Professional Documents
Culture Documents
system. The Co-operative movement originated in the west, but the importance
that such banks have assumed in India is rarely paralleled in the world. Their role
in rural financing continues to be important even today, and their business in the
urban areas also has increased in recent years mainly due to the sharp increase in
the financial on a mutual basis. In India, the co-operative credit movement started
with the chief object of catering to the banking and credit requirements of the urban
middle class e.g. the small trader or workers, the salaried people with limited fixed
Co-operative banking can divided mainly two types Agricultural sector and
Non-Agriculture sector.
The DCCB's (District Central Co-operative Banks) have come into existence
due to the failure of primary societies to attract required resources in the form of
deposits from well to do sections of the village community on one hand and to
inspire the habit of thrift and savings among their members to provide strong base
on the purpose to give support to farmers and small industries. The objectives of
DCCB's.
1
Their democratic organization and management help in catering better to the
They are best suited to guide, supervise and control their societies.
Bank.
2. Ratio Analysis
3. Trend Analysis
The main aim behind the study is to gains practical experience and practical
The period of the study is confined to five years that is from 2005-2006 to
2009-2010 as that period of study is considerably long and enough to comprise all
are ignored.
5. The period of study is limited only for five years that is 2005-2006 to
2009-2010.
CHAPTER PLAN :
Chapter – 1 : Deals with the synopsis and rational study, objectives, data
and methodology of the study, period of the study and limitations of the study.
Chapter – 2 : Deals with introduction about the Co-operative Banks and their
Chapter – 3 : Deals with the profile of the Warangal District Central Co-operative
over view, Definition and the scope, types of Financial analysis and procedure of
Chapter – 5 : Deals with the financial analysis of comparative balance sheet, Ratio
Co-operative Banks :
3
Co-operative banks are an important constituent of the Indian financial
system, judging by the role assigned to the. The co-operative movement originated
in the west, but importance which such banks have assumed in India is rarely
paralleled anywhere else in the world. Their role in rural financing continues to be
important even today, and their Business in the urban areas also has increased in
resent years mainly due to the sharp increase in the number of primary co-
operative banks.
movement started with the chief object of catering to the banking and credit
requirements of the urban middle class e.g. the small trader or businessman, the
artisans, or factory worker, the salaried people with limited fixed income in urban or
semi-urban areas.
Besides protecting the middle classes and men of modest means from the
clutches of the money lenders, the movement is also expected to indicate the habit
Herman Schultz started such societies for the benefit of artisans in the cities. In
Italy, the credit of starting such societies goes to Livgi Luzzatti. Encouraged by the
success of the urban credit institutions in these countries. Social workers in India
middle classes as early as to close of the 19th Century. In India the first credit
society was set up in 1889 at Baroda. But no proper attention was paid for its
development. The government of India showed the golden seed of the co-
credit often at exploitatively high rates of interest. The co-operative banks were
conceived in order to substitute such agencies, provide adequate short term and
market.
among the agencies supplying credit needs of the people residing in the urban
areas. They advance loans mostly to the traders, artisans and salary earners on
personal security as well as against gold and silver. The urban banks cater
primarily to the needs of the lower and middle-income structure of our society.
Co-operative banking can be divided into mainly two types agricultural sector
and non-agricultural sector. Agricultural sector concerned to mainly rural credit. But
Co-operative Bank
5
RBI
NABARD
CCBs CLDBs
PACs
Urban co-operative banks usually meet the needs of specific types or groups
UCBs are also called as Primary Co-operative Banks (PCBs) by the Reserve
units which operate in metropolitan, urban and semi-urban centers to cater mainly
to needs of small borrowers, viz., owners of small scale industrial units, retail
The RBI is the licensing authority for new banks a Act, Co-operative banks
are subject to CRR and liquidity requirements at the level of 3% and 25%
respectively at present, they have been advised to lend 60% of their total advances
First and foremost, they can organize and bring together middle and working
classes kin urban and semi-urban areas and inculcate in them the habits of thrift
and self-help and acquaint them with the elements of ordinary banking principles.
consequent drawing of urban resources into the apex and central co-operative
banks which are in need of funds to finance the rural, industrial and other functional
rescue them from the exploitation of money lenders and others unscrupulous
financing individual industrialist and artisans working in urban area, they can cost.
