project report financial statement

7/31/2019 Project Report Financial Statement

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Project Report: Financial Statement Analysis of the

Industrial Co-operative Bank Limited. Presenter Name : Nilotpal Kumar Saikia

MBA 4th Sem

Roll No:- 521013505

Conducted at:- Industrial Co-operative Bank Ltd.

Lakhtokia, Panbazar,

Guwahati-781001


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Project Overview

What is the project about?

It is about analyzing the financial statement of the Industrial Co-

operative Bank.

What is the goal of this project?

The goal of the project is to know about financial situation of the

firm i.e. about two factors:- (1) Profitability and (2) Financial

Soundness.


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Aims & Objectives

1. To study the short-term and long-term solvency position of

Industrial Co-Operative bank Ltd.

2. To study the profitability of Industrial Co-Operative Bank Ltd.

3. To study the efficiency with which resources are used.

4. To study the capital structure of Industrial Co-Operative Bank Ltd.


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Methodology

Sample Size:-

The sample size is data of the following years i.e. 2008-2009, 2009-2010 and 2010-11.

Data Collection:-

Two types of data were considered for the study i.e.- (a) Primary data and (b)

Secondary Data.

Data Analysis:-

Tools & Techniques used:- 1) Ratio analysis & 2) Comparative & Common Size

Statement.

Data Representation:- Collected data will be presented in tabular format and will also

be represented using bar diagram and pie chart.


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Overview


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Current Ratio

1.37 1.35

0.98

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2009 2010 2011

Current Ratio

Interpretation: From the above analysis, it reveals that Current Ratio is

decreasing from year 2009 onwards.


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Quick or Acid Test RatioYEAR 2008-2009 2009-2010 2010-2011

ACID TEST RATIO 1.36 1.34 0.98

1.36 1.34

0.98

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2008-2009 2009-2010 2010-2011

Acid Test Ratio

Acid Test Ratio

Interpretation: From the above analysis, it reveals that acid test

ratio is on decreasing trend from 2008-09 onwards.


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LONG TERM SOLVENCY POSITION

EQUITY RATIO

YEAR 2008-2009 2009-2010 2010-2011

EQUITY RATIO (%) 13.42 11.24 10.90

2008-2009 2009-2010 2010-2011

Equity Ratio 13.42 11.24 10.9

0%

2%

4%

6%

8%

10%

12%

14%

16%

Equity Ratio

Interpretation: From the above analysis it is clear that the equity

ratio is decreasing from year 2008-09 onwards.


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RATIO OF CURRENT ASSETS TO PROPRIETORS FUNDYEAR 2008-2009 2009-2010 2010-2011

Ratio of Current

Assets to Proprietors 426.96 489.95 385.71

Fund (%)

0.00% 200.00% 400.00% 600.00%

2008-2009

2009-2010

2010-2011

2008-2009 2009-2010 2010-2011

Ratio of Current Assets toProprietor's Fund

426.96 489.95 385.71

Ratio of Current Assets to

Proprietor's Fund

Interpretation: From the above analysis it reveals that ratio of current assets to

proprietors fund increased from 2008-09 to 2009-10 but decreased from 2009-

10 to 2010-11.


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OVERALL PROFITABILITY RATIO

RETURN ON SHAREHOLDERS INVESTMENT OR NET WORTH

YEAR 2008-2009 2009-2010 2010-2011

RETURN ON 5.06 6.01 5.08

SHAREHOLDERS

INVESTMENT (%)

2008-2009 2009-2010 2010-2011

Return on Shareholder's

Investment5.06 6.01 5.08

4.40%

4.60%

4.80%

5.00%

5.20%

5.40%

5.60%

5.80%

6.00%

6.20%

Return on Shareholder's Investment

Interpretation: From the above analysis, it reveals that Return on

Shareholders investment or net worth increased from year 2008-09 to 2009-10

before decreasing from 2010-2011.


