INTRODUCTION

The financial statement provides the basic data for financial performance
analysis. The financial statements provide a summarized view of the financial position
and operations of a firm. Financial analysis (also referred to as financial statement
analysis or accounting analysis) refers to an assessment of the viability, stability and
profitability of a business. The analyst first identifies the information relevant to the
decision under consideration from the total information contained in the financial
performance. Therefore, much can be learnt about a firm from a careful examination
of its financial performance as invaluable documents and performance reports.
The analysis of financial performance is an important aid to financial analysis.
They provide information on how the firm has performed in the past and what is its
current financial position. Financial analysis is the process of identifying the financial
strengths and weakness of the firm from the available accounting data and financial
performance. The analysis is done by establishing relationship between the different
items of financial performance.
The focus of financial analysis is on key figures in the financial performance
and the significant relationship that exists between them. The analysis of financial
performance is a process of evaluating relationship between component parts of
financial performance to obtain a better understanding of the firms position and
performance.
The first task of financial analyst is to select the information relevant to the
decision under consideration from the total information contained in the financial
statement. The second step involved in financial analysis is to arrange the information
in a way to highlight significant relationships. The final step is interpretation and
drawing of inferences and conclusions. In brief, financial analysis is the process of
selection, relation, and evaluation.

NEED FRO THE STUDY

The Financial Performance is mirror which reflects the financial position and
strengths or weakness of the concern. The Non- Banking Financial Company has been
witnessed intense competition from domestic banks and international banks. Every
business needs to view the financial performance analysis.
The study on effectiveness of operational and financial performance of
Sundered finance limited is conducted to measure the overall performance of
company. The financial analysis strengths the firms to make their best use, and to be
able to spot out financial weakness of the firm to state suitable corrective actions.
This study aims at analyzing the overall financial performance of the company
by using various financial tools like Comparative Analysis, common size statement
analysis, Ratio Analysis, and Cash Flow Analysis.
OBJECTIVE OF THE STUDY
The following are the objectives of the study:

To measure of profitability of the firm.

To measure the managerial efficiency of the firm.
To forecast the future prospects of the firm.
To determine efficiency of utilization of fixed assets.
To evaluate the financial position (both liquidity & solvency).
To know the position of working capital.
To indicate future trends of the items in financial performances.
To analyze the performance of a business by establishing Relationships
between the items of balance sheet and the profit & loss account.

SCOPE OF THE STUDY

Financial performances provide meaningful, useful and valuable information
periodically regarding financial position and further prospects of the business
concern.
Various parties (for management, for the creditors & investors) interested can
utilize the information provided by the financial performances in Bhadradri Cooperative Urban Bank
The study was limited to five years for the purpose of carrying out of the
analysis.
The data available in the financial analysis have been grouped and arranged
properly.
The interpretation stage of accounting process demands the person to posses
some specialized knowledge, specialized skills, analytical abilities, reasoning
etc., an accountant, who records, classifies and summarizes the transactions of
financial nature will, treats the liabilities as burdens and the assets as strengths
of the organization.
RESEARCH METHODOLOGY
.A research design is the arrangement of conditions for collection and analysis
of data in a manager that aims to combine for collection and analysis of data relevance
to the research purpose with economy in procedure.
SOURCES OF DATA
Data we collected based on two sources.
Primary data.
Secondary data.

PRIMARY DATA
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The Primary data are those informations, which are collected afresh and for
the first time, and thus happen to be original in character.
In this project the primary data has been collected by directly consulting the
manager
SECONDARY DATA
The Secondary data are those which have already been collected by some other
agency and which have already been processed. The sources of Secondary data are
Annual Reports, browsing Internet, through magazines.
1. It includes data gathered from the annual reports of Bhadradri Co-operative
Urban Bank
2. Articles are collected from official website of Bhadradri Co-operative Urban
Bank
LIMITATIONS OF THE STUDY
The current study is based mainly on the annual reports and audited account as
provided by the company. So the scope of the study falls within limitations of
the accounting practical of the company.
Some information has obtained through oral discussion with the management
of the company. So there might be an element of personal biases.
The current study is mainly concerned with the internal analysis and does not
conclude the external analysis. The data taken for comparison is only for five
years i.e. limited period of time.
One of the main limitations of financial analysis is that it involves analyzing
the financial performances prepared on the basis of historical data and at a
point of time. Therefore, it fails to indicate the future trends of the items of
financial performances.

INTRODUCTION TO BANKING INDUSTRY

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A bank is a financial intermediary that accepts deposits and channels those deposits
into lending activities. Banks are a fundamental component of the financial system and are
also active players in financial markets. The essential role of a bank is to connect those who
have capital (such as investors or depositors) with those who seek capital (such as individuals
wanting a loan or businesses wanting to grow).
Banking is generally a highly regulated industry and government restrictions on
financial activities by banks have varied over time and location. The current sets of global
standards are called Basel II. In some countries such as Germany banks have historically
owned major stakes in industrial corporations while in other countries such as the United
States banks are prohibited from owning non-financial companies. In Japan banks are usually
the nexus of a cross-share holding entity known as the keiretsu. In France bank insurance is
prevalent as most banks offer insurance services (and now real estate services) to their clients.
The most recent trend has been the advance of universal banks which attempt to offer their
customers the full spectrum of financial services under the one roof.
Banking in India originated in the last decades of the 18th century. The oldest bank in
existence in India is the State Bank of India a government-owned bank that traces its origins
back to June 1806 and that is the largest commercial bank in the country. Central banking is
the responsibility of the Reserve Bank of India which in 1935 formally took over these
responsibilities from the then Imperial Bank of India relegating it to commercial banking
functions. After India's independence in 1947 the Reserve Bank was nationalized and given
broader powers. In 1969 the government nationalized the 14 largest commercial banks; the
government nationalized the six next largest in 1980.
Currently India has 96 scheduled commercial banks (SCBs) - 27 public sector banks
(that is with the Government of India holding a stake) 31 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign
banks. They have a combined network of over 53000 branches and 49000 ATMs. According
to a report by ICRA Limited a rating agency the public sector banks hold over 75 percent of
total assets of the banking industry with the private and foreign banks holding 18.2% and
6.5% respectively.

The Indian Banking Industry can be categorized into non-scheduled banks and
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scheduled banks. Scheduled banks constitute of commercial banks and co-operative banks.
There are about 67000 branches of Scheduled banks spread across India. As far as the present
scenario is concerned the Banking Industry in India is going through a transitional phase. The
Public Sector Banks (PSBs) which are the base of the Banking sector in India account for
more than 78 per cent of the total banking industry assets. Unfortunately they are burdened
with excessive Non-Performing assets (NPAs) massive manpower and lack of modern
technology. On the other hand the Private Sector Banks are making tremendous progress.
They are leaders in Internet banking mobile banking phone banking ATMs. As far as foreign
banks are concerned they are likely to succeed in the Indian Banking Industry. In the Indian
Banking Industry some of the Private Sector Banks operating are IDBI Bank ING Vyasa
Bank SBI Commercial and International Bank Ltd Bank of Rajasthan Ltd. and banks from
the Public Sector include Punjab National bank Vijay Bank UCO Bank Oriental Bank
Allahabad Bank among others. ANZ Grind lays Bank ABN-AMRO Bank American Express
Bank Ltd Citibank are some of the foreign banks operating in the Indian Banking Industry.

CO-OPERATIVE BANKS:
The Co-operative bank has a history of almost 100 years. The Co-operative banks are
an important constituent of the Indian Financial System judging by the role assigned to them
the expectations they are supposed to fulfill their number and the number of offices they
operate. The co-operative movement originated in the West but the importance that such
banks have assumed in India is rarely paralleled anywhere else in the world. Their role in
rural financing continues to be important even today and their business in the urban areas also
has increased phenomenally in recent years mainly due to the sharp increase in the number of
primary co-operative banks. While the co-operative banks in rural areas mainly finance
agricultural based activities including farming cattle milk hatchery personal finance etc. along
with some small scale industries and self-employment driven activities the co-operative
banks in urban areas mainly finance various categories of people for self-employment
industries small scale units home finance consumer finance personal finance etc. Some of the
co-operative banks are quite forward looking and have developed sufficient core
competencies to challenge state and private sector banks.
According to NAFCUB the total deposits & lendings of Co-operative Banks is much
more than Old Private Sector Banks & also the New Private Sector Banks.
This exponential growth of Co-operative Banks is attributed mainly to their much
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better local reach personal interaction with customers and their ability to catch the nerve of
the local clientele. Though registered under the Co-operative Societies Act of the Respective
States (where formed originally) the banking related activities of the co-operative banks are
also regulated by the Reserve Bank of India. They are governed by the Banking Regulations
Act 1949 and Banking Laws (Co-operative Societies) Act 1965.
Co-operative movement is quite well established in India. The first legislation on cooperation was passed in 1904. In 1914 the Malaren committee envisaged a three tier structure
for co-operative banking viz.
Primary Agricultural Credit Societies (PACs) at the grass root level Central Cooperative Banks at the district level and State Co-operative Banks at state level or Apex
Level. The first urban co-operative bank in India was formed nearly 100 years back in
Baroda.
Co-operative Institutions are engaged in all kinds of activities namely production
processing marketing distribution servicing and banking in India and have vast and powerful
superstructure. Co-operative Banks are important cogs in this structure.
In the beginning of 20th century availability of credit in India more particularly in
rural areas was almost absent. Agricultural and related activities were starved of organized
institutional credit. The rural folk had to depend entirely on the money lenders who lent often
at usurious rates of interest.
The co-operative banks arrived in India in the beginning of 20th Century as an official
effort to create a new type of institution based on the principles of co-operative organization
and management suitable for problems peculiar to Indian conditions. These banks were
conceived as substitutes for money lenders to provide timely and adequate short-term and
long-term institutional credit at reasonable rates of interest. In the formative stage Cooperative Banks were Urban Co-operative Societies run on community basis and their
lending activities were restricted to meeting the credit requirements of their members. The
concept of Urban Co-operative Bank was first spelt out by Mehta Bhansali Committee in
1939 which defined on Urban Co-operative Bank. Provisions of Section 5 (CCV) of Banking
Regulation Act 1949 (as applicable to Co-operative Societies) defined an Urban Co-operative
Bank as a Primary Co-operative Bank other than a Primary Co-operative Society was made
applicable in 1966. With gradual growth and also given Philip with the economic boom urban
banking sector received tremendous boost and started diversifying its credit portfolio.
Besides giving traditional lending activity meeting the credit requirements of their
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customers they started catering to various sorts of customers viz. self-employed small
businessmen / industries house finance consumer finance personal finance etc.