7
This has a consequently effect also on non-operative lending; ;make a significant
funds etc; available in areas which ;may not be considered suitable for commercial
banking and to persons who may not be able to get such civilities from commercial
banks; and they can provide intelligent, experienced and active leadership to the
cooperative movement including the central and apex cooperative banks, which in
view of their federal character draw their directors from member's institutions.
bank.
The DCCBs have come into existence due to the failure of Primary Societies
to attract required resources in the form of deposits from well to do sections of the
village community on one hand and to inspire the habit of thrift and savings among
their members to provide strong capital base on the other. The Co-operatives
Societies act.
1904 was amended kin 1912 incorporating a clause for the registration of
Societies have been registered under provisions of amended Act and have
advanced.
8
b) They serve as a cushion in absorbing a part of the over dues of
societies.
c) They are best suited to guide, supervise and control the societies.
Andhra Pradesh State was formed in the year 1956. The jurisdiction of the
state is \spread over an area of 2.76 lakhs square kilometers and divided into 23
Like the other states in Andhra Pradesh the cooperative movement made it's
beginning as early as in k1920. Till the formation of the state there was separate
ORGANISATION PROFILE
INTRODUCTION :
Andhra Pradesh Co-operative Societies Act of 1964. The area of operation of the
OBJECTIVES
such members, and recovery of such loan of members till they are
cleared and arrange for issue of fresh long term loans through PACs.
financing institutions.
permission of the Registrar both for banking purposes and issue and
• To advice develop assist and co-ordinate and supervise and inspect the
functioning of the.
• PACs and also to assist and supervise the functioning of other affiliated
cooperative institutions.
and administer
All such other things and acts as are necessary, conductive and incidental to
the attainment of the foregoing and generally to promote the cause of cooperation
in the district.
is called, or the President of the bank, shall be bound to keep, maintain or cause to
11
Maintain such accounts and books relating to that bank in such manner as may be
such accounts and books, for producing or causing production of the same when
accounts and records in form prescribed by the registrar and RBI addition as Board
The Registrar may prescribe such other statements as from time to time.
The statements shall be made as on 30th June of every year and copy of each shall
be sent to the Registrar within 30 days after close of the Co-operative year ending
30th June.
DEPOSITS :
Deposits may be received at any time within the limits determined under the
PACs. Act and rules on such rate of interest on deposits are subject to rules and
• Fixed deposits
• Current deposits
• Saving deposits
• Thrift deposits
• Recurring deposits
• Security deposits
the direction issued by Reserve Bank of India from time and securities approved by
machinery
vi) Any other tangible security To take legal action against members of
ix) To purchase vehicles for the see of the bank as per special by –laws
by Registrar.
i) Agricultural Loans
aspects of the WDCCB are given in chart. The chart can be considered as vertical
chart as the line of command flows form top to bottom in a vertical line. The chart
is as follows.
14
15
FUNDS AND RETURNS :
FUNDS : The Bank will ordinarily obtain funds from the following sources.
i) Share Capital
ii) Deposits
RETURN : The Bank shall prepare annual returns in such form as may be
prescribed by the
iv) Which were under the Madras Province and the Nizam government
respectively.
All the societies, which were established prior to the formation of the state,
have come under the fold the Andhra Pradesh Co-operative Societies Act of 1964.
75% are small and marginal farmers. In A.P. 50% of rural credit is provided by
Co-operative Banks.
systematic study of some significant clues about its financial condition and
prospects. Its major thrust is future and current facts with a view to projecting and
viability of a concern.
financial data of the business with a view to assessing its overall health." It is the
about a particular firm and information processing system designed to supply firm-
Kennedy and Mc.Muller make the statement, they hold that "the analysis and
of financial statement data so that forecast may be made of the prospects for future
earning, ability to pay interest and debt maturates (Current and Long-term), and
profitability, stability and similar items. At its best, financial Analysis seeks to
Financial Analysis can be divided in to two following heads. They are as follows:
i) Internal Analysis
ii) External Analysis
Internal Analysis :
Persons who have access to the internal accounting records of the business
External Analysis :
Outsiders who do not have access to the detailed information of accounting and
records of the business form do this. The outsider includes investors, creditors,
i) Horizontal Analysis
Horizontal Analysis :
Vertical Analysis :
It refers to the study relationship of the various items in financial statement of one
accounting period.
