PROJECT REPORT

ON
FINANCIAL ANALYSIS OF CENTRAL BANK OF INDIA

SUBMITTED TO:
GURU GOBIND SINGH INDRAPASTH UNIVERSITY
In partial fulfilment of the requirement
For the award of the degree of
BACHELORS OF BUSINESS ADMINISTRATION
2012-2015

SUBMITTED TO

SUBMITTED BY

MS DEEPTI GAUR

ABHISHEK CHAWLA
Enrolment No:

NEW DELHI INSTITUTE OF MANAGEMENT

TUGHLAKABAD INDUSTRIAL AREA
NEW DELHI-110062
61, Tughalkabad, New Delhi-110062

ACKNOWLEDGEMENT

The present work is an effort throws some light on Financial Analysis of CENTRAL
BANK OF INDIA. The work would not have been possible to come to the present shape
without the able guidance, supervision and help to me by number of people.

With deep sense of gratitude I acknowledge the encouragement and guidance receive by
DEEPTI GAUR (Faculty Guide)
I convey my affection to all those people who helped and supported me during the course, for
completion of my Project Report.

ABHISHEK CHAWLA
BBA (3TH sem)

CERTIFICATE

This is to certify that ABHISHEK CHAWLA has successfully completed the research
Project titled Financial Analysis of CENTRAL BANK OF INDIA as the partial
fulfilment of the requirement for the award degree of Bachelor of

Business Administration

(BBA) by Guru Gobind Singh Indraprastha University, during batch 2014-2017.

To best of my knowledge the report is original and has not been copied or submitted
anywhere else. It is an independent work done by him.

DEEPTI GAUR
(Faculty Guide)

TABLE OF CONTENTS
S.No.

CONTENTS

PAGE NO.

COVER PAGE

ACKNOWLEDGEMENT

CERTIFICATE

INTRODUCTION TO THE STUDY

1.1

BRIEF OVERVIEW OF STUDY

1.2

OBJECTIVES OF THE STUDY

1.3

SCOPE OF THE STUDY

1.4

LIMITATIONS OF THE STUDY

RESEARCH METHODOLOGY

2
2.1

STATEMENT RESEARCH

2.2

DATA COLLECTION

10
10

2.3

PRESENTATION TOOLS USED

2.4

RESEARCH TOOLS USED

11
11

INDUSTRY OVERVIEW

12

3.1

PAST, PRESENT AND FUTURE TRENDS

13-14

3.2

MAJOR PLAYERS AND THEIR RESPECTIVE

MARKET SHARE

1517

COMPANY PROFILE

18

4.1

HISTORY

4.2

VISION, MISSION AND OBJECTIVES OF THE

COMPANY

19

4.3

ORGANIZATIONAL STRUCTURE

20

4.4
4.5

19

PRODUCTS AND SERVICES OFFERED

MARKETING STRATEGY FOR CUSTOMERS
4

21-22
2

3-24
5
6
6.1

THEORETICAL PERSPECTIVE
FINDINGS AND ANALYSIS
GENERAL FINDINGS

25-28

29
30-60

CONCLUSION AND
RECOMMENDATIONS

61

7.1

SUGGETIONS

62

7.2

CONCLUTION

63

BIBLOGRAPHY

64

COMPARITIVE BALANCE SHEETS

65-72

CHAPTER-1
INTRODUCTION TO THE STUDY

1.1 BRIEF OVERVIEW OF THE STUDY

A financial ratio is a relative magnitude of two selected numerical values taken from an
enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to
evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used
by managers within a firm, by current and potential shareholders (owners) of a firm, and by a
firm's creditors. Financial analysts use financial ratios to compare the strengths and weaknesses in
various banks.

1.2 OBJECTIVES OF THE STUDY

This study is mainly focused to examine the overall financial viability of CENTRAL BANK OF INDIA as
stated below:

To study the financial position of CENTRAL BANK OF INDIA.

To study the periodic changes in the financial performance of CENTRAL BANK OF INDIA by
preparing Comparative balance sheet
To find out the financial strengths and weaknesses of the company.
To study the overall operating efficiency and performance of the company.
The study is conducted to evaluate the returns to the company.

1.3 SCOPE OF THE STUDY

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

It is beneficial to the top management of the banks by providing crystal-clear picture regarding to the

important financial aspects of CENTRAL BANK OF INDIA.

The study is beneficial to Employees and offer motivation by showing how actively they are

contributing for the banks growth.

The investors who are interested in investing in the banks shares will also get benefit by
going through the study and can easily take a decision whether to invest in the banks shares.

1.4 LIMITATIONS OF THE STUDY

The information used is primarily from historical reports available to the public and the same doesnt

indicate the current situation of the firm.

Detailed analysis could not be carried for the project work because of limited time span.
Since financial matters are sensitive in nature the same could not be acquired easily.
If there is anything wrong in the balance sheet (data provided), then the ratios calculated can also be
wrong.

CHAPTER-2
RESEARCH METHODOLOGY

2.1 STATEMENT RESEARCH

9

This project Financial Analysisis based on the information collected from the annual reports and balance
sheets of the company.
According to Kennedy and Muller
The

analysis

and

interpretation

of

financial

statements

reveal

each

and

every

aspect

regarding the well being financial soundness, operational efficiency and credit worthiness of the company.

2.2 DATA COLLECTION

PRIMARY DATA:
Primary data are those, which are collected are fresh and for the first time, and thus happen to be original in
character. Primary Data has been collected by conducting surveys through Questionnaire, which include
both open ended and close-ended Questions.

SECONDARY DATA:
Secondary data have been the sources of data. The major source of secondary data was annual report of
central bank of India for years 2012-13, 2013-14 and 2014-2015 from of the comparative balance sheet of
the company.
These are sources containing data which have been collected and compiled of or another purpose. The
secondary sources consists of readily available compendia and already compiled statistical statements and
reports whose data

may

be

used

by

researches for their studies, e.g.,

census reports,

annual

reports and financial statements of companies, statistical statements, reports of government departments,
annual reports on currency and finance published by the reserve bank of India.