CATEGORIES OF CO-OPERATIVE BANK:

There are two main categories of the co-operative banks.
(a) Short term lending oriented co-operative Banks - within this category there are three sub
categories of banks visa state co-operative banks District co-operative banks and Primary
Agricultural co-operative societies.
(b) Long term lending oriented co-operative Banks - within the second category there are
land development banks at three levels state level district level and village level.
The co-operative banking structure in India is divided into following main 5 categories:
Primary Urban Co-op Banks:
Primary Agricultural Credit Societies:
District Central Co-op Banks:
State Co-operative Banks:
Land Development Bank:
HISTORY:
The first bank in India though conservative was established in 1786. From 1786 till
today the journey of Indian Banking System can be segregated into three distinct phases.
They are as mentioned below:
Early phase from 1786 to 1969 of Indian Banks
Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
To make this write-up more explanatory I prefix the scenario as Phase I Phase II and Phase
III.

PHASE-I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan
and Bengal Bank. The East India Company established Bank of Bengal (1809) Bank of
Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency
Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks mostly Europeans-shareholders. In
1865 Allahabad Bank was established and first time exclusively by Indians Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913 Bank of
India Central Bank of India Bank of Baroda Canara Bank Indian Bank and Bank of Mysore
were set up. Reserve Bank of India came in 1935. During the first phase the growth was very
slow and banks also experienced periodic failures between 1913 and 1948. There were
approximately 1100 banks mostly small. To streamline the functioning and activities of
commercial banks the Government of India came up with The Banking Companies Act 1949
which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act
No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision
of banking in India as the Central Banking Authority. During those days public has lesser
confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the
savings bank facility provided by the Postal department was comparatively safer. Moreover
funds were largely given to traders.
PHASE-II
Government took major steps in this Indian Banking Sector Reform after
independence. In 1955 it nationalized Imperial Bank of India with extensive banking
facilities on a large scale especially in rural and semi-urban areas. It formed State Bank of
India to act as the principal agent of RBI and to handle banking transactions of the Union and
State Governments all over the country. Seven banks forming subsidiary of State Bank of
India was nationalized in 1960 on 19th July 1969 major process of nationalization was
carried out. It was the effort of the then Prime Minister of India Mrs. Indira Gandhi. 14 major
commercial banks in the country were nationalized. Second phase of nationalization Indian
Banking Sector Reform was carried out in 1980 with seven more banks. This step brought
80% of the banking segment in India under Government ownership. The following are the
steps taken by the Government of India to Regulate Banking Institutions in the Country:

 1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.
PHASE-III
This phase has introduced many more products and facilities in the banking sector in
its reforms measure. In 1991 under the chairmanship of M.Narasimham a committee was set
up by his name which worked for the liberalization of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being
put to give a satisfactory service to customers. Phone banking and net banking is introduced.
The entire system became more convenient and swift. Time is given more importance than
money.
The financial system of India has shown a great deal of resilience. It is sheltered from
any crisis triggered by external macroeconomics shock as other East Asian countries suffered.
This is all due to a flexible exchange rate regime the foreign reserves are high the capital
account is not yet fully convertible and banks and their Customers have limited foreign
exchange exposure.

NATIONALIZATION

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By the 1960s the Indian banking industry has become an important tool to facilitate
the development of the Indian economy. At the same time it has emerged as a large employer
and a debate has ensured about the possibility to nationalize the banking industry.
India Gandhi the-then Prime Minister of India expressed the intention of the
Government of India (GOI) in the annual conference of the All India Congress Meeting in a
paper entitled "Stray thoughts on Bank Nationalization". The paper was received with
positive enthusiasm. Thereafter her move was swift and sudden and the GOI issued an
ordinance and nationalized the 14 largest commercial banks with effect from the midnight of
July 19 1969. Jayaprakash Narayan a national leader of India described the step as a
"Masterstroke of political sagacity" Within two weeks of the issue of the ordinance the
Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill
and it received the presidential approval on 9 August 1969.
A second step of nationalization of 6 more commercial banks followed in 1980. The
stated reason for the nationalization was to give the government more control of credit
delivery. With the second step of nationalization the GOI controlled around 91% of the
banking business in India. Later on in the year 1993 the government merged New Bank of
India with Punjab National Bank. It was the only merger between nationalized banks and
resulted in the reduction of the number of nationalized banks from 20 to 19. After this until
the 1990s the nationalised banks grew at a pace of around 4% closer to the average growth
rate of the Indian economy. The nationalized banks were credited by some; including Home
minister P. Chidambaram to have helped the Indian economy withstand the global financial
crisis of 2009-2011.
LIBERALISATION
In the early 1990s the then Narasimha Rao government embarked on a policy of
liberalisation licensing a small number of private banks. These came to be known as New
Generation tech-savvy banks and included Global Trust Bank (the first of such new
generation banks to be set up) which later amalgamated with Oriental Bank of Commerce
Axis Bank(earlier as UTI Bank) ICICI Bank and HDFC Bank. This move along with the
rapid growth in the economy of India revolutionized the banking sector in India which has
seen rapid growth with strong contribution from all the three sectors of banks namely
government banks private banks and foreign banks. The next stage for the Indian banking has
been setup with the proposed relaxation in the norms for Foreign Direct Investment where all
Foreign Investors in banks may be given voting rights which could exceed the present cap of
10% at present it has gone up to 49% with some restrictions. The new policy shook the
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banking sector in India completely. Bankers till this time were used to the 4-6-4 method
(Borrow at 4%; Lend at 6%; Go home at 4) of functioning.
The new wave ushered in a modern outlook and tech-savvy methods of working for
the traditional banks. All this led to the retail boom in India. People not just demanded more
from their banks but also received more. Currently (2009) banking in India is generally fairly
mature in terms of supply product range and reach-even though reach in rural India still
remains a challenge for the private sector and foreign banks. In terms of quality of assets and
capital adequacy Indian banks are considered to have clean strong and transparent balance
sheets as compared to other banks in comparable economies in its region.
The Reserve Bank of India is an autonomous body with minimal pressure from the
government. The stated policy of the Bank on the Indian Rupee is to manage volatility but
without any fixed exchange rate-and this has mostly been true. With the growth in the Indian
economy expected to be strong for quite some time-especially in its services sector-the
demand for banking services especially retail banking mortgages and investment services are
expected to be strong. In March 2006 the Reserve Bank of India allowed Warburg Pincus to
increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first
time an investor has been allowed to hold more than 5% in a private sector bank since the
RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would
need to be voted by them. In recent years critics have charged that the non-government
owned banks are too aggressive in their loan recovery efforts in connection with housing
vehicle and personal loans. There are press reports that the banks' loan recovery efforts have
driven defaulting borrowers to suicide.
Government policy on banking industry (Source:-The federal Reserve Act 1913 and The
Banking Act 1933)
Banks operating in most of the countries must contend with heavy regulations rules
enforced by Federal and State agencies to govern their operations service offerings and the
manner in which they grow and expand their facilities to better serve the public. A banker
works within the financial system to provide loans accept deposits and provide other services
to their customers.
They must do so within a climate of extensive regulation designed primarily to protect
the public interests.
The main reasons why the banks are heavily regulated are as follows:
To protect the safety of the publics savings.
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 To control the supply of money and credit in order to achieve a nations broad economic
goal.
To ensure equal opportunity and fairness in the publics access to credit and other vital
financial services.
To promote public confidence in the financial system so that savings are made speedily and
efficiently.
To avoid concentrations of financial power in the hands of a few individuals and
institutions.
Provide the Government with credit tax revenues and other services.
To help sectors of the economy that they have special credit needs for eg. Housing small
business and agricultural loans etc.
Law of banking
Banking law is based on a contractual analysis of the relationship between the bank and
customerdefined as any entity for which the bank agrees to conduct an account.
The law implies rights and obligations into this relationship as follows:
The bank account balance is the financial position between the bank and the
customer: when the account is in credit the bank owes the balance to the
customer; when the account is overdrawn the customer owes the balance to the bank.
The bank agrees to pay the customer's cheques up to the amount standing to the credit of the
customer's account plus any agreed overdraft limit.
The bank may not pay from the customer's account without a mandate from the customer
e.g. cheques drawn by the customer.
The bank agrees to promptly collect the cheques deposited to the customer's account as the
customer's agent and to credit the proceeds to the customer's account.
The bank has a right to combine the customer's accounts since each account is just an aspect
of the same credit relationship.
The bank has a lien on cheques deposited to the customer's account to the extent that the
customer is indebted to the bank.

