Project On SBI
Project On SBI
Submitted By
SHWETA AGRAWAL
Year-2011-13
DECLARATION I hereby declare that my Summer Training Report entitled ORGANISATIONAL STUDY AND FINANCIAL ANALYSIS is an authentic work done by me as part of my study at (STATE BANK OF INDIA). The Project was undertaken as a part of the course curriculum of MBA Full Time Programme of Barkatullah University , Bhopal. This has not been submitted to any other examination body earlier.
Date: _________
Signature Name: Shweta Agrawal MBA (Full Time) III Sem VNS Institute of Management
ACKNOWLEDGEMENT
I sincerely acknowledge with a deep heartfelt gratitude to my Project In charge PROF. ARCHANA TIWARI for her valuable and faithful guidance, encouragement & suggestions throughout the completion of the Project work. I would like to extend my sincere thanks to PROF. (Dr) P.K. CHOPRA, Director VNS Institute of Management Bhopal (M.P.) for his continuous support and guidance. Last but not the least gratitude to all those who extended their guidance directly or indirectly in completion of this Project work.
CHAPTERS
1. INTRODUCTION A. B. C. D. 2. 3. 4. 5. 6. INTRODUCTION TO TOPICOBJECTIVES RESEARCH METHODOLOGY LIMITATIONS
ORGANISATIONAL /COMPANY PROFILE DATA ANALYSIS AND INTERPRETATION OBSERVATION AND FINDINGSCONCLUSIONS RECOMMENDATIONS BIBLIOGRAPHY
was also an innovation because the practice of accepting money for safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. But, for a long time, and especially upto the time that the three presidency banks had a right of note issue, bank notes and government balances made up the bulk of the investible resources of the banks. The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board.
Business
The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the borrower in favour of the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden. Indians were the principal borrowers against deposit of Company's paper,
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while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities.
public debt offices in the three presidency towns, and the custody of a part of the government balances. The Act also stipulated the creation of Reserve Treasuries at Calcutta, Bombay and Madras into which sums above the specified minimum balances promised to the presidency banks at only their head offices were to be lodged. The Government could lend to the presidency banks from such Reserve Treasuries but the latter could look upon them more as a favour than as a right. The decision of the Government to keep the surplus balances in Reserve Treasuries outside the normal control of the presidency banks and the connected decision not to guarantee minimum government balances at new places where branches were to be opened effectively checked the growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profits of that bank were mainly derived from trade dispersed among a number of port towns and inland centres of the presidency. India witnessed rapid commercialisation in the last quarter of the nineteenth century as its railway network expanded to cover all the major regions of the country. New irrigation networks in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash crops, a portion of which found its way into the foreign markets. Tea and coffee plantations transformed large areas of the eastern Terais, the hills of Assam and the Nilgiris into regions of estate agriculture par excellence. All these resulted in the expansion of India's international trade more than six-fold. The three presidency banks were both beneficiaries and promoters of this commercialisation process as they became involved in the financing of practically every trading, manufacturing and mining activity in the subcontinent. While the Banks of Bengal and Bombay were engaged in the financing of large modern manufacturing industries, the Bank of Madras went into the financing of large modern manufacturing industries, the Bank of Madras went into the financing of small-scale industries in a way which had no parallel elsewhere. But the three banks were rigorously excluded from any business involving foreign exchange. Not only was such business considered risky for these banks, which held government deposits, it was
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also feared that these banks enjoying government patronage would offer unfair competition to the exchange banks which had by then arrived in India. This exclusion continued till the creation of the Reserve Bank of India in 1935.
Presidency Banks of Bengal The presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged in 1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and a giant among Indian commercial banks had emerged. The new bank took on the triple role of a commercial bank, a banker's bank and a banker to the government. But this creation was preceded by years of deliberations on the need for a 'State Bank of India'. What eventually emerged was a 'half-way house' combining the functions of a commercial bank and a quasi-central bank. The establishment of the Reserve Bank of India as the central bank of the country in 1935 ended the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to the Government of India and instead became agent of the Reserve Bank for the transaction of government business at centres at which the central bank was not established. But it continued to maintain currency chests and small coin depots and operate the remittance facilities scheme for other banks and the public on terms stipulated by the Reserve Bank. It also acted as a bankers' bank by holding their surplus cash and granting them advances against authorized securities. The management of the bank clearing houses also continued with it at many places where the Reserve Bank did not have offices. The bank was also the biggest tendered at the Treasury bill auctions conducted by the Reserve Bank on behalf of the Government. The establishment of the Reserve Bank simultaneously saw important amendments being made to the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier restrictions on its business were removed and the bank was permitted to undertake foreign exchange business and executor and trustee business for the first time.
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Imperial Bank The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in terms of offices, reserves, deposits, investments and advances, the increases in some cases amounting to more than six-fold. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. But the lofty traditions of banking which the Imperial Bank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's economic life. When India attained freedom, the Imperial Bank had a capital base (including reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country.
aided by the 480 offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank. The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development. The State Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national development.
Old name : Bank of Calcutta (1809), Bank of Bengal (1809) and Imperial Bank of India (1921) Estd. In Year : 1806 Founder : Bengal Government Nationalization : 1955 Head Office : Mumbai (Maharashtra) Share Capital : 59.73 percent (RBI) Capital : Rs. 4812 Crores
SBI ASSOCIATES
STATE BANK OF BIKANER AND JAIPUR Old Name : The Govind Bank Private Limited Nationalization : 1959 Head Office : Jaipur ( Rajasthan) Share Capital : 75 percent(SBI)
Old Name : Hyderabad Estd. in Year : 1941 Nationalization : 1959 Head Office : Hyderabad (Andhra Pradesh) Share Capital : 100 percent (SBI)
Old Name: Bank of Indore Ltd. Nationalization : 1959 Head Office : Indore (Madhya Pradesh) Share Capital : 98.05 percent (SBI)
Old Name : Patiala State Bank Estd. in Year : 1917 Founder : Maharaja Bhupinder Singh Nationalization : 1959 Head Office : Patiala (Punjab) Share Capital : 100 percent (SBI)
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Old Name : Saurastra state Bank Estd. in Year : 1902 Nationalization : 1959 Head Office : Bhavnagar (Gujarat) Share Capital : 100 percent (SBI)
Old Name: Bank of Mysore Ltd. Estd. in Year : 1913 Founder : M. Visheshwaraiya Nationalization : 1959 Head Office : Bangalore (Karnataka) Share Capital : 92.33 percent (SBI)
Old Name: Travancore Bank Ltd. Estd. in Year : 1945 Nationalization : 1959 Head Office : Trivandrum (Kerala) Share Capital : 75 percent (SBI)
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Branch Code Branch Name Personal Banking Current Accounts Savings Bank Savings Plus Term Deposits Reinvestment Plan Multi Option Deposits Recurring Deposits
Public Provident Fund Scheme Housing Loans Car Loans Education Loans Consumer Durables Loans Personal Loans Property Loans Loans to Pensioners Loans against Shares And Debentures Gold Loans Demand Loans on Term Deposits Demand Loans against Govt. Securities 16
NRI Banking Non Resident External Rupee Accounts (NRE) Ordinary Non Resident Rupee Accounts (NRO) Non Resident Special Rupee Accounts Corporate Banking Cash Credits Medium Term Loans Small Scale Industries Liberalised Scheme Entrepreneur Scheme Equity Fund Scheme Small Business Finance Retail Trade Professionals and Self Employed Business Enterprises Transport Operators Government Business CBDT Special Deposit Scheme Posts Central Civil Pensions Defense Pensions Telecom Pensions State Govt. Pensions Other Services Safe Deposit Lockers Safe Custody Rupee Travellers Cheques Gift Cheques ATM Services ATM Services ATM Services Demat Services Demat Services Demat Services 17
Other Services Internet Banking Miscellaneous Business Demand Drafts Telegraphic Transfers STEPS (Electronic Transfers) Collections (Cheques)
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A.
