adv. fa.docx

8/19/2019 Adv. FA.docx

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UNIVERSITY OF MUMBAI

RAYAT SHIKSHAN SANSTHA’S

KARMAVEER BHAURAO PATIL COLLEGE

VASHI, NAVI MUMBAI

COLLEGE CODE – 33

PROJECT REPORT

ON

COMPARATIVE STUDY OF FINANCIAL RATIO OF STATE BANK OF

INDIA AND BANK OF BARODA

SUBMITTED BY

AARTI LAXMAN BANGAR

ROLL NO : 8371

PROJECT GUIDE

Dr. Megha Lh!"a

IN PARTIAL FULFILLMENT FOR THE COURSE OF

MASTER OF COMMERCE

M.COM.PART – II (SEMESTER IV)

ACADEMIC YEAR 2015-16

RAYAT SHIKSHAN SANSTHA’S

1


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KARMAVEER HA!RAO PATIL COLLEGE

VASHI, NAVI MUMBAI 400 703.

CERTI"ICATE

T!" !" #$ %&'#!() #*# A#$%& L#'# #*#$ , "#+&-# $(

M.C$.P*'#/II S&&"#&' III *" %$& &' '$2&%# $-COMPARATIVE STUDY OF FINANCIAL RATIO OF STATE BANK OF INDIA &

BANK OF BARODA & *" "+!##& * "*#!"(*%#$') '&$'# +-&' #&

+!*-%& $( D$. M+*,# L,&# !- #& *'#!* (+5&-# $( M.C$.

C$+'"& $( U-!6&'"!#) $( M+*! !- #& *%*&!% )&*' 2015-2016

P'$2&%# +!& C$$'!-*#$'

P'!-%!*

U-!6&'"!#) E*!-&'

8


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DECLARATION

I , A#$%& L#'# #*#$ "#+&-# $( KARMAVEER HA!RAO

PATIL COLLEGE, "#+)!- !- M.C.P#$%-II. (S++/%+$ IV)

&'&) &%*'& #*# I *6& %$& #!" '$2&%# '&$'# $-

COMPARATIVE STUDY OF FINANCIAL RATIO OF STATE BANK OF INDIA &

BANK OF BARODA A- *" -$# &&- "+!##& #$ *-) $#&'

U-!6&'"!#) $' I-"#!#+#& ($' #& *9*' $( *-) &'&&, !$* %.

T& !-($'*#!$- !" "+!##& #$ & !" #'+& *- $'!!-* #$ #& &"#

$( ) :-$9&&.

D*#& ;;;;.. A#$%& L#'# #*#$

P*%& ? V*"!, N*6! M+*!.

3


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INDEX

Sr. No. Content Pg. No. Remark/

Sign

1. Research Methodology:

a) Obecti!e o" St#dy

b) $ntrod#ction o" Ratio

c)Classi"ication o" Ratio

%

2. $ntrod#ction o" ank '

3. $ntrod#ction o" Ratio (

4. Ratio nalysis o":

a) State ank o" $ndia

b) ank o" aroda

( to 1(

*+ to *,

5. -inancial Comarati!e nalysis:

a) /S o" S$ & O

b) P/ Statement o" S$ & O *, to 0(

6. Concl#sion

+

7. Re"erence/ ibliograhy 1

4


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RESEARC METODOLO!Y

"TE COMPARATIVE STUDY OF FINANCIAL RATIO OF STATE BANK OF INDIA

AND BANK OF BARODA.#

OB#ECTIVE O$ THE %TUD&:'

1. To know the strength and weakness of State Bank Of India and Bank Of Baroda

through Ratio analysis.2. To evaluate the performance of the companies.. To understand the li!uidity" profita#ility and efficiency positions of the companies.$. To make comparison #etween the ratios during different periods.

INTRODUCTION:

$!(a()!a* Ma(age+e(, is the specific area of finance dealing with the financial

decision corporations make" and the tools and analysis used to make the decisions. The

@


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discipline as a whole may #e divided #etween long%term and short%term decisions and

techni!ues. Both share the same goal of enhancing firm value #y ensuring that return

on capital e&ceeds cost of capital" without taking e&cessive financial risks.

Ca-!,a* !(e/,+e(, 0e)!/!(/ comprise the long%term choices a#out which pro'ects

receive investment" whether to finance that investment with e!uity or de#t" and when or

whether to pay dividends to shareholders.