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 The bank must not disclose details of transactions through the customer's accountunless
the customer consents there is a public duty to disclose the bank's interests require it or the
law demands it.
The bank must not close a customer's account without reasonable notice since cheques are
outstanding in the ordinary course of business for several days.
These implied contractual terms may be modified by express agreement between the
customer and the bank. The statutes and regulations in force within a particular jurisdiction
may also modify the above terms and/or create new rights obligations or limitations relevant
to the bank-customer relationship.
Regulations for Indian banks
Currently in most jurisdictions commercial banks are regulated by government
entities and require a special bank license to operate. Usually the definition of the business of
banking for the purposes of regulation is extended to include acceptance of deposits even if
they are not repayable to the customer's orderalthough money lending by itself is generally
not included in the definition. Unlike most other regulated industries the regulator is typically
also a participant in the market i.e. a government-owned (central) bank. Central banks also
typically have a monopoly on the business of issuing banknotes. However in some countries
this is not the case. In UK for example the Financial Services Authority licenses banks and
some commercial banks (such as the Bank of Scotland) issue their own banknotes in addition
to those issued by the Bank of England the UK government's central bank. Some types of
financial institutions such as building societies and credit unions may be partly or wholly
exempted from bank license requirements and therefore regulated under separate rules. The
requirements for the issue of a bank license vary between jurisdictions but typically include:

Minimum capital
Minimum capital ratio
Fit and Proper' requirements for the bank's controllers owners directors and/or senior

officers
Approval of the bank's business plan as being sufficiently prudent and plausible

Classification of Banking Industry in India

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Indian banking industry has been divided into two parts organized and unorganized
sectors. The organized sector consists of Reserve Bank of India Commercial Banks and Cooperative Banks and Specialized Financial Institutions (IDBI ICICI IFC etc). The
unorganized sector which is not homogeneous is largely made up of money lenders and
indigenous bankers.
An outline of the Indian Banking structure may be presented as follows:1. Reserve banks of India.
2. Indian Scheduled Commercial Banks.
a) State Bank of India and its associate banks.
b) Twenty nationalized banks.
c) Regional rural banks.
d) Other scheduled commercial banks.
3. Foreign Banks
4. Non-scheduled banks.
5. Co-operative banks.
Reserve bank of India
The reserve bank of India is a central bank and was established in April 1 1935 in
accordance with the provisions of reserve bank of India act 1934. The central office of RBI is
located at Mumbai since inception. Though originally the reserve bank of India was privately
owned since nationalization in 1949 RBI is fully owned by the Government of India. It was
inaugurated with share capital of Rs. 5 Crores divided into shares of Rs. 100 each fully paid
up. RBI is governed by a central board (headed by a governor) appointed by the central
government of India. RBI has 22 regional offices across India. The reserve bank of India was
nationalized in the year 1949.
The general superintendence and direction of the bank is entrusted to central board of
directors of 20 members the Governor and four deputy Governors one Governmental official
from the ministry of Finance ten nominated directors by the government to give
representation to important elements in the economic life of the country and the four
nominated director by the Central Government to represent the four local boards with the
headquarters at Mumbai Kolkata Chennai and New Delhi.

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Local Board consists of five members each central government appointed for a term
of four years to represent territorial and economic interests and the interests of cooperative
and indigenous banks.
The RBI Act 1934 was commenced on April 1 1935. The Act 1934 provides the statutory
basis of the functioning of the bank. The bank was constituted for the need of following:
- To regulate the issues of banknotes.
- To maintain reserves with a view to securing monetary stability
- To operate the credit and currency system of the country to its advantage.
Functions of RBI as a central bank of India are explained briefly as follows:
Bank of Issue: The RBI formulates implements and monitors the monitory policy. Its main
objective is maintaining price stability and ensuring adequate flow of credit to productive
sector.
Regulator-Supervisor of the financial system: RBI prescribes broad parameters of banking
operations within which the countrys banking and financial system functions. Their main
objective is to maintain public confidence in the system protect depositors interest and
provide cost effective banking services to the public.
Manager of exchange control: The manager of exchange control department manages the
foreign exchange according to the foreign exchange management act 1999. The managers
main objective is to facilitate external trade and payment and promote orderly development
and maintenance of foreign exchange market in India.
Issuer of currency: A person who works as an issuer issues and exchanges or destroys the
currency and coins that are not fit for circulation. His main objective is to give the public
adequate quantity of supplies of currency notes and coins and in good quality.
Developmental role: The RBI performs the wide range of promotional functions to support
national objectives such as contests coupons maintaining good public relations and many
more.
Related functions: There are also some of the related functions to the above mentioned main
functions. They are such as banker to the government banker to banks etc.

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 Banker to government performs merchant banking function for the central and the
State governments; also acts as their banker.
Banker to banks maintains banking accounts to all scheduled banks.
Controller of Credit: RBI performs the following tasks:
It holds the cash reserves of all the scheduled banks.
It controls the credit operations of banks through quantitative and qualitative Controls.
It controls the banking system through the system of licensing inspection and calling for
information.
It acts as the lender of the last resort by providing rediscount facilities to scheduled banks.
Supervisory Functions: In addition to its traditional central banking functions the Reserve
Bank performs certain non-monetary functions of the nature of supervision of banks and
promotion of sound banking in India. The Reserve Bank Act 1934 and the banking regulation
act 1949 have given the RBI wide powers of supervision and control over commercial and
co-operative banks relating to licensing and establishments branch expansion liquidity of
their assets management and methods of working amalgamation reconstruction and
liquidation.
The RBI is authorized to carry out periodical inspections of the banks and to call for
returns and necessary information from them. The nationalization of 14 major Indian
scheduled banks in July 1969 has imposed new responsibilities on the RBI for directing the
growth of banking and credit policies towards more rapid development of the economy and
realization of certain desired social objectives. The supervisory functions of the RBI have
helped a great deal in improving the standard of banking in India to develop on sound lines
and to improve the methods of their operation.
Promotional Functions: With economic growth assuming a new urgency since
independence the range of the Reserve Banks functions has steadily widened. The bank now
performs a variety of developmental and promotional functions which at one time were
regarded as outside the normal scope of central banking.

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The Reserve bank was asked to promote banking habit extend banking facilities to
rural and semi-urban areas and establish and promote new specialized financing agencies.
Indian Scheduled Commercial Banks
The commercial banking structure in India consists of scheduled commercial banks
and unscheduled banks.
Scheduled Banks:
Scheduled Banks in India constitute those banks which have been included in the
second schedule of RBI act 1934. RBI in turn includes only those banks in this schedule
which satisfy the criteria laid down vide section 42(6a) of the Act. Scheduled banks in
India means the State Bank of India constituted under the State Bank of India Act 1955 (23
of 1955) a subsidiary bank as defined in the s State Bank of India (subsidiary banks) Act
1959 (38 of 1959) a corresponding new bank constituted under section 3 of the Banking
companies (Acquisition and Transfer of Undertakings) Act 1980 (40 of 1980) or any other
bank being a bank included in the Second Schedule to the Reserve bank of India Act 1934 (2
of 1934) but does not include a co-operative bank.
For the purpose of assessment of performance of banks the Reserve Bank of India
categories those banks as public sector banks old private sector banks new private sector
banks and foreign banks i.e. private sector public sector and foreign banks come under the
umbrella of scheduled commercial banks.
Regional Rural Bank:
The government of India set up Regional Rural Banks (RRBs) on October 2 1975
[10]. The banks provide credit to the weaker sections of the rural areas particularly the small
and marginal farmers agricultural labourers and small entrepreneurs. Initially five RRBs were
set up on October 2 1975 which was sponsored by Syndicate Bank State Bank of India
Punjab National Bank United Commercial Bank and United Bank of India. The total
authorized capital was fixed at Rs. 1 Crore which has since been raised to Rs. 5 Crores. There
are several concessions enjoyed by the RRBs by Reserve Bank of India such as lower interest
rates and refinancing facilities from NABARD like lower cash ratio lower statutory liquidity
ratio lower rate of interest on loans taken from sponsoring banks managerial and staff
assistance from the sponsoring bank and reimbursement of the expenses on staff training. The
RRBs are under the control of NABARD. NABARD has the responsibility of laying down
the policies for the RRBs to oversee their operations provide refinance facilities to monitor
their Performance and to attend their problems.

