S 7S MODEL


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STRUCTURE:


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BANK OF BARODA

(GULBARGA BRANCH)


BANK OF BARODA

BRANCH MANAGER

MANAGER

1 ACCOUNTANT

1 CASHIER

Appa Institute of Engineering &Technology 2 COUNTER P. G. Department of Management Studies, OFFICERS

2 CLERKS BANK OF BARODA

2 PEONS

SKILLS •

The distinctive competencies that reside in the organization. Can be distinctive competencies of people, management practices, system, and/or technology.


BANK OF BARODA

•

The Company or Organization has the employees who have various talents and skills.

•

They are not only skilled but also hardworking, honest efficient and innovative in nature.

•

The employees are well experienced and having good skills.

•

The employees are having high morale.


BANK OF BARODA

STYLES: BOB follows top down approach. The decision flow is through top to down direction. The supervision process flows in same direction that is top down approach. As bank structure is organized every department has to perform their part of job, for this they require decision power which is followed in bank. So it follows authoritarian style.


BANK OF BARODA

STRATEGY: Strategy is a course of action through which an organization relates itself with environment so as to achieve its objectives”. The way in which competitive advantage will be achieved. Strategy implies a game plan to achieve the defined business goals. Every business uses a unique strategy to reach its destiny.


BANK OF BARODA

BOB which mainly focuses on Canvassing low cost deposits, improving non-fund business, identifying the customer needs, reading the required loan to the customers and giving polite service.

SYSTEMS: System is a Formal and Informal procedures that support the strategy and structure. The organization has good management control system, resource allocation Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

systems and distribution systems the process is predetermined rules and regulations liberally delegated. All departments are having their own rules, regulations and procedures for the customer service and which can be reviewed from the HOD.

STAFFS:


BANK OF BARODA

The staff of BOB can be classified under the ground of Top level, Middle level, and Lower level: •

On the basis of top level the decision maker as well as who holds authority and responsibilities of bank is the head of branch, manager and assistant manager.

•

On the basis of middle level the technical, supervision, computerized, record and all maintenance activity are performed. It includes special assistant, probationary officer, computer operator, and single window operator.

•

On the basis of lower level the labor work is performed like sweeping.


BANK OF BARODA

SHARED VALUES:


BANK OF BARODA

The core of fundamentals values that are widely in the organization and serve as guiding principles those are important. These values have meaning because they focus attention and provide a border sense of purpose. In the organization there exists lots of mutual understanding and strong interaction among employees.

BOB is purely development and service providing oriented rather than profit oriented. Shared values help to improve the service to their customers and also balance


BANK OF BARODA

the growth of region and develop the backward areas. The main social objective is removal of regional imbalances in the State as well as in the country.

4) SWOT ANALYSIS STRENGHTS:


BANK OF BARODA

•

BANK has good country wide presence, BANK also has overseas presence with profitable overseas operations.

•

It also has fully computerized business at all branches.

•

BANK has 1,500 rural branches in order to serve the agriculture sector in the form of different loan to all categories of farmers like poor farmers, marginal farmers, etc.

•

Overseas posting is easily accessible.


BANK OF BARODA

•

Excellent work performance.

•

All the staff members are experienced and smart workers.

WEAKNESSES: •

There are limited ATMs in Gulbarga which is inconvenient.


BANK OF BARODA

•

BOB has poor recovery of loan.

OPPORTUNITIES: •

As computerized banking is available, more E-banking facilities can be developed.

•

There is an opportunity to expand its branches to several areas.


BANK OF BARODA

•

The bank has opportunity to enlarge its business to other part of city and wherein it can increase its customer base.

THREATS: Major threat appearing is the huge competition from Punjab national bank and corporation bank.


BANK OF BARODA


BANK OF BARODA

5. ANALYSIS OF FINANCIAL STATEMENT BALANCE SHEET as on 31st march, 2009 Rs. 000’s)


(

BANK OF BARODA

Partic ulars

As on 31.3.2009

As on 31.3.2008

Capital

365,53,77

365,52,77

Reserves and surplus

124,70,01,35

106,78,39,91

Deposits

1923,96,95,17

1520,34,12,72

Borrowings

5636,08,59

3927,04,80

Other liabilities and provisions

165,38,14,66

125,94,41,42

TOTAL

2274,06,72,54

1795,99,51,62

Cash & balance with RBI

105,96,34,35

9369,72,34

Balance with Bank, money at call

134,90,77,35

129,29,56,33

Investments

524,45,87,58

438,70,06,78

Advances

1439,85,89,61

1067,01,32,41

Fixed assets

2309,71,93

2427,00,81

Other assets

4578,11,72

4301,82,95

TOTAL

2274,06,72,54

1795,99,51,62

Contingent liabilities

733,86,09,83

823,62,32,83

Bills for collections

139,63,99,04

8315,01,73

Capital and liabilities

Assets


BANK OF BARODA

PROFIT AND LOSS ACCOUNT for the year ended 31 march, 2009 (Rs.000’s)

particulars

Year ended 31 march, 2009

Year ended 31 march, 2008

l. income Interest earned Other income

150,91,57,74 2757,65,80

118,13,47,67 2051,03,61

TOTAL

178492354

138645128


BANK OF BARODA

ll. expenditure Interest expended Operating expenses Provisions & contingencies TOTAL lll. Profit Net profit for the year Available for appropriation Appropriation transfer to:

