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INTRODUCTION

Financial statement analysis is the process of identifying financial strengths and weaknesses of the firm by properly establishing relationship between the balance sheet and the profit and loss account. There are various methods or techniques that are used in analyzing financial statements, such as comparative statements, schedule of changes in working capital, common size percentages, funds analysis, trend analysis, and ratios analysis. Financial statements are prepared to meet external reporting obligations and also for decision making purposes. They play a dominant role in setting the framework of managerial decisions. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements.

DEFINITION
The financial statements provide a summary of the accounts of a business enterprise, the balance sheet reflecting the asses, liabilities and capital as on a certain data and the income statement showing the results of operations during a certain period. John N. Myer Define financial statements as, the end product of financial accounting in a set of financial statements prepared by the accountant of a business enterprise. That purport to reveal the financial position of the enterprise the result of it is recent activities, and an analysis of what has been done with earnings. Smith and Asburne Financial statements, essentially, are interim reports presented annually and reflect a division of the life of an enterprise into more or less arbitrary accounting period-more frequently a year. Anthony

NEED OF THE STUDY


The project work is done for analyzing the financial position of the HDFC Bank. The analysis of the financial position gives a better picture of the financial position of the organization in order to take better decisions. Financial management is very important for both individuals and organizations because it deals with managing the funds. It guides a company and individual to make optimum use of money to achieve maximum returns. Financial analysis helps to an individual / organization to save more and thus invest more.

OBJECTIVE OF THE STUDY


To study the financial position of the HDFC Bank the period of study. To compare the profitability position of the company. To analyze the liquidity position of the HDFC Bank. To know the credit worthiness position of the HDFC Bank. To evaluate the long term solvency position of the HDFC Bank. To observe the operating efficiency of the HDFC Bank. To give the suitable conclusions, suggestions for the better improvement of the HDFC Bank.

SCOPE OF THE STUDY


The current study only moves around the financial statement analysis of the HDFC Bank. The present study concentrates only on the financial department of the HDFC Bank with the use of comparative income statement and ratio analysis

RESEARCH METHODOLGY
Methodology is systematic procedure of collecting information in order to analyze and verifying a phenomenon. The collection of data is done through two principle source viz. 1. primary data 2. secondary data Primary data It is the information collected directly. In the study, it was mainly interviews with concerned officer and staffs individually or collectively. This study does not include any primary data. Secondary data The secondary data was collected from already published sources such as Pamphlets. Annual reports and internal records. The data includes: 1. Collection of required data from annual reports of The HDFC BANK, 2. Reference from text books and journals relating to financial management and articles published in business dairies like the Economic times, business line etc.,

LIMITATIONS OF THE STUDY


The study is mainly based on the secondary data. While computing ratios, averages and percentages the figures are appropriated two Decimal places. Therefore sometimes the total may not exactly tally. Only comparative, common-size statement and ratios analysis has been taken for the study as a tool of financial and no other techniques is used. The study is restricted to only 45 days. The consideration period was limited to five years

INDUSTRY PROFILE
HISTORY
Banking is nearly as old as civilization. The history of banking could be said to have started with the appearance of money. The first record of minted metal coins was in Mesopotamia in about 2500B.C. the first European banknotes, which was handwritten appeared in1661, in Sweden. cheque and printed paper money appeared in the 1700s and 1800s, with many banks created to deal with increasing trade. The history of banking in each country runs in lines with the development of trade and industry, and with the level of political confidence and stability. The ancient Romans developed an advanced banking system to serve their vast trade network, which extended throughout Europe, Asia and Africa. Modern banking began in Venice. The word bank comes from the Italian word ban co, meaning bench, because moneylenders worked on benches in market places. The bank of Venice was established in 1171 to help the government raise finance for a war. The bank of England was formed in 1694 to borrow money from the public for the government to finance the war of Augsburg against France. By 1709, goldsmith were using bank of England notes of their own receipts. New technology transformed the banking industry in the 1900s round the world, banks merged into larger and fewer groups and expanded into other country.

