FINACIAL REPORT

DENA BANK
&
ORIANTAL BANK OF COMMERCE

PROJECT GUIDE:
PROF. RUPAL DESAI

SUBMITTED BY:

NAME : Pooja J. Soni

ID NO : O8BBA062
CLASS : S.Y. B.B.A

SUBMITTED TO:

SANSKAR INSTITUT
OF MANGMENT &
TECHNOLOGUY
 PREFACE

As a student of management, practical knowledge is a must

with full theoretical concepts. Therefore in` order to acquire the
knowledge we were given a this project as one of its subjects to
include in our BBA syllabus by shree KSKV Kachchh University.
So for this said purpose we have made this project of financial
management in which we have compared the two banks .DENA
BANK and ORIANTAL BANK OF COMMERCE.

I hope that my sincere efforts in this field of study would be

considered and the honorable authorities accept this Report

2
“EXPERIENCE IS THE BEST TEACHER”

This Proverbs plays a guiding role in the curriculum of the

B.B.A. Programme of Kutchh University . Only theoretical
knowledge does not impart complete education, it is necessary
that practical exposure being accompanied to add meaning to
education.

I have prepared this project on DENA BANK OF INDIA

and ORINTAL BANK OF COMMERCE . as a part of the
practical studies. I have tried to discuss the firm’s financial
information details in detail

Through this acknowledgement, I express my sincere

gratitude towards all those people who helped me in the
preparation of my project, which has been a learning experience.

I would like to thank the Director, the Faculty, the

Librarians, & the Professors who helped me a lot in completing
this project.

“A Student is always incomplete without the guidance of his

teacher”

3
 By:- Pooja J.Soni

INDEX
PREFES
ACKNOWLEDGMENT
INTRODUCTION
HISTORY OF DENA BANK OF INDIA
HISTORY OF ORIANTAL BANK OF COMMERCE
BALANCE SHEET OF DENA BANK
BALANCE SHEET OF ORIANTAL BANK OF COMMERCE
RATION ANALYASIS
MEANING OF RATIO ANALYASIS
OBJECTIVE OF RATIO ANALYSIS
CLASSIFICATION OF RATIO
CURRENT RATIO
DEBT EQUTY RATIO
PRICE EARNING RATIO
COMPARISION BETWEEN DENA BANK & ORIANTAL
BANK OF COMMERCE
IMPORTANCE OF RATIO ANALYSIS
PURPOSE OF RATIO ANALYSIS
SERVICE PROVIDED BY DENA BANK
SERVICES PROVIDED BY ORIANTAL BANK OF
COMMERCE
CONCLUSION

4
 INTRODUCTION

To understand the information contained in financial

statements with a view to know the strength or weaknesses of the
firm and to make forecast about the future prospects of the firm and
thereby enabling the financial analyst to take different decisions
regarding the operations of the firm.

5
HISTORY OF DENA BANK

Dena Bank was founded on 26th May, 1938 by the family of

Devkaran Nanjee under the name Devkaran Nanjee Banking
Company Ltd.

It became a Public Ltd. Company in December 1939 and later the

name was changed to Dena Bank Ltd.

In July 1969 Dena Bank Ltd. along with 13 other major banks was
nationalized and is now a Public Sector Bank constituted under the
Banking Companies (Acquisition & Transfer of Undertakings) Act,
1970. Under the provisions of the Banking Regulations Act 1949, in
addition to the business of banking, the Bank can undertake other
business as specified in Section 6 of the Banking Regulations Act,
1949.

6
HISTORY OF ORIENTAL BANK
OF COMMERCE

Established on 19th Feb' 1943 in Lahore, Oriental Bank of

Commerce (OBC) is one of the public sector banks in India. Its
modest beginning is creditable to its founder Late Rai Bahadur Lala
Sohan Lal, the first Chairman of the OBC. Within four years of
coming into existence, the country partitioned, the Bank shifted its
Registered Office from Lahore to Amritsar. The Oriental Bank of
Commerce was nationalized on 15th April 1980, and paved its way
to count amongst the strongest banks in India.

OBC has a network of 530 branches and 505 ATM's spread

throughout India, out of which 490 branches offer, centralized
banking solutions. With High Capital Adequacy Ratio, Oriental
Bank of Commerce is known be a consistent profit-making bank. It
offers various services and products, like current/ savings account,
general loans, educational loans, agricultural loans, etc, for the
benefit of customers. For its effective services, the National Institute
of Bank Management (NIBM) rated OBC Bank as "Customer
Friendly" Bank.