INTRODUCTION TO TOPIC
Concept of financial statement: Accounting is the process of identifying, measuring and communicating information to its users. It involves recording, classifying various business transactions. The financial statement used in accounting safes two statement profit & loss A/c or income statement and Balance sheet or position statement. With the help of financial as well as the outsider who are interested in affairs of the firms like creditors customers, supplies, financial institution, encloses government, and public. Definition:1. In the words of john N. Myer :- the financial statement provides a summery of the accounts of a business enterprise, the balance sheet is eating the assets, liabilities and capital as on a creation date and the income statement showing the result of operations during a certain period. 2. According to Anthony :- financial statement essentially are interim reports, presented annually and select a division of the life of an enterprise into more or less arbitrary accounting reread more frequently a year. 1.3 : Importance of financial statement : Financial statements constitute valuable piece of information to various uses in different ways the utility of financial statement to different parties is discarded or follows :1. For the management :- Management is interested in knowing the existing profits, possibility of growth, relative performances, cost information etc. from the financial statement, so that it can be suitable strategy for its entity. 2. For the Creditors :- the creditors are to be paid in a short period the creditors are interested in knowing entitys capability to repay the amount and interest as and when repayment, becomes due, so they are interested in finding out profitability, cash flows etc. of the entity, 3. For the Manages :- Managers are interested in knowing the social image, chances of promotion and the capacity of the entity to compensate them Manager wants to know profitability and chances of grow the of the company. 4. For the employees :- Employs are interested in job satisfaction, job security, promotion, bonus declaration, employees welfare scheme etc. of these unit, so they wants to information an profit ability and future prospects of the company. 19
5. 6.
For the bankers :-Bankers are interested in the security of the loan advanced, firms capacity to repay the principal interact as per terms. For the customers :- Customers are interested in raw product resource, product safety, and socially responsible policies of the entity, Information Statement and reports.
7. 8.
For the Society :- Society is interested in economic progress of the country that depends upon the performance of individual economic entities. For the Investor :- the investor inducing both type of short term and long term investor Investor mill not only analyses the present financial position but is will also study in future planning they wants to know now to safe the investment already made is and how safe the proposed investment will be.
9.
Share holder :- shareholders or proprietors of the business an interested in the well being of the business, inky are likely to know the earning capacity of the business and its prospects of the future growth.
10.
Debenture holder :- debenture holders are interested to know whether the financial position of the company is sound or not.
Financial Analysis :Concept of financial Analysis :- F.A an enterprise or a firm is the process of identifying the financial strength and weakness of the firm by properly establishing the scale township between the ions of the Balance sheet and project & loss A/c. the tern financial analysis extends to include the interpretation of financial statement. Definition 1.5 According to Metcalf R.W and Tetrad P.L :Analyzing financial statements is a process of evaluating relationship between component parts of financial statements to obtain a better understanding of forms, position & performance.
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External Analysis
Internal Analysis
The analysis of financial statement for a firm car be undertaken in different ways, different person or parties may be undertake the analysis of financial statement in the analysis of financial state mint may be the shareholders, the creditors, the financial institution the investor and the management itself. The analysis of financial statement can be classified into different categories are as follows: (i) on the basis of Material used :- According to material used, financial Analysis can be of 2 types (a) External analysis (a) (b) Internal analysis External Analysis :- This analysis is performed by outside parties such as trade
creditors , investor, supplies of long debts etc. this type of analysis is conducted for measuring the operational and managerial efficiency at different level of the firm. This group depends almost contritely on published financial statements, this type of analyses is very quite comprehension and sellable it is curried out on the basis of published information or by there who do not have the detailed seconds of the company. (b) Internal Analysis :- this analysis is performed by the corporate finance and accounting department and is more detailed than external analysis. This is boned on detailed information available to outsider this type of analysis for used of managerial purpose and it can be effected depending upon the pus- pose to be ache cued. Its
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conducted by the excite and emplaces of the enterprises as well as the governmental and court agencies. (ii) on the basis of Method adopted :- According to the method adopted, financial analysis can also be of 2 types. :(a) Horizontal Analysis (a) (b) vertical analysis Horizontal Analysis :- when financial statements for a number of years are
seaweed and analyses , this type of analysis is called Horizontal Analysis this analysis is useful for long term trend analysis and planning. It is based on the data from year one year to another are identified this to also known as the Dynamic Analysis. It cores a period of more than I years. It compares the financial statement i.e. project & loss A/c and Balance sheet of previous year along with the current year. (b) Recital Analysis :- this analysis convert each element of the information into a percentage of a total amount of statement so or to established relationship with other components of the same statements it is based on relationship among items in a single period. It can be provided by a study conducted over a numbers of years, so that comparison can be effected. It is also known as the vertical Analysis. Significance of financial Analysis:1. 2. The main significance of financial Analysis depends upon the management, invertors, Bankers, debenture holders, Government etc. They want to know the capacity to meet the short term loans, financial soundness in long run profitability or performance of one unit with other unit of the same industry. 3. they also wants to find out whether the target and goods are achieved. or not and they valuate the performance of different depart mints, investors want to know the their investment is safe. 4. 5. 1.8 They are interested to know the financial portion of any concern. People are financial statements Analysis for satisfying their particular curiosity. Meaning of financial statement Analysis:Financial statement Analysis is establishing the relationships and interpretation there of to understand the working and the financial position firm. There analysis of financial statement is the process of establishing and identifying the financial weakness and strength of the firm. It is also known as the analysis of financial statement evaluating the relationship between component parts of financial statement for getting a better understanding of the firmer position and performance. 22
The basic tool of financial statement analysis is financial ratio analysis. It is verified as follows:1.9 A. B. C. D. A. Types of Financial Liquidity ratio Turnover ratio Leverages ratio Profitability ratio Growth ratio Valuation ratio
Methods of financial statement Analysis:Comparative Method Trend Analysis Common size statement Ratio Analysis Comparative Statement:- The comparative financial statement are statement of the financial position at different period; of time. The element of financial position are shown in a comparative form so as to give an idea of financial position at 2 or more periods. Any statement prepared in a comparative form will be covered in comparative statement. Similarly, comparative figures will indicate the trend & direction of financial position and operative results. B. Trend Analysis:- The financial statement may be analysis by computing trends of series of information. This method determines the direction up words or downwards and involves the computation of the percentage relationship that each statement item bears to the same item in base year. The information for a number of years is taken up and 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. The analyst is able to see the trend of figures, whether upward or downward. C. Common size statement:- The Common size statement, balance sheet and income statement, are shown in analytical percentages. The figures are shown as percentage 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. 23
D.
