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”.


BANK OF BARODA

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.

The government's regular policy for Indian bank since 1969 has paid rich dividends with


BANK OF BARODA

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.

They are as mentioned below:


BANK OF BARODA

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

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,


BANK OF BARODA

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).

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


BANK OF BARODA

creation and maintenance processes. Larger banks would have a relative advantage

with the incorporation of the norms.

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;


http://en.wikipedia.org/wiki/Business_banking

http://en.wikipedia.org/wiki/Retail_banking

BANK OF BARODA

private banking, providing wealth management services to high net worth

individuals and families; and

Investment banking, relating to activities on the financial markets.

Most banks are profit-making, private enterprises. However, some are owned by

government, or are non-profit organizations. Central banks are normally government-

owned and charged with quasi-regulatory responsibilities, such as supervising


http://en.wikipedia.org/wiki/Central_bank

http://en.wikipedia.org/wiki/Non-profit_organization

http://en.wikipedia.org/wiki/Financial_markets

http://en.wikipedia.org/wiki/Investment_banking

http://en.wikipedia.org/wiki/High_net_worth_individual

http://en.wikipedia.org/wiki/High_net_worth_individual

http://en.wikipedia.org/wiki/Private_banking

BANK OF BARODA

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

2. ICICI BANK LTD

3. STATE BANK OF INDIA LTD

4. PUNJAB NATOINAL BANK LTD


http://en.wikipedia.org/wiki/Lender_of_last_resort

http://en.wikipedia.org/wiki/Interest_rate

BANK OF BARODA

5. BANK OF BARODA LTD

6. FEDERAL BANK LTD

7. AXIS BANK LTD

8. ING VYSYA BANK LTD

9. IDBI BANK LTD

10. INDUSIND BANK LTD

11. YES


BANK OF BARODA

INDIAN BANKING SYSTEM


Reserve Bank of India

Schedule Banks

BANK OF BARODA


Non-Schedule Banks

State co-op Banks

Commercial Banks

Central co-op Banks and Primary Cr. Societies

Commercial Banks

BANK OF BARODA


Indian Foreign

Public Sector Banks Private Sector

Banks

BANK OF BARODA


State Bank of India and its Subsidiaries

Other Nationalized Banks

Regional Rural Banks

BANK OF BARODA

COMPANY PROFILE

A. BACKGROUND AND INCEPTION:

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


http://en.wikipedia.org/wiki/Gujarat

http://en.wikipedia.org/wiki/Vadodara

http://en.wikipedia.org/wiki/Princely_state

http://en.wikipedia.org/wiki/Sayajirao_Gaekwad_III

http://en.wikipedia.org/wiki/Sayajirao_Gaekwad_III

http://en.wikipedia.org/wiki/1908

http://en.wikipedia.org/wiki/July_20

BANK OF BARODA

major commercial banks of India, was nationalized on 19th July, 1969, by the

Government of India.

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


http://en.wikipedia.org/wiki/Crores

http://en.wikipedia.org/wiki/Lakh

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/1969

http://en.wikipedia.org/wiki/19th_July

BANK OF BARODA

delivery channels and through its specialized subsidiaries and affiliates in the

areas of investment banking, credit cards and asset management.

ORIGIN OF BANK

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


BANK OF BARODA

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.

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

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.

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


BANK OF BARODA

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.

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


BANK OF BARODA

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.

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


BANK OF BARODA

branches 2800; more than 1000 ATMs, notwithstanding affiliates, subsidiaries and

delivery channels all over the world.


BANK OF BARODA


BANK OF BARODA

Management Team

Mr. M D Mallya

Chairman & Managing Director

Bank of Baroda

Mr. R K Bakshi


BANK OF BARODA

Executive Director

Bank of Baroda


BANK OF BARODA

Mr. N S Srinath

Executive Director

Bank of Baroda

Mr. S S Mundra

Chief Executive

Bank of Baroda European Operations


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


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.

To permeate sale and service culture across the organization.


BANK OF BARODA

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

aspirations.

QUALITY POLICY

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.


BANK OF BARODA

D. PRODUCT/SERVICES PROFILE

Retail Banking

Rural/Agri Banking

Wholesale Banking

SME Banking

Wealth Management

Demat


BANK OF BARODA

Product Enquiry

Internet Banking

NRI Remittances

Baroda e-Trading

Interest Rates

Deposit Products

Loan Products

ATM / Debit Cards


BANK OF BARODA

Personal Services

Deposits

Gen-Next

Loans

Credit Cards & Debit Cards

Services

Lockers


BANK OF BARODA

Corporate Services

Wholesale Banking

Deposits

Loans

Advances

Services


BANK OF BARODA

International Services

NRI Services

FGN Currency Credits (Foreign Currency Credits)

ECB (External Communication Borrowings)

FCNR (B) Loans

Offshore Banking

Finance in Export and Import

Correspondent Banking Facility


BANK OF BARODA

International Treasury

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

Domestic Services

Deposits

Priority Sector Advances

Services


BANK OF BARODA

Lockers

Priority Sector Advances

Small Scale Industries

Small Business

Retail Loans

Schemes sponsored by the GOI (Government of India)

Baroda General Credit Card Scheme (BGCC)


BANK OF BARODA

Agriculture related Loans

E. AREA OF OPERATION


BANK OF BARODA

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.

