PCA & RD Bank PDF

A STUDY ON FINANCIAL PERFORMANCE AT PCA AND RD BANK
CHAPTER - 1
INTRODUCTION
INTRODUCTION:-
Finance is concerned with broad sense as an economic activity of mobilization
savings and directing them in investment. Finance is life blood and nerve center of business.
Irrespective of size and nature it requires adequate amount of finance. Finance is required to
establish business acquire fixed assets, to produce product, to keep men and machines at
work and to encourage management to maximize earnings of the firm. Even existing firm
needs additional finance for expansion.
Due to globalization, survival of business in the modern world is the driving to do
better than others and entry of private sector has caused for intense competition. That‟s why
among business community is doing something better than others to capture the business.
Therefore monitoring the financial health of a company by checking its sales and profits is
not sufficient today.
So in the changing scenario, every business strives hard for survival in the present
day‟s era of core competence. Survival of the business is possible only who is having the
strength to face challenges, but it will happen through checking current position and fulfill
the requirements.
The financial requirements of a business must be sufficient to meet its long term and
short term commitments. To meet long term commitment, it needs permanent capital and for
short term commitments, it needs working capital. But finance managed in a systematic
manner for
smooth running of a business. Both the excessive and inadequate will cause for business
failures.
A business without finance is a wingless bird. Therefore, the financial analyst is
responsible to monitor the financial position of a bank regularly, because whether the bank‟s
finance is using correctly or not. Then they can
be change easily, if any improper financial practices that is in regarding rate of return,
proportion of fixed capital and working capital.
BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 1

MEANING OF FINANCE:-
Financial is the area of business management devoted to judicious use of capital and a
careful selection of sources of capital in order to enable a business firm to move in the
direction of reaching its goals.
Finance may be defined as the provision of money at the time when it is required.
Finance refers to management of flows of money through an organization it concerns with the
application of skills in the manipulation use and control of money.
DEFINITION OF FINANCE:-
According to Guttmann and Douglas business finance can be broadly defined as

activity concerned with the planning, raising, controlling and administering the funds use in
the business.
According to Joseph and massy, financial management is the operational activity of a

business that is responsible for obtaining and effectively utilizing the funds necessary for
effectively utilizing the funds necessary.
CLASSIFICATION OF FINANCE:
The subject of finance has been traditionally classified into two classes:
a) PUBLIC FINANCE
b) PRIVATE FINANCE
In detail the classes can be explained as:
a) PUBLIC FINANCE:
Public finance deals with the requirements, receipts and disbursements of funds
in the government institutions like states, local self-governments and central
governments.

b) PRIVATE FINANCE:
Private finance is concerned with requirements receipts and disbursements of
fund in case of an individual , a profit seeking business organization and a nonprofit
organization.
Financial management:
Financial management refers to that part of management activity which is concerned

with planning and controlling firm‟s financial resources. It deals with finding out various
sources of raising funds for firm. The sources must be suitable and economical for needs of
business.
The most appropriate use of such funds also forms part of financial management.
Definition:
Financial management is concerned with the efficient use if an important economic
resources, namely, capital funds-professor Solo man.
Aims of Financial Management:

The primary aim of the finance management is to arrange as much funds for the business
as are required from time to time. This function has the following aims:
 Acquiring sufficient funds

 Proper utilization of funds.
 Increasing Profitability.
 Maximizing firm‟s value.
Importance of financial management:-

 Financial planning and successful promotion of bank.
 Acquisition of funds at least cost possible.
 Proper allocation of funds.

 Taking sound financial decisions.

 Increase profitability through strict financial control.
 Increase wealth of investors.
 Economic growth and development.
 Improve standard of living.
Objectives of financial management:-

 Profit maximization.
 Wealth maximization
 Maintenance of adequate liquid assets of firm
 Balanced asset structure
 Ensuring a fair return to shareholders
 Financial discipline
 Profit Maximization:
Earnings profits by a corporate or a company is a social obligation Profit is the only

means through which an efficiency of organization can be measured.
 Wealth Maximization:
The concept of Wealth Maximization refers to the gradual growth of the value of
assets of the firm in terms of benefits it can produce. Any financial action can be judged in
terms of the benefits it, produces less cost of action. The Wealth Maximization attained by a
company is reflected in the market value.
 Balanced Asset Structure:
The subject of financial management must have goal of maintaining balanced asset
structure of company. The size of current assets must permit the company to exploit the
investments on fixed assets. Therefore balance between fixed assets and current assets has to
be maintained.

 Efficiency:
"Innovate or perish" is the slogan of this century. If a company is innovative /

efficient, it can be run successfully in its future periods. The threat of competition alarmed
the businessman to be made creative and efficient. Hence, it is the obligation of a finance
manager to be vigilant in increasing the efficiency level of a company.
 Liquidity:
The Liquidity objective of a company will exploit the long-term vision of a company.
If a firm is 'Liquid', it is an indication of positive growth. The application of management of
cash flows yielded in increasing the company's capacity to meet short-term as well as long-
term obligation of the company.
 Financial Discipline:
As in the recent past, country has witnessed different types of scandals, corporate
financial indiscipline, and misuse of funds. Hence it has become an obligatory responsibility
of a company to have financial discipline through various techniques of financial
management viz., capital budgeting, fund flow and cash flow statement, performance
budgeting, CVP analysis etc.
Financial performance:-
Financial performance is an accounting summary that details a businessman

organizations revenues expenses and net income. A statement of financial performance is
also required to as statement of profit and loss or statement of financial performance on a
monthly, quarterly or annual basis.
A statement of financial performance provides important details about corporation‟s
revenues. Revenues represent income that a company earns during a period. They include
sales, interest income and gains on short term investments.
A statement of financial performance provides important details about corporation‟s
expenses. It represents costs that a company includes during a period. They may include cost
of sales, interest expenses and loses on short term investment.

Tools and techniques of financial analysis:-

1. Comparative financial statements
2. Common size balance statement
3. Trend analysis
4. Ratio analysis
5. Funds flow statements
6. Cash flow statements
Financial performance is being analyzed with widely used tool like ratio
analysis:
Ratio analysis:-
Ratio analysis defined as the systematic use of ratio to interpret the financial
statement so that the strength and weakness of a firm as well as its historical performances
and current financial condition can be determined.
The term ratio refers to the numerical or quantitative relationship between two variables.
Analysis is an activity concerned with giving brief and understandable explanation of

analyzed financial data (ratio) to required people.
The ratio analysis is the relationship between two figures and two amounts. It is deals from
balance sheet and profit and loss statement. The relationships expressed in mathematical term
between figures which are connected with each other.
These are many different ways to measure financial performance but all measures
should be taken in aggregation line items such as revenue from operations, operating income
or cash flow operation can be used, as well as total unit sales. Further, the analyst or investor
may wish to look deeper into financial statements and seek out margin growth rates or any
Declining debt. This particular topic is chosen in most of financial performance, ratio
analysis is one of the most aspects for any banking and company.

This topic is selected to analyze the financial performance of Tumkur District Co-
operative central bank ltd., with the help of ratio analysis it is based on ratio of the company
which had shown a growth steady of increased profits and turnover in recent years.
INDUSTRY PROFILE
INTRODUCTION:
Now-a days banking sector acts as the back bone of modern business. Development of
any country mainly depends upon the banking system.
The term bank is derived from the French word “BANCO” which means a bench. In
olden days, European money lenders or money changes used to displays coins of different
countries in big heaps [quantity] on benches or tables for the purpose of lending or exchange.
A Bank s a financial institution which deals with deposits and advances and other
related services. It receives money from these who want to save in the form of deposits and it
lends money to those who need it.
The built of money transactions today involve the transfer of bank deposits.
Depository institutions, which we normally call banks , are at the very center of our monetary
system. Thus a basic knowledge of the banking system is essential to an understanding of
how money works.
History of Bank:
The very first banks were probably the religious temples of the ancient world. In
them were stored gold in the form of easy to carry compressed plates. Their owners justly
felt that temples were the safety places to store their gold as they were constantly attended.
Well build and were sacred. This deterring would be thieves. There are extent records of
loans from the 18th century BC in Babylon that were made by temple priests to merchants.
Ancient Greece holds further evidence of banking Greek temples as well as private
and civic entities conducted financial transactions such as loans, deposits, currency exchange
and validation of coinage. Interestingly there is evidence too of credit. Whereby in return for
a payment from a client, a money lender in one Greek port would write a credit note for the

client. Who could “CASH” the note in another city, savings the client the danger of carting
coinage with an his journey.
Ancient Rome perfected the administrative aspect of Banking and saw greater
regulation of financial institutions and financial practices charging interest on loans and
paying interest on deposits become more highly developed and competitive.
Evaluation of Banking
The evaluation of banking is closely related to the history of money. As a society
became more civilized. The need for more efficient methods for barter was developed
organically most origins of money can be traced back to the building of large structures such
as temples or large undertakings by leaders, such as wars. The concept of an “I OWE YOU”
[IOU] preceded the idea of a paper check by several thousand years the word “Bank” just
means “Bench” because a lender or barrower needs to display wars on a flat surface in order
to determine value, a money changer is a person who either changes currencies or changes
goods into coins, like a pawn shop. Considering the biblical story of Christ driving the
money changers from the temple. They have been around a long time
With the concept of banking and money, comes the question of dependability banking as we
know it today is a fairly low risk business for an investor of a savings account. From ancient
times. The value of money was determined by its weight in gold, up to the invention of the
paper check, or paper money in the early 1600‟s although much lighter to transport, paper
money was much less dependable for the carrier. The paper was only worth the reputation of
the money changer that signed it. Paper money was not only earlier to carry, it was easier to
steal for this reason, professional money changers did all they could to ensure the appearance
of liquidity and dependability.
This “keeping up of appearances” caused money early banks to keep offices in well-guarded
patrician areas of major cities, and later to build palace like fortresses in order to appear
dependable

