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SUMMER TRAINING PROJECT REPORT
ON
COMPARATIVE STUDY OF FINANCIAL PRODUCT AND REPORT
OF
TOP THREE BANKS OF INDIA
Submitted by: Roshan Jha Under guidance of :
BBA (CAM ) 2011-2014 MR. SUMIT DEBNATH(Asst.Professor)
03321001911 MR. KESHAV GUPTA(Asst.Professor)
IDEAL INSTITUTE OF MANAGEMENT AND TECHNOLOGY
(16x Karkardooma Institutional Area,Delhi-110092)
(G.G.S.I.P UNIVERSITY)
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CERTIFICATE
This is certify that Roshan Jha student of Ideal Institute of Management and Technology, Delhi
has completed his work report on the topic of COMPARATIVE STUDY OF FINANCIAL
PRODUCT AND REPORT OF TOP THREE BANKS and has submitted the work report.
He has worked under our guidance and direction. The said report is based on bona fide
information.
Project guide name Prof. Sumit Debnath
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DECLARATION
I hereby declare that project titled COMPARATIVE STUDY OF FINANCIAL Product is an
original piece of research work carried out by me under the guidance and supervision of Prof.Sumit Debnath . The information has been collected from genuine and authentic sources. The
work has been submitted.
Place Name
Date Signature
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ACKNOWLEDGEMENT
Perseverance inspiration and motivation have always played a key role in success of any
venture.I hereby express my deep sense of gratitude to all the personalities involved directly and
indirectly in my project work.
I would thanks to God for their blessing and my parents also for their valuable suggestion and
support in my project report.
I would also like to thank our friends and those who have helped us during this project directly or
indirectly.
Last but not the least; I would like to express my sincere gratitude to all the faculty memberswho have taught me in my entire BBA(Cam) curriculum and our Director Mr. Anil Parkash
Sharma who has always been a source of guidance, inspiration and motivation. However, I
accept the sole responsibility for any possible errors of omission and would be extremely grateful
to the readers of this project report if they bring such mistakes to my notice.
Roshan Jha
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INDEX
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Sr.No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Subjects
Introduction
Bank Profile
i. SBIii. ICICIiii. PNB
Products & Services
Balance Sheet
Ratio Analysis
Objectives
Importance
Advantages, Limitations
Conclusion
Bibliography
Page
7 - 11
12 - 1617202125
2643
4449
5075
7678
7980
8184
8587
88 - 89
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INTRODUCTION
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INRTODUCTION
After preparation of the financial statements, one may be interested in knowing the position
of an enterprise from different points of view. This can be done by analyzing the financial
statement with the help of different tools of analysis such as ratio analysis, funds flow analysis,
cash flow analysis, comparative statement analysis, etc.
Here I have done financial analysis by ratios. In this process, a meaningful relationship is
established between two or more accounting figures for comparison.
Financial ratios are widely used for modeling purposes both by practitioners and
researchers. The firm involves many interested parties, like the owners, management, personnel,
customers, suppliers, competitors, regulatory agencies, and academics, each having their views
in applying financial statement analysis in their evaluations. Practitioners use financial ratios, for
instance, to forecast the future success of companies, while the researchers' main interest has
been to develop models exploiting these ratios.
Many distinct areas of research involving financial ratios can be discerned. Historically one can
observe several major themes in the financial analysis literature. There is overlapping in the
observable themes, and they do not necessarily coincide with what theoretically might be the
best founded areas.
Financial statements are those statements which provide information about profitability and
financial position of a business. It includes two statements, i.e., profit & loss a/c or income
statement and balance sheet or position statement.
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The income statement presents the summary of the income earned and the expenses incurred
during a financial year. Position statement presents the financial position of the business at the
end of the year.
Before understanding the meaning of analysis of financial statements, it is necessary to
understand the meaning of analysis and financial statements.
Analysis means establishing a meaningful relationship between various items of the two
financial statements with each other in such a way that a conclusion is drawn. By financial
statements, we mean two statements- (1) profit & loss a/c (2) balance sheet. These are prepared
at the end of a given period of time. They are indicators of profitability and financial soundness
of the business concern.
Thus, analysis of financial statements means establishing meaningful relationship between
various items of the two financial statements, i.e., income statement and position statement
Parties interested in analysis of financial statements
Analysis of financial statement has become very significant due to widespread interest of various
parties in the financial result of a business unit. The various persons interested in the analysis of
financial statements are:-
Short- term creditors
They are interested in knowing whether the amounts owing to them will be paid as and when fall
due for payment or not.
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Longterm creditors
They are interested in knowing whether the principal amount and interest thereon will be paid on
time or not.
Shareholders
They are interested in profitability, return and capital appreciation.
Management
The management is interested in the financial position and performance of the enterprise as a
whole and of its various divisions.
Trade unions
They are interested in financial statements for negotiating the wages or salaries or bonus
agreement with management.
Taxation authorities
These authorities are interested in financial statements for determining the tax liability.
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Researchers
They are interested in the financial statements in undertaking research in business affairs and
practices.
Employees
They are interested as it enables them to justify their demands for bonus and increase in
remuneration.
You have seen that different parties are interested in the results reported in the financial
statements. These results are reported by analyzing financial statements through the use of ratio
analysis.
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BANK PROFILE
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STATE BANK OF INDIA
State Bank of India (SBI) (LSE: SBID) is the largest bank in India. It is also, measured by the
number of branch offices and employees, the second largest bank in the world. The bank traces
its ancestry back through the Imperial Bank of India to the founding in 1806 of the Bank of
Calcutta, making it the oldest commercial bank in the Indian Subcontinent. The Government of
India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a
60% stake, and renamed it the State Bank of India. In 2008, the Government took over the stake
held by the Reserve Bank of India.
SBI provides a range of banking products through its vast network in India and overseas,
including products aimed at NRIs. With an asset base of $360 billion and its reach, it is a
regional banking behemoth. SBI has laid emphasis on reducing the huge manpower through
Golden handshake schemes and computerizing its operations.
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The State Bank Group, with over 21500 branches, has the largest branch network in India. It has
a market share among Indian commercial banks of about 20% in deposits and advances.
Regional office of the State Bank of India (SBI), India's largest bank, in Mumbai. The
government of India is the largest shareholder in SBI.
The bank has 52 branches, agencies or offices in 32 countries. It has branches of the parent in
Colombo, Dhakka, Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles,
Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. It has offshore banking
units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape
Town.
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SBI operates several foreign subsidiaries or affiliates. In 1990 it established an offshore bank,
State Bank of India (Mauritius). It has two subsidiaries in North America, State Bank of India
(California), and State Bank of India (Canada). In 1982, the bank established its California
subsidiary, which now has seven branches.
The Canadian subsidiary was also established in 1982 and also has seven branches, four in the
greater Toronto area, and three in British Columbia. In Nigeria, it operates as INMB Bank.
This bank was established in 1981 as the Indo-Nigerian Merchant Bank and received permission
in 2002 to commence retail banking. It now has five branches in Nigeria. In Nepal SBI owns
50% of Nepal SBI Bank, which has branches throughout the country. In Moscow SBI owns 60%
of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia it owns 76% of
PT Bank Indo Monex. State Bank of India already has a branch in Shanghai and plans to open
one up in Tianjin.
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BOARD OF DIRECTORS
1.Pratip Chaudhuri, Chairman
2.Diwakar Gupta
3.Dileep C Choksi
4.D Sundaram
5.J B Mohapatra
6.D K Mittal
7.Rajiv Kumar
8.S Visvanathan
9.Hemant G Contractor
10. A Krishna Kumar
11. S Venkatachalam
12. Parthasarathy Iyengar
13. Deepak Ishwarbhai Amin
14. Subir Vithal Gokarn
15. S K Mukherjee
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INDUSTRIAL CREDIT & INVESTMENT CORPORATION OF INDIA (ICICI)
ICICI was formed in 1955 at the initiative of the World Bank, the government of India and
Indian industry representatives. The principal objective was to create a development financial
institution for providing medium-term and long-term project financing to Indian businesses.
Until the late 1980s, ICICI primarily focused its activities on project finance, providing long-
term funds to a variety of industrial projects.
With the liberalization of the financial sector in India in the 1990s, ICICI transformed its
business from a development financial institution offering only project finance to a diversified
financial services provider that, along with its
Subsidiaries and other group companies offered a wide variety of products and services. As
Indias economy became more market-oriented and integrated with the world economy, ICICI
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capitalized on the new opportunities to provide a wider range of financial products and services
to a broader spectrum of clients.
