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RATIO ANALYSIS
A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION OF THE
DEGREE OF
MASTER IN COMMERCE
UNDER THE FACULTY OF COMMERCE
SUBMITTED BY :
NEHA MAHENDRA KOLI
G.R No. : 393
APRIL, 2019
1
A STUDY ON FINANCIAL PERFORMANCE USING
RATIO ANALYSIS
A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION OF THE
DEGREE OF
MASTER IN COMMERCE
UNDER THE FACULTY OF COMMERCE
SUBMITTED BY :
NEHA MAHENDRA KOLI
G.R No. : 393
APRIL, 2019
2
3
A STUDY ON FINANCIAL PERFORMANCE
4
INDEX
1 Introduction 10
5 Company profile 31
6 Review of literature 59
7 Research Methodology 61
8 Ratio Analysis 64
10 Findings 90
11 Suggestions 92
12 Conclusion 94
13 Bibliography 96
5
CERTIFICATE
This is to certify that Miss. NEHA MAHENDRA KOLI has worked and duly
completed her Project Work for the degree of Master in Commerce under the Faculty of
Commerce in the subject of Accountancy and her project is entitled “ A STUDY ON
FINANCIAL PERFORMANCE USING RATIO ANALYSIS ’’ , under my
supervision.
I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree or Diploma
of any University.
It is her own work and facts reported by her personal findings and investigations.
Seal of the
College
Date of Submission :
6
DECLARATION BY LEARNER
I the undersigned MISS. NEHA MAHENDRA KOLI here by, declare that the
work embodied in this project work titled “ A STUDY ON FINANCIAL PERFOR
MANCE USING RATIO ANALYSIS ’’ forms my own contribution to the research
work carried out under the guidance of MR. RAJ SOSHTE SIR is a result of my own
research work and has not been previously submitted to any other University for any
other Degree/ Diploma to this or any other University. Wherever reference has been
made to previous works of others, it has been clearly indicated as such and included in
the bibliography.
I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.
Certified by
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ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the depth is
so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.
I take this opportunity to thank our Coordinator for her moral support and guidance.
I would also like to express my sincere gratitude towards my project guide Dr. Raj
Soshte whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference books
and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped me
in the completion of the project especially my Parents and Peers who supported me
throughout my project.
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There are many different ways to measure financial performance, but all
measures should be taken in aggregation. Line items such as revenue from
operations, operating income or cash flow from operations can be used, as well as
total unit sales. Furthermore, the analyst or investor may wish to look deeper into
financial statements and seek out margin growth rates or any declining debt.
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INTRODUCTION
The institutional training enlightens the mind of the students about various
policies, procedures and program of the organization. In addition, it helps to keep
in touch with the person holding high position which enriches.
This training bridges of group between for fetch theory and down to earth
really in an organization. Such training is an added significance because kinds of
jobs. So the students are become more adaptable and efficient in the future.
The subject of institution training is almost very important among the entire
subject that a student comes across during their course.
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12
FINANCE (MEANING)
Finance is the life blood and nerve centre of a business, just as circulation of
blood is essential in the human body for maintaining life. Finance is very essential
for smooth running of business. Right from the very beginning i.e., conceiving an
idea to business, finance is needed to promote or establish the business, acquire
fixed assets, make investigations such as market surveys etc., develop product,
keep men and machines at work, encourage management to make progress and
create values. Even an existing firm may require further finance for making
improvement or expanding the business.
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FUNCTIONS OF TREASURER AND THE CONTROLLER
TREASURER CONTROLLER
14
ORGANIZATION OF FINANCE FUNCTION
15
FINANCIAL SYSTEM
16
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FINANCIAL MANAGEMENT
DEFINITION
The importance of financial management cannot be overemphasized. In
every organization,
where funds are involved, sound financial management
is necessary.
Finance manager must realize that when a firm makes a major decision, the
effect of the action will be felt throughout the enterprise.
Sound financialmanagement is essential in both profit and nonprofit
organizations.
The financial managements help in monitoring the effective deployment of
fund in fixed assets and in working capital.
also helps in ascertaining how the company would
Financial management
perform in future.
It helps in indicating
whether the firm will generate enough funds to meet its
various obligations.