BANKING STRUCTURE IN INDIA

In todays dynamic world banks are inevitable for the development of a country. Banks play a pivotal role in enhancing each and every sector. They have helped bring a draw of development on the worlds horizon and developing country like India is no exception. Banks fulfills the role of a financial intermediary. This means that it acts as a vehicle for moving finance from those who have surplus money to (however temporarily) those who have deficit. In everyday branch terms the banks channel funds from depositors whose accounts are in credit to borrowers who are in debit. Without the intermediary of the banks both their depositors and their borrowers would have to contact each other directly. This can and does happen of course. This is what has lead to the very foundation of financial institution like banks. The Bank have developed their roles to such an extent that a direct contact between the depositors and borrowers in now known as disintermediation. Banking industry has always revolved around the traditional function of taking deposits, money transfer and making advances. Those three are closely related to each other, the objective being to lend money, which is the profitable activity of the three. Taking deposits generates funds for lending and money transfer services are necessary for the attention of deposits. The Bank have introduced progressively more sophisticated versions of these services and have diversified introduction in numerable areas of activity not directly relating to this traditional trinity

INDIAN BANKING SYSTEM

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INDIAN BANKING INDUSTRY ANALYSIS


The banking scenario in India has been changing at fast pace from being just the borrowers and lenders traditionally, the focus has shifted to more differentiated and customized product/service provider from regulation to liberalization in the year 1991, from planned economy to market. Economy, from licensing to integration with Global Economics, the changes have been swift. All most all the sector operating in the economy was affected and banking sector is no exception to this. Thus the whole of the banking system in the country has undergone a radical change. Let us see how banking has evolved in the past 57 years of independence. After independence in 1947 and proclamation in 1950 the country set about drawing its road map for the future public ownership of banks was seen inevitable and SBI was created in 1955 to spearhead the expansion of banking into rural India and speed up the process of magnetization. Political compulsions brought about nationalization of bank in 1969 and lobbying by bank employees and their unions added to the list of nationalized banks a few years later. Slowly the unions grew in strength, while bank management stagnated. The casualty was to the customer service declined, complaints increased and bank management was unable to item the rot. In the meantime, technology was becoming a global phenomenon lacking a vision of the future and the banks erred badly in opposing the technology up gradation of banks. They mistakenly believed the technology would lead to retrenchment and eventually the marginalization of unions.

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The problem faced by the banking industry soon surfaced in their balance sheets. But the prevailing accounting practices unable banks to dodge the issue. The rules of the game under which banks operated changed in 1993. Norms or income Recognition, Assets classification and loan loss provisioning were put in place and capital adequacy ratio become mandatory. The cumulative impact of all these changes has been on the concept of state ownership in banks. It is increasingly becoming clear that the state ownership in bank is no longer sustainable. The amendment of banking regulation act in 1993 saw the entry of new private sector banks and foreign banks.

MAJOR PLAYER IN INDIA


1. HDFC BANK LTD 2. ICICI BANK LTD 3. STATE BANK OF INDIA LTD 4. PUNJAB NATOINAL BANK LTD 5. BANK OF BARODA LTD 6. FEDERAL BANK LTD 7. AXIS BANK LTD 8. ING VYSYA BANK LTD 9. IDBI BANK LTD 10. INDUSIND BANK LTD 11. YES BANK LTD

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COMPANY PROFILE
INTRODUCTION The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units.HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment. HDFC Bank began operations in 1995 with a simple mission: to be a World Class Indian Bank. We realized that only a single minded focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal. HDFC Bank Limited (the Bank) is an India-based banking company engaged in providing a range of banking and financial services, including commercial banking and treasury operations. The Bank has a network of 1412 branches and 3295 automated teller machines (ATMs) in 528 cities and total employees are 52687.

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HISTORY OF HDFC BANK

HDFC BANK LTD was incorporated in August 1994 in the name of 'HDFC Bank Limited, with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. . HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment In a milestone transaction in the Indian banking industry, Times Bank was merged with HDFC Bank Ltd., effective February 26, 2000.