Short%term corporate finance decisions are called working capital management and deal

with #alance of current assets and current lia#ilities #y managing cash" inventories" and

short%term #orrowings and lending (e.g." the credit terms e&tended to customers).

*orporate finance is closely related to managerial finance" which is slightly #roader in

scope" descri#ing the financial techni!ues availa#le to all forms of #usiness enterprise"

corporate or not.

RE%EARCH METHODOLOG&

The )()*/!e re/ear)h !/ 2e!(g /e0 , /,0" ,he )+-ar!/( ,he

)+-a(!e/.

Da,a )**e),!(:

%e)(0ar" 0a,a !/ 2e!(g ,a4e(5e2/!,e/

O,)+e/ ,he /,0":

1. 5!,h ,h!/ a(a*"/!/ 6e )+e , 4(6 a2, ,he strength and weakness of

State Bank Of India and Bank Of Baroda through Ratio analysis.2. To evaluate the performance of the companies.. To understand the li!uidity" profita#ility and efficiency positions of the companies.$. To make comparison #etween the ratios during different periods.+.

INTRODUCTION

DE$INITION O$ BANK


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Banking ,eans -ccepting /eposits for the purpose of lending or Investment of

deposits of money from the pu#lic" repaya#le on demand or otherwise and withdraw

#y che!ue" draft or otherwise.-

% Ba(4!(g C+-a(!e/ Reg*a,!( A),91;

ORIGIN O$ THE 5ORD


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%TATE BANK O$ INDIA

%,a,e Ba(4 I(0!a I(0/,r" :Ba(4/ ' P2*!) %e),r

Incorporation 6ear 17++%mail gm.sn#8s#i.co.in

3e#site http9::www.s#i.co.in 4ace ;alue (Rs) 1<

It is the largest Indian #anking and financial services company (#y turnover and total

assets) with its head!uarters in ,um#ai" India. It is state%owned. The #ank traces its

ancestry to British India" through the Imperial Bank of India" to the founding in 1= of

the Bank of *alcutta" making it the oldest commercial #ank in the Indian Su#continent.

Bank of ,adras merged into the other two presidency #anks" Bank of *alcutta and

Bank of Bom#ay to form Imperial Bank of India" which in turn #ecame State Bank of

India. The government of India nationalied the Imperial Bank of India in 17++" with the

Reserve Bank of India taking a >


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CURRENT RATIO:

n indication of a company5s a#ility to meet short%term de#t o#ligationsE the

higher the ratio" the more li!uid the company is. *urrent ratio is e!ual to current assets

divided #y current lia#ilities. If the current assets of a company are more than twice the

current lia#ilities" then that company is generally considered to have good short%term

financial strength. If current lia#ilities e&ceed current assets" then the company may

have pro#lems meeting its short%term o#ligations.

CURRENT RATIO * CURRENT ASSETS CURRENT LIABILITY

c#rrent ratio


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year *++'2*+11

year Ratio

*++' +.+%

*++3 +.+'

*++( +.+

*+1+ +.+

*+11 +.+

LI=UID RATIO:

Ai!uid ratio is also known as >=!)4? r >A)!0 Te/, >Ra,!. Ai!uid assets refer to

assets which are !uickly converti#le into cash. *urrent ssets other stock and prepaid

e&penses

are considered as !uick assets.

=!)4 Ra,! @ T,a* =!)4 A//e,/

T,a* Crre(, L!a2!*!,!e/

10


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=!)4 A//e,/ @ T,a* Crre(, A//e,/ I(e(,r"

4ear Ratio

*++' ,.%*

*++3 ,.1%

*++( %.'*+1+ (.+'

*+11 3.%+

1 8 3 4 @

0

1

8

3

4

@

7

10

[email protected]@

@.74

.07 .@

& $#%&

+!%: '*#!$

EARNING PER %HARE:

In order to avoid confusion on account of the varied meanings of the term capital

employed" the overall profita#ility can also #e 'udged #y calculating earning per share

with the help of the following formula9

Ear(!(g Per E!," %hare @ Ne, Pr!, a,er Ta Preere()e D!!0e(0

N. E!," /hare/

The earning per share of the company helps in determining the market price of the

e!uity shares of the company. comparison of earning per share of the company with

another will also help in deciding whether the e!uity share capital is #eing effectively

11


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used or not. It also helps in estimating the companyFs capacity to pay dividend to its

e!uity shareholders.