9968,16,76 3576,06,17 2077,80,43 156,22,03,36

7901,67,06 3034,29,21 1493,02,86 124,28,99,13

2227,20,18 2227,20,18

1435,52,15 1435,52,15


BANK OF BARODA

a) statutory reserve b) capital reserve

556,80,05 358,25,58

358,88,04 8464,85

c) revenue & other reserves l. general reserve ll. special reserve lll. Statutory reserve d) proposed dividend TOTAL

707,41,44 220,00,00 1,17,48 3835563 2227,20,18

650,35,08


70,30 340,93,88 1435,52,15

BANK OF BARODA

Basic and diluted EPS

RS. 61.14

PERFORMANCE HIGHLIGHTS


RS. 39.41

BANK OF BARODA

•

Total Business (Deposit+Advances) increased to Rs 3, 36,383 crore reflecting a growth of 30.01%.

•

Gross Profit and Net Profit were Rs 4,305.01 crore and Rs 2,227.20 crore respectively. Net Profit registered a growth of 55.2% over previous year.

•

Credit-Deposit Ratio stood at 82.36% as against 77.32%.

•

Retail Credit posted a modest growth of 16.3% constituting 17.8% of the Bank’s Gross Domestic Credit in FY09.


BANK OF BARODA

•

Net Interest Margin (NIM) as per cent of interest earning assets was at the level of 2.91%.

•

Net NPAs to Net Advances stood at 0.31% this year against 0.47% last year.

•

Capital Adequacy Ratio (CAR) as per Basel I stood at 12.88% & as per Basel II at 14.05%.

•

Net Worth improved to Rs 11,387 crore registering a rise of 19.52%.

•

Book Value improved from Rs 261.54 to Rs 312.61 on year.

•

Business per Employee moved up from Rs 710 lacs to Rs 914 lacs on year.


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BANK OF BARODA

6. LEARNING EXPERIENCE Bank of Baroda is a Financial Institution providing various Financial Services and licenses are granted to Banks by Financial Supervision authorities who provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

In my ten week project work, I have learnt how the BOB Bank runs its huge organization with the support from various departmental wings. The success of BOB has shown how the various functional wings are well coordinated to render its best of service of their customers. In my training I learnt how the BOB formulates its strategies and policies to deliver its services and compete with other Nationalized, co-operative, foreign and private banks. The powers and authority have been decentralized wherever it is


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needed so that the managers have the required power to grant loans on a case to case basis at the earliest. BOB maintains good relationship with customers by providing necessary service so as to face competition and challenge to other banks. In the training, I have come to know how the Bank functions, how the proposal of the customer flows through various stages and successfully sanctions the proposal. The Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

experience gained by me during the in project at BOB was very useful, good and knowledgeable. The project has enriched my knowledge and helped me to gain a through understanding of functions and working of BOB. It has helped me to improve my presentation skills, communication and personality development.


BANK OF BARODA

1. GENERAL INTRODUCTION FINANCIAL ANALYSIS Financial analysis is the process of identifying the financial strengths and weaknesses of the firm and establishing relationship between the items of the balance sheet and profit & loss account. Financial ratio analysis is the calculation and comparison of ratios, which are derived from the information in a company’s financial statements. The level and Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

historical trends of these ratios can be used to make inferences about a company’s financial condition, its operations and attractiveness as an investment. The information in the statements is used by •

Trade creditors, to identify the firm’s ability to meet their claims i.e. liquidity position of the company.

•

Investors, to know about the present and future profitability of the company and its financial structure.


BANK OF BARODA

•

Management, in every aspect of the financial analysis. It is the responsibility of the management to maintain sound financial condition in the company.

NATURE OF RATIO ANALYSIS Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making certain Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

decisions. It is only a means of understanding of financial strengths and weaknesses of a firm. There are a number of ratios which can be calculated from the information given in the financial statements, but the analyst has to select the appropriate data and calculate only a few appropriate ratios. The following are the four steps involved in the ratio analysis. •

Selection of relevant data from the financial statements depending upon the objective of the analysis.

•

Calculation of appropriate ratios from the above data.


BANK OF BARODA

•

Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios developed from projected financial statements or the ratios of some other firms or the comparison with ratios of the industry to which the firm belongs.