F. OWNERSHIP PATTERN


BANK OF BARODA

Share Holding Pattern

Bank of Baroda share holding pattern

Entity Percentage

Govt of India 53.80%

Domestic Institutions 22.10%

Foreign Institutional Investors 14.2%


http://www.wikinvest.com/stock/Bank_of_Baroda_(NSE:BANKBARODA)?action=edit&section=9

BANK OF BARODA

Others 9.90%

G) COMPETITORS INFORMATION

State Bank of India

Punjab National Bank


BANK OF BARODA

Bank of India

Canara Bank

Union Bank

IDBI Bank

Oriental Bank

Central Bank

H. INFRASTRUCTURAL FACILITIES


BANK OF BARODA

Fully Computerized Bank

Core banking

Mobile banking

Training Institutions

Internet Facility.

I. ACHIEVEMENTS/AWARDS


BANK OF BARODA

AWARD

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

Bank of Baroda is adjudged one of the top 10 Marketers

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

AMITY Leadership Award for Sectoral Excellence in Banking


BANK OF BARODA

SKOCH Challenger Award for Change Management

IMC Ramakrishna Bajaj National Quality Award

SPJIMR Marketing Impact Awards (SMIA) 2007

The Employer Branding Awards 2007

Association of Business Communicators of India (ABCI) Awards


BANK OF BARODA

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


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


BANK OF BARODA

PICTORAL REPRESENTATION OF MCKENSY’S 7S MODEL


BANK OF BARODA


BANK OF BARODA

STRUCTURE:


BANK OF BARODA


BANK OF BARODA

(GULBARGA BRANCH)


BANK OF BARODA


BRANCH MANAGER

MANAGER

1 ACCOUNTANT 1 CASHIER

2 COUNTER OFFICERS

BANK OF BARODA

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.

STYLES:


BANK OF BARODA

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.

STRATEGY:


BANK OF BARODA

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


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.

Excellent work performance.


BANK OF BARODA

All the staff members are experienced and smart workers.

WEAKNESSES:

There are limited ATMs in Gulbarga which is inconvenient.

BOB has poor recovery of loan.


BANK OF BARODA

OPPORTUNITIES:

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

developed.

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

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


BANK OF BARODA

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)

Particulars As on 31.3.2009 As on 31.3.2008


BANK OF BARODA

Capital and liabilities

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


BANK OF BARODA

Assets

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


BANK OF BARODA

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


BANK OF BARODA

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

2009Year ended 31 march, 2008

l. income

Interest earned 150,91,57,74 118,13,47,67

Other income 2757,65,80 2051,03,61

TOTAL 178492354 138645128

ll. expenditure


BANK OF BARODA

Interest expended 9968,16,76 7901,67,06

Operating expenses 3576,06,17 3034,29,21

Provisions & contingencies 2077,80,43 1493,02,86

TOTAL 156,22,03,36 124,28,99,13

lll. Profit

Net profit for the year 2227,20,18 1435,52,15

Available for appropriation 2227,20,18 1435,52,15

Appropriation transfer to:

a) statutory reserve 556,80,05 358,88,04


BANK OF BARODA

b) capital reserve 358,25,58 8464,85

c) revenue & other reserves

l. general reserve 707,41,44 650,35,08

ll. special reserve 220,00,00

lll. Statutory reserve 1,17,48 70,30

d) proposed dividend 3835563 340,93,88

TOTAL 2227,20,18 1435,52,15

Basic and diluted EPS RS. 61.14 RS. 39.41


BANK OF BARODA

PERFORMANCE HIGHLIGHTS

Total Business (Deposit+Advances) increased to Rs 3, 36,383 crore reflecting a

growth of 30.01%.


BANK OF BARODA

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.

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.


BANK OF BARODA

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.


BANK OF BARODA


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.


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

needed so that the managers have the required power to grant loans on a case to case

basis at the earliest.


BANK OF BARODA

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

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


BANK OF BARODA

understanding of functions and working of BOB. It has helped me to improve my

presentation skills, communication and personality development.

1. GENERAL INTRODUCTION


BANK OF BARODA

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

historical trends of these ratios can be used to make inferences about a company’s


BANK OF BARODA

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.

Management, in every aspect of the financial analysis. It is the responsibility of

the management to maintain sound financial condition in the company.