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 statement can be analyzed more clearly and decisions made from such analysis. Ratio analysis is not an end in itself. It is only means of better understanding of financial strength.
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1. Liquidity ratio
1. Primary
ratio Position Statement ratios ratios 2. Profit & Loss Ak ratio Revenue/ Income Statement Raito 3. Composite/ Mixed Ratios Inter Statement ratios. 3. Actively ratio 4. Profitability ratio 2. Leverages Ratio 2. Secondary
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3 . s No e ti o tu t Ro ub st S
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U n 6. P c ar a o m e b le .
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Comparative Statement
Trend Analysis
Ratio Analysis
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Comparative statement:- The comparative financial statements are statement of the financial position at different periods; of time. The elements of Financial position are shown in a comparative from so as to give an idea of financial position at 2 or more periods. Any statement prepared in a comparative form will be covered in comparative statements. From practical point of view, generally, tow financial Statements 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 financial data will be comparative only when same accounting principles are used in preparing these statements. In case of any deviation in the use of accounting principles this fact must be mentioned at the foot of financial statements and the analyst should be careful in using these statement. The two comparative statements are (i) Balance sheet, and (ii) Income Statement.
(i) Comparative Balance sheet (ii) Comparative Income statement Common-size statement:The common-size statements, balance sheet and income statements 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 pat of total liabilities. These statements are also known as compound percentage or 100% statement because every individual trend percentage where changes in items could not be the analyst is able to assess the figures in relation to total values. The commonsize statement may be prepared in the following way: (1) The totals of assets or liabilities are taken as 100. (2) The individual assets are expressed as a percentage i. e. 100 and different liabilities are calculated in relation to total liabilities. (i) Common- size balance sheet
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(ii)
Trend Analysis:- The financial statements 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 bars to the same item in base year. The information for a number of years is taken up and one year, generally the first year is taken as a base years. The figures of the base year are taken as 100 and trend nations for other years are calculated on the basis of base year. The analyst is able to see the trend of figures, whether upward or downward. For examples if sales figures for the year 2000 to 2005 are to be studied, then sales of 2000 will be taken as 100 and the percentage of sales for all other years will be calculated in relation to the base year, i-e, 2000. Fund flow statement:- Fund flow statements is a method by which we study changes in the financial position of a business enterprise between beginning and ending financial statements dates. It is a statement showing sources and uses of funds for a period of time. In other words the funds flow statement describes the sources from which additional funds were derived and the use to which these sources were put. Thus, funds flow statement is a statement which indicates various means by which the finds have been obtained during a certain period and the ways to which these funds have been used during that period. The term funds used have means working capital, i-e, the excess of current assets over current liabilities. Cash flow statement:- Cash flow statement is a statement which describes the inflows and outflows of cash and cash equivalents in an enterprise during a specified period of time. Such a statement enumerates net effects of the various business transactions on cash and its equivalents and takes into account receipts and disbursements the cash. A cash flow statement summaries the causes of changes in cash position of a business enterprise between dates of two balance Sheets. Cash flow statement should present it for each period for which financial statements are prepared. This statement should report cash flows during the period classified by operating, investing and financing activities. Thus, cash flows are classified into 3 main categories:-
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(iii)
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Ratio Analysis:
Meaning:- Ratio Analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making certain decision. Ratio Analysis is not an end in itself. It is only a means of better understanding of financial strengths and weaknesses of a firm. It is one of the most powerful tools of financial analysis. A ratio is known as a symptom like Blood pressure the rules rate or the temperature of an individual. It is with help of ratios that the financial statements can be analyzed more early and decisions made from such analysis. Limitation of Ratio Analysis: 1. Limited use of a single ratio 2. Lack of Adequate standards 3. Ratios no substitute. 4. Change of Accounting procedure. 5. Window dressing 6. Incomparable 7. Personal bias 8. Price level changes
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(A) (1)
Traditional classification or statement ratios Balance sheet ratios or position statement ratio: Balance sheet ratios deal with the relationship between two balanced sheet items. E.g. the ratio of current assets to current liabilities, or the ratio of proprietors funds to fixed assets. The various balance sheet ratios have been named in the chart classifying statements ratios.
(2)
Profit & loss a/c ratios or revenue/Income statement ratio :This ratio deal with the relationship between two profit & loss A/C items. E.g. the ratio of gross profit to sales, or the ratio of Net profit to sales. The various profit & loss A/ ratios, commonly used, are named in the chart classifying statement ratios.
(3)
Composite/mixed ratios or inter statement ratios:These ratios exhibit the relationship between a profit & loss A/c or Income statement item and a balance sheet item, e.g. stock turnover ratio, or the ratio of total assets to sales. The most Commonly used inter-statement ratios are given in the chart exhibiting traditional classification or statement ratios.
(B)
(1)
Functional classification or Classification According to test Liquidity Ratios: - These are the ratios which measure the short term solvency or
financial position of a firm the various liquidity ration are: current ratio, liquid ratio and absolute liquid ratio.
(2)
Leverage Ratios:- Leverages ratio convey a firms ability to meet the interest cost
and repayments. Schedules of its long term obligations e.g. debt Equity Ratio and Interest Coverage Ratio. Activity Ratios:- Activity ratios are calculated to measure the efficiency with which the resources of a firm have been employed. The various activity or turnover ratios have been named in the chart classifying the ratios.
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B.
Objectives of the research study
OBJECTIVES
Management of working capital is very essential in modern business. Financial statement analysis of working capital is also very useful for short term management of time. The following are the main objectives of my research study. i. To analyze the sources of financial analysis of STATE BANK OF INDIA bank. ii. To analyze the sources of financial management of STATE BANK OF INDIA bank. iii. To examine the overall financial management of STATE BANK OF INDIA bank.
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C.
RESEARCH METHODOLOGY
RESEARCH OBJECTIVES
The above mentioned review literature would have clearly indicated the two different strategies adopted by the two competing brands in Singapore automobile market. In order to understand the depth of the topic the research objectives have been set by the researcher.