ICICI Bank was incorporated in 1994 as a part of the ICICI group. ICICI Banks initial equity
capital was contributed 75.0% by ICICI and 25.0% by SCICI
Limited, a diversified finance and shipping finance lender of which ICICI owned 19.9% at
December 1996. Pursuant to the merger of SCICI into ICICI,
ICICI Bank became a wholly-owned subsidiary of ICICI. ICICIs holding in ICICI Bank
reduced due to additional capital rising by ICICI Bank and sale of shares by ICICI, pursuant to
the requirement stipulated by the Reserve Bank of India that ICICI dilute its ownership of ICICI
Bank. Effective March 10, 2001, ICICI Bank acquired Bank of Madura, an old private sector
bank, in an all-stock merger.
The issue of universal banking, which in the Indian context means the conversion of long-term
lending institutions such as ICICI into commercial banks, had been discussed at length over the
past several years. Conversion into a bank offered,
ICICI the ability to accept low-cost demand deposits and offer a wider range of products and
services, and greater opportunities for earning non-fund based income in the form of banking
fees and commissions. ICICI Bank also considered various strategic alternatives in the context of
the emerging competitive scenario in the Indian banking industry.
ICICI Bank identified a large capital base and size and scale of operations as key success factorsin the Indian banking industry. In view of the benefits of transformation into a bank and the
Reserve Bank of Indis pronouncements on universal banking, ICICI and ICICI Bank decided to
merge.
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At the time of the merger, both ICICI Bank and ICICI were publicly listed in India and on the
New York Stock Exchange. The amalgamation was approved by each of the boards of directors
of ICICI, ICICI Personal Financial Services, ICICI Capital Services and ICICI Bank at their
respective board meetings held on October 25, 2001.
The amalgamation was approved by ICICI Banks and ICICIs shareholders at their
extraordinary general meetings held on January 25, 2002 and
January 30, 2002, respectively. The amalgamation was sanctioned by the High Court of Gujarat
at Ahmedabad on March 7, 2002 and by the High Court of Judicature at Bombay on April 11,
2002. The amalgamation became effective on May 3, 2002. The date of the amalgamation for
accounting purposes under Indian GAAP was March 30, 2002.
The Sangli Bank Limited, an unlisted private sector bank merged with ICICI Bank with effect
from April 19, 2007. On the date of acquisition, Sangli Bank had over 190 branches and
extension counters, total assets of Rs. 17.6billion (US$ 440 million), total deposits of Rs. 13.2
billion (US$ 330 million), total loans of Rs. 2.0 billion (US$ 50million).
The Bank has a network of 2,772 branches and 9,363 ATM's in India, and has a presence in 19
countries, including India.[2]
http://en.wikipedia.org/wiki/ICICI_Bank#cite_note-1http://en.wikipedia.org/wiki/ICICI_Bank#cite_note-1http://en.wikipedia.org/wiki/ICICI_Bank#cite_note-1http://en.wikipedia.org/wiki/ICICI_Bank#cite_note-17/27/2019 Roshan Jha Final
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BOARD OF DIRECTORS
1. Mr. K. V. Kamath, Chairman
2. Mr. Sridar Iyengar
3. Dr. Swati Piramal
4. Mr. Homi R. Khusrokhan
5. Mr. Arvind Kumar
6. Mr. M.S. Ramachandran
7. Dr. Tushaar Shah
8. Mr. V.Sridar
9. Ms. Chanda Kochhar,Managing Director & CEO
10. Mr. N. S. Kannan,Executive Director & CFO
11.Mr. K. Ramkumar,Executive Director
12.Mr. Rajiv Sabharwal,Executive Director
http://www.icicibank.com/aboutus/board-of-directors-kv-kamath.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridar-iyengar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridar-iyengar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-swati-piramal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-swati-piramal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-homi-khusrokhan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-homi-khusrokhan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-arvind-kumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-arvind-kumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ms-ramachandran.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ms-ramachandran.htmlhttp://www.icicibank.com/aboutus/board-of-directors-tushaar-shah.htmlhttp://www.icicibank.com/aboutus/board-of-directors-tushaar-shah.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ns-kannan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-k-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-k-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-k-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-rajiv-sabharwal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-k-ramkumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ns-kannan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-tushaar-shah.htmlhttp://www.icicibank.com/aboutus/board-of-directors-ms-ramachandran.htmlhttp://www.icicibank.com/aboutus/board-of-directors-arvind-kumar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-homi-khusrokhan.htmlhttp://www.icicibank.com/aboutus/board-of-directors-swati-piramal.htmlhttp://www.icicibank.com/aboutus/board-of-directors-sridar-iyengar.htmlhttp://www.icicibank.com/aboutus/board-of-directors-kv-kamath.html7/27/2019 Roshan Jha Final
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PUNJAB NATIONAL BANK (PNB)
Punjab National Bank (PNB) was registered on May 19, 1894 under the Indian Companies Act
with its office in Anarkali Bazaar Lahore. The Bank, founded by Dyal Singh Majithia and Lala
Harkishen Lal, is the second largest government-owned commercial bank in India with about
4,500 branches across 764 cities. It serves over 37 million customers.
The bank has been ranked 248th biggest bank in the world by Bankers Almanac, London. Total
Business of the bank for financial year 2007 is estimated to be approximately US$60 billion. It
has a banking subsidiary in the UK, as well as branches in Hong Kong and Kabul, and
representative offices in Almaty, Shanghai, and Dubai.
We are a leading public sector commercial bank in India, offering banking products and services
to corporate and commercial, retail and agricultural customers. Our banking operations for
corporate and commercial customers include a range of products and services for large
corporations, as well as small and middle market businesses and government entities.
It offers a wide range of retail credit products including housing loans, personal loans and
automobile loans. We cater to the financing needs of the agricultural sector and have created
innovative financing products for farmers. We also provide significant financing to other priority
sectors including small scale industries. Through our treasury operations, we manage our balance
sheet, including the maintenance of required regulatory reserves, and seek to maximize profits
from our trading portfolio by taking advantage of market opportunities.
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Our revenue, which is referred to herein and in our financial statements as our income, consists
of interest income and other income. Interest income consists of interest on advances (including
the discount on bills discounted) and income on investments. Income on investments consists of
interest and dividends from securities and our other investments and interest from interbank loan
and cash deposits we keep with the RBI.
Securities portfolio consists primarily of Government of India and state government securities.
We meet our statutory liquidity reserve ratio requirements through investments in these and other
approved securities. We also hold debentures and bonds issued by public sector undertakings and
other corporations, commercial paper, equity shares and mutual fund units.
Our interest expense consists of our interest on deposits as well as borrowings. Our interest
Income and expense are affected by fluctuations in interest rates as well as the volume of
activity. Our interest expense is also affected by the extent to which we fund our activities with
low interest or non-interest deposits, and the extent to which we rely on borrowings.
Non-interest expense consists principally of operating expenses such as expenses for wages and
employee benefits, rent paid on premises, insurance, postage and telecommunications expenses,
printing and stationery, depreciation on fixed assets, other administrative and other expenses.
Provisioning for non-performing assets, depreciation on investments and income tax is included
in provisions and contingencies
Use a variety of indicators to measure our performance. These indicators are presented in tabular
form in the section titled Selected Statistical Information on page []. Our net interest income
represents our total interest income (on advances and investments) net of total interest expense
(on deposits and borrowings).
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Net interest margin represents the ratio of net interest income to the monthly average of total
interest earning assets. Our spread represents the difference between the yield on the monthly
average of interest earning assets and the cost of the monthly average of interest bearing
liabilities.
Bank calculate average yield on the monthly average of advances and average yield on the
monthly average of investments, as well as the average cost of the monthly average of deposits
and average cost of the monthly average of borrowings.
Cost of funds is the weighted average of the average cost of the monthly average of interest
bearing liabilities. For purposes of these averages and ratios only, the interest cost of the
unsecured subordinated bonds that we issue for Tier 2 capital adequacy purposes (Tier 2
bonds) is included in our cost of interest bearing liabilities.
In our financial statements, these bonds are accounted for as other liabilities and provisions
and their interest cost is accounted for under other interest expenses.
Since 1969, when we became a public sector bank, we have managed to continue to grow our
business while maintaining a strong balance sheet. As of September 30, 2004, our total deposits
represented 85.9% of our total liabilities. On average, interest free demand deposits and low
interest savings deposits represented 43.8% of these deposits in the first six months of fiscal
2005.