MISSION
World Class Indian Bank. Benchmarking against international standards. To build sound customer franchises across distinct businesses. Best practices in terms of product offerings, technology, service levels, risk management and audit & compliance

VISION
The HDFC Bank is committed to maintain the highest level of ethical standards, professional integrity and regulatory compliance. HDFC Banks business philosophy is based on four core values such as:1. Operational excellence. 2. Customer Focus. 14

3. Product leadership. 4. People.

MANAGEMENT OF HDFC
PERSON Mr. Jagdish Capoor Mr. Aditya Puri Mr. Paresh Sukthankar Mr. Harish Engineer Mr. Keki M. Mistry Mr. Ashim Samanta Mr. Arvind Pande Mrs. Renu Karnad Mr. C M Vasudev Mr. Gautam Divan Dr. Pandit Palande DESIGNATION Vice President Managing Director Executive Director Executive Director Director Director Director Director Director Director Director

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Business Segment
HDFC Bank offers a wide range of commercial and transactional banking services and treasury products to wholesale and retail customers. The bank has three key business segments:

Wholesale Banking Services


The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corporate to small & mid-sized corporate and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. The bank is also a leading provider of structured solutions, which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers. Based on its superior product delivery / service levels and strong customer orientation, the Bank has made significant inroads into the banking consortia of a number of leading Indian corporate including multinationals, companies from the domestic business houses and prime public sector companies. It is recognized as a leading provider of cash management and transactional banking solutions to corporate customers, mutual funds, stock exchange members and banks.

Retail Banking Services


The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. The products are backed by world-class service and delivered to the customers through the growing branch network, as well as through alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile Banking. 16

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the Investment Advisory Services programs have been designed keeping in mind needs of customers who seek distinct financial solutions, information and advice on various investment avenues. The Bank also has a wide array of retail loan products including Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider of Depository Participant (DP) services for retail customers, providing customers the facility to hold their investments in electronic form. HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Master card Maestro debit card as well. The Bank launched its credit card business in late 2001. By September 30, 2005, the bank had a total card base (debit and credit cards) of 5.2 million cards. The Bank is also one of the leading players in the "merchant acquiring" business with over 50,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments.

PRODUCT OF HDFC BANK Account & Deposits Service


Banking should be effortless. With HDFC Bank, the efforts are rewarding. No matter what a customer's need and occupational status, we have a range of solutions that are second to none. Whether you're employed in a company and need a simple Savings account or run your own business and require a robust banking partner, HDFC Bank not only has the perfect solution for you, but also can recommend products that can augment your planning for the future. It includes these services: Saving accounts. Current accounts. Fix deposits. Demate account. 17

Safe deposits lockers.

Savings Accounts
These accounts are primarily meant to inculcate a sense of saving for the future, accumulating funds over a period of time. Whatever persons occupation, bank have confident that person will find the perfect banking solution. There some saving accounts like: -

Regular Saving Account


An easy-to-operate savings account that allows you to issue cheques, draw Demand Drafts and withdraw cash. Check up on your balances from the comfort of your home or office through Net Banking, Phone Banking and Mobile Banking. If you need money urgently then you can take money from the ATM machine. There are 1977 ATM centers across the country.

Saving plus Account


Introducing the best banking option for you with HDFC Bank Savings plus Account. Now you can get access to some of the finest banking facilities with HDFC Bank's Savings plus Account. All you have to do is maintain an Average Quarterly Balance of Rs. 10,000/-.

Saving Max Account


Welcome to a world of convenience. Presenting Savings Max account, loaded with maximum benefits to make your banking experience a pleasure. By maintaining an average quarterly balance of just Rs. 25,000/- you get a host of premium services from HDFC Bank absolutely free.

Senior Citizen Account


HDFC Bank appreciates your needs and endeavors, which is why, they present an account especially dedicated to customer, which like a dutiful child will help you fulfill your needs in the best manner possible. 18

No frills Account In an effort to make banking simpler and more accessible for customers, bank has introduced the 'No Frills' Savings Account, which offers customer all the basic banking facilities. Customer can even avail of services like Net Banking, Mobile banking free of cost. In this customer can put Zero Initial Pay-in and a Zero Balance account

Kids advantage account


Start saving for your child today and secure his/her future a sentence tells by the Hdfc bank. Open a Savings Account and transfer money every month into customers Kids Advantage Account and watch the savings grow as customers child grows. The accumulated savings in the Kids Advantage Account can over the years help in meeting customer child's needs. Main features and benefits of this account are as follow:-

Current accounts
HDFC Bank Current Account gives the power of inter-city banking with a single account and access to more than cities. From special cheques that get treated at par with local ones in any city where branch, faster collection of outstation cheques (payable at branch locations), free account to account funds transfer between HDFC Bank accounts to Free inter-city clearing of up to 100 lakhs per month, banks priority services have become the benchmark for banking efficiency. Supper saver facility

Safe deposit locker


A Safe Deposit Locker with HDFC Bank is the solution to persons fear. Located at select branches in cities all over the country, banks lockers ensure the safe keeping of valuables. Eligibility An individual (not minor), firms, limited company, associations, clubs, trusts, societies, etc may hire a locker.