18
Methods of financial management
19
Financial statement (meaning)
20
For management
For financers
For creditors
Trade creditors are another class for whom financial statements are
important. Trade credit implies extending facilities of deferred
payment for credit purchase by seller to buyer. Financial position of a
creditor can be revealed by financial statements with a help of
solvency ratios, cash and fund flow analysis, etc.
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For investors
22
FINANCIAL STATEMENT
ANALYSIS DEFINITION
According to myres, “financial statements analysis is largely a study of the
relationship among the various financial factors in a business as disclosed by
a single set of statements and a study of the trend of these factors as shown
in a series of statements.”
OBJECTIVES
i. To interpret the profitability and efficiency of various business
activities with the help of profit and loss account.
ii. To measure managerial efficiency of the firm
iii. To measure short-term and long-term solvency of the business.
iv. To ascertain earning capacity in future period.
v. To determine the future potential of the concern.
vi. To measure utilization of various assets during the period.
vii. To compare operational efficiency of similar concerns engaged in the
same industry.
LIMITATIONS
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OBJECTIVES OF FINANCIAL MANAGEMENTS
1. Basic objectives
2. Other objectives
Basic Objectives
Other objectives
25
OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVES
To study and analyze the financial performance of the ING VYSYA BANK
LTD.
To analyze the profitability and solvency position of the bank.
SECONDARY OBJECTIVES
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SCOPE OF THE STUDY
the financial status of the concern during
This study clearly defines
the working period.
The study report being made here brings out the financial structure
and the position of the ING VYSYA BANK comparing from
different years.
The financial study helps us to analyze the financial background and
the utilization of the income earned through the organization process.
To understand the meaning, significance and limitation of financial
statement analysis.
To calculate liquidity, solvency, profitability and activity ratios of the
organization.
To make a comparative study and give solutions for the organisational
improvement.
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LIMITATIONS
The financial details of the bank are collected for 4 years only.
ING Vysya Bank is a multinational company cannot be studied in a month
so time is considered as main constrain.
The information given from the bank was limited.
Time is 6 weeks, so much of economic fluctuations are not seen.
In this study, only selected ratios are used.
Since the study relates only to the financial performance of ING VYSYA
BANK, the findings and suggestions cannot be generalised.
30
31
32
INTRODUCTION
33
STRATEGY
STRATEGIC INTENT
VISION
We are committed to providing quality and door step banking service to
our customer, service quality being our paramount importance.
34
CORPORATE RESPONSIBILITY
ING wants to pursue profit on the basis of sound business ethics and
respect for its stakeholders. Corporate responsibility is therefore a fundamental
part of ING‟sstrategy ethical, social and environmental factors play an integral
role in business decisions
ING Vysya Bank Ltd., is an entity formed with the coming together
of erstwhile, Vysya Bank Ltd, a premier bank in the Indian Private Sector
and a global financial powerhouse, ING of Dutch origin, during Oct 2002.
The origin of the erstwhile Vysya Bank was pretty humble. It was in the year
1930 that a team of visionaries came together to form a bank that would extend a
helping hand to those who weren‟t privileged enough to enjoy banking services.
It‟s been a long journey since then and the Bank has grown in size stature
to encompass every area of present-day activity and has carved a distinct identity
of being India‟s Premier Sector Bank.
In 1980, the bank completed 50 years of services to nation and the post
1985; the bank made rapid strides to reach the coveted position of being the
number one private sector bank. In 1990, the bank completed its Diamond
Jubilee year. At the Diamond Jubilee Celebrations, the Finance Minister Prof.
Madhu Dandavate, had termed the performance of the bank „Stupendous‟. The
75th anniversary, the Platinum Jubilee of the bank was celebrated during 2005.
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The long journey of seventy-five years has had several milestones……
1996 Signs Strategic Alliance with BBL., Belgium. Two National Awards by Gem &
Jewellery Export Promotion Council for excellent performance in Export
Promotion
1998 Cash management Services & Commissioning of VSAT, Golden Peacock
Award – for the best HR Practices by institute of Directors. Rated as Best
Domestic Bank in India by Global Finance (International Finance Journal –
June 1998)
2000 State – of – the – art Date centre art ITPL, Bangalore
RBI clears setting up off ING Vysya Life Insurance Company
2001 ING Vysya Bank commenced Life Insurance Company
2002 The Bank launched a range of products & services like the Vys Vyapar Plus,
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the range of loan schemes for traders, ATM services, Smartsev, personal
assistant service, Save & secure, an account that provides accident
hospitalization and insurance cover, Sambandh, the international debt card and
the mi-bank net banking service.