10

2.3 PRESENTATION TOOLS USED:

The following are some tools to analyses the financial Performance of the company:
1. Bar graphs

2.4 RESEARCH TOOLS USED:

1. Ratio Analysis
2. Comparative balance sheet

11

CHAPTER -3
INDUSTRY OVERVIEW

12

3.1 Past, Present, Future Trends

The Indian banking industry is a key driving force of the Indian economy and the most dominant segment
of the financial sector. Banks in India are classified into commercial banks comprising: 1) scheduled
commercial banks (SCBs) and non-scheduled commercial banks; and 2) co-operative credit institutions that
include various co-operative banks. SCBs are further classified into public sector banks (PSBs), private
banks, foreign banks and regional rural banks (RRBs).
Financial sector reforms since the early 1990s have resulted in a competitive, healthy and resilient banking
system. Looking back over the past 20 years, there have been massive changes in the banking sector, which
have completely changed the nature of intermediation, the range of products and services available and the
intensity of competition. This has been in sync with the overall development of the economy.
India has grown significantly from a ` 5.15 trillion economy in 1991 to ` 73.1 trillion in FY11 (a CAGR of
14.2%). Aggregate deposits of SCBs have grown at a CAGR of 17.9% during 1991-2011 to ` 52.1 trillion in
FY11. Bank lending is a significant driver of the economy and has grown at a CAGR of 19.3% during
1991- 2011 to ` 39.4 trillion. Deposits/GDP rose from 37.4% in 1991 to 71.3% in 2011. Similarly, bank
credit/GDP has grown from 22.6% in 1991 to 53.9% in FY11. Bank credit to commercial sector increased
from 30.3% of GDP in 1990 to 57.6% in 2011. Bank offices in India have grown at a CAGR of 2% during
1991-2010 to 87,768 bank offices in 2010 from 60,220 offices in 1991.
The average population coverage by a commercial bank branch in urban areas improved from 12,300 as on
Jun 30, 2005 to 9,400 as on Jun 30, 2010 and in rural and semi urbanareas from 17,200 as on Jun 30, 2005
to 15,900 as on Jun 30, 2010. The all India weighted average improved from 15,500 to 13,400.

13

Though, the Indian banking system has made impressive strides in resource mobilization, geographical and
functional reach, financial viability, profitability and competitiveness; vast segments of the population,
especially the underprivileged sections of the society, have still no access to formal banking services.
With regard to financial access and penetration, India ranks low when compared with the OECD countries.
India offered 6.33 branches per 100,000 persons whereas OECD countries provided for 23-45 branches per
100,000 people in 2009. For India, the number of branches and ATMs per 100,000 persons has increased to
7.13 and 5.07 in 2010.

14

3.2

Major players and their respective market share

Nationalized Banks

There are 14 nationalized banks in India, but some major are:

State Bank of India

Central Bank of India

Vijaya Bank

P.N.B

Dena bank

Union Bank of India

Allahabad Bank

P & S Bank

Co-operative Banks
Private Ltd. Banks
-

HDFC Bank

ICICI Bank

The banking system, largely, comprises of scheduled banks (banks that are listed under the Second Schedule
of the RBI Act, 1934). Unscheduled banks form a very small component (function in the form of Local Area
Bank). Scheduled banks are further classified into commercial and cooperative banks, with the basic
difference in their holding pattern. Cooperative banks are cooperative credit institutions that are registered
under the Cooperative Societies Act and work according to the cooperative principles of mutual assistance.

15

FIGURE 3.2 : MAJOR SHAREHOLDERS AND PLAYERS

The share of nationalised banks in aggregate deposits mobilised by the commercial banks dipped marginally
to 52.3% as of end June'12, down from 52.7%, in the year ago period, data from Reserve Bank of India
showed. State Bank and its associates improved their share marginally to 22.2% from 22.1% .
As for credit, both nationalised banks and the State Bank group lost market share marginally to 51.3%
( 51.7%) and 22.2% ( 22.5%) respectively, RBI said in its Quarterly Statistics on Deposits and Credit of
Scheduled Commercial Banks: June 2012.

RBI data said that the share of private sector banks in deposits and credit stood at 18.2% and 18.9%
respectively as of end June'12.
The data in the quarterly statistics also indicates that the top hundred centres, arranged according to the size
of deposits accounted for 68.7 per cent of the total deposits and the top hundred centres arranged according
to the size of bank credit accounted for 78.0 per cent of gross bank credit.
The credit-deposit ratio of all banks as on June 29, 2012 stood at 76.7 per cent. At the bank group level, C-D
ratio of foreign banks was 88.7% , new private sector banks was at 80.9% and SBI and its associates was
76.8 % was higher than the all-India average.

16

FIGURE 3.3 : OVERALL RANKING OF BANKS

FIGURE 3.4 : BOUNTY COUNT

17

CHAPTER 4
COMPANY PROFILE

18

4.1 History
Established in 1911, Central Bank of India was the first Indian commercial bankWhich was wholly owned
and managed by Indians? The establishment of the Bankwas the ultimate realization of the dream of Sir
Sorabji Pochkhanawala, founder ofThe Bank. Sir Pherozesha Mehta was the first Chairman of a truly '
Swadeshi Bank'.In fact, such was the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed
Central Bank of India asthe'property of the nation and the country'sAsset'. He also added that 'Central Bank
of India lives on people's faith and regards Itself as the people's own bank'.Using the past 99 years of history
the Bank has weathered many storms and faced many challenges. The Bank could successfully transform
every threat into business opportunity and excelled over its peers in the Banking industry. Central Bank of
India has approached the Reserve Bank of India (RBI) for permission to open representative offices in five
locations - Singapore, Dubai, Doha, London and Hong Kong. This is the first time the bank is venturing an
independent overseas foray after the Sethia scam in the 1970s forced the bank to close down its London
office. RBI had then asked the other two banks, who had operations in London, to close down. As on 31
March 2011, the bank's reserves and surplus stood at 6,868.85 crore. Its total business at the end of the last
fiscal amounted to 2, 09, 757.33 crore. The bank had a staff strength of 37,241 as on Nov 2006.

4.2 Vision, Mission and objectives of the company

During the past 102 years of history the Bank has weathered many storms and faced many challenges.
The Bank could successfully transform every threat into business opportunity and excelled over its
Peers in the Banking industry.

4.2.1 Corporate Vision

19

To emerge as a strong, vibrant and pro-active Bank/Financial Super Market and to positively contribute to
the emerging needs of the economy through consistent harmonization of human, financial and technological
resources and effective risk control systems.

4.2.2 CORPORATE MISSION

To transform the customer banking experience into a fruitful and enjoyable one.

To leverage technology for efficient and effective delivery of all banking services.

To have bouquet of product and services tailor-made to meet customers aspirations.

The pan-India spread of branches across all the state of the country will be utilized to further the socio
economic objective of the Government of India with emphasis on Financial Inclusion.

4.2.3 OBJECTIVES OF THE COMPANY

To know the factors which influence a customer t select a particular institution for home loan.

To know the satisfaction level of customer regarding home loan policy of bank.

To know the problems faced by respondents while getting housing finance.

4.3 Organizational structure/Management hierarchy

20

FIGURE 4.3 : ORGANISATIONAL STRUCTURE

4.4 Products and services offered

21

A number of innovative and unique banking activities have been launched by Central Bank of India and a
brief mention of some of its pioneering services are as under:
1921 Introduction to the Home Savings Safe Deposit Scheme to build
saving/thrift habits in all sections of the society.
1924 An Exclusive Ladies Department to cater to the Bank's women clientele.
1926 Safe Deposit Locker facility and Rupee Travellers' Cheques.
1929 Setting up of the Executor and Trustee Department.
1932 Deposit Insurance Benefit Scheme.
1962 Recurring Deposit Scheme.