Research Design
According to Aaker, Kumar & Day (2001) descriptive research covers a large proportion of marketing research. This being a quantitative research which is to decide of how one variable affects another variable, there are three basic types of research design that is exploratory, casual and descriptive research design. A descriptive research design is the one that describes something such as demographic characteristics of consumers who uses a product or a service. The descriptive study is typically concerned with determining frequency with which something occurs or how two variables vary. Aaker and George (2000), a descriptive study establishes only associations between variables. The purpose is to provide an accurate snapshot of some aspect of the market environment. There are three types of research designs, namely: (a) (b) (c) Exploratory Descriptive, Causative
Exploratory Research:
According to Rajan Saxena, Exploratory research is conducted when the researcher does not know how and why a certain phenomenon occurs. In doing so, they used focus groups. Since the prime goal of an exploratory research is to know the unknown, this research is unstructured. Focus groups, interviewing key customer groups, experts and even search for printed or published information are some common techniques.
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Descriptive Research:
Descriptive research is carried out to describe a phenomenon or market characteristic. Generally, descriptive research is carried out only when the researcher understands the phenomena or behavioral characteristics.
Causative Research:
Causative research is done to establish a cause and effective relationship. Here the researcher may like to see the effect of rising income and changing life style on consumption of select products. In a causative research, unlike exploratory or descriptive, hypotheses are tested. Hypothesis is a statement of predicted outcomes of the research. In building up a hypothesis, it is important that the researcher understands the phenomena thoroughly, or a body of research that exists on the subject matter Descriptive research studies are those study which are concerned with describing the character. It is move valuable because researcher has no control over the variables what has happened or what is happening is considered so it is very accurate so we can say it is more valuable. In this study, for practical reasons, a descriptive approach would be used, considering the proposed study would embrace the above characteristics of a descriptive study. Types of Research The object is comparing the brand equity of European and Asian automotive brands. Simple way to find out the relative success of one of the two identical car sold in Singapore. In a research when we talk of research methodology, we not only take Research methodology, but also considered the logic behind the method we used in the contest of our research study and explain why we are using a particular method. This way we can be stated as under. 1. 2. 3. 4. It relies on empirical evidence it utilize relevant concepts it is committed to only objective consideration it result into probabilistic prediction
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In a method particular research problem involve usually the consideration of the followings means of obtaining the information Explanation of the way in which related means of obtaining information will be organized and the reasoning leading to the selection Investing the reasons for human behavior i.e. people thinks or do certain thinks so we comes for quantitative reaches Types of research are generally classified into two methodologies, qualitative and quantitative. Malhotra (2004) defines qualitative research as An unstructured, exploratory research methodology based on small samples that provides insights and understanding of the problem setting and quantitative research as a research methodology that seeks to Quantify the data and, typically applies some form of statistical analysis. There are merits and demerits of both methodologies (illustrated in following Table4.1). Table 5.1 QUALITATIVE VERSUS QUANTITATIVE RESEARCH Qualitative Research Quantitative Research "All research ultimately has "There's no such thing as qualitative a qualitative - Donald Campbell complete, detailed description. data. grounding" Everything is either 1 or 0" - Fred Kerlinger The aim is to classify features, count them, and construct statistical models in an attempt to explain what is observed. Researcher may only know roughly idea. Recommended design Initially of research Last phases of research projects. All aspects of the study are carefully designed before data is collected. Researcher is the data 38 Researcher uses tools, May clearly in advance
aim
gathering instrument.
Data is in the form of words, objects. Subjective - individuals interpretation of events is important ,e.g., uses participant observation, in-depth interviews etc. Qualitative data is more 'rich', time consuming, and less able to be generalized. Researcher become matter. tends to pictures or
Objective seeks precise measurement & analysis of target concepts, e.g., uses surveys, questionnaires etc
Quantitative data is more efficient, able to test hypotheses, but may miss contextual detail. Researcher remain separated tends from to the
subjectively
objectively
subject matter.
Descriptive research studies are those study which are concerned with describing the character. It is move valuable because researcher has no control over the variables what has happened or what is happening is considered so it is very accurate so we can say it is more valuable. . In a research when we talk of research methodology, we not only take Research methodology, but also considered the logic behind the method we used in the contest of our research study and explain why we are using a particular method. This way we can be stated as under. It relies on empirical evidence 39
it utilize relevant concepts it is committed to only objective consideration it result into probabilistic prediction In a method particular research problem involve usually the consideration of the followings the means of obtaining the information Explanation of the way in which related means of obtaining information will be organized and the reasoning leading to the selection Investing the reasons for human behavior i.e. people thinks or do certain thinks so we comes for quantitative reaches The research methodology used for this study was geared towards obtaining quantitative data.
Limitation of the study 1. The study is based in published internal reports & data of the STATE BANK OF INDIA BANK. 2. The study is limited to a period of 5 yrs 3. No comparison is made b/w the others. RESEARCH DESIGN Research Design is the plan and structure of the in ventilation to obtain answer to research question the plan is the overall scheme, which will be done from writing of the hypothecates to the final analysis. Research design are often dependent on the steps which we referred as research design. in research design the researcher decides hour his objectives will be revised 40
by the research. in research design we find answer of same question that we what would be the study. Where would the study take place, which data to be studied, what method should be adopted and how much should be collected of tells us how the data will be collected Research Design start from the writing of hypothesis & it ends to writing of report. The significance of research design is so give maximum results and effectively researches to be carried to avoid trial error. Thus preparation of the research design should be done with great care as any error may affect the whole study.
Data Analysis
For any research the purpose of achieving the objectives is a very important criterion. Unless the information drawn from the survey is properly interpreted and explained the very purpose of a research cannot be served. Hence data analysis and interpretation is a very important aspect in a project report. Analysis of data is the process of orderly research objectives. The primary data collection is in accurate form that is not ready for analysis. So the researcher must take some measures to bring the data to a form where it can be easily analyzed. The various steps include editing (modifying, correcting the collected data), coding and tabulation (arranging similar data together). The analysis is carried using statistical tools like percentages. Percentage is a special kind of ratio. Percentage is used in making comparison between two or more series of data. Thus the analysis is totally based on frequency and percentage calculation. Finally meaningful information is extracted from the analysis. The collected data is illustrated using pie diagram and bar charts. The conclusions, findings and suggestions are given on the inference drawn from the analysis.
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D.
LIMITATIONS
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COMPANY PROFILE
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3.