A. STATEMENT OF THE PROBLEM


BANK OF BARODA

Ratio analysis is a very analytical technique to raise pertinent questions on number of managerial issues. It provides bases or clues to investigate such issues in detail. While assessing the financial health of the company, ratio analysis answers to the questions relating to company’s profitability, assets utilization and liquidity and financial capabilities of the company. The statement of the problem can be generalized here as: •

Analysis of liquidity and profitability of the current assets and current liabilities.


BANK OF BARODA

•

Detection of the reason for the variability of profits.

•

Analysis of relationship between assets and liabilities.

•

Find out the business fluctuations, technical developments, etc on financial performance.

•

Analysis of various components of working capital such as cash marketable securities, inventories and receivables.


BANK OF BARODA

B. OBJECTIVE OF THE STUDY •

The main objective of the ratio analysis is to get the knowledge about the financial position of BOB.

•

To know about ratio prevailing at the end of different financial years.

•

To form opinion about financial position of BOB.


BANK OF BARODA

•

To find out the solution to the unfavorable financial conditions and financial performance.

•

To determine the Profitability, Liquidity Ratios.

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To analyze the capital structure of the company.

•

To offer appropriate suggestions for the better performance of the organization

C. SCOPE OF THE STUDY


BANK OF BARODA

•

The study has great significance and provides benefits to various parties whom directly or indirectly interact with the company.

•

It is beneficial to management of the company by providing crystal clear picture regarding important aspects like liquidity, leverage, activity and profitability.

•

The study is also beneficial to employees and offers motivation by showing how actively they are contributing for company’s growth.


BANK OF BARODA

•

The investors who are interested in investing in the company’s shares will also get benefited by going through the study and can easily take a decision whether to invest or not to invest in the company’s shares.


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D. METHODOLOGY The information is collected through primary and secondary sources during the project. That information was utilized for calculating performance evaluation and based on that, interpretations were made. The primary source includes the discussion with clerk-cum-cashier of BOB.


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Sources of secondary data: •

Most of the calculations are made on the financial statements of the company provided statements.

•

Referring standard texts and referred books collected some of the information regarding theoretical aspects.

•

Method- to assess the performance of the company method of observation of the work in finance department in followed.


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E. LIMITATIONS OF THE STUDY •

The changing prices make interpretation of ratio analysis difficult.

•

One of the factors of the study was lack of availability of ample information. Most of the information has been kept confidential and as such as not assed as art of policy of company.


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2. ANALYSIS AND INTERPRETATION RATIO ANALYSIS


BANK OF BARODA

Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two variables.

SIGNIFICANCE OF RATIO ANALYSIS


BANK OF BARODA

Ratio analysis is an important technique of analyzing the financial statement and it helps the analyst to make quantitative judgment with regard to concerns financial position and performance. The followings are the main points of importance of ratio analysis are; •

Helps in decision-making

•

Helps in financial forecasting and planning helps in communication

•

Helps in co-coordinating

•

Helps in control


BANK OF BARODA

INTERPRETATION OF THE RATIOS The interpretation of ratios is an important factor. The inherent limitations of ratio analysis should be kept in mind while interpreting them. The impact of factors such as price level changes, change in accounting policies, window dressing etc., should also be kept in mind when attempting to interpret ratios.


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Classification of Ratios 1. Liquidity ratio 2. Leverage ratio 3. Activity ratio 4. Profitability ratio. 5. Market ratio.


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1. LIQUIDITY RATIOS Liquidity refers to the ability of a concern to meet its current obligations as & when there becomes due. The short term obligations of a firm can be met only when there are sufficient liquid assets. •

Current ratio

A. CURRENT RATIO: Appa Institute of Engineering &Technology P. G. Department of Management Studies,

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Current ratio may be defined as the relationship between current assets and current liabilities. This ratio also known as Working capital ratio is a measure of general liquidity and is most widely used to make the analysis of a short-term financial position (or) liquidity of a firm. Formula Current assets


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Current ratio = Current liabilities

2. LEVERAGE RATIOS


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The leverage or solvency ratio refers to the ability of a concern to meet its long term obligations. Accordingly, long term solvency ratios indicate firm’s ability to meet the fixed interest and costs and repayment schedules associated with its long term borrowings. The following ratio serves the purpose of determining the solvency of the concern. •

Proprietary ratio

•

Debt to equity ratio


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•

Current assets to fixed assets

A. PROPRIETARY RATIO A variant to the debt-equity ratio is the proprietary ratio which is also known as equity ratio. This ratio establishes relationship between share holders’ funds to total assets of the firm.