4ear Ratio

*++' 3,.*(

*++3 1+,.%,

*++( 10.,'

*+1+ 1.0'

*+11 11,.+'

1 8 3 4 @

0

80

40

0

0

100

180

14010

.8

10.@

143.7 144.37

11.07

E#$&* P+$ S,#$+ R#%&

R*#!$

DIVIDEND PER %HARE :

It is e&pressed #y dividing dividend paid to e!uity shareholders #y no. of e!uity shares.

this shows the per share dividend given to e!uity shareholders. It is very helpful for

potential investors to know the dividend paying capacity of the company. It affects the

market value of the company.

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D!!0e(0 Per %hare @ D!!0e(0 Pa!0 T E!," %hareh*0er/

N. O E!," %hare/

di!idend er

share

*++' 1

year *++3 *1.%

*++( *(

*+1+ 0+

*+11 0+

0

@

10

1@

80

8@

30

3@

14

81.@

830 30

4&&4+4 +$

/,#$+

NET PRO$IT RATIO:

This ratio indicates the @et margin on a sale of Rs.1


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This ratio helps in determining the efficiency with which affairs of the #usiness are #eing

managed. n increase in the ratio over the previous period indicates improvement in the

operational efficiency of the #usiness. The ratio is thus on effective measure to check

the profita#ility of #usiness.

net ro"it

ratio

*++' 1+.1*

year *++3 11.,%

*++( 1*.+0

*+1+ 1+.%

*+11 3.%%

0

8

4

10

18

14

10.18

[email protected]

10.@4

.@@

- '$5# '*#!$

RETURN ON NET 5ORTH:

It measures the profita#ility of the #usiness in view of the shareholders. It 'udges the

earning capacity of the company and the ade!uacy of return on proprietorFs funds.

Shareholders and potential investors are interested in this ratio. It is calculated as

#elow9

14


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Re,r( O( Ne, 5r,h @ Ne, Pr!, A,er I(,ere/, A(0 Ta 1

%hareh*0er?/ $(0/

ret#rn onshareholder5

s

*++' 1.%

year *++3 10.'*

*++( 1%.'

*+1+ 10.3(

*+11 1*.'1

0

8

4

10

18

14

1

1

[email protected]

[email protected]

13.

18.71

'+'- $-

"*'&$&'"

DEBT' E=UIT& RATIO:

The /e#t%!uity ratio is calculated to find out the long%term financial position of the firm.

This ratio indicates the relationship #etween long%term de#ts and shareholderFs funds.

The soundness of long%term financial policies of a firm can #e determined with the help

of this ratio. It helps to assess the soundness of long%term financial policies of a

#usiness. It also helps to determine the relative stakes of outsiders and shareholders.

1@


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Aong%term creditors can assess the security of their funds in a #usiness. It indicates to

what e&tent a firm depends upon lenders to meet its long%term financial re!uirements.

low /e#t%!uity ratio is considered #etter from the point of view of creditors.

6otal7ebt to

O8ners

-#nd

*++' 10.(*

year *++3 1+.(,

*++( 1*.31

*+1+ 1*.1(

*+11 1.0'

0

8

4

10

18

14

113.8

10.

18.118.1

14.37

T%#7 D+8% % O9+$/ "4

T$#* D&# #$ O9-&'"

F+-

$IXED A%%ET% TURNOVER RATIO:

It is also called as Sales to 4i&ed ssets Ratio. It measures the efficient use of fi&ed

assets. This ratio is a measure of efficient use of fi&ed assets. it is calculated as9

$!e0 A//e,/ Tr(er Ra,! @ C/, g0/ /*0 r %a*e/

Ne, $!e0 A//e,/

1


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It measures the efficiency and profit earning capacity of the #usiness. igher the ratio"

greater is the intensive utiliation of fi&ed assets and a lower ratio shows under

utiliation of the fi&ed assets. This ratio has a special importance for manufacturing

concerns where investment in fi&ed assets" is very high and the profita#ility is

significantly dependent on the utiliation of these assets.

assetst#rno!er ratio

*++' %.

year *++3 ,.0*

*++( '.*

*+1+ '.*,

*+11 '.*

0

1

8

3

4

@

7

@.44

.38

7.8 7.8 7.84

*""" #+'-$6&' '*#!$

CAPITAL TURNOVER RATIO

$ncome / caital emloyed

CP$6

69RNO;

R R6$O

*++' 3.,

17


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4;R *++3 3.(,

*++( 3.((

*+1+ 3.,*

*+11 3.3

.1.8

.3

.4

.@

.

.7

.

.

.1

.4

..