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Loan Services
In todays competitive world every thing happens only with the help of money or through the money every person need money. But some time a person has not cash on hand at that time he needs lone either from any friend or from any financial institute. Lone dose not mean that only lower class person needs it but also upper class person it is needed. As per the requirement of the every person there are much type of loans are there in the HDFC bank.

Personal loan
A person has so many dreams but some time due to scarcity of money a dream cant be satisfy. So, here one solution for that person this is personal loan. From this he/she can fulfill their needs or requirement. It can be any thing either a dream of vacation or son/daughters admission to college or any wedding, so personal loan can be helpful in this entire requirement. As person ordered in the hotel for tea or coffee and it is immediately came fast, same over here any person want to get a personal loan with the nominal documents he can get the loan.

Home loan
HDFC Bank brings, HDFC home loans to doorstep. With over 30 years of experience, a dedicated team of experts and a complete package to meet all housing finance needs, HDFC Home Loans, help people realize dream.

Vehicles loan
Nowadays the life is being so fast, time value is becoming more important so to reach at the destination of any business related occasion or for a boy to reach college or any 20

where at the fix time there are so many requirement of vehicles. But every people have no capacity to purchase vehicles with cash so for that here in the HDFC bank vehicles loan is available. There are many types of vehicles loan.

CARD SERVICES
Credit cards Debit card Kisan Card. Prepaid card Prepaid Travel Card. Gift plus Cards Prepaid Gift Card. Food plus Cards Prepaid Food Plus card. Money plus Card The Corporate Payment card

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AWARDS

Dun & Bradstreet Bharathi Cement Corporate Awards 2012 NDTV Profit Business Leadership Awards 2012

Corporate Awards 2012 Winner in the banking category

NASSCOM CNBC- TV18 IT Innovation Best IT Driven Innovation in Banking Award (COMMERCIAL) The National Quality Excellence Awards Best Customer Service Result FE Best Bank Awards Skoch Financial Inclusion Awards 2013 DSCI Information Technology Award 2012 Businessworld Awards for Banking Excellence 2012 HT-Mars Customer Satisfaction Survey CSO Forum Information Technology Award 2012 The Economic Times CNBC TV18's India Best Banks and Financial Institutions Awards 2012 Mint-Aon Hewitt study on India's Best Managed Boards 2012 Forbes Asia IBA Banking Technology Awards 2011 HDFC Bank wins in 3 categories at FE Best Bank Awards Organisation of the Year - Security in Bank (2nd time in a row) - Security Leader of the Year (Banking) - Most tech-friendly Bank - Deal of the year (Rupee Bonds) Bank and Credit Card customer satisfaction Survey Best Organisation for Information Security Practice (2nd time in a row) ET Awards for Corporate Excellence Company of the Year 2012 Best Private sector Bank Our Bank among India's six best managed Boards 2012 Fab 50 Companies - Winning for the 6th year - Best Online Bank - Best use of Business Intelligence - Best Customer Relationship Initiative - Best Risk Management & Security 22

Initiative - Best use of Mobility Technology in Banking - Overall Best Bank Dun & Bradstreet Banking Awards 2012 - Best Private Sector Bank - Asset Quality - Private Sector - Retail Banking -Private Sector IDRBT Banking Technology Excellence Awards 2011-12 Asia Money 2012 Best Bank in 'IT for Operational Effectiveness' category Best Domestic Bank in India

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FINANCIAL STATEMENT ANALYSIS Meaning Of Finance


Finance is the Provide of money when is required Finance is the process of accumulated funds to productive funds to productive use. Finance has aptly been called the science of money.Finance may be defined as that administrative area or set of administrative functions in An organization which relate with the arrangement cash and credit, so that the organization objective as satisfactory as possible. May have the means to carry out its

Finance Function
Finance function is the procurement of funds and their effective utilization for Business. Establishing asset management politics. Determining the allocation of net profit. Establishing and controlling cash flows and outside financing. Deciding upon needs and sources of new outside financing. Checking upon financial performance.