2002 ING takes over the Management of the Bank from October 7th, 2002
RBI clears the new name of the Bank as ING Vysya Bank Ltd, vide their letter
of 17.12.02
2003 Introduced customer friendly products like Orange Savings, Orange
Current and Protected Home Loans
2005 Introduced Solo – My own Account Youth and Customer Service Line – Phone
Banking Service
2006 Bank has networked all the branches to facilitate „AAA‟ transactions i.e.
Anywhere, Anytime & Anyhow Banking
37
In terms of pure numbers, the performance over the decades can better
be appreciated from the following table :
Rs. In Millions
38
Outlets comprises of 468 branches, 13 ECs, 28 Satellite Offices and 357
ATMS as of March 31st 2010. Additionally the bank also has Internet
Banking, Mobile Banking Customer Service Line for Phone Banking Services.
On the other hand, ING group originated in 1990 from the merger
between Nationale - Nederlanden
NV the largest Dutch Insurance Company and NMB Post Bank Group NV.
Combining roots and ambitions, the newly formed company called
“Internationale Nederlanden Group”. Market circles soon abbreviated the name to
I-N-G. the company followed suit by changing name to “ING Group N.V.”
PROFILE
ING has gained for its, integrated approach of banking, insurance and asset
management. Furthermore, the company differentiates itself from other financial
service providers by successfully establishing life insurance companies in
countries with emerging economies, such as Korea, Taiwan, Hungary, Poland,
Mexico and Chile. Another specialization is ING Direct, an Internet and direct
marketing concept with which ING is rapidly winning retail marketing share in
mature markets. Finally, ING distinguishes itself internationally as a provider of
„employee benefits‟ i.e. arrangements of nonwage benefits, such as pension plans
for companies and their employees.
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MISSION
The immediate benefit to the bank, ING Vysya Bank, has been the pride of
having become a Member of the global financial giant ING. As at the end of the
year December 2010, ING‟s total assets exceeded 1247 billion Euros, with a
underlying net profit of 3893 million Euros, employed around 105000 people,
serves over 85 million customers, across 40 countries. This global identity
coupled with the backup of a financial power house and the status of being the
first Indian International Bank, would also help to enhance productivity,
profitability, to result in improved performance of the bank, for the benefit of all
the stake holders.
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ING VYSYA MANAGEMENT TEAM
Name (Sri)
Arun Thiagarajan
part-time Chairman
Shailendra Bhandari
Managing Director & Chief Executive Officer
Aditya Krishna
Director
Richard Cox
Director
Santhosh Ramesh Desai
Director
M. Damodaran
Director
Vaughn Nigel
Richtor Director
Peter Henri Maria
Staal Director
Lars Kramer
Director
Vikram Talwar
Director
Mark Edwin
Newman Director
41
EXECUTIVE MANAGEMENT COUNCIL (IN ALPHABETICAL
ORDER) (UPDATED AS OF 28.07.10)
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SWOT ANALYSIS
STRENGTHS WEAKNESS
ING as one on the biggest Very few branches
financial MNC. 7th in 500 Less variety of
Fortunes financial/banking products
Only foreign bank which has location
acquired an Indian Private
Bank (ING Vysya Bank)
than
Higher rate of interest
other private banks
Most of the financial plans
are legalized under 80 (ccc)
Top notch customer care
and staff behavior
Unique features with
different kinds of accounts
Working hours
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OPPORTUNITIES THREATS
New segments of Doctors, Presence of two top private
banking players in the
Students and CAs as they
market (ICICI & HDFC)
like innovation in their
financial needs and like to
Large market share
enjoy the services already captured
High class (upper strata) Non willingness of
population of city
Muzaffarnagar citizens to
change for something
Increase in different
kind
of financial products new, or to try innovation
in their banking
NGO and public relations
44
BRANCHES OF ING VYSYA BANK
45
PRODUCT PROFILE
The ING Vysya Bank Ltd is one of the well known financial organizations
in India. It is applicable for both short term and long term financial solutions. It is
mainly an entity or a venture which has been formed with the global financial giant
ING of Netherlands. The ING Vysya Bank Ltd is a trusted name in the banking
and commercial sector of the country.