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RETURN ON EQUITY CAPITAL

YEAR 2008-2009 2009-2010 2010-2011

RETURN ON EQUITY 102.35 115.84 106.84

CAPITAL (%)

2008-2009 2009-2010 2010-2011

Return on Equity Capital 102.35 115.84 106.03

95.00%

100.00%

105.00%

110.00%

115.00%

120.00%

Return on Equity Capital

Interpretation: From the above analysis, it reveals that Return on Equity

Capital increased by 13.49% from year 2008-09 to 2009-10 but decreased by

9.81% from year 2009-10 to 2010-11.


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EARNING PER SHARE

2008-2009 2009-2010 2010-2011

22.51 24.90 21.30

2008-2009, 22.51

2009-2010, 24.9

2010-2011, 21.3

Interpretation: From the above analysis, it reveals that Earning per Share

(EPS) was high in the year 2009-10 but declined in the next year 2010-11.


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CAPITAL STRUCTURE

RATIO OF CURRENT LIABILITIES TO PROPRIETORS FUND

YEAR 2008-2009 2009-2010 2010-2011

RATIO OF CURRENT

LIABILITIES TO 3.12 3.62 3.90PROPRIETORS FUND

0 0.5 1 1.5 2 2.5 3 3.5 4

2008-2009

2009-2010

2010-2011

3.12

3.62

3.9

Ratio of Current Liabilities to Proprietor's Fund

Interpretation: From the above analysis, it is clear that Ratio of

Current Liabilities to Proprietors Fund is on increasing trend from year 2008 -

09 onwards.


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RATIO OF RESERVE TO EQUITY CAPITAL

YEAR 2008-2009 2009-2010 2010-2011

RATIO OF RESERVE 1819 1711 1879TO EQUITY CAPITAL

(%)

1600.00%

1650.00%

1700.00%

1750.00%

1800.00%

1850.00%

1900.00%

2008-2009 2009-2010 2010-2011

Ratio of Reserve to Capital 1819 1711 1879

1819

1711

1879

Ratio of Reserve to Capital

Interpretation: From the above analysis, it reveals that the Ratio of

Reserve to equity Capital decreased from year 2008-09 to 2009-10 but increases

from 2009-10 to 2010-11.


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PROPERTY & ASSETS 2008-2009 2009-2010

INCREASE/ INCREASE/(In Rs.) (In Rs.)

DECREASE DECREASE (%)

Current Assets:

Cash 15,01,37,278.36 17,55,87,266.70 + 254,49,988.70 + 16.95

Balance with Banks 7,79,57,893.00 29,96,65,076.11 +221,707,183.11 + 284.40

Short Term Loan 66,30,84,834.00 67,76,16,468.60 + 14,531,634.50 + 2.19

Interest Receivable 31,47,526.00 4,42,000.83 - 2,705,525.17 - 85.96

Bills Receivable 74,80,145.00 56,07,314.48 - 1,872,830.52 - 25.04Other Current Asset 13,61,562.00 20,07,447.77 + 645,885.77 + 47.43

903,169,238.36 1,160,925,574.49 + 257,756,335.40 + 28.53

Fixed Assets:

Land & Building 8,64,46,017.00 8,59,38,617.00 -507,400.00 - 0.58

Furniture & Fixture 59,21,186.00 69,48,738.30 + 1,027,552.30 +17.35

92,367,203.00 92,887,355.30 + 520,152.30 + 16.77

Investment 30,05,65,026.00 40,11,19,224.25 + 100,554,198.25 + 33.45

Advance 102,184,014.00 223,389,340.00 +121,205,326.00 + 118.61

157,55,67,411.00 2,10,74,59,896.14 +531,892,485.14 + 33.75

COMPARITIVE BALANCE SHEET

OF INDUSTRIAL CO-OPERATIVE BANK LTD.