Financial Analysis
Financial analysis is the process of evaluating the relationship between component parts of financial statements to obtain a better understanding of the firms position and performance Financial analysis is the identifying strength and weakness of the firm by properly establishing relationship between the items of balance sheet and the profit and loss account.

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Financial Statement
A financial statement is an organized collection of data according to logical and consistent accounting its purpose is to convey an understanding of some financial Aspects of a business firm. It may show a position at a movement of time as in the case of A balance sheet or may reveal a series of activity over a given period of times, as in the case of an income statement.

TYPES OF FINANCIAL STATEMENT


Income statement: - it explains what has happened to a business as a result of Operations between two balance sheet dates. Balance sheet: - it is a statement of financial position of a business at a specified Moment of time. Statement of retained earrings: - The term retained earning means the accumulated excess of earnings over losses and dividend. STEMENTS OF SHOWING CHANGES IN FINANCIAL POSITION Changes in the firms working capital Changes in the firms cash position Changes in the firms total financial position.

METHOD OR DEVICES OF FINANCIAL ANALYSIS


The analysis and interpretation of financial statement is used to determine the financial Position and results of operations as well. A number of methods or devices are used to Study the relationship between different statements. An effort is made to use those devices which clearly analyze the position of the enterprise. The following methods of analysis are generally used. Comparative statements. Income statement Common-size statements Trend analysis 25

Ratio

COMPARATIVE FINANCIAL STATEMENTS


COMPARATIVE STATEMENTS
The comparative statements are statements of the financial position of different periods of the time. Similarly comparative figures will indicate the trend and direction of financial position and operating results. The two comparative statements are Comparative income sheet Comparative balance sheet

Comparative Income Statement


The income statement gives the results of the operations of a business comparative income Statement gives an idea of the progress of a business over a period of time. The changes in absolute data in money values and percentages can be determined to analyze the profitability of the business. The comparative income statement has four columns, the first two columns give figures of various items for two years, and third and fourth columns are used to show increase or decrease in figure in absolute amounts and percentages respectively.

Comparative Balance Sheet


The comparative balance 3 sheet analysis is the study of the trend the same items, groups of tiers and computed items in two or more balance sheets of the same business enterprises on different dates. The changes in periodic balance sheet items reflect the conduct of the business. The changes can be observed by the comparison of the balance sheet at the beginning and at the comparative balance sheet the first two columns are for the data of original balance sheet. A third column is used to show

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increase and decrease4 in figures the fourth column may be added for giving percentages of Increased or decreases.

COMMON SIZE STATEMENT


The common size statement can be used to compare companies of different size. The comparison of figures in different periods is not useful because total figures may be affected by a number of factors. The common size statements, balances sheet and income statement are shown in analytical percentages. The common size statements are of two types, they are: Common size income statement Common size balance sheet

Common size Income Statement


The items in income statements can be shown as percentages of sales to show the relation of each item to sales. A significant relationship can be established between items of income statement and volume of sales increases to a considerable extent. Administrative and financial expenses may go up. In case the sales are declining the selling expenses should be reduced at once. So, a relationship is establishing between sale and other items in income statement and this relationship is help full in evaluating operating activities of the enterprise.

Common Size Balance Sheet


A statement in which balance sheet items are expresses as the ratio of each asset to total assets and the ratio of each liability is expresses as ratio of total liabilities is called common size balance sheet.

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OBJECTIVE OF FINANCIAL ANALYSIS


Accounting ratios calculated for a number of years of the trend of the change of position the ascertainment of trend helps in making estimate for

Interpretation Of The Ratios


The interpretation of ratios is an important factor. The inherent limitations of ratio analysis should be kept in mind while interpreting them. The interpretation of ratios can be made in the following ways.

Single Absolute Ratio


Generally speaking one amount draws conclusions when a single is considered in isolation. But single ratios may be studied in relation to certain thumb-rules, which are based upon well proven conventions.

Group Or Ratios
Ratios can be interpreted by calculating a group of related ratio. A single by other related additional ratios becomes more understandable and meaningful.