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Unscheduled Banks:
Unscheduled Bank in India means a banking company as defined in clause (c) of
section 5 of the Banking Regulation Act 1949 (10 of 1949) which is not a scheduled bank.
NABARD
NABARD is an apex development bank with an authorization for facilitating credit
flow for promotion and development of agriculture small-scale industries cottage and village
industries handicrafts and other rural crafts. It also has the mandate to support all other allied
economic activities in rural areas promote integrated and sustainable rural development and
secure prosperity of rural areas. In discharging its role as a facilitator for rural prosperity
NABARD is entrusted with:
1. Providing refinance to lending institutions in rural areas
2. Bringing about or promoting institutions development and
3. Evaluating monitoring and inspecting the client banks
Besides this fundamental role NABARD also:
Act as a coordinator in the operations of rural credit institutions
To help sectors of the economy that they have special credit needs for eg. Housing small
business and agricultural loans etc.
Co-operative Banks
Co-operative banks are explained in detail in Section II of this chapter
Services provided by banking organizations
Banking Regulation Act in India 1949 defines banking as Accepting for the purpose of
lending or investment of deposits of money from the public repayable on demand and
withdraw able by cheques drafts orders etc. as per the above definition a bank essentially
performs the following functions: Accepting Deposits or savings functions from customers or public by providing bank
account current account fixed deposit account recurring accounts etc.
The payment transactions like lending money to the public. Bank provides an effective
credit delivery system for loan able transactions.
Provide the facility of transferring of money from one place to another place. For
performing this operation bank issues demand drafts bankers cheques money orders etc. for
transferring the money. Bank also provides the facility of Telegraphic transfer or tele- cash
orders for quick transfer of money.
19

 A bank performs a trustworthy business for various purposes.

A bank also provides the safe custody facility to the money and valuables of the general
public. Bank offers various types of deposit schemes for security of money. For keeping
valuables bank provides locker facility. The lockers are small compartments with dual
locking system built into strong cupboards. These are stored in the banks strong room and
are fully secured.
Banks act on behalf of the Govt. to accept its tax and non-tax receipt. Most of the
government disbursements like pension payments and tax refunds also take place through
banks. There are several types of banks which differ in the number of services they provide
and the clientele (Customers) they serve. Although some of the differences between these
types of banks have lessened as they have begun to expand the range of products and services
they offer there are still key distinguishing traits. These banks are as follows:
Commercial banks which dominate this industry offer a full range of services for individuals
businesses and governments. These banks come in a wide range of sizes from large global
banks to regional and community banks.
Global banks are involved in international lending and foreign currency trading in addition
to the more typical banking services.
Regional banks have numerous branches and automated teller machine (ATM) locations
throughout a multi-state area that provide banking services to individuals. Banks have
become more oriented toward marketing and sales. As a result employees need to know about
all types of products and services offered by banks.
Community banks are based locally and offer more personal attention which many
individuals and small businesses prefer. In recent years online bankswhich provide all
services entirely over the Internethave entered the market with some success. However
many traditional banks have also expanded to offer online banking and some formerly
Internet-only banks are opting to open branches.
Savings banks and savings and loan associations sometimes called thrift institutions are the
second largest group of depository institutions. They were first established as communitybased institutions to finance mortgages for people to buy homes and still cater mostly to the
savings and lending needs of individuals.
Credit unions are another kind of depository institution. Most credit unions are formed by
people with a common bond such as those who work for the same company or belong to the
same labour union or church. Members pool their savings and when they need money they

20

may borrow from the credit union often at a lower interest rate than that demanded by other
financial institutions.
Federal Reserve banks are Government agencies that perform many financial services for
the Government. Their chief responsibilities are to regulate the banking industry and to help
implement our Nations monetary policy so our economy can run more efficiently by
controlling the Nations money supplythe total quantity of money in the country including
cash and bank deposits. For example during slower periods of economic activity the Federal
Reserve may purchase government securities from commercial banks giving them more
money to lend thus expanding the economy. Federal Reserve banks also perform a variety of
services for other banks.
For example they may make emergency loans to banks that are short of cash and
clear checks that are drawn and paid out by different banks.
The money banks lend comes primarily from deposits in checking and savings accounts
certificates of deposit money market accounts and other deposit accounts that consumers and
businesses set up with the bank. These deposits often earn interest for their owners and
accounts that offer checking provide owners with an easy method for making payments safely
without using cash. Deposits in many banks are insured by the Federal Deposit Insurance
Corporation which guarantees that depositors will get their money back up to a stated limit if
a bank should fail.
STRUCTURE OF CO-OPERATIVE BANKS:

NABARD
(National Agriculture Bank and Rural Development)

SCBs
(State Co-Operative Banks)

CCBs
CCBS Banks)
(Central Co-Operative
PACS
(Primary Agriculture Credit Societies)
21

ORGANIZATION PROFILE
BHADRADRI CO-OPERTIVE URBAN BANK LTD
Bhadradri Co-operative Urban bank ltd. Established on 4-10-1997 under co-operative
act 1976. Audit officer of Khammam certified that the Bhadradri co-operative Urban bank
Ltd., is A class co-operative bank. Its authorized share capital is 150 lakhs including 30
lakhs preference share capital
NAME:
The Bank is called Bhadradri co-operative Urban Bank Ltd.,Khammam
REGISTERED OFFICE:
The Registered office of the Bank is at Khammam town, khammam district,
TELANGANA STATE.
AREA OF OPERATION:
The Area of Operation of Bhadradri Co-operative urban bank limited is confined to
the entire district of khammam . the bank has been operating nine branches
1. GANDHI CHOWK BRANCH
2. MAYURI CENTER BRANCH
3. MUSTAFA NAGAR BRANCH
4. ROTARY NAGAR BRANCH
5. BHADRACHALAM BRANCH
6. KOTHAGUDEM BRANCH
7. SATHUPALLY BRANCH
8. MADHIRA BRANCH
9. MANUGURU BRANCH
CEO
Chairman
Vice Chairman
Vice Chairman

: Sri Bulusu Sambamurthi

: Sri. Cherukuri Krishna Murthy.
: Sri. Gurram Umamesheswara Rao,
: Sri. M.V.L. Narasimha Rao

Directors
Sri Devatha Raja Rao
Sri Sanne Uday pratap ,
Sri Arvapalli Niranjan,
Sri Rekhala Bhaskar
Sri Velpuri Sambasiva Rao
Sri Vemulapalli Venkateswara Rao
Sri Yada Krishna Murthy.
Sri Gadapalli Madhava Rao
Managing Director is also the chief Executive Officer or General Manager of
the bank appointed by the Board of Director.
22

OBJECTIVE OF THE BANKS

1. To encourage thrift, self help and cooperation among members.
2. To accept deposits of money from public repayable on demand or otherwise and
withdrawals by cheque Draft Order investment.
3. To borrow or raise money.
4. To lend or to advance money either upon or with the security to members and to other as
permitted by the register.
5. To draw, make accept , buy sell , collect and deal in the Bills of Exchange, Hun dies,
promissory notes, coupons, Drafts, Bills of landing, Railway Receipts, warrant
certificates, script and other instruments and other securities whether transferable
negotiable or not.
6. To grant and to issue letters of credit, travels cheques and circular notes.
7. To acquire, to hold to issue on commission to underwrite and to deal in stocks, funds ,
shares , debentures, stocks , unit, bonds, obligations, securities and investments of all
kinds in non-speculative manner.
8. To buy and sell foreign exchange including foreign bank notes.
9. To receive all kinds of bounds, script, shares, debentures valuables on deposit or for safe
custody or otherwise.
10. To purchase and to sell bounds scripts or other forms of securities on behalf of
constituents. To provide safe deposit values.
11. To collect and transmit money and securities.
12. To negotiate loans and advances.
13. To carry on and to transact every kind of guarantee and indemnity business on behalf of
constituents.
14. To effort , to insure, to guarantee, to underwrite , to participate in managing and carrying
out any issue, public or private of state, municipal or other loans or of share ,stocks
debentures, debenture sticks of any company, co-operative society or corporation or
association and to lend money for the purpose of any such issue.
15. To acquire , to construct for the purpose of the bank.
16. To manage , to sell and to realize any property which may come into the possession of
the bank in satisfaction of any of its claims.
17. To open branches and place office with the permission of the register and Reserve bank
of India within the area of operation of the bank so as to provide banking services to the
public.
18. To establish , to support or to aid in establishment and support of Associations,
institutions, funds Trusts, and conveniences constituted to benefit the members ,
employees, ex-employees of the bank or the dependents or connections of such persons.
19. To prepare and finance schemes for amelioration of the financial condition of members.
23

20. To provide financial and technical assistance to self employed persons for setting up
their own business and finance the small scale and other industries as are permitted by
the reserve Bank of India from time to time.
21. To enter into participation arrangement with any other bank, or banks of financial
institutions with the object of making loans and advances.
FUNDS
The funds may be raised by the following means:

Shares
Entrance fee
Subscription
Deposits
Loans, cash credits, Overdrafts and advances.
Donations, grants and subsidies

MAXIMUM BORROWING POWER OF THE BANK

The maximum borrowing power of the bank shall not exceed 50 times of the paid-up
share capital and reserve minus bad debts reserves and accumulated losses.

BANK SHARES
The authorized share capital of the bank is Rs.1,50,00,000 made up of 1,20,2000 A
Class shares of Rs. 10 each should be paid on application and 30,00,000 B Class share of
Rs. 10 each which should be paid in full on application A Class shares will be allotted to
individual members and B class shares will be allotted to associated / nominal member.
The authorized share capital may be increased from time to time by general body resolution
subject to the approval of the register.
LIABILITY OF MEMBERS:
The liability of a share holder shall be limited to the capital represented by the share of
which such shareholder is the registered shareholder. The liability of a past shareholder, to the
extent of shares as they existed at the time when he ceased to be share holder, shall continue
for a period of two years from the data of occasion.
BANK ACTIVITIES
1.