for the year ending 31stMarch 2008-09 and 2009-10


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COMMON SIZE INCOME STATEMENT

for the year ending 2008-2009 and 2009-2010

2008-2009 2009-2010

Rs. % Rs. %

Total Income 14,80,35,530 100.00 16,68,88,827 100.00Less:-

1) Interest on deposits and borrowings 7,64,31,054 51.63 9,23,14,199 55.31

2) Salaries, allowances & staff

provident fund 4,12,74,209 27.88 3,05,59,772 18.31

3) Rent, Taxes, Insurance & Lighting 10,21,002 00.68 11,23,032 00.67

4) Deposit Insurance Premium 11,17,258 00.75 15,83,866 00.94

5) Directors & Local Committee

Members fees and allowances 1,49,000 00.10 1,11,000 00.06

6) Law Charges 2,67,232 00.18 1,84,064 00.11

7) Postage, Telegram & Telephone

charges 1,57,803 00.10 1,04,367 00.06

8) Audit Fees 3,38,903 00.22 3,87,800 00.23

9) Depreciation & Repairs to Property 23,07,183 01.58 23,89,258 01.43

10) Printing, Stationery &

Advertisement 6,11,844 00.41 8,86,495 00.53

11) Other Expenditure 1,36,51,651 09.22 2,30,05,456 13.78

12) Balance of Profit 1,07,08,392 07.23 1,42,39,518 08.53


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PROPERTY & ASSETS 2009-2010 2010-2011

INCREASE/ INCREASE/


Current Assets:

Cash 17,55,87,266.70 9,56,83,079.25 - 79,904,187.45 - 45.50

Balance with Banks 29,96,65,076.11 28,03,36,994.31 -19,328,081.80 - 6.45

Short Term Loan 67,76,16,468.60 71,93,96,258.20 + 41,779,789.60 + 6.16

Interest Receivable 4,42,000.83 4,42,000.83 0.00 0.00

Bills Receivable 56,07,314.48 55,71,582.37 - 35,732.11 - 00.63

Other Current Asset 20,07,447.77 24,20,663.45 + 413,215.68 + 20.58

1,160,925,574 .49 1,103,850,578.41 -57,074,996.08 -4.91

Fixed Assets:

Land & Building 8,59,38,617.00 8,54,43,902.00 - 494715.00 - 00.57

Furniture & Fixture 69,48,738.30 81,61,421.30 + 1,212,683.00 + 17.45

92,887,355.30 93,605,323.30 + 717,968.00 + 00.77

Investment 401,119,224.25 668,057,297.85 + 266,938,073.60 + 66.54

Advance 223,389,340.00 234,605,738.12 + 11,216,398.12 + 05.02

624,508,564.25 902,663,035.97 + 278,154,471.72 + 44.53

COMPARITIVE BALANCE SHEET

OF INDUSTRIAL CO-OPERATIVE BANK LTD.

for the year ending 31st

March 2009-10 and 2010-11


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CAPITAL & LIABILITIES 2009-2010 2010-2011 INCREASE/ INCREASE/