7
BALANCE SHEET OF DENA BANK

8
BALANCE SHEET OF ORIANTAL
BANK OF COMMERCE

9
RATIO ANALYSIS:

Fundamental Analysis has a very broad scope. One aspect

looks at the general (qualitative) factors of a company. The other
side considers tangible and measurable factors (quantitative). This
10
means crunching and analyzing numbers from the financial
statements. If used in conjunction with other methods, quantitative
analysis can produce excellent results.

Ratio analysis isn't just comparing different numbers from

the balance sheet, income statement, and cash flow statement. It's
comparing the number against previous years, other companies, the
industry, or even the economy in general. Ratios look at the
relationships between individual values and relate them to how a
company has performed in the past, and might perform in the
future.

MEANING OF RATIO:
A ratio is one figure express in terms of another figure. It is a
mathematical yardstick that measures the relationship two figures,
which are related to each other and mutually interdependent. Ratio
is express by dividing one figure by the other related figure. Thus a
ratio is an expression relating one number to another. It is simply
the quotient of two numbers. It can be expressed as a fraction or as
a decimal or as a pure ratio or in absolute figures as “so many
times”. As accounting ratio is an expression relating two figures or
accounts or two sets of account heads or group contain in the
financial statements.

MEANING OF RATIO ANALYSIS:

11
 Ratio analysis is the method or process by which the
relationship of items or group of items in the financial statement
are computed, determined and presented.

Ratio analysis is an attempt to derive quantitative measure or

guides concerning the financial health and profitability of business
enterprises. Ratio analysis can be used both in trend and static
analysis. There are several ratios at the disposal of an analyst but
their group of ratio he would prefer depends on the purpose and the
objective of analysis.

While a detailed explanation of ratio analysis is beyond the

scope of this section, we will focus on a technique, which is easy to
use. It can provide you with a valuable investment analysis tool.

This technique is called cross-sectional analysis. Cross-

sectional analysis compares financial ratios of several companies
from the same industry. Ratio analysis can provide valuable
information about a company's financial health. A financial ratio
measures a company's performance in a specific area. For example,
you could use a ratio of a company's debt to its equity to measure a
company's leverage. By comparing the leverage ratios of two
companies, you can determine which company uses greater debt in
the conduct of its business.

12
 A company whose leverage ratio is higher than a competitor's
has more debt per equity. You can use this information to make a
judgment as to which company is a better investment risk.

However, you must be careful not to place too much

importance on one ratio. You obtain a better indication of the
direction in which a company is moving when several ratios are
taken as a group.

OBJECTIVE OF RATIOS

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Ratio is work out to analyze the following aspects of business
organization-

A) Solvency-
1) Long term
2) Short term
3) Immediate
B) Stability
C) Profitability
D)Operational efficiency
E) Credit standing
F) Structural analysis
G)Effective utilization of resources

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CURRENT RATIO: -

Liquidity refers to the ability of a firm to meet its short-term

(usually up to 1 year) obligations. The ratios, which indicate the
liquidity of a company, are Current ratio, Quick/Acid-Test ratio,
and Cash ratio. These ratios are discus

This ratio compares the current assests with the current liabilities.
It is also known as ‘working capital ratio’ or ‘solvency ratio’. It is
expressed in the form of pure ratio.

16
Formula:

CURRENT RATIO = CURRENT ASSET

CURRENT LIABILITY

The current assests of a firm represents those assets which can be,
in the ordinary course of business, converted into cash within a
short period time, normally not exceeding one year. The current
liabilities defined as liabilities which are short term maturing
obligations to be met, as originally contemplated, within a year.
Current ratio (CR) is the ratio of total current assets (CA) to total
current liabilities (CL). Current assets include cash and bank
balances; inventory of raw materials, semi-finished and finished
goods; marketable securities; debtors (net of provision for bad and
doubtful debts); bills receivable; and prepaid expenses. Current
liabilities consist of trade creditors, bills payable, bank credit,
provision for taxation, dividends payable and outstanding expenses.
This ratio measures the liquidity of the current assets and the ability
of a company to meet its short-term debt obligation.CR measures
the ability of the company to meet its CL, i.e., CA gets converted
into cash in the operating cycle of the firm and provides the funds
needed to pay for CL. The higher the current ratio, the greater the
short-term solvency. This compares assets, which will become liquid
within approximately twelve months with liabilities, which will be

17
due for payment in the same period and is intended to indicate
whether there are sufficient short-term assets to meet the short-
term liabilities. Recommended current ratio is 2: 1. Any ratio below
indicates that the entity may face liquidity problem but also Ratio
over 2: 1 as above indicates over trading, that is the entity is under
utilizing its current assets