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These low-cost deposits led to an average cost of funds excluding equity for the first six months
of fiscal 2005 of 4.7%. As of September 30, 2004, our gross and net non-performing assets
constituted 7.65% and 0.30% of our gross and net advances, respectively. In fiscal 2004 our total
income was Rs. 96.5 billion and our net profit was Rs. 11.1 billion before adjustment and Rs.
10.6billion after adjustment as part of the restatement of our financial statements for this Issue.
In the first six months of fiscal 2005 our total income was Rs. 51.9 billion and our net profit was
Rs. 7.4billion. Between fiscal 2002 and 2004, our total income grew at a compound annual rate
of12.5%, our unadjusted and adjusted net profit grew at a compound annual rate of 40.4%
and37.4%, respectively, and our total deposits and total advances grew at a compound annual
growth rate of 17.1% and 17.2%, respectively.
We intend to maintain our position as a cost efficient and customer friendly institution that
provides comprehensive financial and related services. We seek to achieve this by continuing to
adopt technology which will integrate our extensive branch network. We intend to grow by cross
selling various financial products and services to our customers and by expanding geographically
in India and internationally. We are committed to excellence in serving the public and also
maintaining high standards of corporate responsibility. In line with our philosophy of aiding
Indis development we have opened branches in many rural areas.
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BOARD OF DIRECTORS
1.K R Kamath
2.Usha Ananthasubramanian
3.B B Chaudhry
4.Mohinder Paul Singh
5.M N Gopinath
6.Sunil Gupta
7.N S Viswanathan
8.Rakesh Sethi
9.Anurag Jain
10. Mushtaq A Antulay
11. Pradeep Kumar
12. D K Singla
13. Sadhu Ram Bansal
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PRODUCTS
&
SERVICES
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1. SBI BANKING
Personal Banking
Agricultural & Rural Banking
NRI Services
International Banking
Corporate Banking
Services
Govt. Business
SME
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Personal Banking Agricultural NRI Services
Deposit Schemes Micro Credit Type of Accounts
Personal Finance Regional Rural Bank Corporate Banking
Corp Salary Package Agriculture Banking Corporate AccountsInternational Trade Mid Corporate Group
Merchant Banking
Project Finance
Correspondent Banking
Products and Services
Internet Banking
Mobile Banking
ATM Services
Demat Services
Public Provident Fund
Govt. SME Business
Govt. Accounts
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PERSONALBANKING
SBI Term Deposits
SBI Loan For PensionersSBI Recurring Deposits
SBI Loan Against Mortgage Of Property
SBI Housing Loan
SBI Loan Against Shares & Debentures
SBI Car Loan
SBI Rent Plus Scheme
SBI Educational Loan
SBI Medi-Plus Scheme
SBI Personal Loan
AGRICULTURE
State Bank of India caters to the needs of agriculturists and landless agricultural laborers througha network of 6600 rural and semi-urban branches. There are 972 specialized branches which
have been set up in different parts of the country exclusively for the development of agriculture
through credit deployment.
These branches include 427 Agricultural Development Branches (ADBs) and 547 branches with
Development Banking Department (DBDs) which cater to agriculturists and 2 Agricultural
Business Branches at Chennai and Hyderabad catering to the needs of hi tech commercial
agricultural projects.
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Our branches have covered a whole gamut of agricultural activities like crop production ,
horticulture , plantation crops, farm mechanization, land development and reclamation, digging
of wells, tube wells and irrigation projects, forestry, construction of cold storages and go downs,
processing of agro-products, finance to agro-input dealers, allied activities like dairy , fisheries,
poultry, sheep-goat, piggery and rearing of silk worms.
The branch also has farmer's meet in villages to explain to farmers about various schemes
offered by the bank. To give special focus to agriculture lending Bank has set up agro business
unit. Bank has also agro specialists in various disciplines to handle projects/ guide farmers in
their agriculture ventures. Advances are given for very small activity covering poorest of the
poor to hi-tech activities involving large fund outlays.
We are the leaders in agro finance in the country with a portfolio of Rs. 18,000 cars in agri
advances to around 50 lac farmers.
NRI SERVICES
World Class Services from a Bank you can Trust Indians everywhere should become enlightened
International citizens. Wherever you are, whichever country you live, enrich that nation, not only
in financial terms, but also with your sweat knowledge and dignity since that is the tradition of
the country from where you came. At the same time, remember we have a common umbilical
connectivity to our motherland, India.
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INTERNATIONAL BANKING
International banking services of State Bank of India are delivered for the benefit of its Indian
customers, non-resident Indians, foreign entities and banks through a network of 84
offices/branches in 32 countries as on 31 March 2008, spread over all time zones. The network is
augmented by a cluster of Overseas and NRI branches within India and correspondent links with
over 522 banks, the world over. Bank's Joint
Ventures and Subsidiaries abroad further underline the Bank's international presence. The
services include corporate lending, loan syndications, merchant banking, handling Letters of
Credit and Guarantees, short-term financing, collection of clean and documentary credits and
remittances.
The Bank has carved a niche for itself in the Euro land with branches located in Antwerp, Paris
and Frankfurt. Indian banks and corporates are able to avail single-window Euro services from
the Bank's Frankfurt branch.
CORPOTRATE BANKING
SBI is a one shop providing financial products / services of a wide range for large, medium and
small customers both domestic and international.
Working Capital Financing
-Fund based facilities to Corporate,
Partnership firms, Proprietary concerns
Term Loans to support capital expenditures for setting up new ventures as also for expansion,
renovation etc.
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Deferred Payment Guarantees to support purchase of capital equipment.
Corporate Loans For a variety of business related purposes to corporate.
Export Credit To Corporate / Non Corporate Strategic Business Units
(i) Corporate Accounts Group (CAG)
(ii) (ii)Project Finance (iii) Lease Finance
An exclusive unit providing ones shopping to Corporate
A dedicated set up specialized in financing of infrastructure and other large projects
Exclusive set up for handling large ticket leases.
Pricing
SBI's Prime Lending Rates (PLR) is among the lowest
Presently Bank has two PLR's
SBAR for loans payable on demand and up to one year
SBMTLRfor loans payable beyond one year.
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SERVICES
Listed on the left are Services, SBI offers to its customers.
DOMESTIC TREASURY
SBI VISHWA YATRA FOREIGN TRAVEL CARD
BROKING SERVICES
REVISED SERVICE CHARGES
ATM SERVICES
INTERNET BANKING
E-PAY
E-RAIL
RBIEFT
SAFE DEPOSIT LOCKER
GIFT CHEQUES
GOVERNMENT BUSINESS
State Bank of India's linkage with Government business is widespread. No wonder that out of
9315 branches in India, about 7000 branches are conducting Government Business. The large
network of our branches provides easy access to the common man to deposit the following
Government dues and pension payments.
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SME (small scale industries)
State Bank of India has been playing a vital role in the development of small scale industries
since 1956.The Bank has financed over 8 lakhs SSI units in the country. It has 55 specialized SSI
branches, 99 branches in industrial estates and more than 400 branches with SIB divisions.
The Bank finances for Small Business activities which are of special significance to a large
number of people as many of these activities can be started with relatively lower investment and
with no special skills on the part of the entrepreneurs.
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2. ICICI BANKING
Safety, Flexibility, Liquidity, Returns!
ICICI Bank offers a wide Variety of Deposit Products to suit your banking requirements.
Simplified Documentation, Quick Processing.
Exclusive, Economical Investment Plans
World Class Service and Acceptance!!!A truly world class service as ICICI Bank cards have both national and international acceptance.
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Secure, Reliable ,Convenient!!!
Convenience has always been synonymous with ICICI Bank and keeping in
line we offer the facility of buying Insurance policies online.
Banking at your fingertips!!!
Why be inline when you can be online for paying your utility bills, mobile bills, prepaid mobile
recharge, Shopping, Credit card, insurance premium and lots more.
INTERNATIONAL BANKING
In 2001, we identified international banking as a key opportunity, aiming to cater to the cross-
border needs of clients and leveraging our domestic banking strengths to offer products
internationally. We have made significant progress in the international business since we set up
our first overseas branch in Singapore in 2003.
ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in
Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre, Qatar Financial
Centre and the United States and representative offices in the United Arab Emirates, China,
South Africa, Bangladesh, Thailand, Malaysia and Indonesia.
The Banks wholly owned subsidiary ICICI Bank UK PLC has nine branches in the United
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Kingdom and a branch each in Belgium and Germany. ICICI Bank Canada has eight branches
including three in Toronto. ICICI Bank Eurasia LLC has six branches including three branches
in Moscow and one in St. Petersburg.