.8

.4

CAPITAL TURNOVER

RATIO

To%1' 1,,$%, %ro8$r r1%0o:

total

assets

t#rno!er ratio

*++' +.+3

year *++3 +.+(

*++( +.+(

*+1+ +.+(

*+11 +.+3

1


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0.07

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0 0.0 0.0

0.0

#$#* *""" #+'-$6&'

'*#!$

PRICE9 EARNIN! RATIO

Price earning ratio < market rice er share/ earning er share

Price

;arning =P/;)

*++' 11.30

4ear *++3 1%.03

*++( '.,0

*+1+ 1.'3*+11 *1.(*

1


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0

@

10

1@

80

8@

11.3

[email protected]

7.3

14.7

81.8

P'!%& E*'-!-

BANK O$ BARODA

# : #$4# !" #& #!' *'&"# *-:!- I-!*, *(#&' #& S#*#& B*-: $( I-!* *- #& P+-2* N*#!$-* B*-: *- *&* $(ICICI B*-:.3 B$B !" '*-:& 73 !- F$'&" G$* 8000 !"#. B$B *" #$#* *""" !-

&%&"" $( R". 3.@ *: %'$'&", $' R". 3,@3 !!$-, * -$': $( $6&' 3,40 '*-%&"

*- $%&", *- *$+# 1,@7 ATM". I# *-" #$ $&- 400 -&9 '*-%&" !- #& %$!-

)&*'. I# $&'" * 9!& '*-& $( *-:!- '$+%#" *- 5-*-%!* "&'6!%&" #$ %$'$'*#&

*- '*! %+"#$&'" #'$+ * 6*'!) $( &!6&') %*--&" *- #'$+ !#"

"&%!*!& "+"!!*'!&" *- *!*#&" !- #& *'&*" $( !-6&"#&-# *-:!-, %'&!#

%*'" *- *"" *-*&&-#. I#" #$#* +"!-&"" 9*" R". @,4@8 !!$- *" $( J+-& 30.4

s o" #g#st *+1+> the bank has '3 branches abroad and by the end o" -411 this n#mber sho#ldclimb to (+. $n *+1+> O oened a branch in #ckland> Ne8 ?ealand> and its tenth branch in

the 9nited @ingdom. 6he bank also lans to oen "i!e branches in "rica. esides branches>

o lans to oen three o#tlets in the Persian A#l" region that 8ill consist o" 6Ms 8ith a

co#le o" eole.

6he Maharaah o" aroda> Sir Sayairao Aaek8ad $$$> "o#nded the bank on *+ B#ly 1(+3 in the

rincely state o" aroda> in A#arat. 6he bank> along 8ith 10 other maor commercial banks o"

$ndia> 8as nationalied on 1( B#ly 1(,(> by the go!ernment o" $ndia.

RATIO ANALYSIS OF BANK OF BARODA

Crre(, ra,!:

C9RR;N6 SS;6S/ C9RR;N6 $$$6$;S

80

http://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532134http://en.wikipedia.org/wiki/Hindi_languagehttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/Bank_of_Baroda#cite_note-2http://en.wikipedia.org/wiki/Forbes_Global_2000http://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Croreshttp://en.wikipedia.org/wiki/Bank_of_Baroda#cite_note-3http://en.wikipedia.org/wiki/Sayajirao_Gaekwad_IIIhttp://en.wikipedia.org/wiki/Princely_statehttp://en.wikipedia.org/wiki/Baroda_Statehttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Bombay_Stock_Exchangehttp://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532134http://en.wikipedia.org/wiki/Hindi_languagehttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/ICICI_Bankhttp://en.wikipedia.org/wiki/Bank_of_Baroda#cite_note-2http://en.wikipedia.org/wiki/Forbes_Global_2000http://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Croreshttp://en.wikipedia.org/wiki/Bank_of_Baroda#cite_note-3http://en.wikipedia.org/wiki/Sayajirao_Gaekwad_IIIhttp://en.wikipedia.org/wiki/Princely_statehttp://en.wikipedia.org/wiki/Baroda_Statehttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Government_of_India


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C#rrentRatio

*++' +.+

year *++3 +.+0

*++( +.+*

*+1+ +.+*

*+11 +.+*

0

0.01

0.01

0.08

0.08

0.03

0.03

0.04

0.04

[email protected]

0.03

0.08 0.08 0.08

C$$+% R#%&

C+''&-# R*#!$

:UICK RATIO

D#ickRatio

*++' 11.*(

year *++3 (.%,

*++( (.,*

*+1+ *1.33

*+11 *,.03

81


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0

@

10

1@

80

8@

30

11.8.@ .8

81.