BANK OF BARODA

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

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


BANK OF BARODA

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.

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


BANK OF BARODA

other firms or the comparison with ratios of the industry to which the firm

belongs.

A. STATEMENT OF THE PROBLEM

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


BANK OF BARODA

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.

Detection of the reason for the variability of profits.

Analysis of relationship between assets and liabilities.


BANK OF BARODA

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.

B. OBJECTIVE OF THE STUDY


BANK OF BARODA

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.

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

performance.

To determine the Profitability, Liquidity Ratios.


BANK OF BARODA

To analyze the capital structure of the company.

To offer appropriate suggestions for the better performance of the organization

C. SCOPE OF THE STUDY

The study has great significance and provides benefits to various parties whom

directly or indirectly interact with the company.


BANK OF BARODA

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.

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.


BANK OF BARODA

D. METHODOLOGY


BANK OF BARODA

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.

Sources of secondary data:


BANK OF BARODA

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.

E. LIMITATIONS OF THE STUDY


BANK OF BARODA

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.


BANK OF BARODA

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.

Classification of Ratios


BANK OF BARODA

1. Liquidity ratio

2. Leverage ratio

3. Activity ratio

4. Profitability ratio.

5. Market ratio.

1. LIQUIDITY RATIOS


BANK OF BARODA

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:


BANK OF BARODA

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

Current ratio =


BANK OF BARODA

Current liabilities

2. LEVERAGE RATIOS


BANK OF BARODA

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


BANK OF BARODA

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.


BANK OF BARODA

Formula

Shareholders fundsProprietary ratio = Total assets


BANK OF BARODA

B. DEBT TO EQUITY

Indicates how well creditors are protected in case of the company's insolvency.

Formula


BANK OF BARODA

Total DebtTotal 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 AssetsCurrent Assets to Fixed Assets Ratio =


BANK OF BARODA

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

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.


BANK OF BARODA

Formula

Net profitReturn on assets = Total assets

B. RETURN ON EQUITY

Measures the income earned on the shareholder's investment in the business.


BANK OF BARODA

FormulaNet Income

Equity

C. RESERVES AND SURPLUS TO CAPITAL RATIO


BANK OF BARODA

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.

Formula

Reserves& surplusReserves & surplus to capital = Capital


BANK OF BARODA

D. RETURN ON NET WORTH

This volume ratio indicates how many return dollars are generated with each dollar of

investment (net worth).


BANK OF BARODA

Formula Net profit Return on net worth = Net worth

4. MARKET SHARE


BANK OF BARODA

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

Price-earning ratio

A. EARNINGS PER SHARE


BANK OF BARODA

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.

Formula

Net profit after tax


BANK OF BARODA

Earnings per share = Number of Equity shares

B.DIVIDEND PER SHARE

Dividend per share is calculated by dividing dividend and number of equity shares.

Formula


BANK OF BARODA

Total amount of DividendDividend 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

income by the number of shares outstanding.) The P/E Ratio indicates how much


BANK OF BARODA

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 SharePrice / Earning Ratio = Earning Per Shares


BANK OF BARODA


BANK OF BARODA

Common Size Analysis (Vertical and Horizontal):


BANK OF BARODA

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

make business decisions, so understanding financial statements is of great importance.


BANK OF BARODA

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.


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.


BANK OF BARODA

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


BANK OF BARODA

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


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


BANK OF BARODA

Current ratio = Current liabilities

2.1 TABLE SHOWING CURRENT RATIO OF THE BANK

(Rs. In 000)


BANK OF BARODA

YEAR CURRENT

ASSETCURRENT LIABLITIES

RATIO


BANK OF BARODA

2006 39911639 70839004 0.56

2007 52125045 84376961 0.61

2008 43018295 125944142 0.34

2009 45781172 165381466 0.27


BANK OF BARODA

2.1 GRAPH SHOWING CURRENT RATIO OF THE BANK


BANK OF BARODA


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


BANK OF BARODA

PROPRIETARY RATIO:

Formula

Shareholders fundsProprietary ratio = Total assets


BANK OF BARODA

2.2 TABLE SHOWING PROPRIETARY RATIO OF THE BANK


BANK OF BARODA

(Rs. In 000)


YEAR SHAREHOLDERS

FUNDTOTAL ASSET

RATIO

2006 78444346 1133925273 0.069

2007 86499376 1431461746 0.060

2008 110439268 1795995162 0.061

2009 128355412 2274067254 0.056

BANK OF BARODA

2.2 GRAPH SHOWING PROPRIETARY RATIO OF THE BANK


BANK OF BARODA


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:


BANK OF BARODA

FormulaTotal debt

Debt to equity = Total Equity

2.3 TABLE SHOWING DEBT EQUITY RATIO OF THE BANK


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


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:


BANK OF BARODA

Formula

Current AssetsCurrent 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

CURRENT ASSET

FIXED ASSETS

RATIO

2006 39911639 9207269 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


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:


BANK OF BARODA

. Formula

Net profitReturn 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


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


BANK OF BARODA

Net incomeReturn 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


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


BANK OF BARODA

Reserves& surplusReserves & 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


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.