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Formula

Shareholders funds Proprietary ratio = Total assets


BANK OF BARODA

B. DEBT TO EQUITY Indicates how well creditors are protected in case of the company's insolvency. Formula


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Total Debt Total Equity

C. CURRENT ASSETS TO FIXED ASSETS RATIO This ratio differs from industry to industry. The increase in the ratio means that trading is slack or mechanization has been used. A decline in the ratio means that debtors and


BANK OF BARODA

stocks are increased too much or fixed assets are more intensively used. If current assets increase with the corresponding increase in profit, it will show that the business is expanding. Formula Current Assets Current Assets to Fixed Assets Ratio =


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Fixed Assets


BANK OF BARODA

3. PROFITABILITY RATIOS The primary objectives of business undertaking are to earn profits. Because profit is the engine, that drives the business enterprise •

Return on total asset


BANK OF BARODA

•

Return on equity

•

Reserves and surplus to capital ratio

•

Return on net worth

A. RETURN ON TOTAL ASSETS


BANK OF BARODA

Profitability can be measured in terms of relationship between net profit and assets. This ratio is also known as profit-to-assets ratio. It measures the profitability of investments. The overall profitability can be known. Formula Net profit Return on assets = Total assets


BANK OF BARODA

B. RETURN ON EQUITY Measures the income earned on the shareholder's investment in the business. Formula Net Income Equity


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C. RESERVES AND SURPLUS TO CAPITAL RATIO It reveals the policy pursued by the company with regard to growth shares. A very high ratio indicates a conservative dividend policy and increased ploughing back to profit. Higher the ratio better will be the position.


BANK OF BARODA

Formula Reserves& surplus Reserves & surplus to capital = Capital

D. RETURN ON NET WORTH


BANK OF BARODA

This volume ratio indicates how many return dollars are generated with each dollar of investment (net worth).

Formula Net profit Return on net worth = Net worth


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4. MARKET SHARE Market Value Ratios relate an observable market value, the stock price, to book values obtained from the firm's financial statements. •

Earning per share

•

Dividend per share


BANK OF BARODA

•

Price-earning ratio

A. EARNINGS PER SHARE Earnings per share ratio are used to find out the return that the shareholder’s earn from their shares. After charging depreciation and after payment of tax, the remaining amount will be distributed by all the shareholders.


BANK OF BARODA

Formula Net profit after tax Earnings per share = Number of Equity shares

B.DIVIDEND PER SHARE Dividend per share is calculated by dividing dividend and number of equity shares. Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Formula Total amount of Dividend Dividend per share = Number of outstanding shares


BANK OF BARODA

C. PRICE / EARNING RATIO

The Price-Earnings Ratio is calculated by dividing the current market price per share of the stock by earnings per share (EPS). (Earnings per share are calculated by dividing net Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

income by the number of shares outstanding.) The P/E Ratio indicates how much investors are willing to pay per dollar of current earnings. As such, high P/E Ratios are associated with growth stocks.

Formula Market Price per Share Price / Earning Ratio = Appa Institute of Engineering &Technology P. G. Department of Management Studies,

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Earning Per Shares


BANK OF BARODA


BANK OF BARODA

Common Size Analysis (Vertical and Horizontal): 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. Financial statement information is used by both external and internal users, including investors, creditors, managers, and executives. These users must analyze the information in order to Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

make business decisions, so understanding financial statements is of great importance. Several methods of performing financial statement analysis exist. I will discuss two of these methods: horizontal analysis and vertical analysis.

Horizontal Analysis Methods of financial statement analysis generally involve comparing certain information. The horizontal analysis compares specific items over a number of accounting periods. Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

For example, accounts payable may be compared over a period of months within a fiscal year, or revenue may be compared over a period of several years. It is a procedure in fundamental analysis in which an analyst compares ratios or line items in a company's financial statements over a certain period of time. The analyst will use his or her discretion when choosing a particular timeline; however, the decision is often based on the investing time horizon under consideration.


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VERTICAL ANALYSIS It is a method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities and equities) in a balance sheet is


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represented as a proportion of the total account. The main advantages of analyzing a balance sheet in this manner are that the balance sheets of businesses of all sizes can easily be compared. It also makes it easy to see relative annual changes in one business. When using vertical analysis, the analyst calculates each item on a single financial statement as a percentage of a total. The term vertical analysis applies because each year's figures are listed vertically on a financial statement. The total used by the analyst on the income statement is net sales revenue, while on the balance sheet it is total assets. This approach to financial statement analysis, also known Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

as component percentages, produces common-size financial statements. Common-size balance sheets and income statements can be more easily compared, whether across the years for a single company or across different companies.


BANK OF BARODA


BANK OF BARODA

1. LIQUIDITY RATIOS CURRENT RATIO: Formula Current assets


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Current ratio = Current liabilities

2.1 TABLE SHOWING CURRENT RATIO OF THE BANK (Rs. In 000)


BANK OF BARODA

YEAR

CURRENT ASSET

CURRENT LIABLITIES

2006

39911639

70839004

0.56

2007

52125045

84376961

0.61

2008

43018295

125944142

0.34


RATIO

BANK OF BARODA

2009

45781172

165381466


0.27

BANK OF BARODA

2.1 GRAPH SHOWING CURRENT RATIO OF THE BANK


BANK OF BARODA

0.7 0.6 0.5 0.4 RATIO

0.3 0.2 0.1 0

2006

2007

2008

2009


BANK OF BARODA

Interpretation: As a rule, the current ratio with 2:1 (or) more is considered as satisfactory position of the firm. But BOB is not maintaining liquidity and it was increased in 2007 and decreasing


BANK OF BARODA

over 2 years. The current ratio in year 2006, 2007, 2008 and 2009 is 0.56, 0.61, 0.34 and 0.27 respectively.