COMPANY PROFILE
Traded as
BSE SENSEX Constituent Industry Banking, Financial services Founded July 1, 1955 Headquarters Mumbai, Maharashtra, India Area served Worldwide Pratip Chaudhuri Key people
(Chairman)
Credit cards, Consumer banking, corporate Products insurance, banking, finance and investment banking,
mortgage loans, private banking, Revenue Profit Total assets Total equity Owner(s) Employees Website wealth management US$32.44 billion (2011)[1] US$2.34 billion (2011)[1] US$369.56 billion (2011)[1] US$18.71 billion (2011)[1] Government of India 222,933 (2011)[1] www.statebankofindia.com 45
State Bank of India (NSE: STATE BANK OF INDIA N, BSE: 500112, LSE: STATE BANK OF INDIA D) is the largest banking and financial services company in India by revenue, assets and market capitalization. It is a state-owned corporation with its headquarters in Mumbai, Maharashtra. As of March 2011, it had assets of US$370 billion with over 13,000 outlets including 150 overseas branches and
of about 20% in deposits and loans.[3] The State Bank of India is the 29th most reputed company in the world according to Forbes.[4] Also, STATE BANK OF INDIA is the only bank featured in the coveted "top 10 brands of India" list in an annual survey conducted by Brand Finance and The Economic Times in 2010.[5] The State Bank of India is the largest of the Big Four banks of India, along with ICICI Bank, Punjab National Bank and HDFC Bankits main competitors.[6]
History
The roots of the State Bank of India lie in the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on June 2, 1806. The Bank of Bengal was one of three Presidency banks, the other two being the Bank of Bombay (incorporated on April 15, 1840) and the Bank of Madras (incorporated on July 1, 1843). All three Presidency banks were incorporated as joint stock companies and were the result of the royal charters. These three banks received the exclusive right to issue paper currency in 1861 with the Paper Currency Act, a right they retained until the formation of the Reserve Bank of India. The Presidency banks amalgamated on January 27, 1921, and the re-organized banking entity took as its name Imperial Bank of India. The Imperial Bank of India remained a joint stock company. Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of India, which is India's central bank, acquired a controlling interest in the Imperial Bank of India. On April 30, 1955, the Imperial Bank of India became the State Bank of India. The government of India recently acquired the Reserve Bank of India's stake in STATE BANK OF INDIA so as to remove any conflict of interest because the RBI is the country's banking regulatory authority. In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, enabling the State Bank of India to take over eight former state-associated banks as its subsidiaries. On September 13, 2008, the State Bank of Saurashtra, one of its associate banks, merged with the State Bank of India. STATE BANK OF INDIA has acquired local banks in rescues. For instance, in 1985, it acquired the Bank of Cochin in Kerala, which had 120 branches. STATE BANK OF
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INDIA was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive network in Kerala.
International presence
As of December 31, 2009, the bank had 157 overseas offices spread over 32 countries. It has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA. STATE BANK OF INDIA operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius). In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten branches nine branches in the state of California and one in Washington, D.C. The 10th branch was opened in Fremont, California on 28 March 2011. The other eight branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield. The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in British Columbia. In Nigeria, STATE BANK OF INDIA operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria. In Nepal, STATE BANK OF INDIA owns 55% of Nepal STATE BANK OF INDIA Bank, which has branches throughout the country. In Moscow, STATE BANK OF INDIA owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex. The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.[7]
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In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8 million in October 2005.[8].. The State Bank of India (with 74% of the total capital) alongwith the largest global banking groupBNP Paribas (with 26% of the remaining capital) headquatered in Paris formed a joint venture which established India's most reputed and trusted life insurance company named STATE BANK OF INDIA Life Insurance company Ltd. in March 2001.
Associate banks
STATE BANK OF INDIA has five associate banks; all use the same logo of a blue circle and all the associates use the "State Bank of" name, followed by the regional headquarters' name:
State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore
Earlier STATE BANK OF INDIA had only seven associate banks that constituted the State Bank Group. Originally, the then seven banks that became the associate banks belonged to princely states until the government nationalized them between October 1959 and May 1960. In tune with the first Five Year Plan, emphasizing the development of rural India, the government integrated these banks into the State Bank of India system to expand its rural outreach. There has been a proposal to merge all the associate banks into STATE BANK OF INDIA to create a "mega bank" and streamline operations.[9] The first step towards unification occurred on August 13, 2008 when State Bank of Saurashtra merged with STATE BANK OF INDIA, reducing the number of state banks from seven to six. Then on June 19, 2009 the STATE BANK OF INDIA board approved the merger of its subsidiary, State Bank of Indore, with itself. STATE BANK OF INDIA holds 98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by the government hold the balance of 1.77%.)
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The acquisition of State Bank of Indore added 470 branches to STATE BANK OF INDIA 's existing network of 12,448 and over 21,000 ATMs. Also, following the acquisition, STATE BANK OF INDIAs total assets will inch very close to the 10 trillion marks. The total assets of STATE BANK OF INDIA and the State Bank of Indore stood at 9,981,190 million as of March 2009. The process of merging of State Bank of Indore was completed by April 2010, and the STATE BANK OF INDIA Indore branches started functioning as STATE BANK OF INDIA branches on August 26, 2010.[11]
Non-banking subsidiaries
Apart from its five associate banks, STATE BANK OF INDIA also has the following non-banking subsidiaries: 1. STATE BANK OF INDIA Capital Markets Ltd 2. STATE BANK OF INDIA Funds Management Pvt Ltd 3. STATE BANK OF INDIA Factors & Commercial Services Pvt Ltd 4. STATE BANK OF INDIA Cards & Payments Services Pvt. Ltd. (STATE BANK OF INDIA CPSL) 5. STATE BANK OF INDIA DFHI Ltd 6. STATE BANK OF INDIA Life Insurance Company Ltd. 7. STATE BANK OF INDIA General Insurance
2. Hemant G. Contractor (Managing Director) 3. Diwakar Gupta (Managing Director) 4. A Krishna Kumar (Managing Director) 5. Dileep C Choksi (Director) 6. S. Venkatachalam (Director) 7. D. Sundaram (Director) 8. Parthasarathy Iyengar (Director) 9. G. D. Nadaf (Officer Employee Director) 10. Rashpal Malhotra (Director) 11. D. K. Mittal (Director) 12. Subir V. Gokarn (Director)[12]
State Bank of India has 172 foreign offices in 37 countries across the globe. STATE BANK OF INDIA has about 25,000 ATMs (25,000th ATM was inaugurated by the then Chairman of State Bank Shri O.P. Bhatt on 31 March 2011, the day of his retirement); and STATE BANK OF INDIA group (including associate banks) has about 45,000 ATMs.
STATE BANK OF INDIA has 21,500 branches, including branches that belong to its associate banks. STATE BANK OF INDIA includes 99345 offices in India. India's number one ADB is in Bellary i e State bank of India Bellary ADB
The symbol of the State Bank of India is a circle and not key hole and a small man at the centre of the circle. A circle depicts perfection and the common man being the centre of the bank's business.
also includes : "With you - all the way" and : "a bank of common man"
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Loan to NTPC
On July 8, 2011, STATE BANK OF INDIA agreed to give a loan of 100 billion to NTPC (National Thermal Power Corporation), making it the largest loan STATE BANK OF INDIA had ever given to any single customer in its entire 200 year history. The loan had a "door-to-door" maturity period of 12 years, accompanied by a drawdown period of four years. An NTPC press release said at the time of the declaration of the loan that: "The loan shall be utilized for financing the capital expenditure of ongoing and new projects." NTPC chairman at the time, Arup Roy Choudhury clarified that the loan amount would be used to add 128,000 MW capacity by the end of year 2032 (NTPC'c capacity at the time of the declaration of the loan was 34,584 MW).[13] This loan was offered amidst declining finance for power projects in India, which were a direct result of the lending constraints placed by the Reserve Bank of India and the increased risk awareness of power projects. It will also help minimize the shortfall of around 4.51 trillion that the Power Ministry of India expected to incur in achieving the objectives of the Eleventh Five Year Plan (This plan targeted an addition of 78,577 MW or power generation capacity which would require an investment of 10.3 trillion).