The ING Vysya Bank Ltd was established in the month of October in the
year 2002. The bank came into existence when the Vysya Bank Ltd went into a
venture with global financial giant ING. Vysya Bank Ltd was one of the first
private sector banks in the country and was set up in the year 1930. The main
objective of setting up the bank was to provide financial support to the various
sectors of the economy. In the year 1948, the Vysya Bank was listed among the
Scheduled Banks.
In order to increase its profit and add to its operations, the Vysya Bank Ltd
merged with ING. Currently, it is one of the well known banks in the country and
has around 677 branches across various parts of the country. The headquarters of
the bank is located in the city of Bangalore. Among the total number of branches,
there are 407 regular branches, 28 satellite offices, 39 extension counters. The
number of ATMs is around 203 which are expected to increase within the next few
years. The deposit of the bank amounts to around ` 204980.00 millions while the
net worth is around` 14260.00 millions. The profits of the bank amount to around `
1569.00 millions.
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PRODUCTS AND SERVICES OF ING Vysya Bank Ltd
Being a well known name in the domain of financial and banking services in the
country, the ING Vysya Bank Ltd has come up with a number of financial
solutions and services in a number of areas. Some of the well known segments in
which the bank offers customized and specialized services are
Personal Banking The personal banking department of ING Vysya Bank Ltd
offers high quality services and solutions to cater to the financial needs and
preferences. The high end solutions make them a one stop organization to fulfill
the needs and requirements of the customers. Some of the well known services
offered in the segment of personal banking are
Mutual Funds
Tax Savings Bonds
NRI Services
Internet Banking
Phone Banking
Mobile Banking
Self Banking
Term deposits
Demat accounting
Wealth management
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Wealth Management services the wealth management services of the ING
Vysya Bank Ltd offers the best services in order to take care of the needs and
preferences of the consumers in various wealth management sectors. The secure
services offered by the bank also minimize the risk processes. In addition to these,
ING Vysya Bank Ltd also offers business banking facilities and services of high
standards. The services are meant to take care of the business needs and also
provide high degree of financial stability to the various corporate organizations and
business sectors. Some of the well known services that are offered include
In addition to these, ING Vysya Bank Ltd also carries out research and
development to add more stability to the Indian economic scenario. The customers
are also given useful guidance about investing their assets and funds.
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PRODUCTS
Advantage Salary
Aspira Corporate Salary Solution
Orange Salary
Solo
Saral
General
Freedom
ING Formula Savings Account
Current Accounts
Orange Current
Advantage Current
General Current
Comfort Current
Flexi Current Account
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Term Deposits
Fixed Deposit
Cumulative Deposit
Akshaya
Tax Advantage Deposit
Demat Account
Jiyo Easy Hand Book – Terms & Conditions
Loans
Home Loan
Private Banking
Products & Services
Special Services
NRIs
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Wealth Management
General Insurance
Life Insurance
Investment Products
Wealth Management process
NRI Services
Accounts and Deposits
RSA
51
NRE Fixed Deposit
52
Net Banking
Self Banking
SMS
Contact Us
Business Continuity Management
Cards
Debit Card
Most Important Terms & Conditions [MITC]
Card member Terms & Conditions
Fair practice code for credit card operation
DSA's code of conduct
Master Circular on Credit Card Operations of Banks
Debit Collection Standards in India
Easy Banking
Internet Banking
mi-bank Features
Become mi-bank User
Log into mi-bank
Online Security Guidelines
Phone Banking
53
Current Functionalities
How to use IVR?