Subsequently, even after the nationalization of the Bank in the year 1969, Central Bank continued to
introduce a number of innovative banking services as under:
1976 The Merchant Banking Cell was established.
1980 Central card, the credit card of the Bank was introduced.
1986 'Platinum Jubilee Money Back Deposit Scheme' was launched.
1989 The housing subsidiary Cent Bank Home Finance Ltd. was started with
its headquarters at Bhopal in Madhya Pradesh.
1994 Quick Cheque Collection Service (QCC) & Express Service was set up to
enable speedy collection of outstation cheques.

4.5 Marketing strategies for customer satisfaction

Among the Public Sector Banks, Central Bank of India can be truly described as an All India Bank, due to
distribution of its large network in 27 out of 29 States as also in 3 out of 7 Union Territories in India. Central
Bank of India holds a very prominent place among the Public Sector Banks on account of its network
of 4336 Branches, Asset Recovery Branches (ARB) 9, Retail Asset Branches (RAB) 15 and 26
22

extension counters along with satellite branches at various centers throughout the length and breadth of the
country.
Customer satisfaction is one of the formidable challenges in marketing of services in banking industry in our
country. The thrust on customer service has increased after liberalization of Indian economy. Customer
satisfaction is an urgent need of the hour. This can be achieved by efficient customer service and immediate
tactful handling of customers grievances. Better customer-management relationship leads to customer

Satisfaction and a good public image is to win over the customers. Hence, public relations should be one of
the strategies to achieve customer satisfaction. Banking system has a significant role to play in the rapid
growth of the economy. Effectiveness of Banking system depends upon the customers satisfaction and in fact
customer is the kingpin of the banking industry. No industry can afford to ignore its customers and banks are
required to give top priority in providing satisfactory and efficient service to their customers. The purpose of
this paper was to study the actual level of customer satisfaction in four commercial Banks in Jammu and to
make a comparative analysis of the level of customer satisfaction through five point linker scale. Study has
revealed that customers are highly satisfied with the employees and the management of the banks.
Comparative analysis of level of customer satisfaction in four banks shows that employees in the Central
Bank of India are the most satisfied lot. The paper provides an opportunity to the employees of the all the
four banks to understand the requirement of providing prompt and quality service to their customers. Effort
should be made to raise the level of customers satisfaction amongst all the Banks.

Central Bank is a small bank, still its customers are most satisfied i.e. 3.30.

Customers Satisfaction In Central Bank of India

No.of
Catg.-I
customers Attitude
towards Bank

Catg.II
Attitude
towards

Catg.III
Attitude
towards
23

Agerage
Mean Score

Employees

Managemen
t
2.92
3.96
3.04
3.31

B=8
3.18
3.01
3.04
S=6
3.51
3.55
3.67
P=6
3.25
3.28
3.19
Avg,Mea 3.31
3.28
3.30
n Score
*B- Businessmen. S- Service Class. P- Practitioners.

This when compared to actual averages shown by different categories of customers, it becomes clear from
the table under reference that it is higher than those of businessmen responses (3.04) and practitioners (3.9)
but lower than that of service class (3.67).

Above Table further shows that comparing the variable wise position of the bank regarding First variable i.e.
attitude towards Bank, overall average (3.31) is higher than that of businessmen and practitioners (3.25)
while lower than service class.. It clarifies the fact that businessmen and practitioners are more satisfied with
the bank. Same is the position regarding variable attitude towards management i.e. (3.31).

As regards third category i.e. attitude towards management overall mean is lower than that of service class
customers (3.96) and higher than in case of practitioners (3.04) very poor response has been shown by
businessmen as clear from the below average mean score of 2.92 second variable i.e. attitude towards
employees shows lowest mean score of 3.28 which is lower than that of service class customers (3.55) but
higher than that of businessmen (3.01). It is equal to that of practitioners (3.28).

24

CHAPTER 5
THEORETICAL PERSPECTIVE

25

1. RATIO ANALYSIS
Ratio analysis is a powerful tool of financial analysis.
The relationship between two accounting figures, expressed mathematically, is known as a financial ratio (or
simply as a ratio). Ratios help to summaries large quantities of financial and to make Qualitative
judgment about the firms financial performance.
It refers to the systematic use of ratios to interpret the financial statements in terms of the operating
performance and financial position of a firm. It involves comparison for a meaningful interpretation of the
financial statements.

Types of Ratios:
Several ratios, calculated from the accounting data, can be grouped into various classes according to
financial activity or function to be evaluated. In view of the requirements of the various users of ratios, we
may classify them into the following four important categories:

Proprietary ratios
Liquidity Ratios
Profitability ratios
Activity Ratios

Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication of a firm's
financial performance in several key areas. The ratios are categorized as Short-term Solvency Ratios, Debt
Management Ratios, Asset Management Ratios, Profitability Ratios, and Market Value Ratios.
Ratio Analysis as a tool possesses several important features. The data, which are provided by financial
statements, are readily available. The computation of ratios facilitates the comparison of firms which differ
in size. Ratios can be used to compare a firm's financial performance with industry averages. In addition,
ratios can be used in a form of trend analysis to identify areas where performance has improved or
deteriorated over time. Because Ratio Analysis is based upon accounting information, its effectiveness is
limited by the distortions which arise in financial statements due to such things as Historical Cost
Accounting and inflation. Therefore, Ratio Analysis should only be used as a first step in financial analysis,
to obtain a quick indication of a firm's performance and to identify areas which need to be investigated
further.

26

1. Proprietary Ratios:
A strong short-as well as long-term financial position. To judge the long-term financial position of the
firm, proprietary ratios or capital structure ratios are calculated. These ratios indicate mix of
funds provided by owners and lenders. As a general rule, there should be an appropriate mix of debt and
owners` equity in financing the firms assets. The process of magnifying the shareholders` return through
the use of debt is called financial leverage or financial gearing or trading on equity.
The following are some of the proprietary ratios:
1. Debt-Equity Ratio
2. Proprietary Ratio
3. Debt-Equity Ratio (Long-Term)

2. Liquidity Ratios
It is extremely for a firm to be able to meet its obligations as they become due.Liquidity ratios
measure the ability of the firm to meet its current obligations (liabilities). The failure of a company to meet
its obligations due to lack of sufficient liquidity, will result in poor credit worthiness, loss of creditors`
confidence, or even in legal tangles resulting in the closure of the company. A very high degree of liquidity
is also bad; idle assets earn nothing. The firms funds will be unnecessarily tied up in current
assets. Therefore, it is necessary to strike a proper balance between high liquidity and lack of liquidity. The
most common ratios, which indicate the extent of liquidity or lack of it, are:

1. Current Ratio
2. Quick Ratio

27

3. Profitability Ratios:
A company should earn profits to survive and grow over a long period of time. Profits are essential, but it
would be wrong to assume that every action initiated by management of a company should be aimed at
maximizing profits, irrespective of concerns for customers, employees, suppliers or social consequences.
Profit is the difference between revenues and expenses over a period of time (usually one year). Profit is the
ultimate output of a company, and it will have no future if it fails to make sufficient profits. Therefore, the
financial manager should continuously evaluate the efficiency of the company in term of profits.

The profitability ratios recalculated as follows:

1.
2.
3.
4.