BANK OF BARODA

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.


BANK OF BARODA

RETURN ON NET WORTH:

Formula Net profit Return on net worth = Net worth


BANK OF BARODA

2.8 TABLE SHOWING RETURN ON NET WORTH OF THE BANK

(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


BANK OF BARODA


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 taxEarnings per share = Number of Equity shares


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


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.


BANK OF BARODA

DIVIDEND PER SHARE:


BANK OF BARODA

Formula

Total amount of DividendDividend 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


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


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


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

particulars 2006 2007 2008 2009

amount % amount % amount % amount %


BANK OF BARODA

ASSETS

Cash & balance with RBI

33.33 100 64.13 192.41 93.69 281.10 105.96 317.91

Balance with Bank, money at call

101.21 100 118.66 117.24 129.29 127.47 134.90 133.29

Investment 351.14 100 349.43 99.51 438.70 124.94 524.45 149.36


BANK OF BARODA

Advance 599.11 100 836.20 139.54 1067.01 178.10 1439.85 241.33

Fixed assets 9.20 100 10.88 118.26 24.27 263.80 23.09 250.98

Other assets 39.91 100 52.12 130.59 43.01 107.77 45.78 114.71

TOTAL 1133.92 1431.46 1795.99 2274.06

LIABILITIES

Capital 3.65 100 3.65 100 3.65 100 3.65 100


BANK OF BARODA

Reserve and surplus

74.78 100 82.84 110.78 106.78 142.79 124.70 166.75

Deposits 936.61 100 1249.15 133.37 1520.34 162.32 1923.96 205.42

Borrowings 48.02 100 11.42 23.78 39.27 81.78 56.36 117.37

Other liabilities 70.83 100 84.37 119.12 125.94 177.81 165.38 233.49

TOTAL 1133.92 1431.46 1795.99 2274.06


BANK OF BARODA

2.13 VERTICAL ANALYSES OF BALANCE SHEET

particulars 2006 2007 2008 2009

amount % amount % amount % amount %

ASSETS


33.33 2.9 64.13 4.4 93.69 5.2 105.96 4.6


BANK OF BARODA


101.21 8.4 118.66 8.2 129.29 7.1 134.90 5.9

Investment 351.14 30.9 349.43 24.4 438.70 24.4 524.45 23.06

Advance 599.11 52.83 836.20 58.4 1067.01 59.4 1439.85 63.33

Fixed assets 9.20 0.64 10.88 0.76 24.27 1.3 23.09 1.01

Other assets 39.91 4.5 52.12 3.6 43.01 2.3 45.78 2.01


BANK OF BARODA

TOTAL 1133.92 1431.46 1795.99 2274.06

LIABILITIES

Capital 3.65 0.32 3.65 0.25 3.65 0.20 3.65 0.16

Reserve and surplus

74.78 6.5 82.84 5.7 106.78 5.9 124.70 5.4

Deposits 936.61 82.5 1249.15 87.2 1520.34 84.46 1923.96 84.60


BANK OF BARODA

Borrowings 48.02 4.2 11.42 0.80 39.27 2.1 56.36 2.4

Other liabilities

70.83 6.2 84.37 5.8 125.94 7.0 165.38 7.2

TOTAL 1133.92 1431.46 1795.99 2274.06

2.14 COMPARATIVE BALANCE SHEET


BANK OF BARODA


particulars Amount

2006 2007 difference %

ASSETS


33.33 64.13 30.8 92.41


101.21 118.66 17.45 17.24

Investment 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

LIABILITIES

Capital 3.65 3.65 0.00 0.00

Reserve and surplus

74.78 82.84 8.06 10.78

Deposits 936.61 1249.15 312.54 33.37

Borrowings 48.02 11.42 -36.6 -76.22

Other liabilities 70.83 84.37 13.54 19.17

TOTAL 1133.92 1431.46

BANK OF BARODA

2.15 COMPARATIVE BALANCE SHEET


BANK OF BARODA


particulars Amount

2008 2009 difference %

ASSETS


93.69 105.96 12.27 13.10


129.29 134.90 5.61 4.34

Investment 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

LIABILITIES

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

Borrowings 39.27 56.36 17.09 43.52

Other liabilities 125.94 165.38 39.44 31.32

TOTAL 1795.99 2274.06

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.

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.


BANK OF BARODA

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

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

2009.


BANK OF BARODA

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.

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.


BANK OF BARODA

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.

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


Documents

MBA Finance project