RBI
The reserve bank of India is India‟s central banking institution, which controls the monetary
policy of Indian rupee. It was established on April 1935 during the British raj in accordance
with the provisions of the Reserve bank of India act 1934.
Need for a Central Bank
Before the establishment of the Reserve Bank, the currency and credit systems of the
country was operated by the two different authorities; namely, the government and the
Imperial Bank of India. The establishment of the
Central Bank was found necessary in view of establishing the value of money, neither
internally nor externally.
The Reserve Bank of India was established with a due to secure monitory stability by means
of functioning as the other Commercial Bank.
Main objectives of RBI:

 To manage monetary and credit system of the country.
 To stabilize internal and external value of rupee.
 For balanced and systematic development of banking in the country.
 For proper arrangement of agricultural finance.
 For proper arrangement of industrial finance.
Functions of RBI
 Monopoly of note issue
 Banker to Government
 Credit control
 Banker‟s to Bank
 Bank rate policy
 Clearing agent

 Bank inspection
 Control over NBFIS
 Exchange rate management
Classification of a bank
Indian banking system comprises of both organized and un organized bank, un
organized banking includes indigenous bankers and village money lenders and organized
banking includes the following.
 Central bank
 National bank for agricultural and rural development
 Regional rural banks
 Commercial Banks
 Investment or Industrial Bank
 Exchange Banks
 Co-operative Banks
 Land Development Banks
 Saving Banks
 Apex Bank
BANKING SECTOR:
 Public sector banks
 Private sector banks
 Internet banking
 Foreign Banks in India
 Indian Banks in abroad

PRIVATE BANKS IN INDIA
All the banks in India were earlier private banks. They were founded in the pre-
independence era to cater to the banking needs of the people. But after nationalization of
banks in 1969 public sector banks came to occupy dominant role in the banking structure.
Private sector banking in India received a fillip in 1994 when Reserve Bank of India
encouraged setting up of private banks as part of its policy of liberalization of the Indian
Banking Industry. Housing Development Finance Corporation Limited (HDFC) was
amongst the first to receive an „in principle‟ approval from the Reserve Bank of India (RBI)
to set up a bank in the private sector.
Private Banks have played a major role in the development of Indian Banking
Industry. They have made banking more efficient and customer friendly. In the process they
have jolted Public Sector Banks out of complacency and forced them to become more
competitive.
MAJOR PRIVATE BANKS IN INDIA

 Bank of Rajasthan
 Bharath Overseas Bank
 Catholic Syrian Bank
 Centurion Bank of Punjab
 Dhanalakshmi Bank
 Federal Bank
 HDFC Bank
 ICICI Bank
 IDBI Bank
 Indusland Bank
 ING Vysya Bank
 Jammu & Kashmir Bank
 Karnataka Bank
 KarurVysya Bank

 Kotak Mahindra Bank

 SBI Commercial and International Bank
 South Indian Bank
 United Western Bank
 UTI Bank
 YES Bank
 TGMG Bank
 AXIS Bank
CO-OPERATIVE BANKS AND CREDIT SOCIETY
The Co-operative Banks and Societies perform an important role in meeting the
requirement of the people in the rural areas. The Co-operative Banks are organized on a Co-
operative basis and governed by their members according to the co-operative laws. Certain
provisions of the Banking Regulation Act also apply to the Co-operative Banks. At the lower
ladder, there are primary Co-operative Societies and on the top, there is a State Co-operative
Bank.
The main strategy is to provide finance for development. Primary Agricultural Credit
Co-operatives provide short term loans. Medium term loans to formers to by seeds,
fertilizers, implements etc.,
The Agricultural Marketing Societies take great interest in getting the good prices for
the products produced by the farmers. Most of the Co-operative Societies obtain funds from
share capitals, deposits, loans from District Central Banks, Apex Banks, Commercial Banks
or RRB‟s.
Co-operative movements in India

A Co-operative movement was first started in Germany in 1986. Then provincial
government in Madras deputed one of its officers. Nicholson to study the experience of the
land banks in Germany, so as to explore the possibility of adopting the system in Indian
conditions.

He recommended by the organization of raiffesen type of Co-operative Societies as a

solutions for the problem in the Indian context.
The Madras province provided an idea ground for the experiment with its long
tradition even of indigenous societies known as NIDHIS. Around this time another civil
servants in the united provinces Mr. Dupurnex published the results of his study in the
province and recommend the established of peoples banks of northern Indian as the most
hopeful solution to the problem of indebtedness usury and stagnant rural economy, with
usage pleasantly drawing inspiration from these two studies societies came to be organized in
the various parts of the country.
It was realized very early that any significant advances in the organization of the Co-
operative Societies was possible only with the necessary legislature support. Accordingly
government of India appointed a committee under sir. Edward law, to examine the issue.
This committee drew up a model schemes for the management of both Rural and Urban Co-
operative and framework of the legislation to provide to the societies the required privileges
for their functioning Sir. Edward recommendations provided the basis for the bill which was
passed in 1904 in to law as the Co-operative Credit Societies Act system soon emerged as the
premier institutional agency for provision of agricultural credit in the country.
In 1912 some major amendments were brought about in the act with a view to board
balancing it to enable. Organization of non-credit society as well as with constitutional
reforms popularly known as Montague Chelms ford reforms and the passing of the act of
1919 for the purpose of Co-operative becomes a transferred subject. The own legislation
notable among
there were Bombay, Madras and Bihar which were reputed, replaced the central act with their
own legislation in 1925, 1932, 1934 and 1935 respectively.
Provisional government simultaneously initiated the number of other measure as well

as for the development co-operative movements. As consequences the co-operative credit
system at by the twenties becomes the

principal institutional agencies for the provision of agricultural advances both on production
and investment.
The royal commission on agriculture in 1928 observed that if co-operative fails there
would fail the best hope of rural India. It would make
the co-operative structure commercially viable and it with financial strength, so gained would
be able to mobilize rural savings and meet the bulk. If not entire credit needs of the rural
sector other institutional measures recommended. They were setting up of National Co-
operative Development Corporation under the agencies of the Central Government to extend
support for processing, marketing and storage facilities in the Co-operative sector. Central
and State housing co-operative National Agricultural Credit Fund in
the RBI provide medium term loans for the event of failure of on account of natural
calamities banking personal as well as state levels were geared to development Co-operatives
as on exclusive institutional agency for purveying credit.
The Indian Co-operative Banking System consists of three sections.
HEIRARCHY OF CO-OPERATIVE BANK

 Primary Credit Societies

A Primary Credit Society is an association of 10 or more persons residing in a
particular locality. Knowing one another intimately and showing interest in the welfare of
one another.
Primary Credit Societies are two types
 Rural Credit Societies
 Urban Credit Societies
 District Central Co-operative Banks

These are federation of Primary Credit Societies operating in a specified area.
Generally, they are located in the district head quarters or
some prominent towns of the district. They are organized on the basis of limited liability
.
 State Co-operative Banks

Every state has Co-operative Bank at the top of the Co-operative banking structure. It
controls and coordinates the working of all Co-operative credit institutions in the capital city
of the state.
Emerging scenario of Co-operative Credit Institutions:

Co-operative Credit Institution continued to remain on important of the multi-agency
rural credit system in the country. As at end of March 2001, 68% dispensing out lets as well,
as rural credit borrower accounts was under the fold of co-operative operatives was about
42% in respect of production credit for agricultural largest among all agencies.
The emerging scenario of Co-operative Credit Institution appeared to be the mixed

one. While the Co-operative Institution they are strong would be able to meet the challenges.
The survival of the weak ones was uncertain specific measures like amalgamation and
merges were warranted besides action to overcome the weakness. There is a need for Co-
operative Credit Institution action by state government. The National Bank, RBI and Central

Government. If the Co-operative Credit Institutions have t become strong and survive in the
emerging scenario.
THEORITICAL PROSPECTIVE
INTRODUCTION AND MEANING OF FINANCIAL STATEMENTS
INTRODUCTION:
Firm communication financial information to the consumers through financial
statements and report. The financial statement contains summarized information of the
firm‟s financial affairs organized systematically.
They are gone to present the firm‟s financial situation to customers preparation of the
financial statements is the responsibility of top management. As these statements are used by
investors and financial analyst to examine the firm‟s performance in order to make
investment decisions they should be prepaid very carefully and contain complete information.
These statements are present in a company‟s annual reports. A typical annual report
also includes the Chairmen‟s speech, the Director‟s report, the auditor‟s report and
accounting policy changes.
For internal management purpose is planning and controlling, much information than
contained in the published financial statements needed. Therefore the financial accounting
information is presented in different statements and report in such a way as to serve internal
needs of management.
Meaning:
A financial statement is organized collection of data according to logical and
consistent accounting procedures. Its purpose is to convey as understanding of some
financial aspects of a business firm. It may show a position at a moment of time as in the
case of a balance sheet, or may reveal a series of activities over a given period of time, as in
the case of an income statement.