2. LEVERAGE RATIOS Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

PROPRIETARY RATIO: Formula Shareholders funds Proprietary ratio = Total assets


BANK OF BARODA

2.2 TABLE SHOWING PROPRIETARY RATIO OF THE BANK


BANK OF BARODA

(Rs. In 000) YEAR

SHAREHOLDERS TOTAL ASSET FUND

RATIO

2006

78444346

1133925273

0.069

2007

86499376

1431461746

0.060

2008

110439268

1795995162

0.061

Appa Institute of Engineering &Technology P. G. Department of Management Studies, 2009 128355412 2274067254

0.056

BANK OF BARODA

2.2 GRAPH SHOWING PROPRIETARY RATIO OF THE BANK


BANK OF BARODA

0.07 0.06 0.05 0.04 RATIO

0.03 0.02 0.01 0

2006

2007

2008

2009


BANK OF BARODA

Interpretation: It determines the long-term solvency of the firm. This ratio indicates the extent to which the assets of the company can be lost without affecting the interest of the company.


BANK OF BARODA

The proprietary ratio decreases from 0.069 to 0.056 in the year 2009. The shareholders fund increases over the five years, this shows that there is increase the profitable of the bank.

DEBT TO EQUITY: Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Formula Total debt Debt to equity = Total Equity

2.3 TABLE SHOWING DEBT EQUITY RATIO OF THE BANK Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

(Rs. In 000) YEAR

TOTAL DEBT

TOTAL EQUITY

RATIO

2006

48022007

78444346

0.61

2007

11425614

86499376

0.13


BANK OF BARODA

2008

39270480

110439268

0.35

2009

56360859

128355412

0.44


BANK OF BARODA

2.3 GRAPH SHOWING DEBT EQUITY RATIO OF THE BANK


BANK OF BARODA

0.7 0.6 0.5 0.4 RATIO

0.3 0.2 0.1 0

2006

2007

2008

2009


BANK OF BARODA

Interpretation: Debt-equity ratio in the year 2006 was 0.61 and it had decreased to 0.13 in the year 2007 and increased in next 2 years.


BANK OF BARODA

CURRENT ASSETS TO FIXED ASSETS RATIO: Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Formula

Current Assets Current Assets to Fixed Assets Ratio = Fixed Assets


BANK OF BARODA

2.4 TABLE SHOWING CURRENT ASSETS TO FIXED ASSETS RATIO OF THE BANK (Rs. In 000) YEAR

2006

CURRENT ASSET

FIXED ASSETS

39911639

9207269


RATIO

4.33

BANK OF BARODA

2007

52125045

10888075

4.79

2008

43018295

24270081

1.77

2009

45781172

23097193

1.98


BANK OF BARODA

2.4 GRAPH SHOWING CURRENT ASSETS TO FIXED ASSETS RATIO OF THE BANK


BANK OF BARODA

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

RATIO

2006

2007

2008

2009


BANK OF BARODA

Interpretation: The current asset to fixed asset ratio of the bank was decreasing as fixed assets are more intensively used in the bank. The ratio in year 2006 was 4.33 which increased to 4.79 in


BANK OF BARODA

the year 2007 and decreased to 1.77 in year 2008 and later increased to 1.98 in the year 2009.

3. PROFITABILITY RATIOS RETURN ON TOTAL ASSETS:


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. Formula Net profit Return on assets = Total assets

2.5 TABLE SHOWING RETURN ON ASSET RATIO OF THE BANK


BANK OF BARODA

(Rs. In 000) YEAR

NET PROFIT

TOTAL ASSET

RATIO

2006

8269597

1133925273

0.73

2007

10264645

1431461746

0.72


BANK OF BARODA

2008

14355215

1795995162

0.80

2009

22272018

2274067254

0.98


BANK OF BARODA

2.5 GRAPH SHOWING RETURN ON ASSET RATIO OF THE BANK


BANK OF BARODA

1 0.9 0.8 0.7 0.6 0.5 0.4

RATIO

0.3 0.2 0.1 0

Appa Institute of Engineering &Technology 2006 2007 2008 2009 P. G. Department of Management Studies,

BANK OF BARODA

Interpretation: The ratio indicates the return on total assets in the form of profits. The return of total asset in the year 2006 was 0.73; in 2007 0.72; in 2008 0.80 and in 2009 it increased to 0.98 this shows the increase in profit of the bank.