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RATIO OF DENA BANK

MARCH 2008 CURRENT RATIO

CURRUNT ASSET = 126648027
CURRUNT LAIBLITY= 25032668

CURRENT RATIO = CURRENT ASSET

CURRENT LIABILITY
= 126648027
25032668
= 5.06

MARCH 2009 CURRUNT RATIO

CURRUNT ASSET = 88845858
CURRUNT LAIBLITY = 31872695

CURRENT RATIO = CURRENT ASSET

CURRENT LIABILITY
= 88845858
31872695
= 2.79

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COMENT ON CURRUNT RATIO OF DENA BANK

The current ratio of DENA BANK is 5.06 in 2008 and 2.79 in

2009.
It shows that the current ratio of DENA BANK have declined up to
2.27% during 2009.
It is also unsatisfactory during current year which shows that the
working condition of DENA BANK is weak. The ratio is far away
from the decided standard of current ratio that is 2:1 .according to
this stander the current ratio of DENA BANK is sufficient in 2009.

20
RATIO OF ORIENTAL BANK OF COMMERCE

CURRUNT RATIO MARCH 2008

CURRUNT ASSET = 130152156
CURRUNT LAIBLITY=52328867

CURRUNT RATIO = CURRUNT ASSET

CURRUNT LAIBILITIES
= 130152156
52328867
= 2.49

CURRUNT RATIO MARCH 2009

CURRUNT ASSET = 150640939
CURRUNT LAIBLITY=60883366
CURRUNT RATIO = CURRUNT ASSET
CURRUNT LAIBILITIES
= 60883366
150640939
= 2.47

21
COMMENT ON CURRUNT RATIO OF
ORIENTAIL BANK OF COMMERCE

The ORIANTAL BANK OF COMMERCE is 2.49 in 2008 &

2.47 in 2009. It shows that the current ratio of ORIANTAL BANK
OF COMMERCE have increase up to 0.02% in 2009. So the banks
working condition is better than previous year but the standard of
current ratio is 2:1. So as per standard of current ratio, the ratio of
ORIANTAL BANK OF COMMERCE is satisfactory. This shows
that the working condition of ORINATAL BANK OF COMMERC
is good in comparison of the standard.

22
DEBT EQUTY RATIO

Formula:

DEBT EQUTY RATIO = TOTAL LONG TERM DEBT

OWNER’S FUND

Debt equity ratio is also called as leverage ratio. Leverage

means the process of the increasing the equity shareholders return
through the use of debt. Leverage is also known as ‘gearing’ or
‘trading on equity’. Debt equity ratio shows the margin of safety for
long-term creditors & the balance between debt & equity.

23
DEBT EQUTY RATIO OF DENA BANK

DEBT EQUTY RATIO MARCH 2008

TOTAL DEBT = UNSECURED LOANS = 33943.18

OWNER’S FUND =
1. EQUITY CAPITAL = 286.82
2. PREFRANCE CAPITAL = 1279.69
TOTAL OF OWNER’S FUND = 1566.51

DEBT EQUTY RATIO = TOTAL LONGTRME DEBT

OWNER’S FUND

= 33943.18
1566.51
= 21.67

DEBT EQUTY RATIO MARCH 2009

TOTAL DEBT = UNSECURED LOANS = 43050.61
OWNER’S FUND =
1. EQUITY CAPITAL = 286.82
2. PREFRANCE CAPITAL = 1662.09
TOTAL OF OWNER’S FUND = 1948.91

24
DEBT EQUTY RATIO = TOTAL LONGTRME DEBT
OWNER’S FUND

= 43050.61
1948.91

= 22.09

COMENT ON DEBT EQUITY RATIO OF DENA BANK

The debt equity ratio of DENA BANK is 21.67 in 2008 and

22.09 in 2009. IT shows that the debt equity ratio of the bank has
increased upto 0.42 % in 2009. So we can see that the working
condition of DENA BANK is good in 2009. It is satisfactory. It
mean DENA BANK have more owner’s fund in comparison of
their total debt which will help the bank to run the business very
smoothly and satisfy the consumer of it .