Mobile Banking
ATM Kiosks
FAQs on ATMs
Payment Services
Electronic Funds Transfer
RTGS
NEFT
Bill Pay
Smartserv
Collection Service
Doorstep Banking Service
Important Policies
Cheque Collection Policy
Compensation Policy
Safe Deposit Locker Policy
Interest Rates
Domestic & NRO Term Deposit Rates
NRE Deposit Rate
FCNR & RFC Rates
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Service Charges
Savings Bank Accounts
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BUSINESS
SME
Business Loans- M Power BLT
Contact Us
About us
Agri
Term Loan
Emerging Corporates
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Banks & Financial Institutions Group
Product Offerings
Offshore Borrowings
Investment Banking, Local Debt Syndication and Securitisation
Trade & Commodity Finance
Cash Management Services
Financial Market
Market Making and Trading
CUSTOMER SERVICE
ING Customer
Contact Us
Know Your Customer (KYC) Guidelines
Fair Practice Code
Citizen Charter
Code Of Commitment
Complaints
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ABOUT US
Company Overview
Our Corporate Statement
Shareholders Information
Financial Results
CONTACT US
Email Us
Call Us
Branch Network
CAREERS
Security Features
General Tips
FAQs
Privacy Policy
Disclaimer
Complaints
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REVIEW OF LITERATURE
This part provides a review of some notable, theoratical and empirical research works done
by various institutions and authors in evaluating the financial performance.
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RESEARCH METHODOLOGY
PRIMARY DATA
Data that has been collected from first-hand-experience is known as primary data.
Primary data has not been published yet and is more reliable, authentic and
objective. Primary data has not been changed or altered by human beings, therefore
its validity is greater than secondary data.
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SECONDARY DATA
Data collected from a source that has already been published in any form is called
as secondary data. The review of literature in any research is based on secondary
data. Mostly from books, journals and periodicals.
PURPOSE
The main purpose of this study is to study the financial performance of ING
VYSYA BANK LTD.
The information needed for this study was collected from the organization in
the form of secondary data.
Ratio analysis
PERIOD OF STUDY
The study covers the period of (2011-12 to 2012-13) ING VYSYA BANK
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RATIO ANALYSIS
Ratio analysis is one of the techniques of financial analysis where ratios are
used as a yardstick for evaluating the financial condition and performance of a
firm. Ratio analysis was pioneered by Alexander wall who presented a system of
ratio analysis in the year 1909.
RATIO (MEANING)
a. In proportion
b. In rate or times or coefficient
c. In percentage
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ADVANTAGES OF RATIO ANALYSIS
a) Forecasting
b) Managerial control
c) Facilitates communication
d) Measuring efficiency
e) Facilitating investment decisions
f) Useful in measuring financial solvency
g) Inter firm comparison
LIMITATIONS
a. Practical knowledge
b. Ratios are means
c. Inter-relationship
d. Non availability of standards or norms
e. Accuracy of financial information
f. Consistency in preparation of financial statements
g. Detachment from financial statements
h. Time lag
i. Change in price level
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CLASSIFICATION OF RATIOS
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B. CLASSIFICATION BY USERS
Under this classification ratios are grouped on the basis of the parties who are
interested in making use of the ratios. The following is the classification on this
basis.
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C. CLASSIFICATION BY RELATIVE IMPORTANCE
1. PRIMARY RATIOS
a) Return on capital employed
b) Assets turnover
c) Profit ratios
2. SECONDARY PERFORMANCE RATIOS
a) Working capital turnover
b) Stock to current assets
c) Current asset to fixed assets
d) Stock to fixed assets
e) Fixed assets to total assets
3. SECONDARY CREDIT RATIOS
a) Debtors Turnover
b) Liquid Ratio
c) Current Ratio
d) Creditors Turnover
e) Average Collection Period
4. GROWTH RATIOS
a) Growth Rate in Sales
b) Growth Rate in Net Assets
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RATIO ANALYSIS OF ING VYSYA BANK
CURRENT RATIO
CURRENT RATIO
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CURRENT RATIO
0.08
0.07
0.06
0.05
0.04
CURRENT RATIO
0.03
0.02
0.01
0
2009 2010 2011 2012
INTREPRETATION:
From the above calculation it is inferred that current assets for meeting current
liabilities are more during the year 2009 and later starts decreasing during the year
2010 and 2011. But, later it starts increasing during the year 2012 which shows
that current assets are more than current liabilities.