Financial statements contain summarized information of the firm‟s financial affairs,

organized systematically.
Financial statements are prepared from accounting records maintained by the firm.
There are two basic financial statements prepared for the purpose of external reporting to
owners, investors and creditors are:
1. Balance sheet or statement of financial position.
2. Profit and loss A/c or income statement.
Objective of financial statement:

Financial statements are prepared from the accounting records maintained by the firm.
The generally accepted accounting principles and procedures are followed to prepare are
followed to prepare these statements.
The basic objectives of financial statement into assist in decision working the other objectives
are
 To provide reliable financial information about economic resources is obligation of a
balances enterprise.
 To provide reliable information about changes in net resources (resources minus

obligations) of an enterprise that result from the profit directed activities.
 To provide financial information that assists in estimating the earnings potential of the
enterprise.
 To provide other needed information related to the financial statements that is relevant
to the statements users.
To provide other needed information about changes in economic resources and obligations.
Financial Statement includes:

 Balance Sheet
 Profit and Loss Account
 Cash flow Statement
 Fund flow Statement
 Auditor report

Balance Sheet:
The balance sheet is a statement at a given data showing on one side the trader‟s
property and possessions and on the other liabilities. Balance sheet may also consider as a
statement of sources and application funds because the liabilities side shown how exactly the
funds for utilized in the business.
The Balance sheet shows the financial position of the business. It indicates the
financial condition or the state of affairs of a business of particular movement of time. More
specially balance sheet of a firm
Prepared on 31st December every year reveals the firm financial position on specific date. In
the language of accounting balance sheet communication information about accounts,
liabilities and owners equity for a business from
on specified date. It provides a snapshot of a financial position of the firm at the close of the
firm in accounting period.
Functions of the Balance Sheet

The important functions served by the balance sheet are
 It gives a concise summary of the firm‟s account and liabilities
 It is the measure of the firm‟s in liquidity.
 It is the measure of the firm‟s solvency.
If the function of balance sheet is examined in terms of the basic accounting function then
the balance sheet functions are
 Accumulates information is conformation in conforming with the basic accounting
equation TA=TL+OE
 Measures Assets and Liabilities in monitory units and in accordance with cost
principles.
 Communicates information about assets in (resources), liabilities (out side claims) and
owner‟s equity. (residual claim of owners) to owners, creditors and others

Profit and Loss Account:

Bankers and financial analysis in India have recently started playing more attention to
the earning capacity as a measure of its financial strength, the earning capacity and potential
of a firm are reflected by the profit loss account. The profit and loss account reflects the
results of the operations for a period of time.
Profit & Loss Account represents the summary of revenues, expenses, and net income
or net loss of the firm. Thus, it serves as a measure of the firm‟s profitability. Revenues are
amounts which the customers pay to the firm‟s for providing them goods and services.
The firm uses economic resources in providing goods and services to customers. The
cost of economic resources used to earn revenues during a period of time is called expenses.
Thus to determinenet income or net loss.
The accounting system matches expenses incurred during the accounting period
against revenues earn during the period this matching expenses with revenues earned during a
period exceed expenses incurred during the accounting period against revenues earned during
the period this matching expenses with revenues is called matching concept. The time period
for which a matching is done is called accounting period. Normally the accounting period for
the business firms operation is the amount by which revenues earned during a period exceed
expenses incurred during the period.
The firms operations prove to be unprofitable, total expenses will exceed total
revenues and the deference is referred to as net loss.
Functions of Profit and Loss Statement:

The important functions of the profit and loss statement are as follows:
 It gives the summary of firm‟s revenues expenses during a period of time.
 It measures the firm profitability in terms of overall accounting function the profit and
loss statement is as follows.
I Accumulators economic date‟s revenue and expenses in accordance with the mode
(Revenue-Expenses=Net profit)
II Measures Net Profit by matching revenues and expenses according principles.
III Communicate information regarding the results of firms activities to owners and others

Relationship between balance sheet and profit and loss account

The balance sheet and profit and loss account are not two separate and independent
statements lots are related to each other.
The profit and loss account is a list between the balance sheet at the beginning of the
period and the balance at the end of the period. We can easily say the impact of profit and
loss account, if we remember that revenues in an inflow of assets are an out flow of liabilities
and expenses in a flow of liabilities.
Generally the profit and loss account is prepared to complete net profit.
Net profit can also be completed by comparing the balance sheet at the beginning and
the end of the period. This fact emphasis the role of the profit and loss account in a link
between connective statements of the position.
Types of Financial Analysis:

Different types of financial statement can be made on the basis of
a) The nature of analyst and the material used by him.
* External analysis
* Internal analysis
b) The objectives of analysis
* Long term analysis
* Short term analysis
c) The modes of operation of the analysis
* Horizontal/dynamic analysis
*Vertical/static analysis
Tools or Techniques/methods of data analysis and interpretation

The fallowing techniques can be used in data analysis and interpretation of financial
statements.
1. Comparative financial statement.
 Comparative income statement
 Comparative Balance sheet

2. Common size statement.

3. Trend analysis.
4. Fund flow statement.
5. Cash flow statement.
6. Networking capital analysis.
7. Ratio analysis.
Comparative Financial Statements:

Comparison of statement is one of the very important tools of analysis of financial
statement. Comparison of financial statements means financial statements of a company for
any year are compared with financial statement of that company for 3 earlier years. The
balance sheet and profit and loss account are the two most important financial statements.
 Comparative balance sheet
 Comparative income statement
Common size statement:
Common size statement is a type of comparative financial statement in which each item of
the financial statement is expressed as a percentage of the
appropriate total. A common size statement may be prepared for balance sheet as well as
statement.
 Common size balance sheet
 Common size income statement
Fund flow statement:

Funds flow statement is statement of source and application of funds. According to
Bobber Anthony “The funds flow statement descries the sources from which additional funds
were derived and the use to which these funds are put.
Advantages-
 It helps in knowing the sources and uses of funds.
 It suggests the way in which the working capital position can be improved.

 It can be used in planning a sound divided policy.
Cash flow statement:

Cash flow statement is a statement. This shows the changes in the cash position of a
company between two accounting period. In simple word
it is a statement. This indicates the cash flows and cash out flows during a financial period.
Advantages-
 It reveals the causes of changes in the position of an enterprise between two balance
sheet periods.
 It is very helpful to a concern in evaluating the current cash position.
Parties Interested in Financial Analysis:

Information contained in financial statement is useful to different categories of uses of
finance data. They are
1. Management
Management of a companies is interested in its financial condition profitability; and
progress. It is useful to management to exercise control the business and to make decision to
run it more efficiency.
2. Shareholders:
Shareholders mainly analyse the profitability and long term solvency of the company.
Shareholders are interested in the profitability divided and marked of their holdings.
3. Creditors:
All types of creditors are interested to know the business financial strength and
profitability position. Because profit is viewed as due primary sources for payment of interest
loan and debentures.

4. Government:
Financial statements are used by various government departments to determine the tax
policy, import export policy, sales tax etc.,
5. Other invested groups:

It also serves the needs of many other user groups for example; workers consumer‟s
trade unions analyze all financial statement to make comparative study of profitability of
many companies.
Significance and purpose of financial statement analysis
1. Judging the Profitability:

Profitability is measure of the efficiency and success of business enterprises. If the
company earns profit it attracts the potential investors. It helps the investors to judging
decide whether to invest in a company or not.
2. Judging liquidity:
Short term creditors like trade creditors and bankers and bankers make on assessment
of liquidity before granting credit to the company.
3. Judging Solvency:
Debenture holders and financial institution judge the solvency of a company before
any lending decisions.
4. Judging the efficiency of management:

Performance and efficiency of management of a company can be easily judged by
analysing its financial statements.
5. Forecasting and budgeting:

Financial analysis is the starting point for making plan by forecasting and preparing
budgets.

Financial statement analysis is more important to divide the investment. It is helpful

to all the people involved in the business field.
Ratio analysis:-
Ratio analysis is one of the powerful tool of the financial analysis. Ratio can be
defined as “The indicated quotient of the mathematical expression” and as “the relationship
between two or more things” A ratio can be used as a yard stick for evaluating the financial
position and performance of concern. Because the absolute accounting data can‟t provide
meaningful understanding and interpretation.
A ratio is the relationship between two accounting items express mathematically.

Ratio analysis helps the analysis to make quantities judgment with regard to concern financial
position and performance.
Uses of ratio analysis:-

1. Useful in analysis of financial statement:
Ratio analysis is the most important for analyzing financial statements. Such analysis
is made not only the management but also by the outsider parties like bankers, creditors,
investors etc.,
2. Useful in improving financial performance:

Ratio analysis indicates weak spots of the business. This helps management in
overcoming such weakness and improving the overall performance of the business in future.
3. Useful in judging the efficiency of a business:

Accounting ratios helps in judging the efficiency of a business liquidity, solvency,
profitability etc., of a business can be easily evaluated with the help of various accounting
ratios.
4. Useful in inter firm comparison:

Comparison of the performance of one firm with another can be made only when
absolute data is converted into comparable ratios. This is possible only under ratio analysis.

5. Helps in decision making:

Ratio analysis helps the management in taking decisions regarding to formation of
capital structure, dividend decision.
6. Helps in financial planning and forecasting:

Ratio analysis helps in planning and forecasting the future financial requirements of a
firm.
7. Helps in communicating:
The financial strength and weakness of a firm are communicated more easily and in
understandable manner by the use of ratios.
8. Helps in co-ordination:
Better communication of efficiency and weakness of an enterprise results in better co-
ordination in the enterprise.
9. Helps in control:
Ratio analysis even helps in making effective control of the business. Standard ratio
can be helps in making effective control of variation.
Limitations of Ratio analysis:
1. Financial standard data are not exact. Statements are only like interim reports. Moreover,
many management ratios are based on data. Some (or) all of which are known and factual
and have therefore, to be treated with great caution.
2. Financial statements are generally based on historical (or) original cost. The current
economic conditions are ignored.
3. Not all ratios and percentages are significant and useful. One should beware of the
temptation to calculate them for their own sake.