LOANS AND ADVANCES:

24

Bank gives loans and advance to Agricultural, Non-Agricultural, sectors:

Term loans to small industries and also to Co-operative societies, house construction
and gold loans to short term loans will be for a period up to 15 months, Medium term loans
for 15 months to 5 years with permission of Government.
The entire loaning system in Bhadradri Co-Operative Bank has been broadly
classified as follows.
LOANS AND ADVANCES

NON FUND BASED

FUND BASED

a.Bank Guarantees
b.Letter of Credit
DEMAND
LOANS
2. DEPOSITS:

TERM LOANS

OVER DRAFT &

CASH CREDIT

DEMAN
D

The bank raises different types of deposits from public under tow main heads such as
Demand deposits and term deposits. The various types of deposits maintained by bank are as
follows:
Capital Adequacy
It was to be 12% but it rated to 21.46%
Asset quality
While giving the loan to the customers they are verifying in all the corners of the asset
and sanctioning the loan to the customer by the Board only. Because assets are more
important it depends upon the member of the bank.
Management:
Member of the bank committee is observing the different activities in good
Programme. Audit committee, loan committee, Investment committee, recovery committee,
Inspection committee, these old aspects will be observed for every three months and enabling
the receipts & payments of the bank.
Earnings:
25

Bank auction had already observed that bank incomes. The incomes of the Bank have
gone up. Income on interest has developed.
Liquidity:
The value of assets that which his convertible into money with in the limited period is
liquidity and estimating the economic status of the bank. The management has given the
details to the Bank Advocates and bank Approved Engineering for taking the decisions.
Systems and Control:
The inspection will be done by Reserve Bank for every two years. Auditor will
inspect for
Auditor
Concurrent Audit
Internal Inspection
Bank inspection committee

- Every year
- for every 3 months
- for every year
- for every 6 months

Then every month Branch officers will inspect suddenly Co-operative department also
will survey within the time.
Audit & Bank Grade:Reserve bank had grading as grade-1 from starting on wards & every year Shankar
institutions & Auditors will inspect & they graded it A class Bank. Present year also M/s. D.
Murali Krishna Prasad & Co has verified & inspected & graded it has A class.
AUTHORITY RELATIONSHIP
Organization structure is primarily concerned with allocation of main tasks and
delegation of authority.
Authority is the degree of discretion conferred on people to make it possible for
them to use their judgment. As the enterprises grow there is need to more and more people to
cope with the basis of authority and responsibility we can identify three levels of
management in the organization.
I.TOP MANAGEMENT:
Top management consists of owners as Chairman, Board of Directors, and general
Manager. They will establish policies, plans and objectives of the bank.
II.MIDDLE MANAGEMENT:
This level of management is basically concerned with the task of implementing the
policies and plans laid down by the top management. It works as a necessary link between the
top management and the middle management as specified in the organization chart.
III.SUBORDINATE MANAGEMENT / LOWER LEVEL MANAGEMENT:
It is the lowest level in hierarchy of management and actual operations are the
responsibility of this level of management. It consists of desk officer , clerk cum cashier and
various levels of employees who are in direct touch with the public.
26

DEPARTMENTS OPERATED BY THE BANK

There are three department operated by bank. They are:

Banking Department

Accounting Department

Advance Department
1.

BANKING DEPARTMENT:
The department mainly mobilizes deposits from all section in the society. This

department consists of head of the department and assisted by four clerks.

FUNCTIONS OF THE DEPARTMENT: To collect amount from deposit holders.
To issue certificate of fixed deposits holders.
To issue passbooks to of saving holders.
DUTIES HEAD OF THE DEPARTMENT:

He is responsible for all types of the department activities.

He should verify and sign on deposit certificates.
He controls the employees who are working in the department.
He is responsible for maintenance of record and carried with the help of other staff.
He communicates all the important to the employees working in the department
according to the duties prescribed to them.

2.

ACCOUNTING DEPARTMENT:
This department is mainly concerned with checking all types accounts day by

day. This department consists of head of the department and assisted by two clerks.
FUNCTIONS OF THE DEPARTMENT: To verify all accounts of the bank.
It co-ordinates between manager and other employees
He guides his department staff
He authorizes the accounts after due verification, preparation and finalization of

3.

relating to accounts.
He is responsible of all types department function.
ADVANCE DEPARTMENT:
This department is mainly concerned with sanctioning short term loans to customers.

This department consists of head of the department and assisted by two clerks.
FUNCTIONS OF THE DEPARTMENT
To sanction loan to businessmen involved in trading & manufacturing activities.
To sanction agricultural loans.
To sanction gold loans.
27

To sanction loans for house constructions.

FUNCTIONS OF DEPARTMENT HEAD

He appraises loan application and grant loans
He manages and co-ordinates the department activities.
He guides the department staff member.
He verifies and authorizes all types of documents prepared in the department.
CHIEF EXECUTIVE OFFICER
The powers and duties of chief executive Officer who will be responsible to the board
of directors will be as under.

To take action on the resolutions and decisions taken by the general body and board

directors.
The general body meeting will be conducted , as decided by the board of directors.
To conduct correspondence on behalf of the bank.
To arrange maintenance of all books of accounts, register and ledgers as may have been

prescribed under the APSCs Acts.

To receive applications for memberships of the bank and for additional shares and to
place them before the bank and for additional shares and to place them before the board

of directors with his report at and recommendations.

To receive applications for loans and to place them for conation before the Board of
directors together with a detailed report containing his specific comments

/recommendations.
To accept deposits of all kinds and types and to arrange for issue of receipts, statements

and pass books.

Eek order from staff /committee for appointment of staff subordinate to him within the
sanctioned strength, on such scales of pay and allowances as may have been sanctioned

by the board of directors from time to time

To allot work amongst the banks staff and supervise their work.

To represent the organization with various government agencies and bodies.

FINANCIAL PERFORMANCE ANALYSIS

28

Financial Performance is the process of managing the financial resources, including

accounting and financial reporting, budgeting, collecting accounts receivable, risk
performance, and insurance for a business.
The financial performance system for a small business includes both how you are
financing it as well as how you manage the money in the business.
In setting up a financial performance system your first decision is whether you will
manage your financial records yourself or whether you will have someone else do it for you.
There are a number of alternative ways you can handle this. You can manage everything
yourself hire an employee who manages it for you keep your records in-house, but have an
accountant prepare specialized reporting such as tax returns or have an external bookkeeping
service that manages financial transactions and an accountant that handles formal reporting
functions. Some accounting firms also handle bookkeeping functions. Software packages are
also available for handling bookkeeping and accounting.
Bookkeeping refers to the daily operation of an accounting system, recording routine
transactions within the appropriate accounts. An accounting system defines the process of
identifying, measuring, recording and communicating financial information about the
business. So, in a sense, the bookkeeping function is a subset of the accounting system. A
bookkeeper compiles the information that goes into the system. An accountant takes the data
and analyzes it in ways that give you useful information about your business. They can advise
you on the systems needed for your particular business and prepare accurate reports certified
by their credentials. While software packages are readily available to meet almost any
accounting need, having an accountant at least review your records can lend credibility to
your business, especially when dealing with lending institutions and government agencies.
Setting up an accounting system, collecting bills, paying employees, suppliers, and
taxes correctly and on time are all part of running a small business. And, unless accounting is
your small business, it is often the bane of the small business owner. Setting up a system that
does what you need with the minimum of maintenance can make running a small business
not only more pleasant, but it can save you from problems down the road.
The basis for every accounting system is a good Bookkeeping system. What is the
difference between that and an accounting system? Think of accounting as the big picture of
29

how your business runs -- income, expenses, assets, liabilities -- an organized system for
keeping track of how the money flows through your business, keeping track that it goes
where it is supposed to go. A good bookkeeping system keeps track of the nuts and bolts -the actual transactions that take place. The bookkeeping system provides the numbers for the
accounting system. Both accounting and bookkeeping can be contracted out to external firms
if you are not comfortable with managing them yourself.
Even if you outsource the accounting functions, however, you will need some type of
Recordkeeping Systems to manage the day-to-day operations of your business - in addition to
a financial plan and a budget to make certain you have thought through where you are headed
in your business finances. And, your accounting system should be producing Financial
Performance. Learning to read them is an important skill to acquire.
Another area that your financial performance system needs to address is risk. Any
good system should minimize the risks in your business. Consider implementing some of
these risk performance strategies in your business. Certainly, insurance needs to be
considered not only for your property, office, equipment, and employees, but also for loss of
critical employees. Even in businesses that have a well set up system, cash flow can be a
problem.
There are some tried and true methods for Managing Cash Shortages that can help
prevent cash flow problems and deal with them if they come up. In the worst case you may
have difficulties meeting all you debt obligations. Take a look at Financial Difficulties to
learn more about ways to manage situations in which you have more debt than income.
It is possible you may even be at the a point where you want to sell the business or
simply close it and liquidate assets. There are financial issues involved for these
circumstances too. So, be certain that you know what steps you need to take in order to
protect yourself financially in the the long run.
Clearly, financial performance encompasses a number of crucial areas of your
business. Take time to set them up right. It will make a significant difference in your stress
levels and in the bottom line for your business.