BANK OF BARODA

RETURN ON EQUITY: Formula Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Net income Return on Equity = Equity

2.6 TABLE SHOWING RETURN ON EQUTY RATIO OF THE BANK (Rs. In 000)


BANK OF BARODA

YEAR

NET INCOME

EQUITY

RATIO

2006

8269597

78444346

10.54

2007

10264645

86499376

12.00

2008

14355215

110439268

13.00


BANK OF BARODA

2009

22272018

128355412


17.00

BANK OF BARODA

2.6 GRAPH SHOWING RETURN ON EQUTY RATIO OF THE BANK


BANK OF BARODA

18 16 14 12 10 8 6 4 2 0

2006 2008 &Technology 2009 Appa Institute of2007 Engineering P. G. Department of Management Studies,

RATIO

BANK OF BARODA

Interpretation: The bank equity ratio recorded are 10.54, 12.00, 13.00 and 17.00 in the year 2006, 2007, 2008, 2009 respectively this shows continuously increase in the equity ratio of the bank which measures the net income.


BANK OF BARODA

RESERVES AND SURPLUS TO CAPITAL RATIO: Formula Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Reserves& surplus Reserves & surplus to capital = Capital

2.7 TABLE SHOWING RESERVES AND SURPLUS TO CAPITAL RATIO OF THE BANK


BANK OF BARODA

(Rs. In 000) YEAR

RESERVES AND SURPLUS

CAPITAL

RATIO

2006

74789072

3655274

20.46

2007

82844100

3655277

22.66


BANK OF BARODA

2008

106783991

3655277

29.21

2009

124700135

3655277

34.11


BANK OF BARODA

2.7 GRAPH SHOWING RESERVES AND SURPLUS TO CAPITAL RATIO OF THE BANK


BANK OF BARODA

35 30 25 20 RATIO

15 10 5 0

2006

2007

2008

2009


BANK OF BARODA

Interpretation: The ratio is used to reveal the policy pursued by the company a very high ratio indicates a conservative dividend policy and vice-versa. Higher the ratio better will be the position. The ratio of the bank was increasing over year; the ratios are 20.46, 22.66, 29.21 and 34.11 in the year 2006, 2007, 2008 and 2009 respectively. Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

RETURN ON NET WORTH:


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Formula Net profit Return on net worth = Net worth

2.8 TABLE SHOWING RETURN ON NET WORTH OF THE BANK


BANK OF BARODA

(Rs. In 000) YEAR

NET INCOME

NET WORTH

RATIO

2006

8269597

78444400

10.54

2007

10264645

86499400

11.86


BANK OF BARODA

2008

14355215

110439300

12.99

2009

22272018

128355400

17.35


BANK OF BARODA

2.8 TABLE SHOWING RETURN ON NET WORTH OF THE BANK


BANK OF BARODA

18 16 14 12 10 8 6 4 2 0

RATIO

2006

2007

2008

2009


BANK OF BARODA

Interpretation: The return on net worth were increasing year by year in the year 2006, 2007, 2008, and 2009 the ratios were 10.54, 11.86, 12.99 and 17.35.


BANK OF BARODA


BANK OF BARODA

4. MARKET SHARE: EARNINGS PER SHARE: Formula Net profit after tax Earnings per share = Number of Equity shares Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

2.9 TABLE SHOWING EARNING PER SHARE RATIO OF THE BANK (Rs. In 000) YEAR

NET PROFIT AFTER TAX

NUMBER OF EQUITY SHARES


RATIO

BANK OF BARODA

2006

8269597

365527.4

22.62

2007

10264645

365527.6

28.08

2008

14355215

365527.7

39.27

2009

22272018

365527.7

61.00


BANK OF BARODA

2.9 GRAPH SHOWING EARNING PER SHARE RATIO OF THE BANK


BANK OF BARODA

70 60 50 40 RATIO

30 20 10 0

2006

2007

2008

2009


BANK OF BARODA

Interpretation: The earning per share of the bank recorded are 22.62, 28.28, 39.27 and 61.00 in the year 2006, 2007, 2008 and 2009 respectively this shows the continuous increase in the earning per share of the bank. Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

DIVIDEND PER SHARE: Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Formula Total amount of Dividend Dividend per share = Number of outstanding shares


BANK OF BARODA

2.10 TABLE SHOWING DIVIDEND PER SHARE RATIO OF THE BANK (Rs. In 000) YEAR

TOTAL AMOUNT OF DIVIDEND

NUMBER OF OUTSTANDING SHARES


RATIO

BANK OF BARODA

2006

2076769

365527.4

6.00

2007

2524584

365527.6

7.00

2008

3409388

365527.7

9.00

2009

3835563

365527.7

10.00


BANK OF BARODA

2.10 GRAPH SHOWING DIVIDEND PER SHARE RATIOOF THE BANK


BANK OF BARODA


BANK OF BARODA

10 9 8 7 6 5 4 3 2 1 0

RATIO

2006

2007

2008

2009


BANK OF BARODA

Interpretation: The dividend per share of the bank recorded are 6, 7, 9 and 10 in the year 2006, 2007, 2008 and 2009 which was increasing, this shows the dividend per share paid by the bank.