Gross profit ratio

Operating profit ratio
Net Profit Ratio
Activity Ratios:

Funds of creditors and owners are invested in various assets to generate sales and profits. The better the
management of assets, the larger the amount of sales.
Activity ratios are employed to evaluate the efficiency with which the firm manages and utilizes its
assets. These ratios are also called turnover ratios. They are:

1. Fixed Assets Turn Over Ratio

2. Total Assets Turn Over Ratio
3. Net Working Capital Turnover Ratio
4. Debtors Turn Over Ratio
5. Inventory Turnover Ratio

COMPARATIVE STATEMENT:

28

Comparative statements are financial statements that cover a different time frame, but are formatted in a
manner that makes comparing line items from one period to those of a different period an easy process.
Many companies make use of standardized formats in accounting functions that make the generation of a
comparative statement quick and easy.

Importance and Uses

The benefits of a comparative statement are varied for a corporation. Because of the uniform format of the
statement, it is a simple process to compare the gross sales of a given product or all products of the company
with the gross sales generated in a previous month, quarter, or year.
Comparing generated revenue from one period to a different period can add another dimension to
analysing the effectiveness of the sales effort, as the process makes it possible to identify trends such
as a drop in revenue in spite of an increase in units sold.
Along with being an excellent way to broaden the understanding of the success of the sales effort, a
comparative statement can also help address changes in production costs

Features of Comparative Statements:

1) A comparative statement adds meaning to the financial data.
2) It is used to effectively measure the conduct of the business activities.
3) Comparative statement analysis is used for intra firm analysis and inters firm analysis.
4) A comparative statement analysis indicates change in amount as well as change in percentage.
5) A positive change in amount and percentage indicates an increase and a negative change in amount and
percentage indicates a decrease

29

ADVANTAGE OF COMPARATIVE STATEMENT

Accountants prepare financial statements at the end of each period. These include the balance sheet, the
income statement and the statement of cash flows. Financial analysts and managers use these financial
statements to analyse the companys activities over the period. Financial statement users incorporate a
variety of tools to analyse the financial results. These include calculating ratios or using comparative
statements. Comparative statements provide several advantages not included in the standard financial
statements.

DISADVANTAGE OF COMPARATIVE STATEMENT:

Accountants prepare financial statements at the end of each period. These include the balance sheet, the
income statement and the statement of cash flows. Financial analysts and managers use these financial
statements to analyse the companys activities over the period. Financial statement users incorporate a
variety of tools to analyse the financial results. These include calculating ratios or using comparative
statements. Comparative statements provide several advantages not included in the standard financial
statement

30

CHAPTER 6
FINDINGS AND ANALYSIS

31

6.1 GENERAL FINDINGS:

DATA ANALYSIS AND INTERPRETATION:

Liquidity Ratios
It is extremely for a firm to be able to meet its obligations as they become due .Liquidity ratios
measure the ability of the firm to meet its current obligations (liabilities). The failure of a company to meet
its obligations due to lack of sufficient liquidity, will result in poor credit worthiness, loss of creditors`
confidence, or even in legal tangles resulting in the closure of the company. A very high degree of liquidity
is also bad; idle assets earn nothing. The firms funds will be unnecessarily tied up in current
assets. Therefore, it is necessary to strike a proper balance between high liquidity and lack of liquidity. The
most common ratios, which indicate the extent of liquidity or lack of it, are:

1. Current Ratio

2. Quick Ratio

32

1. CURRENT RATIO:

Current Ratio = Current Asset

Current Liabilities

YEAR

CURRENT
ASSETS

CURRENT
LIABILITIES

RATIO

1772.19

1558.23

1.14

1838.02

1641.45

1.12

2028.13

1739.24

1.17

201213
201314
201415

Current Ratio
1.18
1.16
1.14
1.12
1.1
1.08

Current Ratio

2012-2013

2013-2014

2014-2015

Interpretation of current ratio:

An increase in the current ratio represents improvement in the liquidity position of the firm, while a decrease
in the current ratio indicates that there has been deterioration in the liquidity position of the firm.
The current ratio 1.14 in the year ending 2012-13 and its 1.12 in the year ending 2014. This is because there
has been appropriately decrease in current assets and increase in current liabilities. Current ratio is
ending 2014-15 is 1.17 which even higher than both previous year. Though current assets have increase
proportionately increase in current liabilities has been more. However this is considered quite cruel as it
doesnt take into account liquidity of each component of current asset, which may be used to meet its current
obligations. It may be observed that the concern has a current ratio much lesser than the standard ratio 1.33:1

33

2. QUICK ASSET RATIO (ACID TEST RATIO)

An indicator of a companys short-term liquidity. The quick ratio measures a companys ability to
meet its short-term obligations with its most liquid assets

QUICK RATIO =

CURRENT ASSETSINVESTORS
CURRENT LIABILITES

OR

QUICK ASSETS
CURRENT LIABILITES

YEAR

QUICK
ASSETS

CURRENT
LIABILITIES

RATIO

2012-13

983.05

1558.2 3

0.63

2013-14

1026.27

1641.45

0.62

2014-15

1288.89

173 9.24

0. 74

Quick Ratio
0.75
0.7

Quick Ratio

0.65
0.6
0.55
2012-2013

2013-2014

Interpretation of the Quick asset

34

2014-2015

The higher the Quick ratio indicates the ability of a firm is liquid and has the ability to meet its current
liabilities in time. The companys quick ratio is almost equal to standard ratio 1:1 in the year 2014-15 i.e
0.74, but in 2012-13 i.e. 0.63 and 2013-14 i.e. 0.62 it is not equal to ideal ratio.

3. DEBT EQUITY RATIO:

The Debt-Equity measures the long term financial solvency of a business concern. This ratio is viewed as
indicating the relative proportion of debt amends equity in financing the assets of the business unit. Debtequity (DE) ratio is directly computed by dividing total debt by net worth:

Debt Equity Ratio =

Total Debt
equity shareholders

YEAR

DEBT

EQUITY

RATIO

2012-13

214.4

615.83

0.35

2013-14

226.97

620.54

0.37

2014-15

182.61

694.06

0.26

Debt Equity Ratio

5
4

Debt Equity Ratio

3
2
1
0
2012-2013

2013-2014

2014-2015

Interpretation of Debt Equity Ratio

If debt equity ratio is high, the owners are putting up relatively less money of their own. It is a danger signal
for the creditors. If the project should fail financially, the creditors would lose heavily. The greater the ratio,
35

the greater the risk to the creditors.The above graph shows a mixed trend during last three years. Though the
proportionate variation during last two previous years was very high it is due to high amount of debt taken.
The result is favourable for the company.