1) Selection
2) Classification
3) Interpretation
The first step involves selection of information (data relevant to the purpose
18
classification of data and the third step includes drawing of inferences and
conclusions.
1) Comparative Statement
2) Common-Size Statement
3) Ratio Analysis
4) Cash-flow Analysis
5) Fund-flow Analysis
6) Trend Analysis
7) Cost-Volume-Profit Analysis
As the project work deals with the study of the following methods, these
The Comparative Balance Sheet analysis is the study of the trends of same
items, groups of items and computed items in to two or more balance sheet of the
same business on different data. The changes in the periodic Balance sheet items
2) Ratio Analysis :
19
(a) Classification of Ratios
In order the ratios serve as tool for financial analysis, they are classified on the
The Ratio Analysis is the one of the next powerful tools financial analysis which
is used to analyze and interpret the financial health of the enterprise. It is with the
help of ratios that the financial statement can be analyzed more clearly and
Sl. Liquidity Ratio Long-term Solvency Turn over Ratio Profitability Ratio
No. & Leverage Ratio
1. Current Ratio Debit Equity Ratio Fixed Interest Gross Profit
Turnover Ratio
2. Liquid Ratio Debt to total Capital Total Assets Net Profit
Ratio Turn over Ratio
3. Absolute Liquid Interest Coverage Working Operating Profit
Ratio Capital
Turnover Ratio
4. Cash flow / Debit Capital Operating Ratio
Employed
5. Capital gearing Payables Expenses Ratio
Turnover Ratio
6. Debtors Return on Equity
Turnover Ratio
7. Creditors Return on
Turnover Ratio Capital
8. Inventory Return on Total
Turnover Ratio Resources
9. Earning per
Share
10. Price-earning
Ratio
Importance of Ration Analysis :
20
Uses of Ratio Analysis :
1) It helps in decision-making
7 Helps in knowing the financial position of the company to extend credit to the
8) It helps in knowing the profitability of the concern because fringe benefits are
(a) Ratios are based only on information that has been recorded in the financial
as historical approach.
(b) Ratios are not only the indicators: they cannot be taken as final decision
(c) Ratios will give misleading results with the effects in price level are not taken
into account.
(d) No fixed standards can be laid down for ideal ratio; it may differ from industry
to industry.
(e) They can be easily window dressed to present better picture of financial and
profitability of outsider.
21
(f) Different people intercept ratios in different ways, which leads to bias. As it
ANALYSIS
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2005 31-3-2006 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 653.23 653.23 (-) 41.89 (-) 6.03
Investments 1541.01 2069.66 528.65 34.31
Loans & Advances 17099.97 26697.32 3579.35 21.04
Govt. Securities 127.83 127.83 -- --
22
Fixed Assets 38.87 40.17 1.3 3.34
Interest Receivable 2972.06 2770.33 (-)201.73 (-)6.79
Other Assets 349.72 305.54 (-)44.18 (-)12.63
Closing Stock 3.56 2.36 (-)1.2 (-)33.71
Miscellaneous 65.10 183.29 118.19 181.55
Loss 1486.15 2002.92 516.77 34.77
Total Current Assets 24379.39 28852.66 4473.27 18.35
CURRENT LIABILITIES
Deposits 4780.12 6399.92 1619.8 33.89
Interest Payable 1452.48 1815.15 362.67 24.97
Borrowing 14165.42 15727.85 1562.43 11.03
Miscellaneous 266.02 315.91 49.89 18.75
Capital 1719.44 2146.17 426.73 24.82
Reserve & Funds 1995.90 2447.66 451.76 22.63
Total Current Liabilities 24379.39 28852.66 4473.27 18.35
Interpretation
Balance Sheet:
1) There has been increased in the loans & Advances Rs. 1403.90 Lakhs i.e.
6.78% and Also an heavy decrease in deposits of the bank in the current year
2) Cash & Bank balances have shown an decrease in the second year over the
first year, this will grow less liquidity position of the concern.
3) Even though there is a slight increase in the fixed assets but other assets has
4) The borrowings of the bank are slightly increased by Rs. 1326.09 Lakhs i.e.
8.43%
23
5) The Increase in the reserve and funds will mean an increase in Interest
liability where as an increase in capital will not increase any liability for paying
interest.
6) Accumulated loss increased by Rs. 1201.29 Lakhs that is 59.98% over the
previous year.