BANK OF BARODA

PRICE / EARNING RATIO: Formula Market Price per Share Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

Price / Earning Ratio = Earning Per Shares

2.11 TABLE SHOWING PRICE / EARNING RATIO OF THE BANK (Rs. In 000)


BANK OF BARODA

YEAR

MARKET PRICE PER SHARE

EARNING PER SHARE

RATIO

2006

214.61

22.62

9.49

2007

236.64

28.08

8.43


BANK OF BARODA

2008

302.14

39.27

7.69

2009

351.15

61

5.76


BANK OF BARODA

2.11 GRAPH SHOWING PRICE / EARNING RATIO OF THE BANK


BANK OF BARODA

10 9 8 7 6 5 RATIO 4 3 2 1 0 Appa Institute of Engineering &Technology 2006 2007 2008 2009 P. G. Department of Management Studies,

BANK OF BARODA

Interpretation: The market price per share is increased due to the increase in the reserves & surplus. The earnings per share are also increased greatly compared with the last year because of increase in the net profit. So, the ratio is decreased compared with the previous year.


BANK OF BARODA

It was 9.49 in year 2006 and decreased to 5.76 in 2009.

2.12 HORIZONTAL ANALYSES OF BALANCE SHEET


BANK OF BARODA

2006 particulars

2007

2008

2009

amoun t

%

amoun t

%

amoun t

%

amoun t

%

Cash & balance with RBI Balance with Bank, money at call Investment

33.33

10 0

64.13

192.4 1

93.69

281.1 0

105.96

317.91

101.21

10 0

118.66

117.2 4

129.29

127.4 7

134.90

133.29

351.14

349.43

99.51

438.70

149.36

599.11

836.20

Fixed assets

9.20

Other assets

39.91

139.5 4 118.2 6 130.5 9

TOTAL

1133.92

124.9 4 1067.01 178.1 0 24.27 263.8 0 43.01 107.7 7 1795.99

524.45

Advance

10 0 10 0 10 0 10 0

ASSETS

10.88 52.12 1431.46

1439.85 241.33 23.09

250.98

45.78

114.71

2274.06

LIABILITIES Capital

3.65

10 3.65 100 3.65 0 Reserve and 74.78 10 82.84 110.7 106.78 surplus 0 8 Deposits 936.61 10 1249.15 133.3 1520.34 0 7 Borrowings 48.02 10 11.42 &Technology 23.78 39.27 Appa Institute of Engineering P. G. Department of 0Management Studies, Other liabilities 70.83 10 84.37 119.1 125.94 0 2 TOTAL 1133.92 1431.46 1795.99

100

3.65

100

142.7 9 162.3 2 81.78

124.70

166.75

56.36

117.37

177.8 1

165.38

233.49

1923.96 205.42

2274.06

BANK OF BARODA

2.13 VERTICAL ANALYSES OF BALANCE SHEET


BANK OF BARODA

2006 particulars

2007

2008

2009

amoun t

%

amoun t

%

amoun t

%

amoun t

%


33.33

2.9

64.13

4.4

93.69

5.2

105.96

4.6

101.21

8.4

118.66

8.2

129.29

7.1

134.90

5.9

351.14

30.9

349.43

438.70

24.4

524.45

23.06

Advance

599.11

836.20

Fixed assets

9.20

52.8 3 0.64

Other assets

39.91

4.5

52.12

24. 4 58. 4 0.7 6 3.6

TOTAL

1133.92

ASSETS

10.88

1431.46

1067.01 59.4

1439.85 63.33

24.27

1.3

23.09

1.01

43.01

2.3

45.78

2.01

1795.99

2274.06

LIABILITIES Capital

3.65

0.32

3.65

Reserve and surplus Deposits

74.78

6.5

82.84

936.61

82.5

0.2 5 5.7

3.65

0.20

3.65

0.16

106.78

5.9

124.70

5.4

84.4 6 2.1

1923.96 84.60 56.36

2.4

7.0

165.38

7.2

1249.15 87. 1520.34 2 Borrowings 48.02 4.2 11.42 &Technology 0.8 39.27 Appa Institute of Engineering P. G. Department of Management0 Studies, Other 70.83 6.2 84.37 5.8 125.94 liabilities TOTAL 1133.92 1431.46 1795.99