Employees
STATE BANK OF INDIA has turned into the third-largest employer in India among listed companies after Coal India Limited (383,347) and Tata Consultancy Services(226,751).
Best Online Banking Award, Best Customer Initiative Award & Best Risk Management Award (Runner Up) by IBA Banking Technology Awards 2010 The Bank of the year 2009, India (won the second year in a row) by The Banker Magazine Best Bank Large and Most Socially Responsible Bank by the Business Bank Awards 2009 Best Bank 2009 by Business India 52
The Most Trusted Brand 2009 by The Economic Times Most Preferred Bank & Most preferred Home loan provider by CNBC Visionaries of Financial Inclusion By FINO Technology Bank of the Year by IBA Banking Technology Awards SKOCH Award 2010 for Virtual corporation Category for its e-payment solution The Brand Trust Report[16]: 11th most trusted brand in India.
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54
55
3.
56
3.
Assets Assets
Cash & Balances with RBI 119,349.83 Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Minority Interest Group Share in Joint Venture Total Asset 35,977.62 1,006,401.5 5 419,066.45 17,543.26 11,402.13 6,141.13 345.7 60,615.96 0 0 1,647,898.2 4 82,195.58 39,653.42 869,501.64 402,754.13 15,886.95 10,359.09 5,527.86 486.03 50,025.30 0 0 1,450,143.96 74,161.07 51,100.63 750,362.38 372,231.45 14,063.96 9,127.29 4,936.67 286.81 51,746.73 0 0 1,304,825.74 74,817.26 14,211.16 603,221.94 273,841.72 12,641.08 8,224.86 4,416.22 246.57 56,514.65 0 0 1,027,269.52 45,066.10 27,410.76 487,285.96 216,521.05 11,274.90 7,425.54 3,849.36 150.02 34,891.16 0 0 815,174.41
57
Init. Contribution Settler 0 Preference Share Application Money Employee Stock Option Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Minority Interest Policy Holders Funds Group Share in Joint Venture 0 0 82,836.25 0 83,471.25 1,255,562.4 8 142,470.77 1,398,033.2 5 2,977.17 0 0
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Current Asset
Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
Current Asset
1,647,898.24
1,450,143.96
1,304,825.74
1,027,269.52
815,174.41
1,800,0 00.00 1,600,0 00.00 1,400,0 00.00 1,200,0 00.00 1,000,0 00.00 800,000.00 600,000.00 400,000.00 200,000.00 0.00
Current Asset
Mar Mar Mar Mar Mar '11 '10 '09 '08 '0 7
59
Current Liability
Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
Current liability
1,644,799.46
1,447,512.68
1,302,597.46
1,025,241.40
813,484.48
1,8 00,000 .00 1,6 00,000 .00 1,4 00,000 .00 1,2 00,000 .00 1,0 00,000 .00 8 00,000 .00 6 00,000 .00 4 00,000 .00 2 00,000 .00 0 .00
Current liability
Mar '11
Mar '10
Mar '09
Mar '08
Mar '0 7
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CURRENT RATIOS:
Current ratio
The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's current assets to its current liabilities. It is expressed as follows:
For example, if WXY Company's current assets are 50,000,000 and its current liabilities are 40,000,000, then its current ratio would be 50,000,000 divided by 40,000,000, which equals 1.25. It means that for every dollar the company owes in the short term it has 1.25 available in assets that can be converted to cash in the short term. A current ratio of assets to liabilities of 2:1 is usually considered to be acceptable (i.e., your current assets are twice your current liabilities). The current ratio is an indication of a firm's market liquidity and ability to meet creditor's demands. Acceptable current ratios vary from industry to industry. If a company's current ratio is in this range, then it is generally considered to have good short-term financial strength. If current liabilities exceed current assets (the current ratio is below 1), then the company may have problems meeting its short-term obligations. If the current ratio is too high, then the company may not be efficiently using its current assets or its short-term financing facilities. This may also indicate problems in working capital management. Low values for the current or quick ratios (values less than 1) indicate that a firm may have difficulty meeting current obligations. Low values, however, do not indicate a critical problem. If an organization has good long-term prospects, it may be able to borrow against those prospects to meet current obligations. Some types of businesses usually operate with a current ratio less than one. For example, if inventory turns over much more rapidly than the accounts payable become due, then the current ratio will be less than one. This can allow a firm to operate with a low current ratio.
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If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months.
Current Ratio
Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
Current Ratio
0.04
0.04
0.04
0.07
0.05
Interpretation : Current ratio is increasing from 2007 to 2010 so it is having stong financial position
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Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
Quick Ratio
1.4
1.47
1.24
1.08
1.03
63
Mar '11
Mar '10
Mar '09
Mar '08
Mar '07
0.65
0.91
1.08
1.04
0.86
1.2 1 0.8 0.6 0.4 0.2 0 Mar Mar Mar Mar Mar '1 1 '10 '09 '08 '07 N Profit R et atio
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4.
1) The working capital of the bank which was Rs. 2446.07 crs. As on 31 st march
2008 & stood at Rs. 4269.81 On 31st march 2007 there was a marginal increase in the banks working capital by 5057.18 Crs. 2) The borrowing had risen to 652.41 [email protected]% rose from the year end 20002006.At present it is on a decline standing at 596.46 for the year ended 2008-09. 3)The loans and advanceof the which were at Rs. 2095.30 Crs. as on 31st mar.2007 increase and stood at Rs. 2450.12 Crs. as on 31st march, 2008 and as on 31st march it is decreased with Rs. 2293.42 Crores as on 31st march 2009. 4) The deposit of bank were on its peaks of 1656.60Crs. On 2004-05. It decline on 2005-06 by 2% & again on the rise since 2005-06 and the deposits have increased by Rs.482.31Crs. during the year and stood at Rs. 2923.31Crs. as on 31 st march 2009 as against Rs. 2440.90 Crs.as on 31st march, 2008. 5) The reserve funds and other funds of the bank which amounted to Rs. 458.48 Crs. as on 31st march 2008 & now it increased to 477.23 Crs. as on 31 st march 2009. 6) The authorised share capital of the bank is RS. 200.00.The paid up capital of the bank which was at Rs. 110.93Crs. as on 31st march 2008. Increased and stood at Rs.122.02 Crores as on 31st march 2009. 7) The investment of bank have increased by Rs. 1068.02 Crs. as on 31 st march 2008 decreased and stood at Rs. 2293.42 Crs. as on 31st march 2009. 8) In STATE BANK OF INDIA Bank the working capital is managed where bills for collection being bills (As per contra)receivables is deducted from assets and liabilities side and fixed assets are also deducted from it then we find the accurate working capial of the bank as shown in annual report of the bank that is 5057.18 which is increasing year by year.