7) The over all financial position of the bank has slightly increased from the
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2006 31-3-2007 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 297.87 228.13 (-)69.74 (-) 23.41
Investments 1774.43 1839.38 64.95 3.66
Loans & Advances 22101.22 22161.33 60.11 0.27
Govt. Securities 127.83 127.83 -- --
Fixed Assets 45.03 51.57 6.54 14.52
Interest Receivable 3370.36 4996.66 1626.30 48.25
Other Assets 254.54 228.75 (-)25.69 (-)10.13
Closing Stock 0.97 0.30 (-)0.67 (-)69.07
Miscellaneous 229.13 230.67 1.54 0.67
Loss 3204.21 5314.28 2110.07 65.85
Total Current Assets 31405.58 35178.90 3773.32 12.01
CURRENT LIABILITIES
Deposits 5672.28 5567.75 (-)104.53 (-)1.84
Interest Payable 2598.32 2996.79 398.47 15.34
24
Borrowing 17053.94 16862.64 808.70 4.74
Miscellaneous 244.42 297.48 53.06 21.71
Capital 2158.68 2155.55 (-)3.23 (-)1.50
Reserve & Funds 3677.84 6298.69 2620.85 71.26
Total Current Liabilities 31405.58 35178.90 3773.32 12.01
Interpretation
Balance Sheet:
loans and capital and there is increased in fixed assets by Rs. 6.54 lakhs
2) The other assets are decreased by Rs. (-) 25.79 lakhs that is (-) 10.13%
3) The borrowing of the bank are slightly increased by Rs. 808.7 lakhs that is
4) The capital structure has decreased by Rs. (-) 3.23 lakhs that is (-) 1.50%
5) The reserves and funds have tremendously increased by Rs. 2620.85 lakhs
that is 71.26%
6) The cash and bank balances has heavily decreased by Rs. (-)69.74 lakhs
that is (-) 23.41% it shows that the bank has a problem with cash.
7) The bank has not doing well in their recoveries it shows that the
accumulated loss has been Increased by Rs. 2110.07 lakhs that is 65.85%
25
8) The current assets and the current liabilities have slightly increased by Rs.
3773.32 lakhs that is 12.01% and the over all financial position of the bank
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2007 31-3-2008 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 228.13 668.58 440.45 193.07
Investments 1839.38. 1888.47 49.09 2.67
Loans & Advances 22161.33 23701.35 1540.02 6.95
Govt. Securities 127.83 127.83 -- --
Fixed Assets 51.57 19.01 (-)42.56 (-)63.15
Interest Receivable 4996.66 4565.68 (-)430.98 (-)8.63
Other Assets 282.75 177.86 (-)50.89 (-)22.25
Closing Stock 0.30 (-)0.07 (-)0.37 (-)132.33
Miscellaneous 230.67 201.31 (-)29.36 (-)12.73
Loss 5314.28 5183.89 (-)130.39 (-)2.41
Total Current Assets 35178.90 36533.91 1355.01 3.85
CURRENT LIABILITIES
Deposits 5567.75 5858.45 290.70 5.22
Interest Payable 2996.79 3764.78 767.99 25.63
Borrowing 17862.64 17759.19 (-)103.45 (-)0.58
Miscellaneous 297.48 269.02 (-)28.46 (-)9.57
Capital 2155.55 2111.62 (-)43.93 (-)2.04
Reserve & Funds 6298.69 6770.85 472.16 7.50
Total Current Liabilities 35178.90 36533.91 1355.01 3.85
26
Interpretation
Balance Sheet:
2) Deposits of Bank have shown slight increase of Rs. 290.70 lakhs that is
5.22% the loans and advance have increased by Rs. 1540.02 lakhs that is
6.95% this shown that bank is using its resources very properly.
3) Borrowing for the first time have decreased by Rs. (-) 103.45 lakhs that is (-)
0.58% then the previous year showing a decreased liability of the bank.
4) The investment of the bank has slightly increased by Rs. 472.16 lakhs that is
7.50%
6) The bank is decreasing the accumulated loss by Rs. (-) 130.39 lakhs that is
7) The capital of the bank has decreased by Rs. (-)43.93 lakhs that is (-) 2.04%
8) The overall financial position of the bank is not bad and has registered
growth in every aspect and the growth of Rs. 1355.01 lakhs that is 3.85.
