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RATIO ANALYSIS:

BANK OF BARODA

PREPARED BY:
GROUP 6
DEEPAK
GARIMA GARG
KRATIKA GARG
SHIVANGI GUPTA
SIMRAN
BANK OF BARODA

 Bank of Baroda was founded by Maharaja Sayajirao Gaekwad on July 20, 1908. It was set up under the
Companies Act of 1897. Currently CEO of Bank of Baroda is Shri P. S. Jayakumar.
 At present, Bank of Baroda is one of the largest banks in India as well as part of NIFTY Index of the
National Stock Exchange.
 As of March 31, 2015, the bank had total asset size of Rs 714,988.55 crore (US$ 114.23 billion), which
places it amongst the top five banks in terms of asset size in the country.
 Bank of Baroda’s central philosophy is financial integrity, business prudence, caution and an abiding
care and concern for the hard earned savings of its customers.
PROFITABILITY
ANALYSIS FORMULA
Profit Margin Profit/Sales
PROFITABILITY RATIOS Asset Turnover Sales/Assets
Return on Asset Profit/Assets
Return on Equity Profit/Equity

PROFITABILITY
RATIOS 2018 2017 2016 2015
Profit Margin -0.05 0.03 -0.11 0.07
Asset Turnover 0.07 0.07 0.07 0.07
Return on Asset 0.00 0.00 -0.01 0.00
Return on Equity 0.00 0.00 0.00 0.00
PROFIT MARGIN RATIO ANALYSIS

 The profit ratio compares the earnings reported by a business to its sales.
 It is a key indicator of the financial health of an organization.
 The profit margin Ratio of Bank of Baroda has decreased from 0.03 to -0.05 indicating that
Company has not been able to convert its Sales into profits.
ASSET TURNOVER RATIO ANALYSIS

 The asset turnover ratio measures the value of a company's sales or revenues relative to the value of
its assets.
 The asset turnover ratio can be used as an indicator of the efficiency with which a company is using its
assets to generate revenue.
 The constant value of 0.07 indicates that the Company’s ability to generate sales from assets has
neither increased or decreased.
RETURN ON ASSET ANALYSIS

 Return on assets is a profitability ratio that provides how much profit a company is able to generate
from its assets.
 Return on assets (ROA) measures how efficient a company's management is in generating earnings
from their economic resources or assets on their balance sheet.
 ROA is shown as a percentage, and the higher the number, the more efficient a company's management
is at managing its balance sheet to generate profits.
 Bank of Baroda has 0 ratio for the last four years the company is in loss and not been able to
generate any profit.
RETURN ON EQUITY ANALYSIS

 ROE is considered a measure of how effectively management is using a company’s assets to create
profits
 Bank of Baroda is not able to earn profits from its assets and is in loss for the last four years.
Calculations of Earning Assets Ratio and Interest on Loans
ANALYSIS
Earnings Assets Ratio
 A low ratio means that a company is providing loans that do not perform well since the amount of
interest from those loans is approaching the value of the earning assets.
 The ratio has increased meaning that the bank is bringing in good amount of Investment Income from
loans and investments.
 This also means that the loans are properly priced and investments are properly managed.
 In Bank of Baroda the ratio has gone up from 5.04 to 6.4.
Earns Interest on loans
 The “Interest on loans” ratio has increased which means that the company has given out more loans
and hence gained more interest.
 The amount of interest expense has a direct bearing on profitability, especially for companies with a
huge debt load.
 Heavily indebted companies may have a hard time serving their debt loads during economic
downturns.
Calculations of Net Asset Margin and Equity to Total Assets Ratio
ANALYSIS
Net Interest Margin
 Net interest margin for Bank of Baroda have been increased from 2016 to 2018 from 2.14 to 2.60.
 This increase has been made due to increase in interest income generated by banks in comparison to
the amount of interest paid out to their lenders
 This increase will lead in increase the profits for the Bank of Baroda which is profitable for the bank.
Equity to Total Assets Ratio
 Equity to net asset ratio is minimum in all the years which tells that Bank of Baroda have finance all
their capital mainly from deposits and not from equity.
 So the main source of finance in Bank of Baroda is not equity rather it is deposits which the people
deposits.
 Generally the banks have less equity to assets ratio as the main source for banks is not equity.
LOANS TO DEPOSIT RATIO ANALYSIS

 Loan Deposit Ratio= total loan/total deposit


 Loan Deposit Ratio of Bank of Baroda- 0.24(Mar 18) as compared to 0.21(Mar 17)
 The Investment-to-deposit ratio is used to assess a bank's liquidity by comparing a bank's total loans to
its total deposits for the same period.
 The LDR helps to show how well a bank is attracting and retaining customers. If a bank's deposits are
increasing, new money and new clients are being on-boarded.
DEBT TO CAPITAL RATIO ANALYSIS

 Debt to Capital Ratio= Total Debt/Total Capital


 Debt to capital Ratio of Bank of Baroda- 0.24(Mar 18) as compared to 0.21(Mar 17)
 The debt-to-capital ratio gives analysts and investors a better idea of a company's financial structure
and whether or not the company is a suitable investment.
 Higher the debt-to-capital ratio, the riskier the company.
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