4. PROPRIETARY RATIO:

This is a variant of the debt-to-equity ratio. It is also known as equity ratio or net worth to total assets ratio.
This ratio relates the shareholder's funds to total assets. Proprietary / Equity ratio indicates the long-term or
future solvency position of the business.
Proprietary Ratio = Shareholders funds / Total Assets
or
Proprietary Ratio = Shareholders' equity / Total tangible assets

YEAR

SHAREHOLDERS FUND

TOTLA
ASSETS

RATIO

2012-13

615.83

2388.46

0.26

2013-14

620.54

2488.96

0.25

2014-15

694.54

2615.91

0.26

Proprietary Ratio
0.27
0.26

Proprietary Ratio

0.26
0.25
0.25
2012-2013

2013-2014

2014-2015

Interpretation of Proprietary ratio:

36

Higher the ratio better is the position. From the analysis proprietary ratio was changes in every year, 20122013, 2013-2014 & 2014-2015 were 0.26, 0, 25 & 0.26. Though proprietary ratio decreased in
proportionately increase in total assets has been more. This in dictates the firm quite satisfactory.

5. FIXED ASSETS RATIO:

The firm may wish to know its efficiency of utilizing fixed assets and current assets separately.

Fixed Asset Ratio =

YEAR

Net Sales
Assets

SALES

FIXED
ASSETS

RATIO

2012-13

642.36

813.23

1.29

2013-14

650.29

847.51

1.3

2014-15

580.22

876.67

1.51

Fixed Asset Ratio

1.55
1.5
1.45
1.4
1.35
1.3
1.25
1.2
1.15

Fixed Asset Ratio

2012-2013

2013-2014

2014-2015

37

Interpretation of Fixed Asset Ratio:

The ideal norm of the ratio is 1:1, which means that the long-term funds raised are utilized for the
acquisition of long-term assets of the company .The asset turn ratio is increased over a period of time from
1.29 & 1.30 in 2012 to 2014 and 1.51 in the year 2014-15 respectively. This proves the company is making
utilization of fixed assets.

III. Profitability Ratios:

A company should earn profits to survive and grow over a long period of time. Profits are essential, but it
would be wrong to assume that every action initiated by management of a company should be aimed at
maximizing profits, irrespective of concerns for customers, employees, suppliers or social consequences.
Profit is the difference between revenues and expenses over a period of time (usually one year). Profit is the
ultimate output of a company, and it will have no future if it fails to make sufficient profits. Therefore, the
financial manager should continuously evaluate the efficiency of the company in term of profits.

The profitability ratios recalculated as follows:

5. Gross profit ratio
6. Operating profit ratio
7. Net Profit Ratio

38

6. GROSS PROFIT RATIO:

Gross profit ratio (GP ratio) is a profitability ratio that shows the relationship between gross profit and
total net sales revenue. It is a popular tool to evaluate the operational performance of the business. The ratio
is computed by dividing the gross profit figure by net sales.
Gross Profit Ratio =

Gross Profit
Net Sales

OR

Gross Profit Margin =

YEAR

GROSS
PROFIT

Gross Profit
X 100
Net Sales

SALES

RATIO

2012-13

695.58

3438.12

23.14%

2013-14

670.25

3643.03

18.40%

2014-15

899.54

4268.21

21.07%

39

Gross Profit Ratio

25
20
Gross Profit Ratio

15
10
5
0
2012-2013

2013-2014

2014-2015

Interpretation of Gross profit Ratio:

Higher the ratio, the better the position of the firm is which means that the firm earns grater profits out of the
sales and vice versa. The above graph shows that there is a decreasing trend in the gross profit ratio which
was 23.14% in the year 2012-13 and further decrease 18.40% in the year 2013-14 and increase in 201415 i.e. 21.07% respectively. Higher the ratio is better it is a low ratio indicates unfavourable trends, therefore
the above graph shows the efficiently of the company.

7. NET PROFIT RATIO:

Net profit is obtained when operating expenses, interest and taxes are subtracted from the gross profit. The
ratio establishes a relationship between net profit and sales and indicates managements efficiency in
manufacturing, administrating and selling the products. This ratio is the overall measure of the firms ability
to turn each rupee sales into net profit. If the net margin is inadequate, the firm will fail to achieve
satisfactory return on owners equity.
Net profit ratio =

Net Profit after Tax

Net Sales

YEAR

NET PROFIT

SALES

RATIO

2012-13

154.08

3438.12

4.40%

2013-14

90.21

3643.03

2.48%

2014-15

165.11

4268.21

3.87%

40

Net Profit Ratio

5
4
3
2
1
0

Net Profit Ratio

2012-2013

2013-2014

2014-2015

Inter predation of Net Profit Ratio:

A high net profit ratio indicates that the profitability of the concern is good. On the other hand, a low net
profit ratio indicates that the profitability of the enterprise is poor. But while interpreting the ratio it should
be kept in mind that performance of profits must also be seen in relation to investments or capital of the firm
and not only in relation to sales.
In this case of performance of the Net Profit margin ratio is satisfactory in the year 2012-13 it was 4.4%.
Further decreased compare In the year 2013-14 & 2014-15 that is 2.48% & 3.87% respectively.

8. OPERATING RATIO:

Operating profit is the profit which is earned by the companys core activities. This ratio expresses the
relationship

between

operating

profit

and

sales.

It

is

worked

out

by

dividing operating profit by net sales. With the help of this ratio, one can judge the managerial efficiency
which may not be reflected in the net profit ratio.

Operating ratio =

YEAR

OPERATING
PORFIT

Operating Expenses
Net Sales

SALES
41

RATIO

2012-13

2642.54

3438.12

76.86%

2013-14

2972.78

3643.03

81.60%

2014-15

3368.67

4268.21

78.92%

Operating Ratio
82
80

Operating Ratio

78
76
74
2012-2013

2013-2014

2014-2015

Interpretation of operating Ratio:

Lower the ratio, the more favourable and better the firms position is, which highlights the percentage of
absorption, cost of goods sold and operating expenses out of sales and vice versa. The above graph shows
that there is a variation trend in the operating ratio which was 76.86%, 81.60% & 78.92% in the year 2012 to
2015. Here it clearly shows that lower Ratio, the more favourable i.e. cost of operating expenses was
decreased compare to 2015 and better position of the firm.

9. RETURN ON ASSETS:
The return on assets (ROA) percentage shows how profitable a company's assets are in generating revenue.

YEAR

PROFIT
AFTER TAX

2012-13

154.08

2013-14

90.21

2014-15

165.11

42

AVERAGE
ASSTES

RETURN
ON ASSETS

2388.46

6.45%

1825.1

4.95%

1951.58

8.46%

Return On Assets
10
8
6
4
2
0

Return On Assets

2012-2013

2013-2014

2014-2015

Interpretation of Return on Assets

If the actual ratio is 10% or more, it is an indication of higher productivity of the total resources. On the
other hand, a return of less than 10% is an indication of lower productivity of the resources. The above
calculation indicates a downward trend of return on total resources, which indicates the less proportionate
increasing productivity. This higher percentage helps in optimizing the total assets of the company and the
company has been able to maintain efficient realizable assets in comparison to the production capacity.
Though there is a decreasing trend, but still the ratio compared to others in the same industry is very high
therefore it indicates the higher efficiency of the firm.