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5.CONCLUSIONS
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5.
CONCLUSIONS
Every business need fund for two purposes- for its establishment and to carry out its day to day operations. Fund which is needed for the short term period or to carry out it day to day operations like for purchases of raw material, payment of wages , etc. are known as It should have neither redundant or excess nor inadequate or shortage of working capital. The basic goal of working capital management is to manage the current asset and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, i. e. it is neither inadequate nor excessive. The requirement for working capital is increasing, by a very merger amount which the bank is having proper management for its working capital requirement. The banks has reduced its borrowing which it built us its own resources. The bank is mostly serve the agricultural loan to farmers. The loans & advances of the bank were on the steady rise until 2007-08 but On 2008-09n it has marginally reduced so the loans and advances are on decline which reflects that the bank is not lending ample amount of money in the market.
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6. RECOMMENDATIONS
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5.
RECOMMENDATIONS
The following suggestions have made for the company to improve the present condition. It is suggested that the financial manager must be very vigilant in the management of working capital as it significantly affect the profitability of the firm. An immediate care is to be given for the working capital management of the firm, as it is on the banks of closure. Finance manager must consider the variables that affect the profitability of the firm directly or indirectly and proper attention must be given to control these variables. The management must control the variables like average payment period days and average collection period days to reduce its time period of cash conversion cycle. The management must conduct research studies on their workings and financial performance at least once in every three financial years. Management must provide proper training to its finance managers to strengthen their knowledge in managing the different areas of working capital management like cash management, inventory management, receivable management and marketable securities management etc. It is suggested that the companies must give a better presentation of creditors for the relative period and for the earlier periods separately. (It has found that current years purchase is too less but the creditors for suppliers stood at a very large amount. That looks so frivolous.) Amounts in the reserves and surpluses should be utilized for productive purposes which will not only increase the earnings of the company but will also increase the reputation of the company in the market. The companies must encourage and support the outside scholars who want to conduct research studies on their companies financial performance and other relevant areas of management. Lastly, it has also suggested the researchers should be provided with proper and relevant information by the management for research studies. It has often found that the management hesitates to provide detailed information regarding finance. The following suggestions have made for the researchers who want to study further about the working capital management. It is suggested that comparison of the result of one industry with another similar industry will help to bring proper conclusions of the study and also it adds effectiveness to the results. A keen probe into the financial parameters of each public sector undertakings and their difficulties in arranging the working funds will give a clear picture about the present day condition of the in our state. It is suggested that further research is to be conducted on 70
the same topic with different companies by extending the years of the sample study. The scope of further research can be extended to keen areas of working capital management including cash, marketable securities, receivables and inventory. A further intense exploration of the variables selected for this research study can be done to find out the extend of deviations happen in the working capital of any firm so that the finance managers can be very vigilant in their policies and can exercise a good control over all those variables which directly or indirectly affect the life of the firm.
After interpretation and analysis, i am giving certain suggestion to the bank, which i hope will be helpful for the banks: (b) The Bank should try to increase its proportion of the fixed assets to net worth.
(c) The proportion of current assets and current liabilities not maintain please try
(e) The Bank should pay attention towards proper and efficient utilization of working capital. (f) The Bank should improve its sales strategy. (g) The Bank must increase its return. (h) It should also pay attention in increasing its net profit margin, so that it can survive in adverse condition also. (i) The Bank should try reducing their expenses, so that the margin of can be increase. (j) There is not sitting arrangements for trainees pls try to maintain the facility. (k) Please maintain the working capital of the bank.
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BIBLIOGRAPHY
72
BIBLIOGRAPHY
1.
Depo: 8th Edition: 1998 2. Agrawal N.K: Management Accounting of working Capital: Sterling Publishers
Donald Cooper: Business Research Methods: New Delhi: Tata McGraw Hill
Edition: 1998 4. I.M Pandey: Financial Management: New Delhi: Vikas Publishing House (P)
Ltd.: 1983 5. James C. Van Horne: Financial Management Policy: Singapore: Pearson
Education Pvt. Ltd.: Twelfth Edition: 1998 6. K.V Smith: Management of Working Capital: New York: West Publishing
Company: 1994
7.
Vishwa Prakashan: 1999 8. Kulshreshtha N.K: Theory & Practice of Management Accounting: Aligarh:
M.A Sahaf: Management Accounting: Principles and Practices: New Delhi: Vikas
Publishing (p) Ltd: 2005 10. Agrawal: Cost Accounting: Principles and Practice: Delhi: Sahitya Bhavan M.L
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74
ANNEXURE
75
ANNEXURE
Rs.
Cr.
------------------Mar '07
12 mths Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital 635 635 0 0
12 mths
12 mths
12 mths
12 mths
Init. Contribution Settler 0 Preference Share Application Money Employee Stock Opiton Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Minority Interest Policy Holders Funds 0 0 82,836.25 0 83,471.25 1,255,562.4 8 142,470.77 1,398,033.2 5 2,977.17 0
76