FINANCIAL PLANNING
30

Financial planning is often thought of as a way to manage debt, but a good financial
plan really is a way to make certain that you have financial security throughout your life.
Many small business owners consider their business as their investment in their future, but
that is a huge risk to take. As any economist will tell you, diversification is the only sure way
to create security in the long run. Your business is one stream of income. Putting together a
financial plan that allows for multiple streams of income is what provides you security in the
longer term.
The essential components of a good financial plan are investing, retirement planning,
insurance, borrowing and using credit, tax planning, having a will, and ensuring the right
people receive your assets. Financial planning is the process of meeting your life goals
through the proper performance of your finances. Life goals can include buying a home,
saving for your child's education or planning for retirement.
The financial planning process involves gathering relevant financial information,
setting life goals, examining your current financial status and coming up with a plan for how
you can meet your goals given your current situation and future plans.
There are personal finance software packages, magazines and self-help books to help
you do your own financial planning. However, you may decide to seek help from a
professional financial planner if

you need expertise you don't possess in certain areas of your finances. For example, a
planner can help you evaluate the level of risk in your investment portfolio or adjust
your retirement plan due to changing family circumstances.

you want to get a professional opinion about the financial plan you developed for
yourself.

you don't feel you have the time to spare to do your own financial planning.

you have an immediate need or unexpected life event such as a birth, inheritance or
major illness.

you feel that a professional adviser could help you improve on how you are currently
managing your finances.

you know that you need to improve your current financial situation but don't know
where to start.

31

A financial planner is someone who uses the financial planning process to help you
figure out how to meet your life goals. The planner can take a "big picture" view of your
financial situation and make financial planning recommendations that are right for you. The
planner can look at all of your needs including budgeting and saving, taxes, investments,
insurance and retirement planning. Or, the planner may work with you on a single financial
issue but within the context of your overall situation. This big picture approach to your
financial goals may set the planner apart from other financial advisers, who may have been
trained to focus on a particular area of your financial life.
In addition to providing you with general financial planning services, many financial
planners are also registered as investment advisers or hold insurance or securities licenses
that allow them to buy or sell products. Other planners may have you use more specialized
financial advisers to help you implement their recommendations. With the right education
and experience, each of the following advisers could take you through the financial planning
process. Ethical financial planners will refer you to one of these professionals for services
that they cannot provide and disclose any referral fees they may receive in the process.
Similarly, these advisers should refer you to a planner if they cannot meet your financial
planning needs.

ACCOUNTANT
Accountants provide you with advice on tax matters and help you prepare and submit
your tax returns to the Internal Revenue Service. All accountants who practice as Certified
Public Accountants (CPAs) must be licensed by the state(s) in which they practice.

ESTATE PLANNER
Estate planners provide you with advice on estate taxes or other estate planning issues
and put together a strategy to manage your assets at the time of your death. While attorneys,
accountants, financial planners, insurance agents or trust bankers may all provide estate
planning services, you should seek an attorney to prepare legal documents such as wills,
trusts and powers of attorney. Many estate planners hold the Accredited Estate Planner (AEP)
designation.

FINANCIAL PLANE
32

Many financial planners have earned the Certified Financial Planners certification, or
the Chartered Financial Consultant (ChFC) or Personal Financial Specialist (CPA/PFS)
designations. Financial planners can take you through the financial planning process.

INSURANCE AGENT
Insurance agents are licensed by the state(s) in which they practice to sell life, health,
property and casualty or other insurance products. Many insurance agents hold the Chartered
Life Underwriter (CLU) designation. Financial planners may identify and advise you on your
insurance needs, but can only sell you insurance products if they are also licensed as
insurance agents.

INVESTMENT ADVISER
Anybody who is paid to provide securities advice must register as an investment
adviser with the Securities and Exchange Commission or relevant state securities agencies,
depending on the amount of money he or she manages. Because financial planners often
advise people on securities-based investments, many are registered as investment advisers.
Investment advisers cannot sell securities products without a securities license. For that, you
must use a licensed securities representative such as a stockbroker.

STOCK BROKER
Also called registered representatives, stockbrokers are licensed by the state(s) in
which they practice to buy and sell securities products such as stocks, bonds and mutual
funds. They generally earn commissions on all of their transactions. Stockbrokers must be
registered with a company that is a member of the National Association of Securities Dealers
(NASD) and pass NASD-administered securities exams.
The government does not regulate financial planners as financial planners instead; it
regulates planners by the services they provide. For example, a planner who also provides
securities transactions or advice is regulated as a stockbroker or investment adviser. As a
result, the term "financial planner" may be used inaccurately by some financial advisers. To
be sure that you are getting financial planning advice, ask if the adviser follows the six steps.

33

THE

FINANCIAL PLANNING

PROCESS

CONSISTS

OF THE

FOLLOWING SIX STEPS

1. Establishing and defining the client-planner relationship
The financial planner should clearly explain or document the services to be provided
to you and define both his and your responsibilities. The planner should explain fully
how he will be paid and by whom. You and the planner should agree on how long the
professional relationship should last and on how decisions will be made.

2. Gathering client data, including goals

The financial planner should ask for information about your financial situation. You
and the planner should mutually define your personal and financial goals, understand
your time frame for results and discuss, if relevant, how you feel about risk. The
financial planner should gather all the necessary documents before giving you the
advice you need.

3. Analyzing and evaluating your financial status

The financial planner should analyze your information to assess your current situation
and determine what you must do to meet your goals. Depending on what services you
have asked for, this could include analyzing your assets, liabilities and cash flow,
current insurance coverage, investments or tax strategies.

4. Developing and presenting financial planning recommendations and/or

alternatives
The financial planner should offer financial planning recommendations that address
your goals, based on the information you provide. The planner should go over the
recommendations with you to help you understand them so that you can make
informed decisions. The planner should also listen to your concerns and revise the
recommendations as appropriate.

34

5. Implementing the financial planning recommendations

You and the planner should agree on how the recommendations will be carried out.
The planner may carry out the recommendations or serve as your "coach,"
coordinating the whole process with you and other professionals such as attorneys or
stockbrokers.

6. Monitoring the financial planning recommendations

You and the planner should agree on who will monitor your progress towards your
goals. If the planner is in charge of the process, she should report to you periodically
to review your situation and adjust the recommendations, if needed, as your life
changes.

Best practices when approaching financial planning

Set measurable goals.

Understand the effect your financial decisions have on other financial issues.

Re-evaluate your financial plan periodically.

Start now - don't assume financial planning is for when you get older.

Start with what you've got - don't assume financial planning is only for the wealthy.

Take charge - you are in control of the financial planning engagement.

Look at the big picture - financial planning is more than just retirement planning or
tax planning.

Don't confuse financial planning with investing.

Don't expect unrealistic returns on investments.

Don't wait until a money crisis to begin financial planning.

You are the focus of the financial planning process. As such, the results you get from

working with a financial planner are as much your responsibility as they are those of the
planner.
To achieve the best results from your financial planning engagement, you will need to
be prepared to avoid some of the common mistakes by considering the following advice

35

Set measurable financial goals

Set specific targets of what you want to achieve and when you want to achieve results.

For example, instead of saying you want to be "comfortable" when you retire or that you
want your children to attend "good" schools, you need to quantify what "comfortable" and
"good" mean so that you will know when you've reached your goals.

Understand the effect of each financial decision

Each financial decision you make can affect several other areas of your life. For

example, an investment decision may have tax consequences that are harmful to your estate
plans. Or a decision about your child's education may affect when and how you meet your
retirement goals. Remember that all of your financial decisions are interrelated.

Re-evaluate your financial situation periodically

Financial planning is a dynamic process. Your financial goals may change over the

years due to changes in your lifestyle or circumstances, such as an inheritance, marriage,

birth, house purchase or change of job status. Revisit and revise your financial plan as time
goes by to reflect these changes so that you stay on track with your long-term goals.

Start planning as soon as you can

Don't delay your financial planning. People who save or invest small amounts of

money early, and often, tend to do better than those who wait until later in life. Similarly, by
developing good financial planning habits such as saving, budgeting, investing and regularly
reviewing your finances early in life, you will be better prepared to meet life changes and
handle emergencies.

Be realistic in your expectations

Financial planning is a common sense approach to managing your finances to reach

your life goals. It cannot change your situation overnight it is a lifelong process. Remember

36

that events beyond your control such as inflation or changes in the stock market or interest
rates will affect your financial planning results.

Realize that you are in charge

If you're working with a financial planner, be sure you understand the financial planning
process and what the planner should be doing. Provide the planner with all of the relevant
information on your financial situation. Ask questions about the recommendations offered to
you and play an active role in decision-making.

LIMITATIONS (STUDY OF FINANCIAL POSITION)

1. ONLY INTERIM REPORTS

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Only interim performance dont give a final picture of the concern. The data given in
these performance is only approximate. The actual position can only be determined when the
business is sold or liquidated.

2. DONT GIVE EXTRA POSITION

The financial performance are expressed in monetary values, so they appear to give
final and accurate position. The values of fixed assets in the balance sheet neither represent
the value for which fixed assets can be sold nor the amount which will be required to replace
these assets.

3. HISTORICAL COSTS
The financial performance are prepared on the basis of historical costs or original
costs. The value of assets decreases with the passage of time current price changes are not
taken into account. The performance are not prepared keeping in view the present economic
conditions. The balance sheet loses the significance of being an index of current economic
realities.

4. ACT OF NON MONITORY FACTORS IGNORED

There are certain factors which have a bearing on the financial position and operating
results of the business but they dont become a part of these performance because they cant
be measured in monetary terms. Such factors may include in the reputation of the
performance.