2274.06

BANK OF BARODA

2.14 COMPARATIVE BALANCE SHEET


BANK OF BARODA

particulars

Amount 2006

2007

difference

%


33.33

64.13

30.8

92.41

101.21

118.66

17.45

17.24

351.14

349.43

-1.71

-0.49

Advance

599.11

836.20

237.09

39.57

Fixed assets

9.20

10.88

1.68

18.26

Other assets

39.91

52.12

12.21

30.59

TOTAL

1133.92

1431.46

Capital

3.65

3.65

0.00

0.00

Reserve and surplus

74.78

82.84

8.06

10.78

ASSETS

LIABILITIES

Deposits 936.61 1249.15 312.54 Appa Institute of Engineering &Technology Borrowings 48.02 11.42 -36.6 P. G. Department of Management Studies, Other liabilities 70.83 84.37 13.54 TOTAL

1133.92

1431.46

33.37 -76.22 19.17

BANK OF BARODA

2.15 COMPARATIVE BALANCE SHEET


BANK OF BARODA

particulars

Amount 2008

2009

difference

%


93.69

105.96

12.27

13.10

129.29

134.90

5.61

4.34

438.70

524.45

85.75

19.55

Advance

1067.01

1439.85

372.84

34.94

Fixed assets

24.27

23.09

-1.18

-4.86

Other assets

43.01

45.78

2.77

6.44

TOTAL

1795.99

2274.06

Capital

3.65

3.65

0.00

0.00

Reserve and surplus

106.78

124.70

17.92

16.78

Deposits

1520.34

1923.96

403.62

26.55

ASSETS

LIABILITIES

AppaBorrowings Institute of Engineering &Technology 39.27 56.36 17.09 P. G. Department of Management Studies, Other liabilities 125.94 165.38 39.44 TOTAL

1795.99

2274.06

43.52 31.32

BANK OF BARODA

FINDINGS OF THE STUDY 1. The current ratio has shown in a fluctuating trend as 0.56, 0.61, 0.34, and 0.27 during 2006-2009 of which indicates a continuous increase in both current assets and current liabilities.


BANK OF BARODA

2. The proprietary ratio has shown a fluctuating trend. The proprietary ratio is decreased compared with the last year. So, the long term solvency of the firm is decreased. 3. Debt-equity ratio in the year 2006 was 61.22 and it had decreased to 13.22 in the year 2007 and increased in next 2 years. 4. The current asset to fixed asset ratio of the bank is decreasing as fixed assets are more intensively used in the bank. The ratio in year 2006 was 4.33 which increased to 4.79 in Appa Institute of Engineering &Technology P. G. Department of Management Studies,

BANK OF BARODA

the year 2007 and decreased to 1.77 in year 2008 and later increased to 1.98 in the year 2009. 5. The return of total asset in the year 2006 was 0.73; in 2007-0.72; in 2008-0.80 and in 2009 it has been increased to 0.98 this shows the increase in profit of the bank.


BANK OF BARODA

6. The bank equity ratio recorded are 10.54, 12.00, 13.00 and 17.00 in the year 2006, 2007, 2008, 2009 respectively this shows continuously increase in the equity ratio of the bank which measures the net income. 7. The reserve and surplus ratio of the bank has been increasing over year; the ratios are 20.46, 22.66, 29.21 and 34.11 in the year 2006, 2007, 2008 and 2009 respectively.


BANK OF BARODA

8. The return on net worth were increasing year by year in the year 2006, 2007, 2008, and 2009 the ratios were 10.54, 11.86, 12.99 and 17.35. 9. The earning per share of the bank recorded are 22.62, 28.28, 39.27 and 61.00 in the year 2006, 2007, 2008 and 2009 respectively this shows the continuous increase in the earning per share of the bank.


BANK OF BARODA

10. The dividend per share of the bank recorded are 6, 7, 9 and 10 in the year 2006, 2007, 2008 and 2009 which has been increasing, this shows the dividend per share paid by the bank. 11. The price / earning ratio is decreased compared with the previous year. It was 9.49 in year 2006 and decreased to 5.76 in 2009.


BANK OF BARODA


BANK OF BARODA

SUGGESTIONS: 1) After the analysis of Financial Statements, the company status is in better position.


BANK OF BARODA

2) The company profits are huge in the current year; it is better to declare the dividend to shareholders. 3) The company is utilizing the fixed assets, which majorly help to the growth of the organization. The company should maintain that perfectly. 4) The company fixed deposits are raised from the inception, it gives the other income i.e., Interest on fixed deposits.


BANK OF BARODA


BANK OF BARODA


BANK OF BARODA

CONCLUSION The company’s overall position is at a good position. Particularly the current year’s position is well due to raise in the profit level from the last year position. It is better for the organization to diversify the funds to different sectors in the present market scenario.


BANK OF BARODA


BANK OF BARODA


BANK OF BARODA


BANK OF BARODA

BIBLIOGRAPHY REFFERED BOOKS · FINANCIAL MANAGEMENT - I. M. PANDEY · MANAGEMENT ACCOUNTANCY - PILLAI & BAGAVATI · MANAGEMENT ACCOUNTING – SHARMA & GUPTA


BANK OF BARODA


BANK OF BARODA


BANK OF BARODA


BANK OF BARODA


MBA Finance project

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