Our international strategy is focused on building a retail deposit franchise, diverse wholesale
funding sources and strong syndication capabilities to support our corporate and investment
banking business; achieving the status of a non-resident Indian (NRI) community bank in key
markets; and expanding private banking operations for India-centric asset classes. During fiscal
2008, we focused on deepening our presence in existing overseas locations and expanding our
operations in key markets. In line with our strategy to establish a presence in large markets with
significant savings pools, we entered into Germany through a branch established by ICICI Bank
UK PLC. We have been able to successfully leverage our technology advantage to create a
growing international deposit base. 30% year-on-year increase in standalone profit after tax to `
1,956 crore (US$ 370 million) for the quarter ended September 30, 2012 (Q2-2013) from ` 1,503
crore (US$ 284 million) for the quarter ended September 30, 2011 (Q2-2012).
We have established a strong franchise among NRIs by offering a comprehensive product suite,
technology enabled access, a wide distribution network in India and alliances with local banks in
various markets. Currently, we have over 500,000 NRI customers. We have undertaken
significant brand-building initiatives in international markets and have emerged as a well-
recognized financial services brand for NRIs.
We continue to maintain a market share of 25% in inward remittances to India. During fiscal
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2012, we launched innovative products like instant money transfer and enhanced our focus on
customer relationship management and process automation. Additionally, we also undertook the
development of low cost remittance products in non-India geographies with correspondent tie-
ups for disbursements in over 100 such geographies.
Through our international private banking services, we offer various products to mass affluent
and high net worth clients based on their financial needs and risk appetite. The offerings range
from simple deposits and loans to more sophisticated structured products, private equity and
products giving exposure to the real estate sector in India.
CORPORATE BANKING
Our corporate banking strategy is based on providing comprehensive and customized financial
solutions to our corporate customers. We offer a complete range of corporate banking products
including rupee and foreign currency debt, working capital credit, structured financing,
syndication and transaction banking products and services.
Our corporate and investment banking franchise is built around a core relationship team that has
strong relationships with almost all of the countrys corporate houses. The relationship team is
product agnostic and is responsible for managing banking relationships with clients. We have
also put in place product specific teams with a view to focus on specific areas of expertise in
designing financial solutions for clients.
Through our relationship teams working in tandem with product solution teams, we have
deepened our client relationships across our product portfolio or resulting in significant growth
in income and wallet share among all our top corporate clients, as compared to the previous year.
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We have created an integrated Global Investment Banking Group, which is responsible for
working with the relationship team in India and our international subsidiaries and branches, for
origination, structuring and execution of investment banking mandates on a global basis. We
have also restructured our delivery team for transaction banking products by creating dedicated
sales teams for trade services and transaction banking products. This has been done with the
intent to increase our market share from transaction banking products, which will translate into
recurring fee income for the Bank. We have also focused on increasing market share in trade
finance by leveraging and further strengthening correspondent banking relationships
SME BANKING
During fiscal year 2008, our small customer base enterprises increased by 26% to about 1.1
million accounts. We have introduced our service offerings in over 400 new branches, increasing
our coverage to over 1,000 branches. During the year, we have focused on product specialization
including investment banking for SMEs.
We have continued to focus on shaping the small and medium enterprises sphere in India
through initiatives such as the Emerging India Awards, the SME CEO Knowledge Series - a
platform to mentor and assist SME entrepreneurs, and the SME Dialogue - a weekly feature in
a leading financial newspaper sharing SME best practices and success stories. During the year,
we have launched several new products and services like the SME toolkit an online business
and advisory resource for SMEs.
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RURAL BANKING AND AGRI-BUSINESS
We believe the rural economy has high growth potential and offers large credit growth
opportunities. Towards this end, our suite of products and services is targeted to address the
needs of both the farm and non-farm sectors. Our retail product suite encompasses loans for crop
production, purchase of farm equipment; commodity based finance as well as various savings,
investment and insurance products.
Bank also offer micro-finance and jewel loans. We have also focused on enhancing credit to
farmers by leveraging on corporate partnerships. For example, we have partnered with various
dairies to provide financing to farmers for purchase of milk cattle. We also provide credit and
banking services to SMEs active in the agricultural value chain. To enhance our service quality
and product delivery capabilities we have developed a large network of rural branches which is
further augmented by non-branch channels.
Rural banking in India is still at a nascent stage and the deployment of technology channels and
modern banking methods for rural lending continues to be an evolving process. In line with our
learning from our rural banking operations, we undertook a comprehensive review of and
realigned our channel architecture, credit underwriting processes and account management
systems.
We have put in place a robust risk management structure to Mitigate and manage credit,
operational and fraud risks. Through this, we aim to create a strong foundation for scaling up of
our rural business.
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3.PNB BANKING
Term loans
Cash credit and other working capital facilities
Bill discounting
Export credits
Other credit and financing products
SERVICES TO NON-RESIDENT INDIANS
We provide personal financial services for NRIs. We have established a branch in Kabul and
Representative offices in other cities overseas in order to facilitate services being provided to
NRIs. We offer foreign currency accounts to NRIs under our Foreign Currency Non-Resident
Scheme and rupee accounts for NRIs under our Non-Resident External and Non-Resident
Ordinary Schemes. We have introduced our
Global Foreign Currency Scheme and Global Rupee Deposit Scheme, which offer benefits and
concessions to NRIs and their relatives provided a minimum balance of Rs. 250,000 or
US$5,000 is maintained in the account. We also offer various products for facilitating
remittances from NRIs to India.
We recently entered into an arrangement to facilitate money transfers through Western Union,
which is a global leader in money transfer services. We have also entered into an agreement with
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Times Online Money Ltd., a Times of India group company, with a view to establishing an
internet based international remittance service. In addition, we also provide housing loans to
NRIs.
RETAIL BANKING
In retail banking, our principal competitors are the large public sector banks, as well as existing
and new private sector banks and foreign banks in the case of retail loan products. The other
public sector banks have large deposit bases and large branch networks, including the State Bank
of India which has 13,593 branches. Private sector and foreign banks compete principally by
offering a wider range of products as well as greater technological sophistication in some cases
Foreign banks, while having a small market penetration overall, has a significant presence
among non-resident Indians and also competes for non-branch based products such as auto loans
and credit cards.
In particular, we face significant competition primarily from private sector banks and to a lesser
degree from other public sector banks, in the housing, auto and personal loan segments. In
mutual fund sales and other investment related products, our principal competitors are brokers,
foreign banks and new private sector banks.
SERVICES FOR AGRICULTURE CUSTOMERS
Agriculture contributes 22% to Indias GDP and supports approximately two-thirds of Indias
population. In fiscal 2004, we surpassed the stated national goal that banks should provide at
least18% of their net bank credit (which is gross credit minus Foreign Currency Non-Resident
Bank deposits) to this segment, for which we received an award from Indias Finance Minister.
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Our average credit growth rate in this segment has been 32.2% over the last four years. As of the
last reporting Friday of September 2004, agricultural loans constituted 18.8% of our net bank
credit.
SMALL SCALE INDUSTRIES
We provide financing to small scale industries or SSIs. SSIs are defined as manufacturing,
processing and servicing businesses with up to Rs. 50 million invested in plant and machinery
for certain industries such as hosiery, hand tools, drugs and pharmaceuticals and stationery items
and up to Rs. 10 million invested in plant and machinery for other small scale industries.
SSIs are also considered a priority sector for directed lending purposes. See the section titled
Business-Directed Lending below. As of the last reporting Friday in September 2004, SSI
loans constituted 11.3% of our net bank credit
. As of the last reporting Friday in September, 2004 we had an outstanding loan portfolio of Rs.
57.3 billion in this segment compared to Rs. 48.5 billion as of the last reporting Friday in
September 2003, representing growth of approximately 18.1%.We have also received awards
and recognition from the Government of India relating to our efforts in financing SSI businesses.