Other Liabilities & Provisions 163,294.96 1,644,799.4 Total Liabilities 6 Mar '11
12 mths
12 mths
12 mths
12 mths
12 mths
Assets Cash & Balances with RBI 119,349.83 Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Minority Interest Group Share in Joint Venture 35,977.62 1,006,401.5 5 419,066.45 17,543.26 11,402.13 6,141.13 345.7 60,615.96 0 0 1,647,898.2 Total Assets 4 1,450,143.96 1,304,825.74 1,027,269.52 815,174.41 82,195.58 39,653.42 869,501.64 402,754.13 15,886.95 10,359.09 5,527.86 486.03 50,025.30 0 0 74,161.07 51,100.63 750,362.38 372,231.45 14,063.96 9,127.29 4,936.67 286.81 51,746.73 0 0 74,817.26 14,211.16 603,221.94 273,841.72 12,641.08 8,224.86 4,416.22 246.57 56,514.65 0 0 45,066.10 27,410.76 487,285.96 216,521.05 11,274.90 7,425.54 3,849.36 150.02 34,891.16 0 0
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State Bank of India ------------------in Profit & Loss account Mar '11 Mar '10 Mar '09 Mar '08 Rs. Cr. ------------------Mar '07
12 mths Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses
12 mths
12 mths
12 mths
12 mths
81,394.36 14,935.09 96,329.45 48,867.96 14,480.17 12,141.19 990.5 12,479.30 0 31,430.88 8,660.28 88,959.12 Mar '11
70,993.92 14,968.15 85,962.07 47,322.48 12,754.65 7,898.23 932.66 7,888.00 0 24,941.01 4,532.53 76,796.02 Mar '10
63,788.43 12,691.35 76,479.78 42,915.29 9,747.31 5,122.06 763.14 8,810.75 0 18,123.66 6,319.60 67,358.55 Mar '09
48,950.31 9,398.43 58,348.74 31,929.08 7,785.87 4,165.94 679.98 7,058.75 0 14,609.55 5,080.99 51,619.62 Mar '08
39,491.03 7,446.76 46,937.79 23,436.82 7,932.58 3,251.14 602.39 7,173.55 0 13,251.78 5,707.88 42,396.48 Mar '07
12 mths Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) 7,370.35 0 0.34 7,370.69 0 1,905.00 246.52 116.07 300
78
1,023.40 Statutory
1,038.76
912.73
776.48
594.69
Reserves 2,488.96 Transfer to Other Reserves 2,729.87 Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 2,151.52 0.34 7,370.69
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Cash Flow
------------------- in Rs. Cr. ------------------Mar '11 Mar '10 Mar '09 Mar '08 12 mths 12 mths 13926.10 -1804.99 -1761.52 -3359.67 -6926.18 12 mths 14180.64 29479.73 -1651.93 5097.38 32925.18 12 mths
Net Profit Before Tax 14954.23 Net Cash From Operating 34282.52 Activities Net Cash (used in)/from -1245.53 Investing Activities Net Cash (used in)/from 2057.11 Financing Activities Net (decrease)/increase In 35094.10 Cash and Cash Equivalents Opening Cash & Cash 87780.05 Equivalents Closing Cash & Cash 122874.15 Equivalents
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State Bank of India Capital Structure Period Instrument --- CAPITAL (Rs. cr) --From To Authorised Issued 2010 2011 Equity Share 5000 635.08 2009 2010 Equity Share 1000 634.97 2008 2009 Equity Share 1000 634.97 2007 2008 Equity Share 1000 631.56 2006 2007 Equity Share 1000 526.3 2005 2006 Equity Share 1000 526.3 2004 2005 Equity Share 1000 526.3 2003 2004 Equity Share 1000 526.3 2002 2003 Equity Share 1000 526.3 2001 2002 Equity Share 1000 526.3 2000 2001 Equity Share 1000 526.3 1999 2000 Equity Share 1000 526.3 1996 2000 Equity Share 1000 526.3 1995 1996 Equity Share 1000 474.01 1994 1995 Equity Share 1000 474.01 1993 1994 Equity Share 1000 473.83 1991 1993 Equity Share 1000 200 Source : Asian CERC
-PAIDUPShares (nos) Face Value 634998991 10 634882644 10 634880222 10 631470376 10 526298878 10 526298878 10 526298878 10 526298878 10 526298878 10 526298878 10 526298878 10 526298878 10 526298878 10 474009872 10 474009189 10 473828726 10 20000000 100
Capital 635 634.88 634.88 631.47 526.3 526.3 526.3 526.3 526.3 526.3 526.3 526.3 526.3 474.01 474.01 473.83 200
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State
Bank
of
India Key Financial Ratios Mar '11 Investment Valuation Ratios Face Value 10.00 Dividend Per Share 30.00 Operating Profit Per Share (Rs)255.39 Net Operating Profit Per Share 1,504.34 (Rs) Free Reserves Per Share (Rs) 468.29 Bonus in Equity Capital -Profitability Ratios Interest Spread 4.12 Adjusted Cash Margin(%) 9.60 Net Profit Margin 8.55 Return on Long Term Fund(%)96.72 Return on Net Worth(%) 12.71 Adjusted Return on Net 12.74 Worth(%) Return on Assets Excluding 1,023.40 Revaluations Return on Assets Including 1,023.40 Revaluations Management Efficiency Ratios Interest Income / Total Funds 8.39 Net Interest Income / Total 4.10 Funds Non Interest Income / Total 0.09 Funds Interest Expended / Total 4.29 Funds Operating Expense / Total 2.67 Funds Profit Before Provisions / Total 1.43 Funds Net Profit / Total Funds 0.65 Loans Turnover 0.14 Total Income / Capital 8.48 Employed(%) Interest Expended / Capital4.29 Mar '10 10.00 30.00 229.63 1,353.15 412.36 -3.82 11.62 10.54 95.02 13.89 13.91 1,038.76 1,038.76 8.52 3.82 0.10 4.69 2.38 1.46 0.91 0.15 8.62 4.69 82 Mar '09 10.00 29.00 230.04 1,179.45 373.99 -4.34 13.04 12.03 100.35 15.74 15.74 912.73 912.73 8.88 3.79 0.11 5.09 2.06 1.75 1.08 0.16 8.99 5.09 Mar '08 10.00 21.50 173.61 899.83 356.61 -4.32 12.81 11.65 86.83 13.72 13.70 776.48 776.48 8.82 3.87 0.14 4.96 2.16 1.74 1.04 0.15 8.96 4.96 Mar '07 10.00 14.00 147.72 833.38 184.43 -4.20 11.43 10.12 99.20 14.50 14.47 594.69 594.69 8.27 3.85 0.19 4.42 2.39 1.54 0.86 0.15 8.46 4.42
Employed(%) Total Assets Turnover Ratios 0.08 Asset Turnover Ratio 7.24 Profit And Loss Account Ratios Interest Expended / Interest 60.04 Earned Other Income / Total Income 1.10 Operating Expense / Total 31.51 Income Selling Distribution Cost 0.26 Composition Balance Sheet Ratios Capital Adequacy Ratio 11.98 Advances / Loans Funds(%) 77.19 Debt Coverage Ratios Credit Deposit Ratio 79.90 Investment Deposit Ratio 33.45 Cash Deposit Ratio 8.96 Total Debt to Owners Fund 14.37 Financial Charges Coverage 0.35 Ratio Financial Charges Coverage 1.19 Ratio Post Tax Leverage Ratios Current Ratio 0.04 Quick Ratio 8.50 Cash Flow Indicator Ratios Dividend Payout Ratio Net 26.03 Profit Dividend Payout Ratio Cash 23.24 Profit Earning Retention Ratio 74.03 Cash Earning Retention Ratio 76.80 AdjustedCash Flow Times 100.71 Mar '11 Earnings Per Share Book Value 116.07 1,023.40
0.09 7.26 66.66 1.21 27.61 0.26 13.39 74.22 75.96 36.33 7.56 12.19 0.33 1.21 0.04 9.07 23.36 21.20 76.67 78.82 79.54 Mar '10 144.37 1,038.76
0.09 7.20 67.28 1.18 22.91 0.33 14.25 78.34 74.97 36.38 8.37 12.81 1.36 1.23 0.04 5.74 22.90 21.13 77.11 78.88 75.05 Mar '09 143.67 912.73
0.09 6.32 65.23 1.56 24.13 0.30 13.47 78.31 77.51 34.81 8.29 10.96 1.37 1.23 0.07 6.15 22.64 20.56 77.33 79.41 72.64 Mar '08 106.56 776.48
0.08 5.44 59.35 2.25 28.19 0.20 12.34 76.16 73.44 38.22 6.22 13.92 1.37 1.22 0.05 6.52 18.98 16.75 80.97 83.21 84.87 Mar '07 86.29 594.69
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