25
DEBT EQUTY RATIO OF ORIANTAL BANK

OF COMMERCE

DEBT EQUTY RATIO MARCH 2008

TOTAL DEBT = UNSECURED LOANS = 77856.70
OWNER’S FUND =
1. EQUITY CAPITAL = 250.54
2. RESERVE SURPLUSE = 5525.36
TOTAL OF OWNER’S FUND = 5775.9

DEBT EQUTY RATIO =TOTAL DEBTS

OWNER’S FUND
= 5775.9
77856.70
= 13.48
DEBT EQUTY RATIO MARCH 2009
TOTAL DEBT = UNSECURED LOANS = 98368.85
OWNER’S FUND =
1. EQUITY CAPITAL =2505397
2. RESERVE SURPLUSE = 7152,90,73

3. TOTAL OF OWNER’S FUND =74034470

26
DEBT EQUTY RATIO =TOTAL DEBTS
OWNER’S FUND
= 9836885
74034470
= 0.13

COMMENT ON DEBT EQUITY RATIO OF

ORIANTAL BANK OF COMMERCE

The debt equity ratio of ORIANTAL BANK OF COMMERCE

is 13.48 in 2008 and o.13in 2009. Its shows that the debt equity ratio
of the bank have decreased up to 13.35% in 2009. So we can see
that the working condition of ORIANTAL BANK OF COMMERCE
is poor in current year. It is not satisfactory. its mean ORINATAL
BANK OF COMMERCE have more debt than owner’s fund in
2009 which will not help the bank to run the business very smoothly
and not satisfy the consumer of it.

27
PRICE EARNING RATIO

It saws the relationship between the market price of share and

earnings per share .it significance the price that is currently ruling
in the market for each rupee of earnings being made by compny per
share. As geral rule, the higher this ratio , the beter it is for owners .
This ratio is widly used by the analyist to the value of firm’s
performance as exepted by investor . The higher the P/E ratio, the
better is for owners.
Formula:

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE

28
PRICE EARNING RATIO OF DENA BANK

PRICE EARNING RATIO MARCH 2008

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE
EARNING PER SHARE = NET PROFIT AFTER TAX
NUMBER OF EQUITY SHARES
= 329.87
28.6823
= 11.50

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE
= 286.82
11.50
= 24.94

29
PRICE EARNING RATIO MARCH 2009

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE

EARNING PER SHARE = NET PROFIT AFTER TAX

NUMBER OF EQUITY SHARES

= 423.37
28.6823
= 14.76

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE

= 286.82
14.76
= 19.43

30
COMENT ON PRICE EARNING RATIO OF DENA
BANK

The price earnings ratio of Dena bank 24.94 in 2008 and

19.43 in 2009. it shows that the price earnings ratio of the bank
have declined in 2009 up to 5.51% it shows that the working
condition of Dena bank according to P.E ratio is weak.

PRICE EARNING RATIO OF ORIANTAL BANK OF

COMMERCE

PRICE EARNING RATIO MARCH 2008

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE

31
EARNING PER SHARE = NET PROFIT AFTER TAX
NUMBER OF EQUITY SHARES
= 353.22
2505.40
= 14.09

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE
= 250.14
14.09
= 17.75

PRICE EARNING RATIO MARCH 2009

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE
EARNING PER SHARE = NET PROFIT AFTER TAX
NUMBER OF EQUITY SHARES
= 905.42
2505.40

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 = 36.14

PRICE EARNING RATIO = MARKET VALUE OF SHARE

EARNING PER SHARE

= 250.14
36.14
= 6.93

COMENT ON PRICE EARNING RATIO OF ORIANTAL

BANK OF COMMERCE

The price earnings ratio of ORIANTAL BANK OF

COMMERCE 17.75 in 2008 and 6.93 in 2009. it shows that the
price earnings ratio of the bank have declined in 2009 up to 10.82%
it shows that the working condition of ORIANTAL BANK OF
COMMERCE according to P.E ratio is weak.

33
COMPARISON BETWEEN DENA BANK &
ORIANTAL BANK OF COMMERCE OF YEAR
2009

BANK CURRENT DEBT PRICE

RATIO EQUTY EARNING
RATIO RATIO

DENA BANK 2.79 22.09 19.43

ORIANTAL 2.47 0.13 6.93
BANK OF
COMMERCE

34
CURRUNT RATIO

As per the year 2009, the current ratio of DENA BANK is 2.79
and current ratio of ORIANTAL BANK OF COMMERCE is 2.47
Now by observing the current ratio of both the banks we can
fine that the current ratio of DENA BANK is more than the
ORIANTAL BANK OF COMMERCE it is high up to o.32%.
It shows that the current asset’s condition of DENA BANK is
good than ORIANTAL BANK OF COMMERCE. It has more
liquidity power.
As per the general standard of current ratio that is 2:1.
So the desired standard can be maintained

35
DEBT EQUTY RATIO

As per the year 2009 the debt equity ratio of DENA BANK is
22.09 & debt equity ratio of ORIANTAL BANK OF COMMERCE
bank is o.13
Now by observing the debt equity ratio of both the banks we
can fine that the debt equity ratio of DENA BANK is more than the
ORIANTAL BANK OF COMMERCE it is high up to 21.96%.
It shows that the owner’s fund or capital of DENA BANK is
more than the ORIANTAL BANK OF COMMERCE. Which helps
Dena bank to compete with its total debts? While in ORIANTAL
BANK OF COMMERCE they have also more owners’ fund to
compete with its total debts but it is less in comparison of DENA
BANK. So the debt equity ratio of DENA BANK is satisfactory.