Current Liabilities

Deposits &

Other Accounts 839,883,528.00 1,086,827,941.34 +246,944,413.34 + 29.40

Bills Payable 1,00,31,717.00 1,03,37,432.92 + 305,715.92 + 3.04

Dividend Payable 20,00,232.00 28,61,122.87 + 860,890.87 + 43.04

Audit Fees 90,000.00 1,46,462.00 + 56,462.00 + 62.73

Sundries 71,76,140.00 1,83,77,864.99 + 11,201,724.99 + 156.09

Service Tax Payable 2,071.00 628.00 - 1,443.00 - 69.67

859,183,688.00 1,118,551,452.12 + 259,367,764.12 + 30.18

Capital 122,91,625.00 1,37,22,425.00 + 1,430,800.00 + 11.64

Reserve Fund &

Other Reserves 21,04,13,557.00 25,79,13,679.57 + 47,500,122.57 + 22.57

222,705,182.00 271,636,104.57 + 48,930,922.57 + 21.97

Bills for collection 56,07,314.00 55,71,582.37 - 35,731.63 - 00.63

Branch Adjustment ----------- ---------- ---------- ---------Overdue Interest

Reserve 4,42,000.00 4,42,000.00 0.00 0.00

Interest Payable 3,68,20,250.00 3,38,78,033.64 - 2,942,216.36 - 7.99

Other Liabilities 2,04,45,890.00 3,24,21,510.78 + 11,975,620.78 + 58.57

Profit & Loss A/c 1,42,39,517.00 1,45,50,356.12 + 310,839.12 + 2.18

77,554,971.00 86,863,482.91 + 9,308,511.91 + 12.00

Long Term Liabilities 96,73,16,214.40 97,10,42,825.80 + 3,726,611.40 + 00.38


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2009-2010 2010-2011

Rs. % Rs. %

Total Income 16,68,88,827.00 100.00 22,58,09,300.33 100.00

Less:-1) Interest on deposits and borrowings 9,23,14,199.00 55.31 12,23,59.097.77 54.18

2) Salaries, allowances & staff

provident fund 3,05,59,772.00 18.31 3,32,65,245.12 14.73

3) Rent, Taxes, Insurance & Lighting 11,23,032.00 00.67 12,40,398.50 00.54

4) Deposit Insurance Premium 15,83,866.00 00.94 18,74,994.00 00.83

5) Directors & Local Committee

Members fees and allowances 1,11,000.00 00.06 2,91,750.00 00.12

6) Law Charges 1,84,064.00 00.11 2,31,800.00 00.10

7) Postage, Telegram & Telephone

charges 1,04,367 .00 00.06 1,05,345.44 00.04

8) Audit Fees 3,87,800 .00 00.23 4,53,108.00 00.20

9) Depreciation & Repairs to Property 23,89,258.00 01.43 37,67,654.00 01.68

10) Printing, Stationery &

Advertisement 8,86,495 .00 00.53 8,95,080.50 00.39

11) Other Expenditure 2,30,05,456.00 13.78 4,67,74,470.88 20.71

12) Balance of Profit 142,39,518.00 08.53 1,45,50,356.12 06.44


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a) Ratio of Reserve to Equity Capital shows a sound capital structure ofthe Industrial Co-operative Bank Ltd. Though it decreased from 1819%(2008-09) to 1711% (2009-10) it increased to high ratio of 1879% in year

2010-11. High ratio shows a strong capital structure.

b) From the Comparative Balance Sheet I found that the current assets hasbeen increased from year 2008-09 to 2009-10 but decreased in the next

year 2009-10 to 2010 -11. Although the current liabilities has been

increasing from the last 3 years.

c) From the Common-Size statement I found that the rate of profitabilityincreased from 7.23 to 8.53 during the year 2008-09 to 2009-10 but

decreased in the year 2010-11 to 6.44 due to increase in banks operating

and other expenses.


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RECOMMENDATION

1) From the data analysis, I found that the Current Ratio is not satisfactory,and so is the Quick or Acid Test Ratio which has fallen under the normal

standard in the last year. So, the Industrial Co-operative Bank Ltd. needs

to improve its short-term financial position.

2) After the analysis of Equity Ratio, I found that the ratio is not satisfactorybut they are improving. The bank needs to emphasize on the

improvement of its long term solvency position.

3) Return on Shareholders investment or Net Worth reveals how well theresources of a firm being used, higher the ratio better the results. But the

ratio is not very satisfactory; the bank needs to improve it as this ratio is

of great importance to the present and prospective shareholders as well as

the management of the bank.


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1) From the above analysis, I found out that the shareholders are not gettinggood return .On the other hand Industrial Co-operative Bank Ltd. has

sufficient funds in the Reserves. The bank should give shareholders a

good return on their investment so that they dont get demoralized.

2) From the above analysis I found out that the rate of profitability hasdecreased in the last year due to increase in banks operating and other

expenses. So the bank should try to control and reduce its expenses so

that it will help the organization to gain more profit from its business.

3) From the above analysis I found that the current liabilities are increasing.The banks position will improve if it carefully manage its current

liabilities and put more finds in current assets.

project report financial statement

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