4. Activity Ratios:
Funds of creditors and owners are invested in various assets to generate sales and profits. The better the
management of assets, the larger the amount of sales.
Activity ratios are employed to evaluate the efficiency with which the firm manages and utilizes its
assets. These ratios are also called turnover ratios. They are:

1. Total Capital Turnover Ratio

2. Fixed Assets Turnover Ratio
43

3. Net Working Capital Turnover Ratio

4. Debtors Turnover Ratio
5. Inventory Turnover Ratio

10. TOTAL CAPITAL TURNOVER R ATIO:

Calculated by dividing annual sales by average stockholder equity (net worth). The ratio indicates how much
a company could grow its current capital investment level. Low capital turnover generally corresponds to
high profit margins.

Total capital turnover ratio =

YEAR

SALES

Total Sales
Capital Employed

CAPITAL
EMPLOYED

RATIO

2012-13

3438.12

830.23

4.14%

2013-14

3643.03

847 .51

4.30%

2014-15

4268. 21

876.6 7

4.87%

44

Total Capital Turn-over Ratio

5
Total Capital Turn-over
Ratio

4.5
4
3.5
2012-2013

2013-2014

2014-2015

Analysis and interpretation:

The total capita l turnover ratio is 4.14, 4.30 & 4.87 time for the year 2013
2014 & 2015 respectively. The proportionate ratio is increases to 4.14% to 4.87
In these year % this shows the efficiency of capital turn over to generate sales
capital turnover is low, in efficiency utilization of capital turnover

The Management of ABC Co utilizes the fixed assets effectively in generating more years.

11. FIXED ASSETS TURN OVER RATIO:

The firm may wish to know its efficiency of utilizing fixed assets and current assets Separately.

Fixed Asset Ratio =

YEAR

SALES

Net Sales
Assets

FIXED
ASSETS

RATIO

2012-13

3438.12

642.26

5.35%

2013-14

3643.03

650.29

5.60%

2014-15

4268.21 45

587.22

7.26%

Fixed Asset Turn Over Ratio

8
6

Fixed Asset Turn Over Ratio

4
2
0
2012-2013

2013-2014

2014-2015

INTERPRETATION:
This ratio measures the efficiency of the assets use. The efficient use of assets will generate greater sales per
rupee invested in all the assets of a concern. In the year of 2012 to 2015 fixed assets turnover ratio were
5.35, 5.60 & 7.26% respectively. To conclude that the fixed assets measures efficiency of the assets
used properly.

12. WORKING CAPITAL TURNOVER RATIO:

A firm may also like to relate net current assets (or net working capital gap) to sales. It may thus compute
net working capital turnover by dividing sales by net working capital is:
46

Net working capital turnover ratio =

YEAR

SALES

NET WORKING
CAPITAL

RATIO

2012-13

3438.12

213.96

16.06%

2013-14

3643.03

236.96

15.38%

2014-15

4268.21

288.89

14.7 7%

Total Sales
Working Capital

Working Capital Turn Over Ratio

16.5
16
Working Capital Turn Over
Ratio

15.5
15
14.5
14
2012-13

2013-14

2014-15

Analysis and interpretation:

The higher the ratio, the lower is the investment in working capital and the great are the profits. However, a
very high turnover of working capital is a sign of overtrading and may put the concern into financial
difficulties. On the other hand, a low working capital turnover ratio indicates that working capital is not
efficiently utilized.

13. STOCK/INVENTORY TURN OVER RATIO

47

Stock turnover ratio / Inventory turnover ratio indicates the number of time the stock has been turned
over during the period and evaluates the efficiency with which a firm is able to manage its inventory.

Inventory Turnover Ratio =

Cost of Goods Sold

Average Stocks

YEAR

COST OF
GOODS
SOLD

AVERAGE
STOCK

RATIO

2012-13

2642.54

782.47

3.38%

2013-14

2972.78

797.11

3.73%

2014-15

3368.67

775.115

4.35%

Stock/Inventory Turn Over Ratio

5
4

Stock/Inventory Turn Over

Ratio

3
2
1
0
2012-13

2013-14

2014-15

Interpretation of stock turnover ratio:

Every year it has a very high stock turnover ratio. It is considered better as it indicates that more sales are
being produced by each rupee of investment in stock but it may not always

Be an indicator of favourably results. It may be the result of a very low level of stock which results in
frequent out of stock position. Such a situation prevents the company form meeting customer demands and
the company cannot earn maximum profits. so it clearly shows that the stock turnover ratio is increasing
trend every year 2012 to 2015 it was 3.38, 3.73 & 4.35 times respectively. The stock turnover is better
position in the company

14. DEBTOR TURNOVER RATIO:

48

Debtors turnover ratio or accounts receivable turnover ratio indicates the velocity of debt collection of a
firm. In simple words it indicates the number of times average debtors (receivable) are turned over during a
year.

Net Credit Sales

Debtor Turnover Ratio = Average Debtors + Average Bills Receivable

YEAR

NET
CREDIT
SALES

AVERAGE
DEBTORS

DEBTORS
VELOCITY

2012-13

3438.12

730.58

77 days

2013-14

3643.03

725.49

73 days

2014-15

4268.21

792.5

67 days

Debtor Turn Over Ratio

800
780
760
740
720
700
680

Debtor Turn Over Ratio

2012-13

2013-14

2014-15

Interpretation of debtor turnover ratio:

Higher the ratio, better the position of the firm is in collecting the overdue means the effectiveness of the
collection department and vice versa.
This ratio measure of the collectibles of accounts receivables and tells about how credit policy of the
company is being enforced. The ratios in the years 2012 to 2015 are very high i.e. 77days, 73days & 67 days
respectively. This indicates that debts being collected
More promptly from the debtors. It is very much satisfactory because the ratio should be increasing rather
than decreasing.

COMPARATIVE BALANCE SHEET AS ON 31-03-2013 TO 31-03-2015

49

PARTICULARS
LIABILITIES

1)
3)
4)
5)

(Rs in lacs)
31-3-2014

31-3-2015

189.28
123.76
185.37

189.28
148.76
150.01

117.42

132.49

189.28
198.76
116.67
189.35
189.35

615.83

620.54

694.06

116.13
71.17
27.1

97.54
96.47
32.96

61.27
96.47
24.87

214.4

226.97

182.61

548.79

536.4

596.02

40.52
43.16
63.21

34.26
44.06
44.29
24.96

59.72
63.16
66.43
45.38

Interest payable/Dep/Deb

54.72

55.25

39.87

Others C-Liabilities
Sub Total

285.7
1558.23

319.13
1641.45

359.29
1739.24

Grand Total

2388.46

2488.96

2615.91

Share holders Funds

Capital
s2) Reserves Gen
Reserves & others
Revaluation Reserves
P&L a/c
sub total
Term liabilities
term loans-Banks
Term loans-FI
Deposits payable after -one year
Deferred payment credits
Term deposits
Debenture
Other term liabilities
sub Total
current Liabilities
Bank borrowings
borrowings-associates
Directors
Others
Deposits from dealers
Adv payment from Dealers
Provision for tax
dividend
Others