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BALANCE SHEETOF
STATE BANK OFINDIA
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Balance Sheet of State Bank ofIndia
------------------- in Rs. Cr. -------------------
Mar '12 Mar '11
12 mths 12 mths
Capital and Liabilities:
Total Share Capital 671.04 635.00
Equity Share Capital 671.04 635.00
Share Application Money 0.00 0.00
Preference Share Capital 0.00 0.00
Reserves 83,280.16 64,351.04
Revaluation Reserves 0.00 0.00
Net Worth 83,951.20 64,986.04
Deposits 1,043,647.36 933,932.81Borrowings 127,005.57 119,568.96
Total Debt 1,170,652.93 1,053,501.77
Other Liabilities & Provisions 80,915.09 105,248.39
Total Liabilities 1,335,519.22 1,223,736.20
Mar '12 Mar '11
12 mths 12 mths
Assets
Cash & Balances with RBI 54,075.94 94,395.50
Balance with Banks, Money at Call 43,087.23 28,478.65
Advances 867,578.89 756,719.45
Investments 312,197.61 295,600.57
Gross Block 14,792.33 13,189.28
Accumulated Depreciation 9,658.46 8,757.33
Net Block 5,133.87 4,431.95
Capital Work In Progress 332.68 332.23
Other Assets 53,113.02 43,777.85
Total Assets 1,335,519.24 1,223,736.20
Contingent Liabilities 698,064.74 585,294.50
Bills for collection 201,500.44 205,092.29
Book Value (Rs) 1,251.05 1,023.40
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BALANCE SHEETOF
ICICI BANK
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Balance Sheet of ICICI Bank ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11
12 mths 12 mths
Capital and Liabilities:
Total Share Capital 1,152.77 1,151.82
Equity Share Capital 1,152.77 1,151.82
Share Application Money 2.39 0.29
Preference Share Capital 0.00 0.00
Reserves 59,250.09 53,938.82
Revaluation Reserves 0.00 0.00
Net Worth 60,405.25 55,090.93
Deposits 255,499.96 225,602.11
Borrowings 140,164.91 109,554.28
Total Debt 395,664.87 335,156.39
Other Liabilities & Provisions 17,576.98 15,986.35
Total Liabilities 473,647.10 406,233.67
Mar '12 Mar '11
12 mths 12 mths
Assets
Cash & Balances with RBI 20,461.29 20,906.97
Balance with Banks, Money at Call 15,768.02 13,183.11
Advances 253,727.66 216,365.90
Investments 159,560.04 134,685.96
Gross Block 9,424.39 9,107.47
Accumulated Depreciation 4,809.70 4,363.21
Net Block 4,614.69 4,744.26
Capital Work In Progress 0.00 0.00
Other Assets 19,515.39 16,347.47
Total Assets 473,647.09 406,233.67
Contingent Liabilities 858,566.64 883,774.77
Bills for collection 64,457.72 47,864.06
Book Value (Rs) 524.01 478.31
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BALANCE SHEETOF
PUNJAB NATIONAL BANK
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Balance Sheet of PunjabNational Bank
------------------- in Rs. Cr. -------------------
Mar '12 Mar '11
12 mths 12 mths
Capital and Liabilities:
Total Share Capital 339.18 316.81
Equity Share Capital 339.18 316.81
Share Application Money 0.00 0.00
Preference Share Capital 0.00 0.00
Reserves 26,028.37 19,720.99
Revaluation Reserves 1,449.53 1,470.76
Net Worth 27,817.08 21,508.56
Deposits 379,588.48 312,898.73Borrowings 37,264.27 31,589.69
Total Debt 416,852.75 344,488.42
Other Liabilities & Provisions 13,524.18 12,328.27
Total Liabilities 458,194.01 378,325.25
Mar '12 Mar '11
12 mths 12 mths
Assets
Cash & Balances with RBI 18,492.90 23,776.90
Balance with Banks, Money at Call 10,335.14 5,914.32
Advances 293,774.76 242,106.67
Investments 122,629.47 95,162.35
Gross Block 5,265.08 4,981.60
Accumulated Depreciation 2,096.22 1,876.01
Net Block 3,168.86 3,105.59
Capital Work In Progress 0.00 0.00
Other Assets 9,792.88 8,259.42
Total Assets 458,194.01 378,325.25
Contingent Liabilities 173,768.84 101,465.73
Bills for collection 50,981.22 37,449.53
Book Value (Rs) 777.39 632.48
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RATIO ANALYSIS
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RATIO ANALYSIS OF STATE BANK OF INDIA
Ratios
Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09Mar ' 08
Per share ratios
Adjusted EPS (Rs) 174.80 130.44 144.54 143.71 106.39
Adjusted cash EPS (Rs) 189.81 146.04 159.23 155.74 117.16
Reported EPS (Rs) 174.46 130.15 144.37 143.67 106.56
Reported cash EPS (Rs) 189.47 145.75 159.06 155.69 117.33
Dividend per share 35.00 30.00 30.00 29.00 21.50
Operating profit per share (Rs) 289.44 255.39 229.63 230.04 173.61
Book value (excl rev res) per share (Rs)1,251.051,023.401,038.76912.73 776.48
Book value (incl rev res) per share (Rs.)1,251.051,023.401,038.76912.73 776.48
Net operating income per share (Rs) 1,776.471,504.341,353.151,179.45899.83
Free reserves per share (Rs) 645.05 468.29 412.36 373.99 356.61
Profitability ratiosOperating margin (%) 16.29 16.97 16.96 19.50 19.29
Gross profit margin (%) 15.44 15.93 15.88 18.48 18.09
Net profit margin (%) 9.73 8.55 10.54 12.03 11.65
Adjusted cash margin (%) 10.59 9.60 11.62 13.04 12.81
Adjusted return on net worth (%) 13.97 12.74 13.91 15.74 13.70
Reported return on net worth (%) 13.94 12.71 13.89 15.74 13.72
Return on long term funds (%) 96.84 96.72 95.02 100.35 86.83
Leverage ratiosLong term debt / Equity - - - - -
Total debt/equity 12.43 14.37 12.19 12.81 10.96
Owners fund as % of total source 7.44 6.50 7.57 7.24 8.36
Fixed assets turnover ratio 0.10 7.24 7.26 7.20 6.32
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Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09Mar ' 08
Liquidity ratios
Current ratio 0.65 0.41 0.43 0.34 0.53
Current ratio (inc. st loans) 0.04 0.04 0.03 0.04 0.07
Quick ratio 12.05 8.50 9.07 5.74 6.15
Inventory turnover ratio - - - - -
Payout ratios
Dividend payout ratio (net profit) 22.59 26.03 23.36 22.90 22.64
Dividend payout ratio (cash profit) 20.80 23.24 21.20 21.13 20.56
Earning retention ratio 77.45 74.03 76.67 77.11 77.33
Cash earnings retention ratio 79.24 76.80 78.82 78.88 79.41
Coverage ratios
Adjusted cash flow time total debt 81.94 100.71 79.54 75.05 72.64
Financial charges coverage ratio 0.32 0.35 0.33 1.36 0.37
Fin. charges cov.ratio (post tax) 1.20 1.19 1.21 1.23 1.23
Component ratios
Material cost component (% earnings) - - - - -
Selling cost Component 0.17 0.26 0.26 0.33 0.30
Exports as percent of total sales - - - - -
Import comp. in raw mat. consumed - - - - -
Long term assets / total Assets 0.85 0.87 0.89 0.88 0.81
Bonus component in equity capital (%) - - - - -
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RATIO ANALYSIS OF ICICI BANK
Ratios
Mar ' 12Mar ' 11Mar ' 10Mar ' 09Mar ' 08
Per share ratios
Adjusted EPS (Rs) 56.10 44.37 34.90 33.60 36.78
Adjusted cash EPS (Rs) 60.65 49.25 40.45 39.70 41.97
Reported EPS (Rs) 56.09 44.73 36.10 33.76 37.37
Reported cash EPS (Rs) 60.64 49.61 41.66 39.85 42.56
Dividend per share 16.50 14.00 12.00 11.00 11.00
Operating profit per share (Rs) 76.15 64.08 49.80 48.58 51.29
Book value (excl rev res) per share (Rs)524.01 478.31 463.01 444.94 417.64
Book value (incl rev res) per share (Rs.)524.01 478.31 463.01 444.94 417.64
Net operating income per share (Rs) 346.19 281.04 293.74 343.59 354.71
Free reserves per share (Rs) 376.49 358.12 356.94 351.04 346.21
Profitability ratios
Operating margin (%) 21.99 22.80 16.95 14.13 14.45
Gross profit margin (%) 20.68 21.06 15.06 12.36 12.99
Net profit margin (%) 16.14 15.91 12.17 9.74 10.51
Adjusted cash margin (%) 17.45 17.52 13.64 11.45 11.81
Adjusted return on net worth (%) 10.70 9.27 7.53 7.55 8.80
Reported return on net worth (%) 10.70 9.35 7.79 7.58 8.94
Return on long term funds (%) 52.09 42.97 44.72 56.72 62.34
Leverage ratios
Long term debt / Equity - - - 0.01 0.01
Total debt/equity 4.23 4.10 3.91 4.42 5.27
Owners fund as % of total source 19.12 19.62 20.35 18.46 15.95
Fixed assets turnover ratio 0.09 3.55 4.60 5.14 5.61
Liquidity ratios
Current ratio 1.97 1.73 1.94 0.78 0.72
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Mar ' 12Mar ' 11Mar ' 10Mar ' 09Mar ' 08
Current ratio (inc. st loans) 0.12 0.11 0.13 0.13 0.10
Quick ratio 16.71 15.86 14.70 5.94 6.42
Inventory turnover ratio - - - - -
Payout ratios