8.3

;& R#%&

+!%: R*#!$

EPS

;arnings PerShare

*++' *3.13

year *++3 0(.1

*++( ,1.1

*+1+ 30.(,

*+11 1+3.00

0

80

40

0

0

100

180

8.1

3.41

1.14

3.

10.33

E#$&*/ P+$ S,#$+

E*'-!-" P&' S*'&

A,,$%, Tro8$r R1%0o

88


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24/42

0.0

0.07

0.07

0.07

0.070.07

0.0

0.0

0.0

0.0

0.07

0.0 0.0 0.0 0.0

T%#7 A//+%/ T$+$ R#%&/

T$#* A""" T+'-$6&'

R*#!$"

6otal $ncome /Caital;mloyed=E)

*++' '.30

year *++3 3.%'

*++( 3.%1

*+1+ '.3,

*+11 '.'%

7.8

7.4

7.A

7.B

B

B.8

B.4

B.A

B.B

7.B3

B.@7B.@1

7.BA7.7@

T-%#7 I2-+ < C#6&%#7 E67-.+4(=)

T$#* I-%$& F C*0!#*

E0$)&,

84


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Net Pro"it /6otal -#nds

*++' +.3

year *++3 +.3(

*++( 1.+(

*+1+ 1.*1

*+11 1.00

0

0.8

0.4

0.

0.

1

1.8

1.4

0.0.

1.0

1.81

1.33

N+% P$>% < T%#7 "4/

N P'$5# T$#* F+-"

7i!idend Per

Share

*++' ,

4ear *++3 3

*++( (

*+1+ 1%

*+11 1,.%

8@


26/42

0

8

4

10

18

14

1

1

1@

1.@

D&&4+4 P+$ S,#$+

D!6!&- P&' S*'&

PRICE9 EARNIN! RATIO

Price earnings ratio < market rice er share/ earnings er share

PR$C;2

;RN$N

A

*++' '.(0

4;R *++3 '.(

*++( 0.(%

*+1+ '.3'

*+11 (.1%

8


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0

1

8

3

4

@

7

10

7.37.4

3.@

7.7

.1@

PRICE/ EARNING

87


28/42


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30/42


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and earn profits. The efficiency with which assets are managed directly

effect the volume of sales. ctivity ratios measure the efficiency (or)

effectiveness with which a firm manages its resources (or) assets. These

ratios are also called LTurn over ratiosM #ecause they indicate the speed with which

assets are converted or turned over into sales.

3orking capital turnover ratio

4i&ed assets turnover ratio

*apital turnover ratio

*urrent assets to fi&ed assets ratio

a 5ORKING CAPITAL TURNOVER RATIO

3orking capital of a concern is directly related to sales.

5r4!(g )a-!,a*@ )rre(, a//e,/ )rre(, *!a2!*!,!e/

It indicates the velocity of the utiliation of net working capital.

This indicates the no. of times the working capital is turned over in the

course of a year. higher ratio indicates efficient utiliation of working

capital and a lower ratio indicates inefficient utiliation.

3orking capital turnover ratioKcost of goods sold:workingcapital.

*omponents of working capital9

*urrent assets *urrent lia#ilities

*ash in hand Outstanding or accrued e&penses

*ash at #ank Bank overdraft

Bills receiva#le Bills paya#le

Grepaid e&penses Short term advances

Short term investments Sundry creditors

Inventories /ividend paya#le

3ork in progress Income ta& paya#le

,arketa#le securities

31


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Sundry de#tors

2 $IXED A%%ET% TURNOVER RATIO

It is also known as sales to fi&ed assets ratio. This ratio measures the efficiency and

profit earning capacity of the firm. igher the

ratio" greater is the intensive utiliation of fi&ed assets. Aower ratio means

under%utiliation of fi&ed assets.

$!e0 a//e,/ ,r(er ra,! @ C/, %a*e/ Ne, !e0 a//e,/

C/, %a*e/ @ I()+e r+ %er!)e/

Ne, $!e0 A//e,/ @ $!e0 A//e,/ ' De-re)!a,!(

) CAPITAL TURNOVER RATIO%

Sometimes the efficiency and effectiveness of the operations

are 'udged #y comparing the cost of sales or sales with amount of capital

invested in the #usiness and not with assets held in the #usiness" though in

#oth cases the same result is e&pected. *apital invested in the #usiness may #e

classified as long%term and short%term capital or as fi&ed capital and working capital or

Owned *apital and Aoaned *apital. ll *apital

Turnovers are calculated to study the uses of various types of capital.