27
Comparative Balance sheet of the Warangal District Co-operative
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2008 31-3-2009 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 668.58 348.98 (-)319.60 (1)47.80
Investments 1888.47 4745.97 2857.50 151.31
Loans & Advances 23701.35 27622.03 3920.68 16.53
Govt. Securities 127.83 127.83 -- --
Fixed Assets 19.01 16.97 (-)2.04 (-)10.73
Interest Receivable 4565.68 3888.84 (-)676.84 (-)14,82
Other Assets 177.86 188.87 11.01 6.19
Closing Stock (-)0.07 (-)1.49 (-)1.56 (-)22.28
Miscellaneous 201.31 56.02 (-)145.29 (-)72.17
Loss 2183.89 43924.11 (-)259.78 (-)5.01
Total Current Assets 36533.91 41918.13 538422 14.74
CURRENT LIABILITIES
Deposits 5858.45 5651.92 (-)206.51 (-)3.52
Interest Payable 3764.78 2666.44 (-)1098.34 (-)29.17
Borrowing 17759.19 21211.81 3452.62 19.44
Miscellaneous 269.02 442.59 173.57 64.52
Capital 2111.62 5115.93 3004.31 142.27
Reserve & Funds 6770.85 6829.42 58.57 0.86
Total Current Liabilities 36533.91 41918.91 5384.22 14.74
Interpretation
Balance Sheet:
2) Investments also increased by Rs. 2857.5 lakhs that is 151.31% and loans &
47.8%.
4) There is a decrease in the fixed assets but the other assets had increased
5) The deposits of the bank have been showed a great decrease by Rs. (-)
6) The borrowings of the bank are increased by Rs. 2452.62 lakhs that is
19.44% and also the reserve and funds have slightly increased by Rs. 58.57
7) The capital of the bank has increased by Rs. 3004.31 lakhs that is 142.27%.
8) The reduction in accumulated losses by Rs. (-)259.78 lakhs that is (-) 5.01%
9) The over all financial: position of the bank is good, it has grown by Rs.
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2009 31-3-2010 Inc / Dec %
Amount
A) INCOME
29
Interest earned 3495.89 3945.19 449.34 12.85
Miscellaneous Receipts 595.27 --- 595.27 0
TOTAL 4091.16 3945.19 1044.57 12.85
B) EXPENDITGURE
Interest paid 2252.94 2692.79 439.85 19.52
Establishment Charges 297.16 255.82 (-)41.34 (-)13.91
Contingent Charges 77.28 50.96 (-)26.32 (-)34,05
Reserve for Depreciation 1,87 6.96 5.09 272.19
Other Reserves Created 860.95 710.37 (-)150.58 (-)17.48
TOTAL 3490.2 3716.9 226.7 226.27
Net Loss before Tax
600.96 228.29 817.87 (-)213.42
(A-B)
INTERPRETATION
The statement shows that the Interest earned is increased by 12.85 and there
30
COMPARATIVE INCOME STGATEMENT OF WARANGAL
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2005 31-3-2006 Inc / Dec %
Amount
A) INCOME
Interest earned 1968.88 19.46.70 (-)22.18 (-)1.13
Miscellaneous Receipts 417.96 541.64 123.68 29.59
TOTAL 2386.84 2488.34 101.50 4.25
B) EXPENDITGURE
Interest paid 1689.50 2191.22 501.72 29.70
Establishment Charges 329.45 337.59 8.14 2.47
Contingent Charges 67.93 69.89 1.96 2.88
Reserve for Depreciation 1.62 1.57 (-)0.05 (-)3.09
Other Reserves Created 225.24 404.86 179.52 79.66
TOTAL 2313.84 3005.13 691.29 29.88
Net Loss before Tax
73.00 (-)516.79 (-)589.79 (-)807.93
(A-B)
31
INTERPRETATION
previous year Rs. 2386.84 lakhs thus registering a growth rate of 4.25%.
2) Net profit decrease from Rs. 73.00 lakhs to (-) 516.79 Lakhs.