Dividend payout ratio (net profit) 32.82 35.23 37.31 36.60 33.12
Dividend payout ratio (cash profit) 30.36 31.76 32.33 31.00 29.08
Earning retention ratio 67.19 64.49 61.40 63.23 66.35
Cash earnings retention ratio 69.65 68.01 66.70 68.87 70.51
Coverage ratios
Adjusted cash flow time total debt 36.54 39.77 44.79 49.41 52.34
Financial charges coverage ratio 0.39 0.43 0.33 0.25 1.25Fin. charges cov.ratio (post tax) 1.31 1.34 1.26 1.20 1.20
Component ratios
Material cost component (% earnings) - - - - -
Selling cost Component 0.73 0.94 0.72 1.74 4.43
Exports as percent of total sales - - - - -
Import comp. in raw mat. consumed - - - - -
Long term assets / total Assets 0.82 0.83 0.80 0.75 0.78
Bonus component in equity capital (%) - - - - -
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RATIO ANALYSIS OF PUNJAB NATIONAL BANK
Ratios
Mar ' 12Mar ' 11Mar ' 10Mar ' 09Mar ' 08
Per share ratios
Adjusted EPS (Rs) 143.88 139.84 123.78 97.97 64.94
Adjusted cash EPS (Rs) 152.49 147.92 130.85 104.03 70.34
Reported EPS (Rs) 144.00 139.94 123.86 98.03 64.98
Reported cash EPS (Rs) 152.62 148.02 130.93 104.09 70.38
Dividend per share 22.00 22.00 22.00 20.00 13.00
Operating profit per share (Rs) 223.61 205.58 191.63 151.48 109.81
Book value (excl rev res) per share (Rs)777.39 632.48 514.77 416.74 341.98
Book value (incl rev res) per share (Rs.)820.13 678.91 562.09 464.75 390.68
Net operating income per share (Rs) 1,170.81940.76 777.82 694.81 505.09
Free reserves per share (Rs) 130.21 69.25 63.79 64.04 63.79
Profitability ratios
Operating margin (%) 19.09 21.85 24.63 21.80 21.74
Gross profit margin (%)
18.36
20.99
23.72
20.93
20.67
Net profit margin (%) 12.09 14.56 15.64 13.76 12.68
Adjusted cash margin (%) 12.80 15.39 16.52 14.60 13.72
Adjusted return on net worth (%) 18.50 22.11 24.04 23.50 18.99
Reported return on net worth (%) 18.52 22.12 24.06 23.52 19.00
Return on long term funds (%) 113.95 108.49 116.11 129.83 111.52
Leverage ratios
Long term debt / Equity - - - - -
Total debt/equity 14.40 15.62 15.36 15.96 15.44Owners fund as % of total source 6.49 6.01 6.11 5.89 6.08
Fixed assets turnover ratio 0.09 6.04 5.89 5.64 4.35
Liquidity ratios
Current ratio 0.72 0.66 0.61 0.27 0.29
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Mar ' 12Mar ' 11Mar ' 10Mar ' 09Mar ' 08
Current ratio (inc. st loans) 0.02 0.02 0.02 0.02 0.02
Quick ratio 23.81 22.24 20.47 9.75 9.40
Inventory turnover ratio - - - - -
Payout ratios
Dividend payout ratio (net profit) 17.75 18.27 20.74 23.86 23.40
Dividend payout ratio (cash profit) 16.75 17.27 19.62 22.47 21.61
Earning retention ratio 82.23 81.72 79.25 76.12 76.59
Cash earnings retention ratio 83.24 82.72 80.37 77.51 78.38
Coverage ratios
Adjusted cash flow time total debt 73.39 66.77 60.43 63.95 75.05
Financial charges coverage ratio 0.35 0.47 1.50 0.43 0.42Fin. charges cov.ratio (post tax) 1.22 1.31 1.32 1.27 1.25
Component ratios
Material cost component (% earnings) - - - - -
Selling cost Component 0.09 0.13 0.16 0.14 0.14
Exports as percent of total sales - - - - -
Import comp. in raw mat. consumed - - - - -
Long term assets / total Assets 0.92 0.92 0.92 0.92 0.92
Bonus component in equity capital (%) - - - - -
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RATIO ANALYSIS
PROFITABILITY RATIO
A class of financial metrics that are used to assess a business's ability to generate earnings as
compared to its expenses and other relevant costs incurred during a specific period of time. For
most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a
previous period is indicative that the company is doing well.
Some examples of profitability ratios are profit margin, return on assets and return on equity. It is
important to note that a little bit of background knowledge is necessary in order to make relevant
comparisons when analyzing these ratios.
For instances, some industries experience seasonality in their operations. The retail industry, for
example, typically experiences higher revenues and earnings for the Christmas season.
Therefore, it would not be too useful to compare a retailer's fourth-quarter profit margin with its
first-quarter profit margin. On the other hand, comparing a retailer's fourth-quarter profit margin
with the profit margin from the same period a year before would be far more informative.
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OPERATING MARGIN
A ratio used to measure a company's pricing strategy and operating efficiency. Operating margin
is a measurement of what proportion of a company's revenue is left over after paying for variablecosts of production such as wages, raw materials, etc. A healthy operating margin is required for
a company to be able to pay for its fixed costs, such as interest on debt. It Is Also known as
"operating profit margin."
Calculated as:
Operating margin gives analysts an idea of how much a company makes (before interest and
taxes) on each dollar of sales. When looking at operating margin to determine the quality of a
company, it is best to look at the change in operating margin over time and to compare the
company's yearly or quarterly figures to those of its competitors.
If a company's margin is increasing, it is earning more per dollar of sales. The higher the margin,
the better. For example, if a company has an operating margin of 12%, this means that it makes$0.12 (before interest and taxes) for every dollar of sales. Often, nonrecurring cash flows, such
as cash paid out in a lawsuit settlement, are excluded from the operating margin calculation
because they don't represent a company's true operating performance.
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OPERATING MARGIN
INTERPRETATION
It shows that operating efficiency of ICICI is better than PNB and SBI. While operating efficiency of
SBI is lower than ICICI and PNB. So rank of operating efficiency of banks can be given as ICICI,
PNB and SBI as on March 2012.
As on March 2011 ICICI was leading the operating efficiency by having Operating Margin of 22.8%
As on March 2010 PNB was leading the operating efficiency by having Operating Margin of 24.63%
GROSS PROFIT MARGIN
A financial metric used to assess a firm's financial health by revealing the proportion of money
left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as
the source for paying additional expenses and future savings. It is also known as "gross margin".
0
5
10
15
20
25
30
SBI ICICI PNB
2012
2011
2010
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Calculated as:
For example, suppose that ABC Corp. earned $20 million in revenue from producing widgets
and incurred $10 million in COGS-related expense. ABC's gross profit margin would be 50%.
This means that for every dollar that ABC earns on widgets, it really has only $0.50 at the end of
the day.
This metric can be used to compare a company with its competitors. More efficient companies
will usually see higher profit margins.
GROSS PROFIT MARGIN
0
5
10
15
20
25
SBI ICICI PNB
2012
2011
2010
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INTERPRETATION
This ratio shows financial position of company. Here, financial position of ICICI is better than SBI and
PNB as on March 2012. So ICICI is at first rank by its financial position than SBI and PNB.
As on March 2011 ICICI was leading the financial position by having Gross Profit of 21.06%.
As on March 2010 PNB was leading the financial position by having Gross Profit of 23.72%.
NET PROFIT MARGIN
For a business to survive in the long term it must generate profit. Therefore the net profit marginratio is one of the key performance indicators for your business. The net profit margin ratio
indicates profit levels of a business after all costs have been taken into account. It is worth
analyzing the ratio over time. A variation in the ratio from year to year may be due to abnormal
conditions or expenses. Variations may also indicate cost blowouts which need to be addressed.