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LIQUID RATIO OR CASH POSITION RATIO
Liquid Ratio is also known as Acid test ratio. This is the ratio of liquid assets
and liquid liabilities. The liquid assets are the assets that are converted into cash
and include cash balances, bills receivables, Debtors and short term investments.
Inventory and prepaid expenses are not including in liquid ratio. Liquid liability
includes all liability except bank over draft the ideal ratio is 0.5:1.
LIQUID RATIO
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LIQUID RATIO
18
16
14
12
10
LIQUID RATIO
8
0
2009 2010 2011 2012
INTERPRETATION
From the above said table reveals that the liquid ratio during the year 2009-
2012 generally shows increasing trend. Liquid assets are sufficient to meet the
current liabilities. This shows the liquid position of assets is found to be very good.
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DEBT-EQUITY RATIO
DEBT-EQUITY RATIO
75
DEBT-EQUITY RATIO
18
16
14
12
10
DEBT-EQUITY RATIO
8
0
2009 2010 2011 2012
INTERPRETATION
From the above calculation it is observed that debt equity ratio is declined
during the year 2010 and later it starts increasing during the year 2011 and atlast it
decreased in the year 2012. This reveals that the debt is less when compared the
owners fund in the year 2012.
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NET PROFIT MARGIN RATIO
Net profit margin (or profit margin, net margin, return on revenue) is a
ratio of profitability calculated as after-tax net income (net profits)
divided by sales (revenue). Net profit margin is displayed as a
percentage. Net profit margin is a key ratio of profitability. It is very
useful when comparing companies in similar industries. A higher net
profit margin means that a company is more efficient at converting
sales into actual profit.
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NET PROFIT MARGIN RATIO
12
10
6
NET PROFIT MARGIN RATIO
0
2009 2010 2011 2012
INTERPRETATION
From the above said table it is revealed that during the year 2009 there is a
low net profit ratio and there is a upward trend in the net profit ratio which shows
the ING VYSYA BANK is earning more profits in the years 2011 and 2012 when
compared to the previous years.
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EARNING RETENTION RATIO
79
EARNING RETENTION RATIO
88
87
86
85
84
EARNING RETENTION RATIO
83
82
81
80
2009 2010 2011 2012
INTERPRETATION
From the above calculation it is analyzed that during the year 2009, earning
retention ratio is increased to 86.97 and in 2010 it is declined to 85.51 and in the
year 2011 it is increased to 86.11 and in the year 2012 it is decreased to 82.53. it
indicates that the bank is not following uniform policy in retaining the funds.
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EARNINGS PER SHARE
EPS measures the profit available to the equity shareholders on a per share
basis, that is, the amount that they can get on every share held. It is calculated by
dividing the profits available to the equity shareholders are represented by net
profits after taxes and preference dividend. Thus,
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EARNINGS PER SHARE
35
30
25
20
EARNINGS PER SHARE
15
10
0
2009 2010 2011 2012
INTERPRETATION
From the above said table it is observed that during the year 2009, the earnings
per share is decreasing and later it starts increasing. In other words, the EPS has
increased over the years. It shows that the firm‟s profitability has improved.
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ASSETS TURNOVER RATIO
Asset turnover (total asset turnover) is a financial ratio that measures the
efficiency of a company's use of its assets to product sales. It is a measure of how
efficiently management is using the assets at its disposal to promote sales. The
ratio helps to measure the productivity of a company's assets.
The numerator of the asset turnover formula shows revenues which are
found on a company's income statement (statement of comprehensive income)
and the denominator shows total assets which is found on a company's balance
sheet (statement of financial position). Asset turnover is a financial ratio that
measures the efficiency of a company's use of its assets in generating sales
revenue or sales income to the company. Companies with low profit margins tend
to have high asset turnover, while those with high profit margins have low asset
turnover.
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ASSETS TURNOVER RATIO
0.12
0.1
0.08
0.06
ASSETS TURNOVER RATIO
0.04
0.02
0
2009 2010 2011 2012
INTERPRETATION
From the above calculation it is obtained that the ratio during the year 2009, it
is increased and later it starts diminishing during the year 2010 and the next year
2011 and 2012 it begins increasing which indicates that there is an efficient
utilization of assets of a business concern.