36
PRICE EARNING RATIO

As per the year 2009 the price earnings ratio of DENA

BANK is 19.43 & P.E. ratio of ORIANTAL BANK OF
COMMERCE is 6.93.
Now by observing the P.E. ratio of both the banks we can
find that the P.E. ratio of DENA BANK is more than the
ORIANTAL BANK OF COMMERCE it is high up to 12.5%.
It shows that the working condition of DENA BANK is better
than the ORIANTAL BANK OF COMMERCE. It indicates that
DENA BANK is more successful to handle the earning per share &
market value of its shares in comparison of ORIANTAL BANK OF
COMMERCE.

37
IMPORTANCE OF RATIO ANALYSIS:

As a tool of financial management, ratios are of crucial

significance. The importance of ratio analysis lies in the fact that it
presents facts on a comparative basis & enables the drawing of
interference regarding the performance of a firm. Ratio analysis is
relevant in assessing the performance of a firm in respect of the
following aspects:

1] Liquidity position,

2] Long-term solvency,

3] Operating efficiency,

4] Overall profitability,

5] Inter firm comparison

6] Trend analysis.

38
PURPOSE OF RATIO ANLYSIS:

1] To identify aspects of a businesses performance to aid decision

making

2] Quantitative process – may need to be supplemented by

qualitative

Factors to get a complete picture.

3] 5 main areas:-

 Liquidity – the ability of the firm to pay its way

 Investment/shareholders – information to enable decisions to
be made on the extent of the risk and the earning potential of
a business investment
 Gearing – information on the relationship between the
exposure of the business to loans as opposed to share capital
 Profitability – how effective the firm is at generating profits
given sales and or its capital assets
 Financial – the rate at which the company sells its stock and
the efficiency with which it uses its assets

39
SERVICES PROVIDED BY DENA BANK

1. Core banking solution

2. Delivery channel
3. Dena ATM services
4. Dena India Remit
5. Value added services
6. Dena Bill pay
7. Inbound remittance
8. Direct tax collection
9. Banc assurance
10. Indirect Tax
11. Distribution of mutual fund
12. RTGS / NEFT
13. Dena e-tax pay
Demat service

40
 SERVICES PROVIDED BY ORIANTAL BANK OF
COMMERCE

1. N.R.I. services
2. Premium Services
 Internet Banking
 R.T.G.S.
 N.E.F.T.
 Online Tax payment

3. Other Service
 Dmat Account
 Foreign Remittance
 Cash Management Service

41
ROLE OF RATIO ANALYSIS:

It is true that the technique of ratio analysis is not a creative

technique in the sense that it uses the same figure & information,
which is already appearing in the financial statement. At the same
time, it is true that what can be achieved by the technique of ratio
analysis cannot be achieved by the mere preparation of financial
statement.

Ratio analysis helps to appraise the firm in terms of their

profitability & efficiency of performance, either individually or in
relation to those of other firms in the same industry. The process of
this appraisal is not complete until the ratio so computed can be
compared with something, as the ratio all by them do not mean
anything. This comparison may be in the form of intra firm
comparison, inter firm comparison or comparison with standard
ratios. Thus proper comparison of ratios may reveal where a firm is
placed as compared with earlier period or in comparison with the
other firms in the same industry.

Ratio analysis is one of the best possible techniques available

to the management to impart the basic functions like planning &
control. As the future is closely related to the immediate past, ratio
calculated on the basis of historical financial statements may be of
good assistance to predict the future. Ratio analysis also helps to
locate & point out the various areas, which need the management
attention in order to improve the situation.
42
 CONCLUSION

As we have given the project work to compare the two well known
banks i.e. DENA BANK and ORIANTAL BANK OF
COMMERCE .I came to know about the financial condition of both
company are good. They are able to generate customer and these
banks are providing new services to customers. At the end I can say
that DENA BANK is good in financial position in compare to
ORINTAL BANK OF COMMERCE.

43