Ca-!,a* ,r(er ra,!@ )/, g0/ /*0)a-!,a* e+-*"e0

Ca-!,a* e+-*"e0 @ )a-!,a* re/ere/ /r-*/

C/, g0/ /*0 @ !()+e r+ /er!)e/

0 CURRENT A%%ET% TO $IXED A%%ET% RATIO

This ratio differs from industry to industry. The increase in the

ratio means that trading is slack or mechaniation has #een used. decline in the ratio

means that de#tors and stocks are increased too much or fi&ed assets are moreintensively used. If current assets increase with the corresponding increase in profit" it

will show that the #usiness is e&panding.

*urrent assets to fi&ed assets ratioK current assets: fi&ed assets

*urrent assets 4i&ed assets

38


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*ash in hand Glant

*ash at #ank ,achinery

Bills receiva#les Aand

Short term investment Building

Inventories ;ehicles

Sundry de#tors

3ork in progress

,arketa#le securities

3. PRO$ITABILIT& RATIO%

The primary o#'ectives of #usiness undertaking are to earn profits. Because profit is the

engine" that drives the #usiness enterprise.

@et profit ratio

Return on total assets

Reserves and surplus to capital ratio

arnings per share

Operating profit ratio

Grice N earning ratio

Return on investments

a NET PRO$IT RATIO

@et profit ratio esta#lishes a relationship #etween net profit (after ta&) and sales and

indicates the efficiency of the management in manufacturing" selling administrative and

other activities of the firm.

Ne, -r!, a,er ,a @ (e, -r!,' 0e-re)!a,!( !(,ere/, !()+e ,a

@et sales K income from services

Ne, -r!, ra,! @ (e, -r!, a,er ,a (e, /a*e/

33


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It also indicates the firmFs capacity to face adverse economic

conditions such as price competitors" low demand etc. O#viously higher the

ratio" the #etter is the profita#ility.

2 RETURN ON TOTAL A%%ET%

Grofita#ility can #e measured in terms of relationship #etween

net profit and assets. This ratio is also known as profit%to%assets ratio. It

measures the profita#ility of investments. The overall profita#ility can #e

known.

Returns on assets K net profit : total assets

@et profit K earnings #efore interest and ta&

Total assets K current assets fi&ed assets

) RE%ERVE% AND %URPLU% TO CAPITAL RATIO

It reveals the policy pursued #y the company with regard to

growth shares. very high ratio indicates a conservative dividend policy

and increased ploughing #ack to profit. igher the ratio #etter will #e the

position.

ReservesH surplus to capital ratio K reservesH surplus:capital

0 EARNING% PER %HARE

arnings per share is a small verification of return of e!uity and

is calculated #y dividing the net profits earned #y the company and those

profits after ta&es and preference dividend #y total no. of e!uity shares.

34


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arning per share K net profit after ta&: no. of e!uity shares

The arnings per share is a good measure of profita#ility when

compared with GS of similar other components (or) companies" it gives a

view of the comparative earnings of a firm.

e OPERATING PRO$IT RATIOOperating ratio esta#lishes the relationship #etween cost of goods sold and other

operating e&penses on the one hand and the sales on

the other.

Operating ratio K operating cost : net sales

owever C+ to =+? may #e considered to #e a good ratio in case of a manufacturing

under taking.

Operating profit ratio is calculated #y dividing operating profit

#y sales.

Operating profit K net sales N operating cost

Operating profit ratio K operating profit : sales

PRICE ' EARNING RATIO

Grice earning ratio is the ratio #etween market price per e!uity

share and earnings per share. The ratio is calculated to make an estimate of

appreciation in the value of a share of a company and is widely used #y

investors to decide whether (or) not to #uy shares in a particular company.

0enerally" higher the price%earning ratio" the #etter it is. If the

price earning ratio falls" the management should look into the causes that

have resulted into the fall of the ratio.

Pr!)e ear(!(g ra,! @ +ar4e, -r!)e -er /hare ear(!(g -er /hare

3@


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Mar4e, -r!)e -er /hare @ )a-!,a* re/ere/ /r-*/ (. e!," /hare/

Ear(!(g -er /hare @ ear(!(g/ 2ere !(,ere/, a(0 ,a (. e!," /hare/

g RETURN ON INVE%TMENT%

Return on share holderFs investment" popularly known as Return on investments (or)

return on share holders or proprietorFs funds is

the relationship #etween net profit (after interest and ta&) and the

proprietorFs funds.