4.In using ratios computed by others, one should realization that the computation of a
particular ratio has not necessarily been standardized.
5.A frequent comparison of ratios between companies is questionable, particularly when
there are important differences between companies, such as industry the nature operations.
6. Ratios are based on financial statements and suffer from the limitations inherent these
statements.
7. Changes in many ratios are closely associated or connected with one another.
8. Ratios are likely to be misused. There are some situations in which they may appear to
be misleading.
9. Comparative study required: Ratios are useful in judging the efficiency of the business
only when they are compared with the past results of the business are with the result of the
similar business.
10. Limitations of financial statements: Ratios are based only on the information which has
been recorded in the financial statements.
11. Ratios alone are not adequate: Ratios are only indicators, they can‟t be taken has final
regarding good or bad. Financial position of the business other things have also to be seen.
12. Window dressing: The term window dressing means manipulation of accounts in a way
so as to conceal vital facts and presents the financial statements in a way to show a better
position that what it actually is.
13. Problems of price level changes: Financial analysis based accounting ratios will give
misleading results if the effect of changes in price level is not taken into account.
14. No fixed standards: No fixed standards can be laid down for ideal ratios.
15. Ratios are composite of many figures: Ratios are a composite of many different figures.
Some cover a time period, others are at an instant of time while still others are only averages.
Classification of ratios: -
I Liquidity ratios
 Current ratio.
 Liquid ratio.
 Absolute liquid ratio.

II Capital structure or Solvency ratios

 Debt-equity ratio.
 Proprietary ratio.
 Interest coverage ratio.
 Capital gearing ratio.
III Turnover or activity ratios

 Stock turnover ratio.
 Debtor turnover ratio.
 Fixed asset turnover ratio.
 Creditor turnover ratio.

 Working capital turnover ratio.
 Capital turnover ratio.
IV Profitability ratios
 Gross profit ratio.
 Net profit ratio.
 Operating ratio.
 Return on investment.
 Return on equity.
 Earnings per share.
 Prince earnings ratio. Interest coverage ratio.
 Capital gearing ratio.
 Stock turnover ratio.
 Debtor turnover ratio.
 Fixed asset turnover ratio.
 Creditor turnover ratio.
 Working capital turnover ratio.
 Capital turnover ratio.
 Gross profit ratio.

 Net profit ratio.

 Operating ratio.
 Return on investment.
 Return on equity.
 Earnings per share.
 Prince earnings ratio
Current ratio: -
This ratio is the measure of the ability of a firm to meet its short term obligations. It
is perhaps the best known measure of financial strength at a given point in time. In general, a
ratio of 2 to 3 is usually considered good. Too small a ratio indicates that some potential
difficulty in covering obligations may exist. A high ratio may indicate that the firm has too
many assets tied up in current assets and in not making efficient use to them .
Current Assets.
Current ratio =
Current liabilities.
Quick ratio:-
Current assets include inventory and prepaid expenses which are not easily
convertible into cash with in a short period. Quick ratio may be defined as the relationship
between liquid assets and current liabilities. The standard ratio is 1:1is considered is
satisfactory.
Quick assets
Quick ratio =
Current liabilities.

Debt Equity Ratio:-

This ratio shows the relative amount of funds supply to the company by outsiders and
by owners. A low debt equity ratio implies a greater claim of owners on the assets of the
company then the creditors on the other hand. A high debt equity ratio indicates that the
claim of the creditors is greater than those of the owners.
Long-term debts.
Debt-Equity ratio =
Shareholders fund.
Proprietary Ratio:-
This ratio shows the extent to which shareholders own the business and thus indicates
the general financial strength of the business. The higher the proprietary ratio, the greater the
long term stability of the company and consequently greater protection to creditors.
Shareholders fund.
Total assets to debt ratio =
Total Assets.
Fixed assets to net worth ratio: -

The ratio establishes the relationship between fixed assets and shareholders fund
i.e., share capital plus reserves, surplus and retained earnings. The ratio of fixed assets to net
worth indicates the extent to which shareholders fund are sunk into the fixed asset. Generally,
the purchase of fixed assets should be financed by shareholders equity including reserves and
surplus and retained earnings. There is no rule of thumb to interpret this ratio but 60 to 65%
is considered to be satisfactory ratio. In case of industrial undertakings.
Fixed assets.
Fixed assets to net worth ratio =
Shareholders fund.

Ratio of current assets to proprietor’s fund: -

The ratio is calculated by dividing the total of current assets by the amount of
shareholders fund. The ratio indicates the extent to which proprietors fund are invested in
current assets there is no “rule of thumb” for this ratio and depending upon the nature of
business there may be difference ratio for different firm.
Current assets
Ratio of current assets to proprietors fund = X 100
Shareholders fund
Fixed assets to total long term funds or fixed assets ratio:

A variant to the ratio of fixed assets to the net worth to the ratio of fixed assets to total
long term funds. The long term fund consists of shareholders‟ funds plus long-term
barrowings. The ratio indicates the extent to which the totals of fixed assets are financed by
the long term funds of the firm. Generally, total of fixed assets should be equal to the total of
long-term funds or say, the ratio should be 100%.
Fixed assets
Fixed assets ratio=
Total long-term funds
Return on shareholders’ investment /net worth:

Return on shareholders‟ investment popularly known as ROI. Return on shareholders
or proprietors fund is the relationship between net profit after tax and interest of the
proprietor‟s fund. The ratio is generally
calculated as the percentage by multiplying the above with 100. The two basic components of
the ratio are net profit and shareholders fund.
Net profit
Net worth ratio =
Shareholders‟ funds

Funded debt to total capitalization ratio:

The ratio establishes link between the long term funds raised from outsiders and total
long-term funds available in the business. The two words used in the ratio are funded debt
and total capitalization.
Funded debt (long-term debt)

Funded debt to total capitalization ratio =
Total Capitalization.
Total Assets to Total Debt:-

A metric used to measure a company's financial risk by determining how much of the
company's assets have been financed by debt. Calculated byadding short-term and long-term
debt and then dividing by the company's total assets.
Total assets Total assets

Total assets to total debt = X 100
Long term debts.
This is a very broad ratio as it includes short- and long-term debt as well as all types
of both tangible and intangible assets.
Return on capital employed:

The return on capital employed (ROCE) ratio, expressed as a percentage, complements the
return on equity (ROE) ratio by adding a company's debt liabilities, or funded debt, to equity
to reflect a company's total "capital employed". This measure narrows the focus to gain a
better understanding of a company's ability to generate returns from its available capital base.
By comparing net income to the sum of a company's debt and equity capital, investors can get
a clear picture of how the use of leverage impacts a company's profitability. Financial

analysts consider the ROCE measurement to be a more comprehensive profitability indicator

because it gauges
management' profitability indicator because it gauges management's ability to generate
earnings from a company's total pool of capital.
Net income
Return on capital employed (ROCE) =
Capital employed
Earning per share: -

It is a small variation of Return on Equity Capital and is calculated by dividing the net
profit after taxes and preference dividend by the total no of equity shares.
Net profit after tax – preference dividend

Earnings per share=
No of equity shares

CHAPTER - 2
RESERCH DESIGN
Research is common parlance refers to a search for pertinent information on a

scientific and systematic search for pertinent information on a specific topic. In fact research
is an art of scientific investigation.
The term “RESEARCH” is generally defined as below,
R- Rational way of thinking.
E- Expert.
S- Seeker of solution.
E- Exactness
A-Analysis of data.
R- Relationship of facts.
C- Critical observation.
H- Honestly at work.
According lolal das “Research is study of execute new knowledge or aims to

increase the existing find of knowledge may be through observation”.

RESEARCH DESIGN
Research design is the basic plan which guides the data collection and analysis phase of the
project it is the frame work, which specifies the type of information to collect the sources
data and the data collection procedure.
Steps in research design:-
Specify the objective
Prepare the list of information
Design the data collected
Select the sample
Determine the sample size
Organize field work
Analyze the data and report the findings

Title of the study:-

“A STUDY ON FINANCIAL PERFORMANCE OF PCA&RD BANK LTD,”.
Statements of the problem:
This particular topic is chosen to analyse the financial performance of PCA&RD

BANK , for the purpose of to measure the enterprise liquidity, profitability, solvency and
other indicators of the firm‟s ability and also to provide other needed information about
changes in economic resources and obligation and also to find out whether the PCA&RD
Bank., is earning profit or loss.
Hence undertaken this problem “A STUDY ON FINANCIAL PERFORMANCE, RATIO
ANALYSIS AT PCA&RD BANK” to appraise and predict the financial health of
PCA&RD Bank, and offer the suggestion.
Scope of the study:-

 Analysis covers only financial aspects of the bank.
 A study relates to PCA&RD Bank
 Analysis is made up on the historical data of bank.
 A study is restricted only past 5 years information is considered.
 The ratio highlights factors associated with successful and non-successful firm.
Objectives of the study:-

 To identify the financial stability of the bank.
 To analysis the short-term liquidity of the bank.
 To study the profitability of the capital employed in the business.
 To provide other needed information about change in economic
Resources and obligations.

 To know about achievement and awards received by the PCA&RD bank.
 To know about modern banking facilities adopted in PLD bank.
 To provide remedial suggestions to improve the working of the bank.