3) Interest paid has increased from Rs. 501.72 lakhs that is 29.70% also other
32
COMPARATIVE INCOME STATEMENT OF WARANGAL
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2006 31-3-2007 Inc / Dec %
Amount
A) INCOME
Interest earned 1946.70 2911.88 965.18 49.58
Miscellaneous Receipts 541.64 201.07 (-)340.57 (-)62.88
TOTAL 2488.34 3112.95 624.61 25.10
B) EXPENDITGURE
Interest paid 2191.22 2609.52 418.30 19.10
Establishment Charges 337.59 360.52 22.93 6.79
Contingent Charges 69.89 114.02 44.13 63.14
Reserve for Depreciation 1.57 1.88 0.31 19.74
Other Reserves Created 404.86 1228.30 823.44 203.39
TOTAL 3005.13 4314.24 1309.11 43.56
Net Loss before Tax
(-)516.79 (-)1201.29 (-)684.50 (-)132.45
(A-B)
INTERPRETATION
33
1) The statement shows that both the interest earned and miscellaneous
receipt has declined by 49.58% and (-)62.88% thus the total income has
declined by 25.10%.
2) The Interest paid has increased from Rs. 418.3 lakhs that is 19.10% and
also the contingent charges have increased by Rs. 44.13 lakhs that is
63.14%. Thus the total expenditure has declined by Rs. 1309.11 lakhs that
is 43.56%.
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2007 31-3-2008 Inc / Dec %
Amount
A) INCOME
Interest earned 2911.88 2731.26 (-)180.62 (-)6.20
Miscellaneous Receipts 201.07 313.16 112.09 55.75
TOTAL 3112.95 3044.42 (-)68.53 (-)2.20
B) EXPENDITGURE
Interest paid 2609.52 2143.46 (-)466.06 (-)17.86
Establishment Charges 360.52 325.76 (-)34.76 (-)9.64
Contingent Charges 114.02 54.32 (-)59.72 (-)52.36
Reserve for Depreciation 1.88 4.84 2.96 157.45
Other Reserves Created 1228.30 2626.12 1397.83 113.80
TOTAL 4314.24 5154.50 8405.26 19.48
Net Loss before Tax (-)1201.29 (-)2110.08 908.79 75.65
(A-B)
INTERPRETATION
Bank has recorded a total income of Rs. (-) 68.53 lakhs that is 2.20% and
the total expenditure is recorded has Rs. 840.26 lakhs that is 19.48%.
2) Other Serve created are increased by Rs. 1397.82 lakhs that is 113.8%.
35
COMPARATIVE INCOME STGATEMENT OF WARANGAL
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2008 31-3-2009 Inc / Dec %
Amount
A) INCOME
Interest earned 2731.26 2758.44 27.18 0.99
Miscellaneous Receipts 313.16 677.66 364.50 116.39
TOTAL 3044.42 3436.10 391.68 12.86
B) EXPENDITGURE
Interest paid 21.43.46 2048.78 (-)94.68 (-)4.42
Establishment Charges 325.76 345.80 20.04 6.15
Contingent Charges 54.32 119.08 64.76 119.22
36
Reserve for Depreciation 4.84 2.04 (-)2.8 (-)57.85
Other Reserves Created 2626.12 790.00 (-)1836.12 (-)069.92
TOTAL 5154.50 3305.70 1848.80 (-)6.82
Net Loss before Tax
(-)2110.08 130.40 (-)1457.12 (-)69.05
(A-B)
INTERPRETATION
1) The statement shows that the both the Interest earned and miscellaneous
receipts are slightly increased by 0.99% and 116.39%. Thus the total
and also the other reserves created as decreased by Rs. (-) 1836.12 lakhs
that is (-) 69.92%. Thus the total expenditure has declined by (-) 6.82%.
37
Comparative Balance sheet of the Warangal District Co-operative
(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2009 31-3-2010 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 357.09 103.36 (-)253.73 (-)71.05
Investments 4975.50 7058.52 2083.02 41.86
Loans & Advances 32558.86 3331.21 759.35 2.33
Govt. Securities -- -- -- --
Fixed Assets 55.88 56.05 0.17 0.30
Interest Receivable 3565.19 4080.66 515.47 14.45
Other Assets 568.14 804.98 239.84 42.21
Closing Stock -- -- -- --
Miscellaneous 284.65 595.27 310.62 109.12
Loss 6814.56 6521.50 (-)293.06 (-)4.30
Total Current Assets 49179.87 52541.55 3361.68 134.92
CURRENT LIABILITIES
Deposits 6312.95 8373.31 2060.36 32.63
Interest Payable 2444.71 2758.89 314.18 12.85
Borrowing 25028.94 25046.67 17.73 0.07
Miscellaneous -- -- -- --
Capital 5182.60 5352.39 169.79 3.27
Reserve & Funds 1035.91 1106.89 70.98 6.85
Total Current Liabilities 40005.11 42638.15 2633.04 55.67
38
INTERPRETATION
2) Deposits of bank have show flight increase of Rs. 2060.36 lakhs that is
32.63% and the loan and advance have decreased by 759.35 lakhs that is
2.33%.