Historical Comparison
One of the easiest and most popular ways of evaluating the performance is to compare to present ratio with the past ratios is called comparison overtime, it gives an indication of the direction of the change and reflect whether the firms performance and financial position has improved detrained or remained constant over as period of time. Nancial statements. 28

These future ratios are compared with the actual ratios to find variance, if any such variance helping interpreting and taking corrective actions. The main objectives of financial analysis are to assess. The present and future earning capacity of the concern. The operational efficiency of the concern as a whole and of its various parts. The short term and long term solvency of the concern for the benefit of debenture holders and trade creditors. To compare the performance of the company with that of another company or of the same company with previous performance.

TYPES OF THE FINANCIAL ANALYSIS MAY BE


The nature of the analyst and the material used by him. The objective of analysis and The modus operandi of the analysis

Internal Analysis
The people who have assessed to the books of accounts make the internal analysis. They are members of the analysis. Analysis of the financial statement or other financial data for managerial is the internal type of analysis. The internal analyst can give more reliable result than the external analyst because every type of analysis. The internal type of analysis can give more reliable than the external analyst because every type of information is at his disposal.

External Analysis
It is made by those persons who arent connected with the enterprises they dont have the assess to the detailed record of the company and have to depend mostly on published statements such analysis is made by investors, credit agencies, agencies, government agencies and research scholars. 29

ACCORDING TO THE OBJECTIVE OF THE ANALYSIS Long Term Analysis


The analysis is made in order to study the long-term financial stability, solvency, profitability and earning capacity of a company. The purpose of making such type of analysis is to know whether in the long run the company will be able to earn a minimum amount, which will be sufficient to maintain a reasonable rate of return of the investment of the company and to meet it cot of capital. This type of analysis help the long term financial planning which essential which essential for the continued success of the company.

Short Term Analysis


This is made to determine the short-term solvency and liquidity of the company. The purpose of this analysis is to know whether in the short run a company will have adequate funds readily available to meet its short-term requirements and sufficient borrowing capacity to meet contingencies in the near future. This analysis is made with reference to items of current assets and current liabilities (working capital analysis) to have fairly sufficient knowledge about the companys position which may be helpful short-term financial planning.

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ACCORDING TO THE MODUS OPERAND OF THE ANALYSIS Horizontal Analysis


This analysis is made to review and analysis financial statements of a number of years and therefore based on financial data taken form several years. This is very useful for long-term analysis and planning.

Vertical Analysis
This analysis is made to review and analyze the financial statement of one particular year only.

Trend Analysis
The financial statement may be assigned by computing trend series of information. This method determines the direction upward or downward and involves the computation of the percentage relationship in each statement item bears to same item in the base year (base year=100). Generally, first year is taken as base year and trend ratios for another year are calculated based on base year. The method of trend analysis is useful analytical device since substitution of percentages for large amounts; the brevity and readability are achieved, however, trend analysis is not calculated for all of these items in financial statement. They are usually calculated for major items since the purpose is import and changes.

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RATIO
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 ratio that the financial statements can be analyzed more clearly and decisions made from such analysis. A ratio is a simple arithmetical expression of the relationship of one number to another. It may be defined as the indicated quotient of two mathematical expressions. According to accountants hand book by wixonkell and Bedford a ratio is an expression of the quantitative relationship between two numbers. According to kholer a ratio is the relation of the amount a to another expressed as the ratio of a to or a simple fraction integer, decimal, percentage. It is the process of critically examining in detail information given the financial statement. For the purpose of analysis individual items are studied their relationship with other related figures established, the data is sometime rearranged to have better understanding of the information with the help of different techniques or tools for the purpose. Analyzing financial statements is a process of evaluation relationship between component parts of financial statement to obtain better understanding of firms position and performanc

Current ratios
The current ratio is a very popular financial ratio it measures the ability of the firm to meet the current liabilities current asset gets converted into cash in the operational cycle of the firm and provide the funds needed to pay the current liabilities current assets includes cash, advances and prepaid expenses, current liabilities consists of loans and advances, trade creditors, accrued expenses and provisions.