Limitation of the study:-

 The present study concentrates only “PCA&RDBANK ” main branch.
 It is assumed that the facts and figures in the annual report are true and correct and
used for analytical study.
 Due to shortage of time it is not possible for me to take extensive study.
 It is based on data written in the financial statements, if the data written in the
financial statement is not accurate and not updated the analysis become unreliable.
PERIOD OF THE STUDY:-

This study uses last 5years of annual reports of the PCA&RD Bank.
RESEARCH DESIGN:-
The study of financial performance in PCA&RD Bank
Primary data:-
Primary data is original data or first hand information collected a fresh and the
first time, which is original in nature. Under the study administering through interviews
and desiccations with dealers and manager as collected research the primary data.
Secondary data:-
Secondary data is collected from annual reports, company website.
The ratio analysis and simple statistical tools will be used for the analysis and
interpretation of data.
TOOLS USED FOR ANALYSIS OF DATA:-

I have used ratio analysis as a tool to analyse along with some traditional ratio to
analyse the data collected.
Geographical area of the study:-

The geographical area of the study is head office that is PCA&RD Bank.

CHAPTER SCHEME:
 Chapter-1 INTRODUCTION
This chapter deals with theoretical introduction of the chosen topic. It also contains
industry profile i.e., origin of banking, banking in India, meaning and definition of bank.
 Chapter-2 RESEARCH DESIGN OF THE STUDY

This chapter deals with design of the study. It includes the statement of the problem and
its objectives, scope, methodology and tools for data collection.
 Chapter-3 COMPANY PROFILE

This chapter deals with the Bank complete profile including origin to its growth.
 Chapter-4 DATA ANALYSIS & INTERPRETATION

This chapter deals with the analysis and interpretation of data by doing comparative
statements, common size statement, trend analysis and ratio analysis
 Chapter-5 FINDINGS, SUGESTIONS AND CONCLUSIONS

 This chapter deals with findings arrived at on the project.
 This chapter deals with suggestions given by analysis of data.
 This chapter deals with conclusion arrived at on the project.

CHAPTER - 3
COMPANY PROFILE
PERMITIVE BANKING
From times immemorial, the banker has been indispensable Pillar as Indian society.
Some king of banking business was begin carried in Indian ever during Vedic period, before
the formation of joint stock banks. Indigenous bankers and money lenders as known as
shresties; offered banking services. ShroFfs, seths, auroras, chetties, vaishyas,
khatirismarwadies, multhanies etc..., the manusmithics and Buddhist literature also provide
ample evidence an the existence of such banking system in our country. It is only 1770,
messicure Alexander and co…, an agency house, established the bank of Hindustan, the
earliest bank started under European direction in india which later went into liquidation in
1832.
CO-OPERATIVE BANKING INTRODUCTION
Germany is the birth place of co-operative credit movement in the world. Herr F.W
Raiffeisen and Herr Franz Schulze of Germany are the pioneers in the field of co-operative
credit. The poverty and the heavy indebtedness of peasants to money lenders forced Herr F.W
Raiffeisen to promote co-operative credit societies in the rural areas of Germany to free the
peasants from the clutches of the money lenders and to promote the economic conditions of
the peasants.
Similarly, the poverty and the heavy indebtedness of artisans, craftsman and industrial
workers to money lenders forced Herry Franz Schulze to promote co-operative credit
societies in the urban areas of Germany to free the artisans and the industrial workers from
clutches of the money lenders, and to help them (i.e. the artisans and the industrial workers)
to stand on their own legs. These two types of co-operative credit societies worked
successfully. The successful
working of these two emergence of co-operative credit societies or co-operative banks in the
other communities of the world including India.

DEFINITION AND MEANING OF CO-OPERATIVE BANKING
In the words of Henry Wolff, “co-operative banking is an agency which is in a

position to deal with the small man on his own terms accepting the security he has and
without drawing on the protection of the rich”.
Devine defined a co-operative bank as “a mutual society formed, composed and

governed by working people themselves for encouraging regular savings and granting loans
on easy terms of interest and repayment.
On an analysis of the definition, one can say that a co-operative bank is a co-operative
organization ( i.e. an organization where persons voluntarily associate together as human
begins on the basis of quality for the promotion of the economic interest of themselves)
engaged in the banking functions of acceptance of deposits and landings of credit. In short
account co-operative bank is an institution which performs the banking functions of
acceptance of deposits and borrowings of funds and lending of credit.
CHARACTERISTIC FEATURES OF CO-OPERATIVE BANKING
Co-operative banking has certain characteristic features of its own.
The important characteristics features of co-operative banking are
 Like commercial banking, co-operative banking also is concerned with performance

of the banking functions of acceptance of deposits and lending of funds.
 Co-operative bank is established under the co-operative societies act.
 A co-operative bank is an association of persons, and not of capital.
 Co-operative banking is generally, federal in structure. For instance, in Indian, short-

term co-operative banks have three tiers setup and long term co-operative banking has
a two tier setup.

 Co-operative banks are democratic institution, in the sense that they follow the
principle of „one man‟ one vote in their management.
 Co-operative banking is based on the principle of mutual help.
 Personalization of credits is the special feature of co-operative banking greater

emphasis is place on the credit-worthiness and character of the borrowing members.
That is why, M. Lauzatti has said the best security for a co-operative bank is the moral
worth of its members.
 Services and not profit is the main motto of co-operative banks.
 Co-operative banks at the bottom level depend on honorary services of members. That
is why, the management of the co-operative banks at the lower rung of the ladder is
generally less costly, but is inefficient.
 Generally, the cost of co-operative banking is relatively low because of low cost of
management.
 The operations of co-operative banks are generally: restricted to a specified area; say
a village, a district, or state.
 Co-operative banking is based on the principle of mutual help.
 Thrift and saving is the essence of the working of co-operative banks.
OBJECTIVES OR AIMS OF CO-OPERATIVE BANKING.
The main objectives of co-operative banking systems are
 To promote thrift among the members, and thereby increase the supply of funds.
 To tap outside sources for the supply of funds (i.e.., to raise funds from non-
members).
 To promote the effective use of credit and to reduce the risk in the granting of
credit through careful and continuous supervision of the operation of the
borrowing members.
 To reduce the cost of management through the honorary services of members and
thereby keeping the cost of the credit as low as possible.
 To make the co-operative credit societies or co-operative banks credit-worthy and

to enable them to raise sufficient funds to finance other co-operative enterprises.
PRICIPLES OF CO-OPERATIVE BANKING.
Co-operative banking has certain principles of its own. The important principles of co-
operative banking are
 Principle of co-operative and mutual help.
 Principle of service, and not profit.
 Principle of one-man one vote in management.
 Principle of thrift and savings.
 Principle of personalization of credit (i.e,, laying emphasis on credit worthiness and

honesty of the borrowing members)
TYPES OF CO-OPERATIVE BANKS
1. Agricultural co-operative banks and
2. Non-agricultural co-operative banks.
MERITS OF CO-OPERATIVE BANKING
Co-operative banking has certain merits or benefits. The main merits of co-operative banking
are
1. Co-operative banks play a very significant role in rural banking is owing to the
following reasons.
I. Co-operative banks have a rural touch

II. They have local feel.
III. They are familiar with rural problems.
IV. They have an attitudinal identification with rural economy.
V. Their methods and procedure and orientation are best adapted to rural economy.
VI. Their relations with the members and non-members are not only personal but are
also humane.
2. As the management of co-operative banks at the lower rung of the ladder depends on
the honorary services of the members, the cost of operations to co-operative banks is
relatively low. Because of the low cost of operation, the co-operative banks are able to
provide credit to the weaker sections in the rural areas at cheaper rates.
3. The impact of co-operative banking on rural peasant is very great. De foe has
beautifully summed up the impact of co-operative banking on people as follows”
Drunkards are
made to take care of wife and children, spendthrifts lay up for a wet day, lazy
fellows becomes diligent and thoughtless Scottish men careful and

prudent”.
4. With the expansion of co-operative banking in rural areas, the hold of village
moneylenders over rural masses has been considerably loosened.
5. Co-operative banking is widely accepted as the only mans of eradicating poverty and
raising standards of living of rural masses.

LIMITATIONS OR DRAWBACKS OF CO-OPERATIVE BANKING.
Co-operative banking gas, no doubt, enjoys several merits. But it is not free from defects
or limitations. It suffers from the following limitations.
1. The co-operative banking structure is weak. A top heavy structure of co-operative banking
is built on very flimsy foundation.
2. The size of co-operative banks, particularly the size of agricultural primary credit societies
is very small size of co-operative banks has checked the growth of co-operative banking.
3. Co-operative banks are not able to mobilize adequate resources from members as well as
BOARD OF DIRECTORS
SL.NO Name Design
1 B.Appireddy Chairman Jangamakote
2 C.Ashvathnarayana Vice chairman Chimangala
3 Muniyappa Director Nadiipanayakanahalli
4 Ashvathnarayanareddy Director Anur
5 R.B.Jayadev Director Bashettahalli
6 D.Singappa Director Devappanagudi
7 A.Ramachandrappa Director Amagarahalli
8 C.M.Gopal Director Chimanahalli
9 Ramalakshmamma Director Dibburahalli
10 K.R.Khandirao Director

ORGANIZATIONAL CHART
Muniyappa
Executive Director
K.Shivaprasad (Accountant)
C.N.Krishnan (Officer) R.Vanajakshamma (Officer)
R.Varadaraju&Ramachandrap
pa

SWOT ANALYSIS
STRENGTHS
Strengths of the banks is quick service to the customer. Co-operative bank provide the
quick service for the loan sanctions, cheque discounting and all services which are provided by
the bank. Loans are within reasonable time, after obtaining all the documents and necessary
certificate is submitted to the board and board take the decision are quick compared to the
nationalized banks because there is a lengthy process for sanctioning of loans.
WEAKNESSES
1. Lack of staff the number of saving bank account, current account fixed deposit account,
other loan accounts has increased to the greatest extent over the years but management has
not appointed additional staff to look after increased work.
2. Lack of training to the staff developing skills require to perform various jobs with
efficiently and to import knowledge, as functional and behavioral areas, by providing need
based training. But P.C.A & R.D banks are not giving the proper training to staff members
to developing their skills.
3. Insufficient knowledge about the computers.
OPPORTUNITIES
There is a opportunity of the bank to attract the customer by providing high interest rates
in their fixed deposits. In hospital area small scale industry situated. It is the great opportunity for
the bank to provide the loans and advances to these industries.