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FIXED CHARGES COVERAGE RATIO
85
FIXED CHARGES COVERAGE RATIO
1.4
1.2
0.8
FIXED CHARGES COVERAGE
0.6 RATIO
0.4
0.2
0
2009 2010 2011 2012
INTERPRETATION
From the above calculation it is inferred that during the year 2009 the fixed
charges coverage ratio is high and later it started declining. It shows the firm‟s
inability to satisfy fixed financing expenses.
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CAPITAL ADEQUACY RATIO
The percent threshold varies from bank to bank (10% in this case, a common
requirement for regulators conforming to the Basel Accords) is set by the national
banking regulator of different countries.
Two types of capital are measured: tier one capital ( above), which can
absorb losses without a bank being required to cease trading, and tier two
capital ( above), which can absorb losses in the event of a winding-up and so
provides a lesser degree of protection to depositors.
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Capital adequacy ratio is the ratio which determines the bank's capacity to
meet the time liabilities and other risks such as credit risk, operational risk etc. In
the most simple formulation, a bank's capital is the "cushion" for potential losses,
and protects the bank's depositors and other lenders. Banking regulators in most
countries define and monitor CAR to protect depositors, thereby maintaining
confidence in the banking system.
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CAPITAL ADEQUACY RATIO
16
14
12
10
8
CAPITAL ADEQUACY RATIO
6
0
2009 2010 2011 2012
INTERPRETATION
From the above said table it is inferred that during the year 2009, the capital
adequacy ratio is 11.65 and in the year 2010 it is increased to 14.91 in the year
2011 it is diminished to 12.94 and in the year 2012 it is increased to 14.0. It shows
that the capital adequacy ratio is not stable it is fluctuating and in the year 2012 the
capital adequacy ratio is 14. It indicates that bank has a capacity to meet the
liabilities and other risks.
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FINDINGS
The important findings recorded in this research report are consolidated as follows:
On comparative study of current ratio and liquid ratio it is observed that
there is an adequate current assets and liquid assets to meet the current
obligations, and it is revealed that the firm is in a good liquidity position.
The debt equity ratio is declining from the year 2009 to 2012 where it
is
indicating the bank has lowered the investments in Long-Term Debt.
From the study, it is noted that there is a tremendous increase in the net
profit margin ratio which shows that the bank is earning more profits.
From the analysis of assets turnover ratio it is observed that the bank has
effective utilizationof assets in the years 2011 and 2012 when compared to
the previous years.
The bank has effectively increased earnings per share over the years, which
indicates that bank profitability is very good and it is a positive indicator
for
the equity shareholders and they will get more earnings per share.
The bank has negative effect on the earning retention ratio and capital
adequacy ratio which was fluctuating. The bank can have a uniform
retention policy of the profits.
The fixed charges coverage ratio is dissatisfied, the bank is unable to meet
all fixed payment obligations in time. Hence the bank can planaccordingly
to suit the circumstance so as to meet the fixed charges in time.
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SUGGESTIONS
The bank‟s current and liquid asset is sufficient to meet the current liabilities
of the bank which shows the sound liquid position. This has to be maintained
for the following years.
earning retention ratio for its
The bank should make efforts to increase the
further business growth and development.
The bank has to take necessary steps to improve the capital adequacy ratio.
efficiently. So the bank can
The debt capital is not utilized effectively and
extend its debt capital in the years to come.
The bank earnings per share is tremendously increased and it is advised that it
should be continued for the following years.
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CONCLUSION
Indian
Banking sector contributes 8.6% for the Indian economy in
2010.
The phenomenal growth of the banking industry is the positive sign
for the growth and development of the country as the more number of
investors are interested to operate the banks.
In this current economic scenario ING vysya bank is performing
outstanding manner its consistent
profit from the last 4 years and it is
performing well in the sector.
MY LEARNING
I got to know in detail about Banking products and services.
Practical exposure to the corporate world.
It also helped me enhance my knowledge in banking sector.
Time management skills and working in a team.
Preparation and presentation of the research reports.
I got to meet a lot of people and have learnt a lot during this
period.
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BIBILIOGRAPHY
REPORTS
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