31-3-2013

50

ASSETS
Fixed Assets
Gross block
less: Depreciation

31-3-2013

31-3-2014

31-3-2015

1470.15
828.39

1575.21
924.92

1599.21
1012.05

Net Block

642.26

650.29

587.22

Sub Total

642.26

650.29

587.22

Investment in other COS

Deferred receivables
Goodwill/Miscel Exp Not written off
P&L a/c

0.58

0.65

0.65

Sub total

0.58

0.65

0.65

Current Assets
Raw-Materials- Imp
Indag
Work in progress
Finished goods
Stores & Spares

245.53
98.6
33.28
321.79
82.94

108.28
159.19
57.21
401.59
85.48

78.03
222.9
64.89
273.79
99.62

130.85
573.15

69.22
651.18

62.19
802.42

305.87

424.1

1838.02
2488.96

2028.13
2615.91

Capital WIP
Advances for capital goods

Debtors(<6months)
Export
Local
Debtors(>6months)
Export
local
Loans and advances
Loans to supplies
Deposits
Cash & Bank Balances

26.58

Other Current assets

other C-Assets

129.36
129.36

Sub total
Grand Total

1772.19
2388.46

31
99.31

Analysis of the Profit & Loss a/c as on 31-3-2013 to 31-3-2015

51

(Rs In lacs)
Gross Sales
domestic Sales
Export sales

31-3-2013
2803.11
934.22

31-3-2014
3127.69
875.3

31-3-2015
3879.55
874.71

total
less: excise duty
Net sales

3737.33
299.21
3438.12

4002.49
359.96
3643.03

4754.26
486.05
4268.21

661.83
1353.82

754.27
1426.46

cost of sales
raw materials
Imported
Indigenous

1547.23

other spares
Power & fuel
Direct labour
Repairs and maintenance

136.99
284.16
506.74
86.22

292.28
642.24

334.82
642.93

other mgt expenses

Depreciation

75.22
58.53

10.18
62.58

1.77
67.12

sub total
add opening WIP
Less closing

2695.09
32.58
29.34

3022.93
29.34
57.21

3277.37
57.21
64.84

cost of production
add opting stock of FG
less Closing stock FG

2698.33
269.74
325.53

2995.06
308.51
330.79

3269.69
330.79
231.81

Cost of Sales

2642.54

2972.78

3368.67

Gross Profit

795.58

670.25

899.54

selling gen-adm-expences

490.29

454.69

557.86

interest
sub total
operating Profit
add: other income
profit before tax
provision for taxes

94.74
585.03
210.55
38.83
249.34
95.26

114.42
569.11
101.14
53.3
154.44
64.23

113.27
171.13
228.41
60.03
288.44
123.23

Net P & L

154.08

90.21

165.11

INTERPRETATIONS:
For the year of (2013 & 2014)
52

COMPARATIVE BALANCE SHEET:

There are no changes in share capital.

The Reserves and surplus is185.37 compare to previous year.
The cash & bank balance is 99.31 & on the year 2012-2013
Current liabilities is 1558.23 on the year 2012-2013
Current assets is 1772.19
The working capital is 213.96

INCOME STATEMENT:
The net sales were 3438.12 2012-2013.
Profit before tax is 249.34 year.
Net profit & loss is 154.08 is 2013-2014

For the year of (2013-2014)

COMPARATIVE BALANCE SHEET:

53

There are no changes in share capital.

The Reserves and surplus has decreased 150.01 compare to previous year.
The cash & bank balance is 185.37& on the year 2013-2014
Current liabilities is 1641.45 on the year 2013-2014
Current assets is 1838.02
The working capital is 196.57

INCOME STATEMENT:

The net sales were 3643.03 in 2013-2014.

Profit before tax is 154.44 this year.
Net profit & loss is 90.21is 2013-2014.

INTERPRETATION:
(From 2013-2015)

54

Debt-Equity ratio is fluctuated in each year; it decreases from 0.35 to 0.26 in the periods in between

2013-15.
Proprietary Ratio have not fluctuated in each year is 0.26-0.26

The banks current ratio has increased to 1.14 to 1.17

The Companys quick ratio is in the years, 2013-15 is 0.63 to 0.74
In the study period the working capital turnover ratio was continuously -fluctuated. And decreased To

16.06 to 14.77
Gross profit of the company is fluctuating throughout the study period, and decreased in the year

2013-15 23.14% to 21.07%

The net profit ratio decreases in between 2013 - 2015 from 4.4% to 3.87%
The Inventory Turnover ratio is increasing every year; has increased in 2013-15 it is

Debtors turnover ratio shows a higher value has increased in 2013 -2015 from 730.58 to 792.50

3.38 to 4.35

ESTIMATION:
(FOR THE YEAR 2014)

The estimated Total asset for 2013-14 is 2615.91

The estimated net sales for 2013-14 are 4268.21 that mean in future net sales has been increasing.
The estimated Debt-Equity Ratio for 2013-14 is 0.26
The estimated Current Ratio for 2013-14 is 1.17
55

The estimated Quick Ratio for 2013-14 is 0.74

The estimated Net Profit Ratio for 2013-14 is 3.87%
. Total Capital Turnover Ratio has been increasing. Is 4.87 %

The estimated Net Working Capital Turnover Ratio for 2013-14 is 14.77 that means in future Net

Working Capital Turnover Ratio has been decreasing.

The estimated Fixed Assets Turnover Ratio for 2013-14 7.26%.

56

CHAPTER 7
CONCLUSION AND RECOMMENDATIONS

Suggestion and Conclusion

7.1 SUGGESTION:
A study on financial performance with reference to ratio analysis in Central Bank of India, the project is
completed in Circle office. This chapter has been designed to recapitulate the key findings of the study as
well as to make suitable suggestions if any to improve the financial performance of the banks using some
important key ratio:
57

1. Ratio Analysis
2. Comparative balance sheet

Current assets were increasing in the year of 2013-14 & 2014-15, so the company has to take the
decision to manage the current Ratio more appropriately for the next consecutive year. Higher the

ratio reflects an excess investment in current assets Otherwise its effects working capital.
Gross profit and Net profit have decreased in the year 2013-14 & so do 2014-15. So management has
to take the decision to improve the profitability of the concern as it needs to be maintained

throughout.
Debt equity ratio and shareholders funds are not properly leveraged because outside liabilities are
increasing gradually. This may in future affect liquidity position of the bank. So management should

control with a limited investment.

The Company is suggested to improve the net profit by increasing the volume of sales as it is found

that sales percentage is fluctuating over the years.

The Company has to go for integrated marketing, so that it can increase its sales, with this the profit

will be increased.
The Working Capital turnover ratio shows a Fluctuating balances. The company must try to assess

working capital needs perfectly.

Company maintains Current Assets equal to Fixed Assets, it is better to invest the ideal funds in other

sources to get other income.

In 2010-2011 the companys performance is decreased due to various reasons, it is better to forecast
the future trends, and make changes in the companys policies to get good returns.