Re,r( ( /hareh*0er?/ !(e/,+e(, @ (e, -r!, a,er !(,ere/, a(0 ,a

/hareh*0er?/ (0

The ratio is generally calculated as percentages #y multiplying

the a#ove with 1


37/42

liabilities and ro!isions

) )

TOTAL

CAPITAL

AND

LIABILITIE

S

1%(,1.+,

*'.0% **(+%.''

00.,, 33(31.,% (.**, 1'+0**.'

1,.1,

*++'2+3 *++32+( *++(21+ *+1+211

bsol#techange Echange bsol#techange Echange bsol#techange Echange bsol#techange Echang

e

A,,$%,

$n!estments +0%*.0( *'.+%% 3,%*.,( %.,* (30,.11 0.%, (31+.% 0.0

d!ances '(01.'1 *0.% 1*%'0% 0+.1, 3(1+.(% 1,.3 1*3+%.0 1(.'%

-iGed assets =01.**) =+.+'+

)

=%0.0*) =+.10) %0.0* +.1% 01.** +.+',

Caital Hork

$n Progress

=0'.+%) =+.11) =01.') =+.1+'

)

01.' +.1*+ 0'.+% +.1*%%

C#rrent assets =3,,%.+() =+.1() *,*+.%1 +.+' =*,*+.%1) =+.+,(

)

3,,%.+( +.*

TOTAL

ASSETS

1%(,1.+

,

*'.0% **(+%.'

'

00.,, 33(31.,% (.**, 1'+0**.

'

1,.1,

$nterretation :

6he caital o" bank increased by 1(.(3Ein +'2+3> +.++%E in +32+(> +.+13E in 1+211.

6here is no change in caital o" the bank in the year +(21+

6here is a h#ge "l#ct#ation in the rate o" increasing in reser!es& s#rl#s .

6he bank is #tiliing its reser!es &s#rl#s in an e""ecti!e manner.

$n +'2+3 deosits increase by *0.0(E> +32+( it increase by 03.+3E> 3.0,E in +(21+>1,.1E in

1+211.

6here is a h#ge "l#ct#ating rate o" increase . in +32+( it had "l#ct#ate to 0.30E.

6he in!estment in 1+211 has increased 8ith a lo8 rate as comared to the receding years .

*'.%%E in +'2+3>%.,*E in +32+(>0.%,E in +(21+>0.0E in 1+211.

6he ad!ances rose by *0.%E in +'2+3>0+.1,E in +32+(>1,.3E in +(21+> 1(.'%E in 1+211.

6here has been a consistent decline in "iGed assets in +'2+3 and +32+( +.+'+E >+.10Eresecti!ely. $ncreased by +.1%E in +(21+> +.+',E in 1+211.

6here is a "all o" c#rrent assets +.1(E in +'2+3 mainly d#e to the reayment o" deosits.+.+'E

in +32+(> s#bseI#ent "all o" c#rrent assets +.+,(E in +(21+> and increase o" +.*E in 1+211.

PROFIT AND LOSS OF STATE BANK OF INDIA FOR TE YEAR ENDIN! ON

MARC 2;;792;


38/42

Partic#lars *++'2+3 *++32+( *++(21+ *+1+211

absol#te

change

E

change

absol#te

change

E

change

absol#te

change E change absol#te change

$NCOM;:

oerating income 111+.(% +.* 13101.+ +.01 (3*.*( +.1* 1+0,'.03

;JP;N7$69R;

:

interest eGended 3(*.*, +.0, 1+(3,.*1 +.13 +'.1( +.1+ 1%%.3

oerating

eGenses 10%'.'' +.1+

0%1.11

+.* ,31'.0% +.0' ,3(.3'

total eGenses

(**0.1

+.*1 1%'03.(0 +.0+ (0'.' +.1 1*1,0.1

ro!ision andcontingencies 2,*,.3( 2+.1+ 1*03.,1 +.* 21'3'.+' +.1 1*1,0.1

net ro"it o" the

year *13'.31 +.3 *0(*.11 +.0% .3* +.++(1 21'(%.,3

eGtraordinary

items + + + + + + +

ro"it bro#ght

"or8ard + + + + + + +

total ro"it/=loss): *13'.31 +.3 *0(*.11 +.0% .3* +.++(1 21'(%.,3

INTERPRETATION

N$% Pro0% O T=$ Y$1r it sho8s a "l#ct#ating trend i.e.> increased by 3E in*++'2+3>0%E in

*++32+(>+.(E in *++(21+ and decline by 1(E in *+1+211d#e to increased taG liability.