THREATS
The greatest threats from nationalized banks because they provide the loans and advances
at lower rate of interest usually co-operative bank charge high interest rate for some loans and
advances. So, nationalized banks grasp the customer from the co-operative bank.
PERFORMANCE OF P.C.A & R.D banks
P.C.A & R.D bank played a significant role in providing loans to the trader‟s shop-keepers
individuals in Gowribidanuru. But high rate of interest and deposits, surplus of funds, lack of
sufficient staff competation from other co-operative banks commercial banks and centralized
banks, have affected smooth running of the banks.

CHAPTER - 4
DATA ANALYSIS AND INTERPRETATION
1. Current Ratio :-
Current Assets.
Current ratio =
Current liabilities
Table no 1
showing Current ratio: -
{Amount in lakhs}
Year Current assets Current liabilities Ratio
2011-12 447.85 420.12 1.06
2012-13 434.46 304.81 1.42
2013-14 863.07 473.88 1.82
2014-15 742.61 337.78 2.19
2015-16 896.16 300.18 2.98
Analysis: -
From the above table it is analysed that, current ratio is slightly fluctuated year by
year.
Items included for CA and CR in the year 2011-12 the current ratio is 1.06% and the
current ratio continuously increasing from 2012-13 to 2015-16 [ from 1.42% to 2.98% ].

GRAPH – 01
GRAPH SHOWS CURRENT RATIO
Ratio
2.98
3
2.5 2.19
1.82
2
1.42
1.5 Ratio
1.06
1
0.5
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
The standard current ratio in the industry is 2:1, where as the bank is having
current ratio of 2.98:1 which is satisfactory and also bank is maintaining a adequate liquidity
position.

2. Quick ratio or liquid ratio:-

Quick assets
Quick ratio =
Current liabilities
Table no 2
showing quick ratio:
{Amount in lakhs}
Year Quick assets Current liabilities Ratio
2011-12 387,99 349.78 1.11
2012-13 910.99 455.01 2.00
2013-14 902.71 304.81 2.96
2014-15 1904.16 579.42 3.28
2015-16 2283.17 451.23 5.05
Analysis: -
From the above table shows that bank‟s quick ratio is increased year by year.
Items included for QA and CL in the year 2011-12 the current ratio is 1.11% and the
current ratio continuously increasing from 2011-12 to 2015-16
[ from 1.11% to 5.05% ].

GRAPH – 02
GRAPH SHOWS QUICK RATIO
Ratio
6
5.05
5
4 3.28
2.96
3 Ratio
2
2
1.11
1
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
The standard Quick ratio in the industry is 1:1, where as the bank is having
Quick ratio of 5.05:1 which is satisfactory and also bank is maintaining a adequate liquidity
position.

3. Debt-Equity ratio: -
Long-term debts.
Debt-Equity ratio =
Shareholders fund.
Table no 3
showing Debt-Equity ratio: -
{Amount in lakhs}
Year Long-term debts Shareholders fund Ratio
2011-12 1468.70 179.62 8.17
2012-13 1864.67 217.46 8.57
2013-14 2468.95 226.07 10.92
2014-15 3068 295.75 10.37
2015-16 4436.33 473.90 9.36
Analysis: -
From the above table analyzed that bank‟s debt equity ratio is slightly fluctuated. In
the year 2011-12 the debt equity ratio 8.17. Then it has increased 8.57% to 10.92% in the
year 2012-13 to 2013-14 and in the year 2014-15 and 2015-16 slightly decreased 10.37% to
9.36% respectively.

GRAPH – 03
GRAPH SHOWS DEBT-EQUITY RATIO
Ratio
12 10.92
10.37
9.36
10 8.57
8.17
8
6 Ratio
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
In the above graph shows the debt equity ratio as increased year by year but it has
slightly fluctuating in the last 2 years 2014-15, 2015-16 is 10.37% , 9.36% respectively.
Indicates that bank is having a strategy of increasing the share holders funds, which is
always good for any concern.

4. Proprietary ratio: -
Shareholders fund.
Proprietary ratio =
Total assets.
Table no 4
showing Proprietary ratio: -
{Amount in lakhs}
Year Shareholders fund Total assets Ratio
2011-12 179.62 2513.54 0.07
2012-13 217.46 2936.95 0.07
2013-14 226.07 4428.26 0.05
2014-15 295.75 5559.76 0.05
2015-16 473.90 6697.39 0.07
Analysis: -
The above table shows that, bank‟s proprietary ratio or equity ratio is slightly
fluctuated year by year.
In the year 2011-12 the proprietary ratio is 0.07% and in the year 2012-13 ratio is
same.
Then drastically decreased to 0.05% in the year 2013-14 and again 2015-16 increased
to 0.07%.

GRAPH – 04
GRAPH SHOWS PROPRIETARY RATIO
Ratio
0.07 0.07 0.07
0.07
0.06
0.05 0.05
0.05
0.04
Ratio
0.03
0.02
0.01
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
The proprietary ratio indicates that there is a protection to creditors higher the ratio or
the share of the shareholders in total capital of the company indicates better is the long term
solvency position of the concern. This ratio indicates the extend to which the assets of the
company can be lost without affecting the interest of the creditors of the company.

5. Ratio of current assets to shareholders fund: -
Current assets.
Current assets to shareholders fund =
Shareholders fund.
Table no 5
showing Ratio of current assets toshare holders fund: -
{Amount in lakhs}
Year Current assets Shareholders fund Ratio
2011-12 447.85 179.62 2.4
2012-13 434.46 217.46 1.9
2013-14 863.07 226.07 3.8
2014-15 742.61 295.75 2.5
2015-16 896.16 473.90 1.89
Analysis: -
The above table shows that, bank‟s ratio of current assets to proprietors fund is
drastically fluctuated year by year.
In the year 2011-12 the ratio of current assets to proprietors fund is 2.4% and it has
declined to 1.9% in the year 2012-13 and in the year 2013-14 increased to 3.8%, than it has
drastically decreased to 2.5%, 1.95 in the year 2014-15, 2015-16 respectively.

GRAPH – 05
GRAPH SHOWS RATIO OF CURRENT ASSETS TO
PROPRIETORS FUND
Ratio
3.8
4
3.5
3
2.4 2.5
2.5
1.9 1.89
2 Ratio
1.5
0.5
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
In the above graphs indicates the extent to which share holders funds invested in
current assets. In the year 2015-16theshare holders less invest in current assets that is 1.89

6. Fixed assets to net worth ratio/ proprietary fund ratio: -
Fixed assets.
Fixed assets to net worth ratio =
Shareholders fund.
Table no 6
showing Fixed assets to net worth ratio: -
{Amount in lakhs}
Year Fixed assets Shareholders fund Ratio

2011-12 13.17 179.62 0.07
2012-13 12.83 217.46 0.05
2013-14 43.37 226.07 0.19
2014-15 50.72 295.75 0.17
2015-16 52.10 473.90 0.11
Analysis: -
The above table shows that, bank‟s fixed assets to net worth ratio is slightly fluctuated
year by year.
In the year 2011-12 the ratio of fixed assets to net worth ratio is 0.05% and in the
year 2012-13 ratio is same 0.05%, than it has once again drastically increased to 0.19% in
the year 2013-14 and in the years 2014-15 to 2015-16 drastically decreased 0.17% to 0.11%

GRAPH-06
GRAPH SHOWS FIXED ASSETE TO NET WORTH RATIO
Ratio
0.19
0.2
0.17
0.18
0.16
0.14
0.11
0.12
0.1 Ratio
0.07
0.08
0.05
0.06
0.04
0.02
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
In the above graphs indicates to extend to which share holders fund into fixed assets. The
purchase of fixed assets should be finance by long term sources.In this graph shows ratio is
more than 100% it implies that owners fund are more than the fixed assets. It is not sufficient
to finance the fixed assets 60% to 65% is consider to be satisfactory

7. Fixed assets to total long term funds or fixed assets ratio: -
Fixed assets.
Fixed assets ratio =

Total long term fund.
Table no 7
showing Fixed assets ratio: -
{Amount in lakhs}
Year Fixed assets Total long term fund Ratio
2011-12 13.17 1468.70 0.0089
2012-13 12.83 1864.67 0.0068
2013-14 43.37 2468.95 0.0175
2014-15 50.72 3068 0.0165
2015-16 52.10 4436.33 0.0117
Analysis: -
From the above table analysed that bank‟s fixed assets to total long term funds or fixed
assets ratio slightly fluctuated year by year.
In the year 2011-12 fixed assets ratio is 0.0089 and it has decreased to 0.0683 in the
year 2012-13 , than it has drastically increased to 0.0175 in the year 2013-14, then it has
declined to 0.165 to 0.117 in the year 2014-15 to 2015-16.

GRAPH-07
GRAPH SHOWS FIXED ASSETS TO TOTAL LONG TERM FUNDS
OR FIXED ASSETS RATIO
Ratio
0.0175
0.018 0.0165
0.016
0.014
0.0117
0.012
0.0089
0.01
Ratio
0.008 0.0068
0.006
0.004
0.002
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
The fixed assets to outsider ratio showing decreasing trend which shows that it is
good to company by having less outsiders fund.