3) Barrowings this year have decreased that is Rs. 17.73 lakhs that is 0.07%.
4) The Deposits of the bank have been showed a increase Rs. 2060.36 that is
32.63%.
5) Other Assets are increased Rs. 239.84 lakhs which is the 42.21%. But there
39
5.2 RATIO ANALYSIS
Current Ratio:
Meaning : This ratio establishes a relation ship between current assets and
current liabilities.
of the firm to meet its short-term obligations and to reflect the short-term financial
Components : There are two components of this relation which are a under
Current Assets : Which mean the assets which are held for there conversion in
Current Liabilities :Which mean the liabilities which are expected to be matured
with in a year.
current liabilities.
This ratio is usually expressed as a pure ratio example 2:1 in the form of a
(Rs.In Lakhs)
The Current assets of WDCCB includes cash & Bank balances, Loans &
Payable.
40
2654301
Y
C
0
E
uU
0
A
rR
987650
rR
-0
S
eE
10
nN
09876
tT
R
A
L
A
aisS
T
tasS
I
ibeE
O
oitT
lsS
i
t&
i
eL
sI
A
B
INTERPRETATION
From the above table 1 is observed that the Current ratio is always
below the ideal Ratio of 2:1 during the period under study. The table shows
decreasing trend from 2005 to 2008 from 1.15. The highest Current Ratio was
in the year 2009 where the current ratio was 1.24 in 2010 the ration showed
0.098 respectively.
41
b) Objective : This Objective of computing this ratio is to measure the relative
Formula:
Shareholders funds
(Rs.In Lakhs)
23105
Y
D
E
05
E
eQ
0
A
B
bU
987650
R
tIT
-0
S
T
10
Y
E
09876
qQ
uU
iI
tT
yY
R
aA
tT
iI
oO
INTERPRETATION
The table reveals that the Debt equity ratio is showing a continuous
decrease for 3 years that is from 2007 to 201 for succeeding 2 years it has shown
The debt equity ratio has always been more that 2:1 indicating excess
dependence on out side borrowings than the owned funds, which will increase the
interest and principle payment obligation on the bank. Average debt equity ratio is
0.85.
Meaning : This ratio is the relationship between the credit given by bank to total
Components : There are two components of this relation, which are under
43
– Advances
– Deposits
(Rs.In Lakhs)
44
2008-09 22161.33 5567.75 398.03
27654301C
Y
A
D
0R
E
redD
0E
A
epvV
987650D
R
doaA
-0I
S
isnN
10T
ticC
09876
teE
sS
D
eE
P
p&
oO
S
sD
I
iE
T
tP
O
S
R
aIA
tT
I
iS
oO
INTERPRETATION:
The table reveals that credit deposit ratio decrease from 323.40% in 2006-07 to
Meaning : Equity to loan ration is measured to know as to how much equity has
45
Objective : High ratio indicates keen participation of equity in the loaning
operations of bank
Components : There are two components of this relation, which are as under
– Equity
– Loans ( Advances)
Computation : This ratio is computed by dividing the equity by the loans and
under
(Rs.In Lakhs)
INTERPRETATION :
The table reveals that equity to loan ratio to decrease from 21.73% in 2005to
Advances.