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Current Ratio =

Current assets ---------------------Current liabilities

Quick Ratio
This ratio is also called acid test ratio establishes a relationship between quick or liquid assets and current liabilities an assets is liquid if it can be converted into cash immediately without a loss of value. Cash is the most liquid asset other liquid assets are debtors and bills receivables and marketable securities inventories are considered to be less liquid quick ratio is found by dividing the quick assets by total current liabilities. Quick assets --------------------Current liabilities

Quick ratio =

Quick assets liabilities)

= current assets inventory & prepaid expenses

Quick liabilities = current liability HDFC Bank over draft (if there in current

Absolute Liquid Ratio (Super Quick Ratio)


This ratio will give the exact amount, what are the resources they have, in terms of cash, from those only this will be calculated. Cash is the most liquid current. Cash is the common denominated to which all current assets can be reduced because other major liquid assets and inventory get eventually converted into cash,. Cash is both beginning and end of the transaction. It is the ratio of absolute liquid assets to current liabilities.

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Absolute liquid ratio =

Absolute liquid assets -------------------------Current Liabilities

Absolute liquid assets = cash at HDFC Bank + short term / temporary investments

Debt Equity Ratio


This ratio is calculated to measure the relative claims of out sides against the firms assets. This ratio indicates the relationship between the external equities (or) the outside funds and the Outside funds. And the internal equities (or) share holders funds. Debt equity ratio = External debt ----------------Internal debt

External debt = Internal debt =

borrowings, adj., heads by other liabilities, payable a/c share capital, reserves, deposits.

Profit Ability Ratio


This ratio expresses the relationship between operating profit and sales with the help of this ratio one ratio one can judge the managerial efficiency which many not be reflect the net profit ratio.

Gross Profit Ratio


The gross profit reflects the efficiency with management produces each unit of product. This ratio indicated the average spread between the cost of goods sold and sale revenue a high gross profit is a sign of good management Gross profit ------------------ x 100 Net sales

Gross profit ratio =

Gross profit = Net Sales cost of goods sold 34

Net sales

= total sales sales revenue

COMPARATIVE INCOME STATEMENT AS ON 31-03-2007 TO 31-032008.


(Rs.In crores)

PARTICULARS Net sales LESS:Cost of goods sold Gross Profit (A) LESS: Operating Expenses Selling& ADM expenses Total Operating Expenses(B) Operation Profit (A-B) Other Income LESS: Non Operating Total Income MISC. Expenses Depreciation Ebit LESS: Interest Ebit LESS: Tax profit for the year

2007 1000000 300000 700000 100000 100000 600000 ------35000 ------------565000 15000 540000 20000 520000

2008 1200000 200000 1000000 200000 200000 800000 -----55000 ------------745000 25000 715000 25000 690000

INC/DEC (value) 200000 -100000 300000 100000 100000 200000 20000

Change in % 20 -33.33 42.85 100 100 33.33 57.14

180000 10000 175000 5000 170000

31.85 66.66 32.40 25 32.69

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INTERPRETATION:
From the above income statement, it was observed that the net sales are increased from the previous year to current year i.e., from 100000 to 120000(20%) due to the increase of advertisement. Gross profit increased from 70,000 to 1,00,000 due to the decrease of cost of goods sold. Operation expenses are increased by 31.85% from the previous year due to the increase in operating profit. EBIT has increased by 31.85% from the precious year due to the increase in operation profit. The profit available to the share holders increased to Rs.1,70,000 i.e., 32.69 which shows satisfactory level of EPS.

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COMPARATIVE INCOME STATEMENT AS ON 31-03-2008 TO 31-03-2009.


(Rs.In crores)

2008 PARTICULARS Net sales LESS: Cost of goods sold Gross Profit (A) LESS:Oparating Expenses Selling& ADM Expenses Total Operating Expenses(B) Operation Profit (A-B) Other Income LESS: Non Operating Total Income MISC. Expenses Depreciation Ebit LESS: Interest Ebit LESS:Tax Profit for the years 1200000 200000 1000000 200000 200000 800000 ------55000 ----------745000 25000 715000 25000 690000

2009

INC/DEC (value) 340000 50000 290000 25000 25000 265000 -10000

Change in % 28.33 25 29 12.5 12.5 33.12 -18.18

1540000 250000 1290000 225000 225000 1065000 -------45000 ------------1020000 30000 990000 20000 970000

275000 5000 275000 -5000 280000

36.91 20 38.46 -20 40.57

INTERPRETATION:

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From the above income statement, it was observed that the net sales are increased from the previous year to current year i.e., from 1200000 to 1540000(28.33%) it is due to the revised sales policy of the HDFC Bank.