NO PRECISION
The precision of financial statement data is not possible because the performance deal
with matters which cant be precisely stated. The data are recorded by conventional
procedures followed over the years. Various conventions, postulates, personal judgments etc.

TYPES OF RATIOS
Ratio Analysis has been divided mainly into 3 ratios they are

1) Liquidity Ratios

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Liquidity refers to the ability of the concern to meet its current obligations as and
when these become due. The short - term obligations are met by realizing amounts from
current, floating or circulating assets. The current assets should either be liquid or nearly
liquid. If current assets can pay off current liabilities, then liquidity position will be
satisfactory.

Current Ratio
The current ratio is calculated by current assets by dividing current liabilities. Current
assets include cash and those assets which can be converted into cash with in a year such a
marketable securities, debtors, inventories.
Current liabilities include creditors, bills payable, accrued expenses, short term bank
loan, income tax liability and long-term debt maturing in current years. The current ratio is a
measure of the firm short-term solvency. Its is test of quantity not quality. The current ratio is
a crude and quick measure of firms liquidity.

Quick Ratio
Quick ratio is calculated by dividing liquid assets by current liabilities. Liquid assets
are obtained by subtracting inventories from current assets. This establishes the relation
between quick or liquid assets and current liabilities. An asset is said to be liquid if it can be
converted into cash with in short period of time with out loss of value cash in hand, cash at
bank are liquid assets. Quick assets are book debts and marketable securities.

Absolute Liquid Ratio or Cash Ratio

Cash ratio is calculated by dividing cash and marketable securities by current
liabilities. Trade investment or marketable securities are equivalent of cash therefore they
may be included in computation of cash ratio.

Inventory Turnover Ratio

It establishes relationship between cost of goods sold during a given period and the
average amount of inventory held during that period. It refers to the no. Of times that the
stock is turned over on an average in a year. This ratio assists the financial manager in
valuating inventory policy. Inventory turnover ratio is also known as stock velocity,
indicating whether inventory is effectively used or not.

Debtors Turnover Ratio

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The ratio is calculated by dividing credit sales by average debtors. This indicates the
number of times average debtors turned over during the year.

Creditors Turnover Ratio The term creditor includes, trade creditors and bills
payable. Incase the details regarding credit purchases, opening and closing balances of
creditors are not available, then instead of credit purchases, total purchases may be taken and
in place of average creditors, the balance may be substituted.

Leverage Ratios
To judge the long-term financial position of the firm, financial leverage or capital
structure, ratios are calculated. These ratios indicate mix of funds provided by owners and
lenders. As a general rule, there should be an appropriate mix of debts and owners equity in
financing the firms assets. The process of magnifying shareholders return through the
employment of debt is called financial leverage & trading on equity.

Debt Equity Ratio

This is calculated by dividing total debts by networth. This relationship describes the
lender contribution for each rupees of the owners contribution is called debt equity ratio.
This is also known as external equity ratio. This ratio is calculated to analyze the efficiency of
capital structure of the firm.

Proprietary Ratio
It is a variant of debt equity ratio. If establishes relationship between the proprietors
or shareholders funds and the total assets of the firm.

Interest Coverage Ratio

The ratio is calculated by dividing EBIT by interest and loan installment. This is
known as Time interest earned ratio This ratio measures the debt servicing.
Capacity of a firm in so far as fixed interest on long-term loan is considered. Since
taxes are computed after interest, interest coverage ratio is calculated in relation to before tax
earnings.

2) Profitability Ratios
The primary objective of a business under taking is to earn profits. Profits to the
performance are the test of efficiency and measurement of control. Generally profitability
ratios are calculated either in relations to sales or in relation to investment.
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Gross Profit Ratio

This ratio is calculated by dividing gross profit by sales. It shows profit relative to
sales after the deductions of productive cost, and indicates the relations between production
and selling price.

Net Profit Ratio

This ratio is calculated by dividing net profit by sales. Net profit is obtaining when
operating expenses; interest and taxes are subtracted from years gross profit. So, net profit
ratio is measured by dividing profit after taxes by sales. This ratio also indicates the firms
capacity to stand with adverse economic conditions. This ratio is an overall measure of firms
ability to turn each rupee sales into net profit.

Return on Total Assets Ratio

This ratio is calculated by dividing net profit after tax by total assets. Total assets are
the sum of all fixed assets and current assets and investment. The conventional approach of
calculating the return on total assets is to divide profit after tax by total assets.

Fixed Assets Ratio

This ratio is calculated by dividing cost of goods sold by fixed assets. Assets rise to
generate sales therefore a firm should manage its assets efficiently to maximize sales. If the
firm wishes to know its efficiency of utilizing fixed assets then it has to go for fixed assets
ratio.

Methods or Devices of Financial Analysis

The analysis and interpretation of financial performance is used to determine the
financial position and results of operations as well. A number of methods or devices are used
to study the relationship between different performance. An effort is made to use those
devices, which clearly analyze the position of the enterprise. The following methods of
analysis are generally used
1. Comparative performance
2. Trend Analysis
3. Common size performance
4. Funds Flow Analysis
5. Cash Flow Analysis
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6. Ratio Analysis
7. Cost Volume Profit Analysis

1. Comparative Performance
The comparative financial performance are performance of the financial position at
different periods of time. The elements of financial position are shown in a comparative form
so as to give an idea of financial position at two or more periods. Any statement prepared in a
comparative form will be covered in comparative performance. From practical point of view,
generally, two financial performance (balance sheet and income statement) are prepared in
comparative form for financial analysis purposes. Not only the comparison of the figures of
two periods but also be relationship between balance sheet and income statement enables an
in depth study of financial position and operative results. The comparative statement may
show
(i)

Absolute figures (rupee amounts).

(ii)

Changes in absolute figures i.e., increase or decrease in absolute figures.

(iii)

Absolute data in terms of percentages.

(iv)

Increase or decrease in terms of percentages.

Comparative Balance Sheet

The comparative balance sheet analysis is the study of the trend of the same items,
group of items and computed items in two or more balance sheets of the same business
enterprise on different dates. The changes in periodic balance sheet items reflect the conduct
of a business. The changes can be observed by comparison of the balance sheet at the
beginning and at the end of a period and these changes can help in forming an opinion about
the progress of an enterprise. The comparative balance sheet has two columns for the data of
original balance sheets. A third column is used to show increases in figures. The fourth
column may be added for giving percentages of increases or decreases.

2. Trend Analysis
42

The financial Performance may be analyzed by computing trends of series of

information. This method determines the direction upwards or downwards and involves the
computation of the percentage relationship that each statement item bears to the same item in
the base year.
The information for a number of years is taken up an one year, generally the first year,
is taken as a base year. The figures of the base year are taken as 100 and trend ratios for other
years are calculated on the basis of base year.

3. Common-Size Performance
The Common-size performance, balance sheet and income performance are shown in
analytical percentages. The figures are shown as percentages of total assets, total liabilities
and total sales. The total assets are taken as 100 and different assets are expressed as a
percentage of the total similarly, various liabilities are taken as a part of total liabilities.
These performance are also known as component percentage or 100 percent performance
because very individual item is stated as a percentage of the total 100. The shortcoming in
comparative performance and trend percentages where changes in items could be compared
with the totals has been covered up. The analyst is able to assess the figures in relation in total
values. The common-size performance may be prepared in the following way

The

totals of assets and liabilities are taken as 100.

The individual assets are expressed as a percentage of total assets i.e., 100 and
different liabilities are calculated in relation to total liabilities.

4. Funds Flow Analysis

The funds flow statement is a statement, which shows the movement of funds and is
report of the financial operations of the business undertaking. It indicates various means by
which funds were obtained during a particular period and the ways in which these funds were
employed. In simple words, it is a statement of sources and applications of funds.

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Meaning and Definition of Funds Flow Performance

Funds flow statement is a method by which we study changes in the financial position
of business enterprises between beginning and ending financial performance dates. It is a
statement showing sources and uses of funds for a period of time.
I.C.W.A. in Glossary of Performance Accounting terms defines funds flow
performance as A Statement prospective or retrospective, setting out the sources and
applications of the funds of an enterprise.
The purpose of the statement is to indicate clearly the requirement of funds and how
they are proposed to be raised and the efficient utilization and application of the same.

Limitations of Funds Flow Statement

The funds flow statement has a number of uses, however, it has certain limitations
also they are
1. It should be remembered that a funds flow statement is not substitute of an income
statement of a balance sheet. It provides only some additional information as regards
changes in working capital
2. It cannot reveal continues changes.
3. It is not an original statement but simply arrangement of data given in financial
performance.
4. It is essential historic in nature and projected funds flow statement cannot be prepared
with much accuracy.
5. Changes in cash are more important and relevant for financial performance than the
working capital.

5. Ratio Analysis
The ratio analysis is one of the most powerful tools of financial analysis. It is the
process of establishing and interpreting various ratios. It is with the help of ratios that the
financial performance can be analyzed more clearly and decisions made from such analysis.

Meaning
A ratio is a simple arithmetical expression of the relationship of one number to
another. It may be defined as the indicated quotient of two mathematical expressions.
The following are the four steps involved in the ratio analysis.
1. Selection of relevant data from the financial performance depending upon the objective of
the analysis.
44

2. Calculation of appropriate ratios from the above data.

3. Comparison of the calculated ratios with the ratios of the same firm in the past, or the
ratios developed from projected financial performance or the ratios of some other firms or
the comparison with ratios of the industry to which the firm belongs.
4. Interpretation of the ratios.