8. Return on shareholders’ investment: -
Net profit
Return on share holders’ investment =
Shareholders fund.
Table no 8
showing Return on shareholders’ investment: -
{Amount in lakhs}
Year Net profit Shareholders fund Ratio
2011-12 6.12 179.62 0.03

2012-13 10.01 217.46 0.04
2013-14 14.41 226.07 0.06
2014-15 104.57 295.75 0.35
2015-16 128.37 473.90 0.27
Analysis: -
The above table shows that, bank‟s return on share holders investment ratio is
increased year by year.
In the year 2011-12 the return on share holders investment ratio is 0.03% and it has
drastically increased to 0.04%, 0.06%, 0.35% in the year 2012-13, 2013-14, 2014-15 and the
year 2015-16 is decreased 0.27%

GRAPH – 08
GRAPH SHOWS RETURN ON SHAREHOLDERS
INVESTMENT/NET WORTH
Ratio
0.35
0.35
0.3 0.27
0.25
0.2
Ratio
0.15
0.1 0.06
0.03 0.04
0.05
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
In the above graph indicates the overall efficiency of the firm as this ratio reveals how well
the resources of the firm are being used. In this graphs shows increase the share holders
investment it is good for the bank. The overall efficiency of the bank is satisfactory.

9. Funded debt to total capitalization ratio: -

Funded debt.
Funded debt to total capitalization ratio =
Total capitalization.
Table no 9
showing Funded debt to total capitalization ratio: -
{Amount in lakhs}
Year Funded debt Total capitalisation Ratio
2011-12 6189.40 1796.27 3.44

2012-13 7466.82 2174.65 3.43
2013-14 11061.69 2260.76 4.89
2014-15 15640.37 2957.58 5.28
2015-16 20431.31 4739.02 4.31
Analysis: -
The above table shows that, bank‟s funded debt to total capitalization ratio is slightly
fluctuated year by year.
In the year 2011-12 the funded debt to total capitalization ratio is 3.44% and it has
decreased in the year 2012-13 at 3.43% and in the year 2013-14, 2014-2015 once again
drastically increased to 4.89% , 5.28% and the year 2015-16 decreased to 4.31%

GRAPH-09
GRAPH SHOWS FUNDED DEDT TO TOTAL CAPITALIZATION RATIO
Ratio
6 5.28
4.89
5 4.31
4 3.44 3.43
3 Ratio
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
The bank long term debt decreased in the year 2015-16 that is 4.31%. That is outsider
fund decreased it is good for the concern.

10. Total Assets to Total Debt:-
Total assets.
Total assets to total debt = X 100
Long term debts
Table no 10
Showing Total Assets to Total Debt: -
{Amount in lakhs}
Year Total assets Long term debts Ratio
2011-12 2513.54 1468.70 1.71

2012-13 2936.95 1864.67 1.57
2013-14 4428.26 2468.95 1.79
2014-15 5559.76 3068 1.81
2015-16 6697.39 4436.33 1.51
Analysis: -
From the above table analysed that total assets to debt ratio is slightly fluctuated year by year.
In the 2011-12 the total assets to debt ratio is 1.71 and it has decreased to 1.57 in the year
2012-13. Then it has drastically increased to 1.79 to 1.81 in the year 2013-14, 2014-15, it has
again declined to 1.51 during the year 2015-16.

GRAPH – 10
GRAPH SHOWS TOTAL ASSETS TO TOTAL DEBT
Ratio
1.85 1.81
1.79
1.8
1.75 1.71
1.7
1.65
1.57 Ratio
1.6
1.55 1.51
1.5
1.45
1.4
1.35
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
In the above graph shows the to total assets to debt ratio as slight fluctuating in all the
five years. Which is highest during the year 2014-15 is 1.8121 and lowest ratio is 1..51 in the
year 2015-16.

11. Return on capital employed: -

Net profit.
Return on capital employed =
Capital employed.
Table no 11
Showing Return on capital employed:-
{Amount in lakhs}
Year Net profit Capital employed Ratio
2011-12 6.12 79.51 0.07

2012-13 10.01 112.17 0.08
2013-14 14.41 111.92 0.12
2014-15 104.57 175.89 0.59
2015-16 128.37 225.40 0.57
Analysis: -
The above table shows the bank‟s return on capital employed ratio is slightly fluctuated year
by year.
In the year 2011-12 the return on capital employed ratio is 0.07% and it has
drastically increased ratio is 0.08%, 0.12% and 0.59% in the year 2012-13, 2013-14 and it has
once again decreased to 0.57% in the year 2015-16.

GRAPH-11
GRAPH SHOWS RETURN ON CAPITAL EMPLOYED
Ratio
0.59
0.57
0.6
0.5
0.4
0.3 Ratio
0.2
0.12
0.07 0.08
0.1
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
From the above graphs indicate to measure the overall profitability and efficiency of
business. The total investment or capital of the bank increased year by year. So, it is good for
any concern.

12. Comparative analysis of Total assets :-
Table no 12
showing Amount of Total assets
Difference in percentage
YEAR 2011-12 2012-13 2013-14 2014-15 2015-16
AMOUNTS
IN (Rs) 44282.66 55597.64 66973.90 25.55% 20.46%
Data source:-
Collected from bank Balance sheet
Analysis: -
The above table shows that total assets of the bank is continuously increasing from the
year 2013-14 to 2015-16. That is in 2013-14 total assets proportion is 44282.66 increased to
55597.64 in 2014-15 & again increased to 66973.90 in 2015-16.
The difference in percentage total assets 2013-14 to 2014-15 & 2014-15 to 2015-16
were calculated as 25.55% & 20.46%.

GRAPH – 12
GRAPH SHOWS COMPARATIVE ANALYSIS
OF TOTAL ASSETS
66973.9
70000
60000 55597.64
50000 44282.66
2011-12
40000 2012-13
2013-14
30000
20000
10000
Inference:-
From the above graph shows decrease the total assets of the bank compare to previous
year total assets. It is not good for the bank or not satisfactory.

13. Comparative analysis of net profit:-
Table no 13
showing Amount of net profit
YEAR 2011-12 2012-13 2013-14 2014-15 2015-16
AMOUNTS 14.41 104.57 128.37 625.68% 22.75%

IN (Rs)
Analysis: -
The above table shows that net profit of the bank‟s continuously increasing from the
year 2013-14 to 2015-16 that net proportion 14.4 is increased 104.57 in 2014-15 and again
increased 128.37 in 2015-16.
The difference in net profit percentage in the year 2013-14 to 2014-15 is 625.68%
and it can be declined to 22.68% in the year 2014-15 to 2015-16.

GRAPH – 13
OF TOTAL NET PROFIT
Comparative analysis of total net profit
1283.69
1400 1045.71
1200
1000
800
600
144.12
400
200
Inference:-
In the above graph shows net profit as almost decreased from 625.68% to 22.68%
because there is increased in cost of goods sold. The net profit of a bank is not satisfactory
compare to previous year.

14. Comparative analysis of Total advances:-
Table no 14
showing Amount of Total advances
2011-12 2012-13 2013-14 2014-15 2015-16
YEAR
AMOUNTS
IN (Rs) 24807.27 32258.65 39447.36 30.03% 22.28%
Analysis: -
The above table shows that total advances of the bank is continues increasing from the
year 2013-14 to 2014-15. That is in 2013-14 total advances proportion is 24807.27 increased
to 32258.65 in 2014-15 and increased to 39447.36 in 2015-16.
The differences in total advances 2013-14 to 2014-15and 2014-15 to 2015-16 were
calculated as 30.03% and 22.28%.

GRAPH - 14
GRAPH SHOWS COMPARATIVE ANALYSIS OF TOTAL ADVANCES
Comparative analysis of total advances
39447.36
40000 32258.65
35000
24807.27
30000
25000
20000
15000
10000
5000
0
Inferences:-
The comparative analysis of total advance of the bank reveals that during
2015-16. There has been decreased in 30.03% to 22.28% which shows that the bank has
utilize advance.

15. Comparative analysis of Total borrowings
Table no 15
showing Amount of Total borrowings
2011-12 2012-13 2013-14 2014-15 2015-16
YEAR
AMOUNTS
IN (Rs) 1106.16 1564.03 2043.13 41.39% 30.63%
Analysis: -
From the above that it can be analysed that total borrowings of the bank is continues
increasing from the year 2013-14 to 2014-15, i.e., in 2013-14 total advances proportion is
1106.16 increased to 1564.03 in 2014-15and increased to 2043.13 in 2015-16.
The differences in total borrowings 2013-14 to 2014-15 and 2014-15 to 2015-16 were
calculated as 41.39% and 30.63%.

GRAPH – 15
GRAPH SHOWS COMPARATIVE ANALYSIS OF TOTAL BORROWINGS
Comparative analysis of total borrowings
2500 2043.13
2000 1564.03
1106.16
1500
1000
500
Inference:-
The above graph shows total borrowing decreased by 41.39% to 30.63% compare to
previous year. It is not good for the bank.

16. Comparative analysis of Total deposits:
Table no 16
showing Amount of Total deposits
2011-12 2012-13 2013-14 2014-15 2015-16
YEAR
AMOUNTS
IN (Rs) 13627.84 15039.63 17631.80 10.35% 17.23%
Analysis:-
From the above that it can be analysed the total deposits of the bank is continuously
increasing year by year i.e., 13627.84, 15039.63 and 17631.80 in the year 20113-14, 2014-15
and 2015-16 respectively.
The differences in total deposits percentage in the year 2013-14 to 2014-15 i.e., 10.35% and
it has drastically increased to 17.23 % in the year 2014-15 to 2015-16.