Components: There are two components of this relation which are a under
Gross Profit
Advances
47
Computation: This ratio is computed by dividing the Gross Profit by the interest
Gross Profit
Gross Profit Ration= --------------- x 100
Advances
Gross Profit ratio reveals the gross income of the banks, which is available to the
(Rs. In Lakhs)
48
23105
Y
G
A
05R
rdE
0O
ovA
987650S
saR
-0
snS
c10
e09876
P
rsR
o(O
F
fL
ioI
taT
n
sI
R
a)nA
tcT
ioI
O
om
e
&
A
d
v
a
n
c
e
s
INTERPRETATION:
The lowest gross profit ratio was 12.02 in 2006-07. The highest gross profit ratio
Quick Ratio:
Components: There are two components of this relation which are under
– Quick Assets
– Current Liabilities
49
Computation: This ratio is computed by dividing the quick assets by the Current
Quick Assets
Quick Ratio = ------------------------- x 100
Current Liabilities
Current
YEAR Quick Assets Liabilities Quick Ratio
50
2654301R
Y
Current
Q
C Liabilities
0U
auE
0I
triA
987650C
ircR
-0K
oekS
n10
09876R
tA
sA
sT
L
ieI
atO
bs
i
l
i
t
i
e
s
INTERPRETATION:
The Table reveals that the Quick ratio is showing a continuous increasing from
2005 – 10
51
SUPER QUICK RATIO:
Cash+Bank+Marketable Securities
Super Quick Ratio = ----------------------------------------------
Current Liabilities
52
243105R
Y
Cash+Bank+Marketable
S
C Securities &
05
auE
0
trpA
987650
ireR
-0
oerS
n10
09876
tQ
u
i
L
ic
ak
b
iR
la
it
ti
io
e
s
INTERPRETATION:
The Table reveals that the super quick ratio is showing slight increase shown 2005-
07 to 2009 – 10.
53
CHAPTER – V
CONCLUSIONS&SUGGESTIONS
1. The authorized share capital is Rs. 22 Crores, and paid up share capital of
Rs. 1719.44 lakhs. There was an increase in the share capital with a
marginal increase in the deposits out standing. It reveals that the bank is
reserves were of Rs. 1995.0 lakhs and it more than doubled to Rs. 6829.42
lakhs in the last year of the study 2009-2010. As the reserves are sources
4. The bank has been very much successful in mobilizing the deposits; it has
lakhs.
5. The bank’s operations are mainly borrowings and loans and loans and loans
APCOB a and other Govt. Banks. The Borrowings are to increased by Rs.
6. The bank’s Investments are increased by Rs. 4745.97 lakhs it will shows the
give the fixed rate of interest to the Bank it will lead the bank of sufficient
working capital.
54
7. The current ratio has always been below the ideal ratio of 2:1 the average
current ratio during the six years period is 1.23. It indicates that
8. This average debt equity ratio for the six years period under study is 1.78. It
9. The credit deposit ratio has increased from 357.73 percent in the year 2000
10. The net profit ratio has been a poor performance indicating losses in the
year 2005 to 20010. During the last year, the NPR varied between 0.94
SUGGESTIONS :
• The firm should try to reduce the amount invested in current assets,
• The bank that the firm should try to reduce current assets there by
• The bank that to increase debt equity ratio of the bank, otherwise, it
55
• The bank that to increase the credit deposit ratio by developing sales
• The bank that should try to decrease the operating cost otherwise,
• The bank that should try to increase the gross profit by increasing the
BIBILIOGRAPHY
BOOKS:
Hill, 2006.
WEBSITE:
1. www. Bankers.com
56
OTHER:
1. The authorized share capital is Rs. 22 Crores, and paid up share capital of
Rs. 1719.44 lakhs. There was an increase in the share capital with a
marginal increase in the deposits out standing. It reveals that the bank is
57
2. The Reserves at the beginning of review period that is 1999-2000 the
reserves were of Rs. 1995.0 lakhs and it more than doubled to Rs. 6829.42
lakhs in the last year of the study 2009-2010. As the reserves are sources
4. The bank has been very much successful in mobilizing the deposits; it has
lakhs.
5. The bank’s operations are mainly borrowings and loans and loans and loans
APCOB a and other Govt. Banks. The Borrowings are to increased by Rs.
6. The bank’s Investments are increased by Rs. 4745.97 lakhs it will shows the
give the fixed rate of interest to the Bank it will lead the bank of sufficient
working capital.
7. The current ratio has always been below the ideal ratio of 2:1 the average
current ratio during the six years period is 1.23. It indicates that
8. This average debt equity ratio for the six years period under study is 1.78. It
58
9. The credit deposit ratio has increased from 357.73 percent in the year 2000
10. The net profit ratio has been a poor performance indicating losses in the
year 2005 to 20010. During the last year, the NPR varied between 0.94
BIBILIOGRAPHY
BOOKS:
Hill, 2006.
59
3. Prasanna Chandra – Financial Management, Tata Mc. Graw-Hill
WEBSITE:
1. www. Bankers.com
OTHER:
60