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DATA ANALYSIS & INTERPRETATION

RATIO ANALYSIS
1. CURRENT RATIO
CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES

Yr.

Current Assets

Current Liabilities

Ratio

2015-2016

9,13,28,208

4,71,17,199

1.93

2014-2015

7,20,21,081

1,60,65,621

4.48

2013-2014

6,97,65,364

3,18,84,616

2.18

2012-2013

5,85,74,151

79,03,952

7.41

2011-2012

3,43,61,315

60,64,665

5.66

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Interpretation:
As a Rule, a current ratio of 2:1 (or) more is considered satisfactory.
When compared to 2011-2012, there is an increase in provision for income tax
and sundry creditors in liabilities account and also there is an increase in advance tax
paid and sundry debtors account.
Further there is a decrease in bank and cash balance. This has resulted in the
decrease in the ratio. But still the ratio is above the benchmark level of 2:1which
shows the comfortable position of the firm.

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2. QUICK RATIO
QUICK RATIO = QUICK ASSETS / CURRENT LIABILITIES

Yr.
2015-2016
2014-2015
2013-2014
2012-2013
2011-2012

Quick Assets

Current Liabilities

Ratio

91,32,28,208

47,11,71,99

1.93

7,20,21,081

1,60,65,621

4.48

6,97,65,346

3,18,84,616

2.18

5,85,74,151

79,03,952

7.41

34,361,315

6,064,665

5.66

Interpretation:
When compared to Quick Ratio, there is an increase in provision for income
tax and sundry creditors in liabilities account and also there is an increase in advance
tax paid and sundry debtors account.
Further there is a decrease in bank and cash balance. This has resulted in the
decrease in the ratio. But still the ratio is above the benchmark level of
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3. ABSOLUTE LIQUIDITY RATIO

ABSOLUTE LIQUIDITY RATIO = ABSOLUTE LIQUID ASSETS / Current Liabilities

Yr.
2015-2016
2014-2015
2013-2014
2012-2013
2011-2012

Quick Assets

Current Liabilities

Ratio

5,16,90,326

4,71,17,199

1.09

3,80,23,634

1,60,65,621

2.36

98,29,327

3,18,84,616

0.30

2,92,57,945

79,03,952

3.70

2,30,46,048

60,64,665

3.80

Interpretation:
This cash ratio implies the ready cash availability in the company. Distribution of
dividends has taken place in the year 2013and hence the decrease is the ratio when
compared to the ratio is 2013.

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4. DEBTORS TURNOVER RATIO

DEBTORS TURNOVER RATIO = INCOME FROM SERVICES /Debtors

Yr.

Income from
services

Debtors

Ratio

2015-2016

5,55,50,649

3,78,56,420

1.46

2014-2015

7,27,28,759

3,22,66,565

2.25

2013-2014

5,38,99,084

5,89,02,926

0.91

2012-2013

3,63,09,834

2,83,44,133

1.28

2011-2012

2,90,34,089

1,02,08,744

2.84

Interpretation:
The higher the value of debtors turnover, the more efficient the performance of
credit. There is a decrease in 2014 as compared to 2013 and this is due to the decrease
in PLF bonus to an extent of Rs.60,00,000/- i.e. lesser income from services.

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5. PROPRIETARY RATIO
PROPRIETARY RATIO = SHARE HOLDERS FUNDS / TOTAL ASSETS
Yr.

Shareholders funds

Total assets

Ratio

5,64,73,652

10,63,85,201

0.53

7,02,31,061

8,91,58,391

0.78

5,33,01,834

8,84,38,107

0.60

6,76,79,219

7,85,62,171

0.86

4,88,90,745

5,49,50,020

0.88

2015-2016
2014-2015
2013-2014
2012-2013
2011-2012

Interpretation:
The ratio establishes the relationship between shareholders funds to total assets.
It determines the long-term solvency of the firm. This ratio indicates the extent to
which the assets of the company can be lost without affecting the interest of creditors
of the company. Even though the ratio of total assets to share holders funds appears to
be decreasing but it is fairly between the manageable leverage positions only.

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6. NET PROFIT RATIO

NET PROFIT RATIO = NET PROFIT AFTER TAX / INCOME FROM Services
Yr.

2015-2016
2014-2015
2013-2014
2012-2013
2011-2012

Net profit after tax

Income from service

Ratio

5,55,50,649

1,82,59,580

0.32

7,27,28,759

1,69,29,227

0.23

5,38,99,084

1,51,25,942

0.29

3,63,09,834

2,11,23,474

0.58

2,90,34,089

1,27,93,761

0.44

Interpretation:
This ratio is the overall measure of the firms ability to turn each rupee of
income from services in net profit. If the net margin is inadequate the firm will fail to
achieve return on shareholder funds. High net profit ratio will help the firm survive in
the fall of income from services, rise in cost of production (or) declining demand.

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7. RETURN ON TOTAL ASSETS RATIO

RETURN ON TOTAL ASSETS RATIO = NET PROFIT AFTER TAX / TOTAL

Yr.
2015-2016
2014-2015
2013-2014
2012-2013
2011-2012

ASSETS

Net profit after tax

Total assets

Ratio

1,82,59,580

10,63,85,201

0.71

1,69,29,227

8,91,58,391

0.18

1,61,25,942

8,84,38,107

0.18

2,11,23,474

7,85,62,171

0.26

1,27,93,761

5,49,50,020

0.23

Interpretation:
It is the ratio between net profit and total assets. This ratio indicates the return
on total assets in the form of profits.
The reason for decrease in ratio is because of increasing trend in total assets at
the same time decrease in net profit.

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8. FIXED ASSETS RATIO

FIXED ASSETS RATIO = INCOME FROM SERVICES / NET FIXED ASSETS

Yr.

Income from service

Net Fixed Assets

Ratio

5,55,50,649

1,50,56,993

3.68

7,27,28,759

1,71,37,310

4.24

5,38,99,084

1,86,72,761

2.88

3,63,09,834

1,99,98,020

1.81

2,90,34,089

2,05,88,705

1.41

2015-2016
2014-2015
2013-2014
2012-2013
2011-2012

Interpretation:
Fixed assets are used in the business for producing the goods to be sold. This
ratio shows the firms ability in generating sales from all financial resources committed
to total assets. The ratio indicates the amount of sale for one rupee investment in fixed
assets.
Increase in ratio indicates good trend and further it indicates optimal utilization
of the services
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FINDINGS
This cash ratio implies the ready cash availability in the company.
Distribution of dividends has taken place in the year 2015 and hence the
decrease is the ratio when compared to the ratio is 2014
The higher the value of debtors turnover, the more efficient the performance of
credit. There is a decrease in 2015 as compared to2013 and this is due to the
decrease in PLF bonus to an extent of Rs.60,00,000/- i.e. lesser income from
services.
This ratio is the overall measure of the firms ability to turn each rupee of
income from services in net profit.
If the net margin is inadequate the firm will fail to achieve return on
shareholder funds.
High net profit ratio will help the firm survive in the fall of income from
services, rise in cost of production (or) declining demand.
The decrease in net profit ratio in 2015 is only because of decrease in PLF
bonus to an extent of Rs.58, 00,000/-.

55

SUGGESTIONS
The profitability of the company is increasing every year continuously from the
years with the turnover increasing.
The profitability as compared to the turnover is going on balance with the
administrative and other costs.
The current ratio of the company as discussed is always much high than the
standard norms, which is also not favorable for the company, this means that
the big amount of money is not being utilized effectively as most of the cash is
tied up in debtors and inventories.
The company should improve upon its credit policies and holding of
inventories, as the company can save the cost of working capital by reducing
the same.
The company should also review the opportunities and threats to its business in
the long term perspective.
The company is diversifying in various aspects. While the only threat to the
company in this field is from unorganized sector producing cheaper and as the
liability of excise duty is not there resulting in low cost of production.
This can be overcome by the company by maintaining its quality standards, as
the consumer now - a - days are ready to pay for the quality products.

CONCLUSITIONS
56

 Comparative balance sheet revels that there was no change in share capital as
there was no fresh issue of shares. It can be seen that the company is heading in
the path of progress and prosperity during the recent years, as this can be justified
The company has generated the funds by raising unsecured long-term loans.
Company has consistently invested in the purchase of fixed assets.
The current assets are always more than the current liabilities, which show that
the liquidity position of the company is sound.
Comparison of the common size balance sheet reveals that the proportion of the
share capital as part of total assets has decreased as part of total assets. An
increasing and decreasing trend was maintained in the case of reserves and
surplus.
Similar trend could be viewed in case of fixed assets and consistency was
maintained in case of investments.
After going through the depth analysis it can be drawn that the company is
heading towards the path of progress and prosperity during the recent years, as
this can be justified by the financial figures and from the fact of the company is
growing.
After the analytical study of financial performance Leo Labs Ltd., and
interpretation of various ratios, it can be concluded that the liquidity position of
the company is better.
From the interpretation of current ratio, it has been observed that the current ratio
of the company was above standards.

BIBLIOGRAPHY
An overview on financial statements and ratio analysis
Chidambaram Ramesh Kumar, Anbumani
Financial statement analysis
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George Foster
Financial Management
Prasanna Chandra
Financial Management
I.M. Pandey
WEBSITES
www.googlefinance.com
www.fimancialanalysis.com

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