I%$r$,% E/$$ it increases "rom 0,E in *++'2+3>13E in *++32+(> 1+E in *++(21+ and

0.*+E in *+1+211.

BALANCE SEET OF BANK OF BARODA FOR TE YEAR ENDIN! ON MARC

2;;792;


39/42


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oerating eGenses %(3.3* *1.,1E '.0( 1.+3E 3,,.%' **.%E (%3.,% *+.0%E

other ro!isions andcontingencies 2*1*.(+ 21%.%E ,%*.1% %,.0,E 230*.(*

2,.+E '*0.,+ '.1*E

total eGenses *>3,1.+ *(.(+E 0>1(0.+ *%.,(E 3*.0 %.*3E >++'.1 *.0,E

$% /ro0% o %=$ $1r +(.+, 0(.3%E '(1.,3 %%.1%E 301.10 0'.0*E 1>130.0% 03.,(E

eGtra ordinary items + +.++E + +.++E + +.++E + +.++E

ro"it bro#ght "or8ard + +.++E + +.++E + +.++E + +.++E

total +(.+, 0(.3%E '(1.,3 %%.1%E 301.10 0'.0*E 1>130.0% 03.,(E

INTERPRETATION

6he net ro"it o" the year sho8s a "l#ct#ating trend i.e.> 0(.3%E in *++'2+3>%%.1%E in*++32

+(>0'.0*E in *++(21+and 03.,(E in *+1+211.

6he interest eGended sho8s a "l#ct#ating trend in *++'2+3 to *+1+211

*++'2+32%.,1E>*++32*++(2*,.%1E >

CONCLUSIONS

1. State ank O" $ndia has o!erall better e""iciency and has er"ormed better in the banking

instit#tion as comared to ank O" aroda.

*. ;PS nd 7PS O" State ank O" $ndia is increasing d#e to increase in the #se o" debt

rather than the #se o" imro!ed oerations.0. 6he P/; Ratio O" State ank O" $ndia is high as comared to its ind#stry and ank O"

aroda 8hich means that S$ is #sing its "#nds in a better manner and it is "#ndamentally

so#nd in nat#re.

. eta O" State ank O" $ndia nd ank O" aroda is less than the market beta 8hich

means that both banks are gi!ing less ret#rns b#t they are less risky and in!estors can

in!est in these shares.

%. 6he !erage S#stainable ;arnings O" State ank O" $ndia is high and the standard

de!iation is lo8 so the bank has its earnings is s#stain and more rob#st in nat#re as

comared to ank o" aroda.

40


41/42

,. 6he Credit 7eosit O" State ank O" $ndia nd ank O" aroda is close b#t the ratio is

high 8hich means that State ank O" $ndia has o!erall good e""iciency and better

er"ormance> i.e.> the bank has high credit deosit ratio.

REFERENCES

=%%/$.0)0/$01.or+0)0S%1%$B1)oI01

=%%/$.0)0/$01.or+0)0B1)oB1ro1

=%%/.@o$(o%ro'.(o@01(01',,%1%$ 1) o I011'1($9,=$$%SBI

=%%/.@o$(o%ro'.(o@01(01',1)o1ro11'1($9,=$$%BOB

=%%/.@o$(o%ro'.(o@01(01',1)o1ro1/ro0%&'o,,BOB

=%%/.@o$(o%ro'.(o@01(01',1)o1ro1/ro0%&'o,,SBI

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41

http://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://www.moneycontrol.com/financials/statehttp://www.moneycontrol.com/financials/bankofbaroda/balance-sheet/BOBhttp://www.moneycontrol.com/financials/bankofbaroda/profit&loss/BOBhttp://www.moneycontrol.com/financials/bankofbaroda/profit&loss/SBIhttp://www.google.com/http://www.capitaline.com/http://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Barodahttp://www.moneycontrol.com/financials/statehttp://www.moneycontrol.com/financials/bankofbaroda/balance-sheet/BOBhttp://www.moneycontrol.com/financials/bankofbaroda/profit&loss/BOBhttp://www.moneycontrol.com/financials/bankofbaroda/profit&loss/SBIhttp://www.google.com/http://www.capitaline.com/


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