A decline in the ratio over time may indicate a margin squeeze suggesting that productivity
improvements may need to be initiated. In some cases, the costs of such improvements may lead
to a further drop in the ratio or even losses before increased profitability is achieved
The calculation used to obtain the ratio is:
Net Profit Margin = Net Profit x 100
Sales
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NET PROFIT MARGIN
INTERPRETATION
This ratio is key performance indicators for business. Key performance means the profit level of
company; from above graph we can say that performance of ICICI is better than SBI and PNB as on
March 2012. So profit level of ICICI is at first rank than SBI and PNB.
As on March 2011 ICICI was leading in Net Profit Margin by 15.91%.
As on March 2010 PNB was leading in Net Profit Margin by 15.64%.
RETURN ON NETWORTH
Return on Net worth (RONW) is used in finance as a measure of a companys profitability. It
reveals how much profit a company generates with the money that the equity shareholders have
invested. Therefore, it is also called Return on Equity (ROE)
0
2
4
6
8
10
12
14
16
18
SBI ICICI PNB
2012
2011
2010
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It is expressed as:-
Net Income
RONW = ------------------------------------------- X 100
Shareholders Equity
RETURN ON NET WORTH
INTERPRETATION
This ratio is useful for comparing the profitability of a company to that of other firms in the same
industry. Here, profitability of PNB is more than SBI and ICICI as on all three consecutive years
(March 2010, 2011 and 2012). So we can say that PNB is at first rank by its profitability than SBI
and ICICI.
The numerator is equal to a fiscal years net income (after payment of preference share dividends
but before payment of equity share dividends).The denominator excludes preference shares and
0
5
10
15
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2012
2011
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considers only the equity shareholding. So, RONW measures how much return the company
management can generate for its equity shareholders.
RONW is a measure for judging the returns that a shareholder gets on his investment as a
shareholder, equity represents your money and so it makes good sense to know how well
management is doing with it.
LEVERAGE RATIO
Any ratio used to calculate the financial leverage of a company to get an idea of the company's
methods of financing or to measure its ability to meet financial obligations. There are several
different ratios, but the main factors looked at include debt, equity, assets and interest expenses.
A ratio used to measure a company's mix of operating costs, giving an idea of how changes in
output will affect operating income.
Fixed and variable costs are the two types of operating costs; depending on the company and the
industry, the mix will differ.
The most well-known financial leverage ratio is the debt-to-equity ratio. For example, if a
company has $10M in debt and $20M in equity, it has a debt-to-equity ratio of 0.5
($10M/$20M). Companies with high fixed costs, after reaching the breakeven point, see a greater
increase in operating revenue when output is increased compared to companies with high
variable costs.
The reason for this is that the costs have already been incurred, so every sale after the breakeven
transfers to the operating income. On the other hand, a high variable cost company sees little
increase in operating income with additional output, because costs continue to be imputed into
the outputs. The degree of operating leverage is the ratio used to calculate this mix and its effects
on operating income.
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DEBT-EQUITY RATIO
A measure of a company's financial leverage is calculated by dividing its total liabilities by
stockholders equity.
Calculated as:
Debt Equity Ratio
Note: Sometimes only interest-bearing, long-term debt is used instead of total liabilities in the
calculation. It is also known as the Personal Debt/Equity Ratio, this ratio can be applied to
personal financial statements as well as companies'.
A high debt/equity ratio generally means that a company has been aggressive in financing its
growth with debt.
This can result in volatile earnings as a result of the additional interest expense. If a lot of debt is
used to finance increased operations (high debt to equity), the company could potentially
generate more earnings than it
would have without this outside financing. If this were to increase earnings by a greater amount
than the debt cost (interest), then the shareholders benefit as more earnings are being spread
among the same amount of shareholders.
However, the cost of this debt financing may outweigh the return that the company generates on
the debt through investment and business activities and become too much for the company to
handle. This can lead to bankruptcy, which would leave shareholders with nothing.
The debt/equity ratio also depends on the industry in which the company operates. For example,
capital-intensive industries such as auto manufacturing tend to have a debt/equity ratio above 2,
while personal computer companies have a debt/equity of under 0.5.
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DEBT EQUITY RATIO
INTERPRETATION
This ratio indicates what proportion of equity and debt the company is using to finance its assets.
From above diagram we can say that PNB has a high debt-equity ratio as on all three consecutive
years ( March 2010, 2011 and 2012) means it is aggressive in financing its growth with debt. Than
after SBI has a low debt-equity ratio as comparison with PNB and ICICI comes at third rank in debt-
equity ratio.
FIXED ASSETS TURNOVER RATIO
Measure of the productivity of a firm, it indicates the amount of sales generated by each dollar
spent on fixed assets, and the amount of fixed assets required to generate a specific level of
revenue. Changes in the ratio over time reflect whether or not the firm is becoming more
efficient in the use of its fixed assets. Formula: Sales revenue average fixed assets.
0
2
4
6
8
10
12
14
16
18
SBI ICICI PNB
2012
2011
2010
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FIXED ASSETS TURNOVER RATIO
INTERPRETATION
This ratio shows specific level of revenue by the amount of fixed assets. SBI has a high level of
revenue in comparison with ICICI and PNB on all three consecutive years (March 2010, 2011 and
2012). After SBI, PNB has a high level of revenue and then ICICI.
LIQUIDITY RATIO
A class of financial metrics that is used to determine a company's ability to pay off its short-
terms debts obligations. Generally higher the value of the ratio, the larger the margin of safety
that the company possesses to cover short-term debts.
Common liquidity ratios include the current ratio, the quick ratio and the operating cash flow
ratio. Different analysts consider different assets to be relevant in calculating liquidity.
0
1
2
3
4
5
6
7
8
SBI ICICI PNB
2012
2011
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Some analysts will calculate only the sum of cash and equivalents divided by current liabilities
because they feel that they are the most liquid assets, and would be the most likely to be used to
cover short-term debts in an emergency.
A company's ability to turn short-term assets into cash to cover debts is of the utmost importance
when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently
use the liquidity ratios to determine whether a company will be able to continue as a going
concern.
CURRENT RATIO
This ratio is a rough indication of a firm's ability to service its current obligations. Generally, the
higher the current ratio, the greater the "cushion" between current obligations and your
Company's ability to pay them. The composition and quality of current assets is a critical factorin the analysis of your Company's liquidity. It is calculated as Total current assets divided by
total current liabilities.
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CURRENT RATIO
INTERPRETATION
Current ratio of ICICI is higher than SBI and PNB, means ICICI has a high ability to pay for its
liabilities, and then secondly comes PNB and ICICI has a low ability to pay for liabilities as on all
three consecutive years (March 2010, 2011 and 2012).
QUICK RATIO
It is also known as the "Acid Test" ratio; it is a refinement of the current ratio and is a more
conservative measure of liquidity. The ratio expresses the degree to which your current
Company's current liabilities are covered by the most liquid current assets. Generally, any value
of less than 1 to 1 implies a "dependency" on inventory or other current assets to liquidate short-
term debt.
0
0.5
1
1.5
2
2.5
SBI ICICI PNB
2012
2011
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It is calculated as Cash plus trade receivables divided by total current liabilities.
QUICK RATIO
INTERPRETATION
PNB has a high quick ratio means it has enough current assets to cover its current liabilities on all
three consecutive years (March 2010,2011 and 2012), while SBI and ICICI have a low quick ratio in
comparison with PNB on all three consecutive years.
PAYOUT RATIOS
The amount of earnings paid out in dividends to shareholders. Investors can use the payout ratio
to determine what companies are doing with their earnings.
Calculated as:
0
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30
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2012
2011
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For example, a very low payout ratio indicates that a company is primarily focused on retaining
its earnings rather than paying out dividends. The payout ratio also indicates how well earnings
support the dividend payments: the lower the ratio, the more secure the dividend because smaller
dividends are easier to pay out than larger dividends.
DIVIDEND PAYOUT RATIO
Dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends:
The part of the earnings not paid to investors is left for investment to provide for future earnings
growth. Investors seeking high current income and limited capital growth prefer companies with
high Dividend payout ratio. However investors seeking capital growth may prefer lower payout
ratio because capital gains are taxed at a lower rate.
High growth firms in early life generally have low or zero payout ratios. As they mature, they
tend to return more of the earnings back to investors. Note that dividend payout ratio is a
reciprocate ratio to dividend cover, which is calculated as EPS/DPS.
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DIVIDEND PAYOUT RATIO
INTERPRETATION
ICICI has a high dividend pay-out ratio on all three consecutive years(March 2010,2011 and 2012),
so the Investors who are seeking high current income and limited capital growth should be invest in
ICICI bank. SBI and PNB have a low dividend pay-out ratio, so investors who are seeking capital
growth should be invest in SBI and PNB because capital gains are taxed at a lower rate.