7.2 CONCLUSION
During the course of the project at Central Bank of India I had the opportunity to view five case studies,
wherein the business firms had submitted application for various credit facilities. The financial statements of
the said five firms were taken up for studies to analyses and understand how banks conduct performance
analysis of their clients for the purpose of taking credit decisions.
From the above analysis it is understood that the clients of the bank submit financial statements for at least a
period of last 3 years along with application form requesting various credit facilities like working capital
limits, term loan, etc.

58

o The current ratio of Central bank of india was maximum in the year in the 2014-15 which was 1.17
followed by 2013-14 which was 1.12 and 1.14 in 2012-2013 and the quick ratio was 0.63 in the year
2012-13 and in the following year it reduced to 0.62 in 2013-14 it was 0.74 in 2014-2015 This
mainly because of high realization of sundry debtors on increase in C-liabilities and comparative
decreases in cash and bank balance. Hence the concern is a position to pay its short term liabilities.
o The debt-equity ratio of Central Bank Of India during the year 2012-2013, 2013-2014, 2014-2015
was 0.35, 0.37, 0.26. Proprietary ratio in the 3 years was 0.26, 0.25, and 0.25. So it is concluded that
the solvency position is not very good. If debt equity ratio is high, the owners are putting up
relatively less money of their own. It is a danger signal for the creditors. If the project should fail
financially, the creditors would lose heavily. The greater the ratio, the greater the risk to the creditors.
The above graph shows a mixed trend during last three years. Though the proportionate variation
during last two previous years was very high it is due to high amount of debt taken. The result is
favourable for the bank.
o Profitability ratios i.e. operating ratio , gross profit ratio and net profit ratio for the years 2012-13,
2013-14 , 2014-15 are : gross profit ratio : 23.14% , 18.40% , 21.07%
2.48% 3.87% , operating ratio :

& net profit ratio : 4.4%

76.86% 81.60% 78.92%

o Stock turnover ratio: It indicates that more sales are being produced by each rupee of investment in
stock but it may not always, be an indicator of favourably results. It may be the result of a very low
level of stock which results in frequent out of stock position. Such a situation prevents the bank form
meeting customer demands and the bank cannot earn maximum profits. so it clearly shows that the
stock turnover ratio is increasing trend every year 2012 to 2015 it was 3.38, 3.73 & 4.35 times
respectively. The stock turnover is better position in the bank.
o

BIBLIOGRAPHY

BOOKS AND WEBSITES REFERED

M. PANDEY (2005), Financial Management, ninth edition Vikas Publishing House Pvt. Ltd.
S. N. MAHESWARI (2006), Financial and Management Accounting, fifth edition, Sultan
Chand & Sons, New Delhi.
C. R. KOTHARI, Research Methodology and Techniques. Second edition, New Agency
International Pvt. Ltd.
BAKER. R .P & HOW WELL. A.C, The Preparation of Reports, New York Ronald Press.
S.P. GUPTA (1995), Statistical Methods", Sultan Chand & Co. New Delhi.
59

www.parleagro.com
www.parleproducts.com
www.google.com (For definitions and Images)
www.dare.co.in
www.hrera.com
Www.wikipedia.com

COMPARATIVE BALANCE SHEET AS ON 31-03-2013 TO 31-03-2015

PARTICULARS
LIABILITIES

1)
3)
4)
5)

Share holders Funds

Capital
s2) Reserves Gen
Reserves & others
Revaluation Reserves
P&L a/c

(Rs in lacs)
31-3-2013

31-3-2014

31-3-2015

189.28
123.76
185.37

189.28
148.76
150.01

117.42

132.49

189.28
198.76
116.67
189.35
189.35

sub total

615.83

620.54

694.06

Term liabilities
term loans-Banks
Term loans-FI
Deposits payable after -one year

116.13
71.17

97.54
96.47

61.27
96.47

60

Deferred payment credits

Term deposits
Debenture
Other term liabilities

32.96

24.87

214.4

226.97

182.61

548.79

536.4

596.02

40.52
43.16
63.21

34.26
44.06
44.29
24.96

59.72
63.16
66.43
45.38

Interest payable/Dep/Deb

54.72

55.25

39.87

Others C-Liabilities
Sub Total

285.7
1558.23

319.13
1641.45

359.29
1739.24

Grand Total

2388.46

2488.96

2615.91

ASSETS
Fixed Assets
Gross block
less: Depreciation

31-3-2013

31-3-2014

31-3-2015

1470.15
828.39

1575.21
924.92

1599.21
1012.05

Net Block

642.26

650.29

587.22

Sub Total

642.26

650.29

587.22

Investment in other COS

Deferred receivables
Goodwill/Miscel Exp Not written off
P&L a/c

0.58

0.65

0.65

Sub total

0.58

0.65

0.65

Current Assets
Raw-Materials- Imp
Indag

245.53
98.6

108.28
159.19

78.03
222.9

sub Total
current Liabilities
Bank borrowings
borrowings-associates
Directors
Others
Deposits from dealers
Adv payment from Dealers
Provision for tax
dividend
Others

27.1

Capital WIP
Advances for capital goods

61

Work in progress
Finished goods
Stores & Spares
Debtors(<6months)
Export
Local
Debtors(>6months)
Export

33.28
321.79
82.94

57.21
401.59
85.48

64.89
273.79
99.62

130.85
573.15

69.22
651.18

62.19
802.42

305.87

424.1

1838.02
2488.96

2028.13
2615.91

local
Loans and advances
Loans to supplies
Deposits
Cash & Bank Balances

26.58

Other Current assets

other C-Assets

129.36
129.36

Sub total
Grand Total

1772.19
2388.46

31
99.31

Analysis of the Profit & Loss a/c as on 31-3-2013 to 31-3-2015

(Rs In lacs)
Gross Sales
domestic Sales
Export sales

31-3-2013
2803.11
934.22

31-3-2014
3127.69
875.3

31-3-2015
3879.55
874.71

total
less: excise duty
Net sales

3737.33
299.21
3438.12

4002.49
359.96
3643.03

4754.26
486.05
4268.21

661.83
1353.82

754.27
1426.46

cost of sales
raw materials
Imported
Indigenous

1547.23

other spares
Power & fuel
Direct labour
Repairs and maintenance

136.99
284.16
506.74
86.22

292.28
642.24

334.82
642.93

other mgt expenses

Depreciation

75.22
58.53

10.18
62.58

1.77
67.12

62

sub total
add opening WIP
Less closing

2695.09
32.58
29.34

3022.93
29.34
57.21

3277.37
57.21
64.84

cost of production
add opting stock of FG
less Closing stock FG

2698.33
269.74
325.53

2995.06
308.51
330.79

3269.69
330.79
231.81

Cost of Sales

2642.54

2972.78

3368.67

Gross Profit

795.58

670.25

899.54

selling gen-adm-expences

490.29

454.69

557.86

interest
sub total
operating Profit
add: other income
profit before tax
provision for taxes

94.74
585.03
210.55
38.83
249.34
95.26

114.42
569.11
101.14
53.3
154.44
64.23

113.27
171.13
228.41
60.03
288.44
123.23

Net P & L

154.08

90.21

165.11

63