GRAPH – 16
OF TOTAL DEPOSITS
Comparative analysis of total deposits
17631.8
15039.63
18000
13627.84
16000
14000
12000
10000
8000
6000
4000
2000
0
Inferences:-
In the above graph shows the total deposits of the three years it has increased by year by
year which is highest in the year 2015-16. It is good for any concern.

17. Ratio of reserves to equity share capital:
Reserves
Reserves to equity share capital = X 100
Equity share capital
Table no 17
showing Ratio of reserves to equity share capital: -
{Amount in lakhs}
Year Reserves Equity share Capital Ratio
2011-12 100.10 217.46 46.03

2012-13 105.28 179.62 58.61
2013-14 114.6 226.07 50.50
2014-15 119.87 295.75 40.53
2015-16 248.51 473.90 52.44
Analysis:-
The above table shows that, in the year 2011-12 the companies proportionate of
reserves towards proprietors funds was 46.03%. where as in the subsequent year 2012-13 it
has been increased by 12.58% drastically. Since 2013-14, this ratio has been again slightly
increased.

GRAPH-17
GRAPH SHOWS RESERVES TO EQUITY SHARE CAPITAL
Ratio
58.61
60
52.44
50.5
50 46.03
40.53
40
30 Ratio
20
10
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
From the above analysis it indicates that the trend will slightly increase in the coming
years having a proportionate of around 50% is a good indication and shows a healthy
financial position.

18. Earnings per share
Profit
Earnings per share =
No of shares
Table no 18
showing Ratio of earnings per share: -
Year Profit No of shares EPS
2011-12 14412252 95000 151.70

2012-13 104571921 95000 1100.75
2013-14 128369745 95000 1351.26
2014-15 6122823.35 95000 64.45
2015-16 10018366.08 95000 105.45
Analysis:-
From the above table shows that earnings per share is slightly fluctuated year by year.
In the year 2011-12 the EPS is 151.70 and it has increased to 1100.75, 1351.26 in the
year 2012-13 , 2013-14 and once again drastically decreased 64.45 in the year 2014-15 and
the year 2015-16 increased to 105.45 per shares.

GRAPH-18
GRAPH SHOWS RATIO OF EARNING PER SHARE
EPS
1351.26
1400
1200 1100.75
1000
800
EPS
600
400
151.7
200 64.45 105.45
0
2011-12 2012-13 2013-14 2014-15 2015-16
Inference:-
Earning per shares increased in 2015-16 it is good for the concern the liquidity
position of the company is satisfactory.

CHAPTER – 5
FINDINGS, SUGGESTIONS & CONCLUSIONS
FINDINGS:
1. The bank share capital is increasing every year because of the bank has enhancement
the share value.
2. The debt equity ratio is continuously increasing year by year from 2011-14 to 2013-
14 i.e., 8.17 to 10.92 & slightly fluctuating in the years 2014-15 to 2015-16 is
10.3736 to 9.36 respectively Because of it is depends on outsiders.
3. Return on capital employed ratio is continuously increased in the year 2011-12, to
2014-15 i.e., 0.07% to 0.59% higher or increase the ROCE the more efficient the
management is considered to be in using the funds available. In the year 2015-16 i.e.,
slightly decreased compared in the year 2014-15.
This ratio is used to measures satisfaction the overall performance of a business from
the point of view of profitability.
.
4. The banks fixed assets increasing every year from past 5 years. It indicates that the
entire fixed assets are financed by shareholders fund.
This ratio measures the efficiency & profit earning capacity of the business.
5. Net profit is increased year by year from 2011-12 to 2015-16 i.e.,
6. 12% to 128.37% hence, this ratio indicates the efficiency of the overall measure of
bank‟s profitability.
7. The banker‟s standard rule for current ratio is 2:1. It shows the ability of the firm to
pay short-term liabilities. Low ratio shows poor liquid form of firm.
But in PLD banks current ratio shows to meet the standard norms 2:1 shows
satisfactory.
8. The PLD bank‟s total advances increased every from the past 3 years 2013-14 to
2015-16 in the ratio is 30.03% to 22.28%.
It indicates shows more credit capacity of the bank.

9. Proprietary ratio of the PLD bank in the 2012-13 is higher ratio i.e., 0.07404%
compared to 4 years. Higher the ratio betters the solvency. The greater the long-term
stability & greater protection to creditors.
In the year 2011-12, 2013-14, 2014-15 & 2015-16 the ratio lesser solvency of the firm
in the bankers standard rule.
10. Total assets to debit ratio of the bankers standard rule of loaned funds.
In the bank‟s lower ratio is 1.51% in the year 2015-16 compare to other four years.
This ratio attempts measure the proportion of total assets funded by long-term debts.
11. The total assets of the PLD bank are high which running from the past 3 years 2013-
14, 2014-15 & 2015-16.
This total asset indicates efficiency of the assets generating the revenue of the bank.
12. The bank total income is increasing every year (from 2011-12 to 2015-16) because of
quality lending & recovery of loans.
13. The bank working capital is increasing every year (2011-12, 2013-14, 2014-15 &
2015-16) because of increasing the deposit, enhancement of shares &introducing the
new concept of banking system & also recovery of loans, so those are all factors helps
to increasing the working capital. But in 2011-12 is slightly decreased the W.C
compared to other 4 years.
14. The bank has mainly concentrating on the improving of agriculture area & small
industry development more than 80% of amount out of loan sanction.
15. The banking transactions are fully computerized.
16. Employers are very active with customers.
17. They more encouraging to cash transactions.

SUGGESTIONS:
The each and every activity is performed by the PCA&RD bank is excellent but still there
are some programmatic suggestions that I want to be mentioned here.
1. The bank has to provide credit card, debit card, ATM facility, E- banking system to the
account holders of the bank.
2. The bank has to open their branches both in village and semi urban areas of the district.
3. The bank should increase the amount loan for weaker section and enhancing the
repayment period.
4. The bank‟s liabilities can be minimized by the accepting the more deposited.
5. In the interest of economy development activity the human resource power has to
increase the bank should provide educational loan for higher education.
6. The bank should give the loans and advances to all sectors of the business and sections of
the society.
7. The bank has provided more and more advertisement in the Medias so the general public
know the quality and strategic of the bank.
8. The bank total income is increasing every year because of quality lending and recovery of
loans.
9. The banking working capital is increasing every year because of increasing the deposit,
enhancing of shares and introducing the new
concept of core banking system and also recovery of loans, so those are all factors helps to
increasing the working capital
10. .The total assets indicate efficiently of the assets generating the revenue to the bank. This
total asset of bank is high which is running from past 3 years Encourage farmers to take
loan.
11. Give more encourage to internet banking.
12. EPS is good and the share holders are satisfied.
13. It is suggested to expand its operations by opening more branches in rural areas also.
14. It has been suggested to increase proportion of share holders fund in its capital structure.
15. If the bank increases deposits, then lending of loans also increases.

CONCLUSION
With the liberalization of policy and with the increase in entry number of company in the
banking sector, it is has now become a highly competitive and further the bank should
introduce new policy to attract the new customers and safety and retain old customers.
The profitability of the bank is highly depending upon mobilization of funds and proper
utilisation of funds.
Based on the analysis we can finally conclude that the overall financial performance of the
bank is very good and also share capital is increasing year by year, deposits is also in very
good position. The bank giving good services to the earnings is also excellent.
The bank Managing Director, Asst. Manager and also Staff members are very co-operated
to me to make a project report.
So I‟m thankful to all.

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A STUDY ON FINANCIAL PERFORMANCE AT PCA AND RD BANK

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 1

According to Guttmann and Douglas business finance can be broadly defined as

According to Joseph and massy, financial management is the operational activity of a

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 2

Financial management refers to that part of management activity which is concerned

Aims of Financial Management:

 Acquiring sufficient funds

Importance of financial management:-

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 3

 Taking sound financial decisions.

Objectives of financial management:-

Earnings profits by a corporate or a company is a social obligation Profit is the only

 Balanced Asset Structure:

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 4

"Innovate or perish" is the slogan of this century. If a company is innovative /

Financial performance is an accounting summary that details a businessman

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 5

Tools and techniques of financial analysis:-

Analysis is an activity concerned with giving brief and understandable explanation of

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 6

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 7

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 8

Need for a Central Bank

Main objectives of RBI:

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 9

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 10

PRIVATE BANKS IN INDIA

MAJOR PRIVATE BANKS IN INDIA

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 Kotak Mahindra Bank

CO-OPERATIVE BANKS AND CREDIT SOCIETY

Co-operative movements in India

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He recommended by the organization of raiffesen type of Co-operative Societies as a

Provisional government simultaneously initiated the number of other measure as well

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 13

HEIRARCHY OF CO-OPERATIVE BANK

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 14

 Primary Credit Societies

 District Central Co-operative Banks

 State Co-operative Banks

Emerging scenario of Co-operative Credit Institutions:

The emerging scenario of Co-operative Credit Institution appeared to be the mixed

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INTRODUCTION AND MEANING OF FINANCIAL STATEMENTS

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Financial statements contain summarized information of the firm‟s financial affairs,

Objective of financial statement:

 To provide reliable information about changes in net resources (resources minus

Financial Statement includes:

BET COLLAGE OF SCIENCE AND MANAGEMENT, BANGALORE Page 17

Functions of the Balance Sheet

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Profit and Loss Account:

Functions of Profit and Loss Statement:

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Relationship between balance sheet and profit and loss account

Types of Financial Analysis:

Tools or Techniques/methods of data analysis and interpretation

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2. Common size statement.