EARNING RETENTION RATIO
The percent of earnings credited to retained earnings. In other words, the proportion of net
income that is not paid out as dividends.
0
5
10
15
20
25
30
35
40
SBI ICICI PNB
2012
2011
2010
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Calculated as:
EARNING RETENTION RATIO
INTERPRETATION
Earning retention ratio is the opposite of the dividend pay-out ratio. PNB have high Earning
Retention Ration on all three consecutive years(March 2010 , 2011 and 2012).
PNB have a high earning retention ratio, so the Investors who are seeking high current income and
limited capital growth should be invest in PNB. ICICI and SBI have low earning retention ratio, so
the investors who are seeking capital growth should be invest in ICICI BANK .
0
10
20
30
40
50
60
70
80
90
SBI ICICI PNB
20122011
2010
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PERSHARE RATIOS
EARNIG PER SHARE
The portion of a company's profit allocated to each outstanding share of common stock. Earnings
per share serve as an indicator of a company's profitability.
Calculated as:
When calculating, it is more accurate to use a weighted average number of shares outstanding
over the reporting term, because the number of shares outstanding can change over time.
However, data sources sometimes simplify the calculation by using the number of shares
outstanding at the end of the period
Diluted EPS expands on basic EPS by including the shares of convertibles or warrants
outstanding in the outstanding shares number.
Earnings per share are generally considered to be the single most important variable in
determining a share's price. It is also a major component used to calculate the price-to-earnings
valuation ratio.
For example, assume that a company has a net income of $25 million. If the company pays out
$1 million in preferred dividends and has 10 million shares for half of the year and 15 million
shares for the other half, the EPS would be $1.92 (24/12.5). First, the $1 million is deducted fromthe net income to get $24 million, and then a weighted average is taken to find the number of
shares outstanding (0.5 x 10M+ 0.5 x 15M = 12.5M). An important aspect of EPS that's often
ignored is the capital that is required to generate the earnings (net income) in the calculation.
Two companies could generate the same EPS number, but one could do so with less equity
(investment) - that company would be more efficient at using its capital to generate income and,
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all other things being equal, would be a "better" company. Investors also need to be aware of
earnings manipulation that will affect the quality of the earnings number. It is important not to
rely on any one financial measure, but to use it in conjunction with statement analysis and other
measures.
EARNING PER SHARE
INTERPRETATION
This ratio is an indicator of a company's profitability. From above graph we can say that SBI has
a high profitability than PNB and ICICI as on March 2012. So, PNB comes at second position
and ICICI comes at third position in profitability.
As on March 2011 PNB was leading the Earning Per Share by 139.94%.
As on March 2010 SBI was leading the Earning Per Share by 144.07%.
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20
40
60
80
100
120
140
160
180
200
SBI ICICI PNB
2012
2011
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OBJECTIVES
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OBJECTIVES
Analysis of financial statements is an attempt to assess the efficiency and performance of an
enterprise. For that there are some objectives which are described as under.
1. EARNING CAPACITY OR PROFITABILITY
The overall objective of a business is to earn a satisfactory return on the funds invested in it.
Financial analysis helps in ascertaining whether adequate profits are being earned on the capital
invested in the business or not. It also helps in knowing the capacity to pay the interest and
dividend.
2. COMPARATIVE POSITION IN RELATION TO OTHER FIRMS
The purpose of financial statements analysis is to help the management to make a comparative
study of the profitability of various firms engaged in similar business. Such comparison also
helps the management to study the position of their firm in respect of sales expenses,
profitability and using capital etc.
3. EFFICIENCY OF MANAGEMENT
The purpose of financial statement analysis is to know that the financial policies adopted by the
management are efficient or not. Analysis also helps the management in preparing budgets by
forecasting next years profit on the basis of past earnings. It also helps the management to find
out shortcomings of the business so that remedial measures can be taken to remove these
shortcomings.
4. FINANCIAL STRENGTH
The purpose of financial analysis is to assess the financial potential of business. Analysis alsohelps in taking decisions.
(a) Whether funds required for the purchase of new machinery and equipment are provided from
internal resources of business or not.
(b) How much funds have been raised from external sources.
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5.SOLVECNY OF THE FIRM
The different tools of analysis tells us whether the firm has sufficient funds to meet its short-term
and long-term liabilities or not.
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IMPORTANCE
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IMPORTANCE
Ratio analysis is an important technique of financial analysis. It is a means for judging the
financial health of a business enterprise. It determines and interprets the liquidity, solvency,
profitability, etc. of a business enterprise.
f
different ratios. Financial ratios simplify, summaries, and systemize the accounting figures
presented in financial statements.
ratio analysis, comparison of profitability and financial soundness can be
made between one industry and another. Similarly comparison of current year figures can also be
made with those of previous years with the help of ratio analysis and if some weak points are
located, remedial measures are taken to correct them.
If accounting ratios are calculated for a number of years, they will reveal the trend of costs,
sales, profits and other important facts. Such trends are useful for planning.
ards for judging
actual performance of a business. For example, if owners of a business aim at earning profit @
25% on the capital which is the prevailing rate of return in the industry then this rate of 25%
becomes the standard. The rate of profit of each year is compared with this standard and the
actual performance of the business can be judged easily.
position of business with liquidity viewpoint, solvency view point, profitability viewpoint, etc.
with the help of such a study, we can draw conclusion regarding the financial health of business
enterprise.
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ADVANTAGES&
LIMITATIONS
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ADVANTAGES
Ratio analysis is an important and age-old technique of financial analysis. The following aresome of the advantages of ratio analysis:
1. Simplifies financial statements: It simplifies the comprehension of financial statements. Ratios
tell the whole story of changes in the financial condition of the business.
2. Facilitates inter-firm comparison: It provides data for inter-firm comparison. Ratios highlight
the factors associated with successful and unsuccessful firm. They also reveal strong firms and
weak firms, overvalued and undervalued firms.
3. Helps in planning: It helps in planning and forecasting. Ratios can assist management, in its
basic functions of forecasting. Planning, co-ordination, control and communications.
4. Makes inter-firm comparison possible: Ratios analysis also makes possible comparison of the
performance of different divisions of the firm. The ratios are helpful in deciding about their
efficiency or otherwise in the past and likely performance in the future.
5. Help in investment decisions: It helps in investment decisions in the case of investors and
lending decisions in the case of bankers etc.
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LIMITATIONS
The ratios analysis is one of the most powerful tools of financial management. Though ratios are
simple to calculate and easy to understand, they suffer from serious limitations.
1. Limitations of financial statements: Ratios are based only on the information which has been
recorded in the financial statements. Financial statements themselves are subject to several
limitations. Thus ratios derived, there from, are also subject to those limitations.
For example, non-financial changes though important for the business are not relevant by the
financial statements. Financial statements are affected to a very great extent by accounting
conventions and concepts. Personal judgment plays a great part in determining the figures for
financial statements.
2. Comparative study required: Ratios are useful in judging the efficiency of the business only
when they are compared with past results of the business. However, such a comparison only
provide glimpse of the past performance and forecasts for future may not prove correct sinceseveral other factors like market conditions, management policies, etc. may affect the future
operations.
3. Problems of price level changes: A change in price level can affect the validity of ratios
calculated for different time periods. In such a case the ratio analysis may not clearly indicate the
trend in solvency and profitability of the company.
The financial statements, therefore, be adjusted keeping in view the price level changes if a
meaningful comparison is to be made through accounting ratios.
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4. Lack of adequate standard: No fixed standard can be laid down for ideal ratios. There are no
well accepted standards or rule of thumb for all ratios which can be accepted as norm. It renders
interpretation of the ratios difficult.
5. Limited use of single ratios: A single ratio, usually, does not convey much of a sense. To make
a better interpretation, a number of ratios have to be calculated which is likely to confuse the
analyst than help him in making any good decision.
6. Personal bias: Ratios are only means of financial analysis and not an end in itself. Ratios have
to interpret and different people may interpret the same ratio in different way.
7. Incomparable: Not only industries differ in their nature, but also the firms of the similar
business widely differ in their size and accounting procedures etc. It makes comparison of ratios
difficult and misleading.
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CONCLUSION
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CONCLUSION
Ratios make the related information comparable. A single figure by itself has no meaning,
but when expressed in terms of a related figure, it yields significant interferences. Thus, ratios
are relative figures reflecting the relationship between related variables. Their use as tools of
financial analysis involves their comparison as single ratios, like absolute figures, are no