Gross profit increased from 10,00,000 to 12,90,000 al though the cost of goods sold increased. Operating expenses are increased to 2,25,000, but increased gross profit level covers the operation expenses. EBIT has increased by 36.91% from the precious year, which is sufficient to meet the interest and tax expenses. The profit available to the share holders increased to 2,80,000 i.e. by 40.57%

COMPARATIVE INCOME STATEMENT AS ON 31-03-2009 TO 31-03-2010.


(Rs.In crores)

38

2009 PARTICULARS Net sales LESS: Cost of goods sold Gross Profit (A) LESS: Operating Expenses Selling & ADM Expenses Total Operating Expenses(B) Operation Profit (A-B) Other Income Total Income LESS: Non Operating Total Income MISC. Expenses Depreciation Ebit LESS: Interest Ebit LESS: Tax Profit for the year 1540000 250000 1290000 225000 225000 1065000 ------------45000 ----------------1020000 30000 990000 20000 970000

2010

INC/DEC (value) 105000 -75000 -30000 25000 25000 -55000 125000 1135000 10000 1100000 55000 -5000 60000 -5000 65000

Change in % 6.8 -30 -2.32 11.11 11.11 -5.16 0 0 22.22 0 5.4 -16.66 6 -25 6.7

1435000 175000 1260000 250000 250000 1010000 125000 1135000 35000 1100000 25000 ---1075000 25000 1050000 15000 1035000

INTERPRETATION:
From the above income statement, it was observed that the net sales are decrease from the previous year to current year i.e., from RS.15,40,000 to 39

14,35,000 i.e,6.8% which indicates that the HDFC Bank is not invested its sales budjet in the right areas. Gross profit decreased from 1290000 to 12,60,000 due to the decrease of sales. Operating expences are increased to RS.250000. EBIT increased 5.4% from the precious year due to the increase in non operating income . The profit available to the shareholders increased to RS. 65,000 i.e. by 6.7%.

COMPARATIVE INCOME STATEMENT AS ON 31-03-2010 TO 31-03-2011.


(Rs.In crores)

40

2010 PARTICULARS Net sales LESS: Cost of goods sold Gross Profit (A) LESS: Operating Expenses Selling& ADM Expenses Total Operating Expenses(B) Operation Profit (A-B) Other Income Total Income LESS: Non Operating Total Income MISC. Expenses Depreciation Ebit LESS: Interest EBIT LESS: Tax Profit for the year 1435000 175000 1260000 250000 250000 1010000 125000 1135000 35000 1100000 25000 ---1075000 25000 1050000 15000 1035000

2011

INC/DEC (value) 215000 50000 165000 150000 150000 15000 425000 10000 430000 -5000 12500 422500 -5000 427500 15000 412500

Change in % 14.98 28.57 13 60 60 1.48 340 28.57 39 -20 0 39.30 -20 40.7 100 39.85

1650000 225000 1425000 400000 400000 1025000 550000 1575000 45000 1530000 20000 12500 1497500 20000 1477500 30000 1447500

INTERPRETATION:
From the above income statement, it was observed that the net sales are increased from the previous year to current year i.e., from 14,35,000 to 16,50,000 i.e.by 14.98% 41

Gross profit increased from 12,60,000 to RS 14,25,000 although the cost of goods sold increased to the some extent. Operating expenses are increased to RS.1,50,000 which is resulted by increase of selling and advertising. EBIT increased 39.30% from the precious year which is resulted by the increase of non operation income. The profit available to the shareholders increased to RS. 4,12,500 i.e.by 39.85%

COMPARATIVE INCOME STATEMENT AS ON 31-03-2011 TO 31-03-2012.


(Rs.In crores)

42

2011 PARTICULARS Net sales LESS: Cost of goods sold Gross Profit (A) LESS: Operating Expenses Selling & ADM Expenses Total Operating Expenses(B) Operation Profit (A-B) Other Income Total Income LESS: Non Operating Total Income MISC. Expenses Depreciation Ebit LESS: Interest Ebit LESS: Tax Profit for the year 1650000 225000 1425000 400000 400000 1025000 550000 1575000 45000 1530000 20000 12500 1497500 20000 1477500 30000 1447500

2012

INC/DEC (value) 50000 25000 625000 -150000 -150000 775000 10000 -675000 55000 620000 10000 7500 637500 5000 642500 5000 647500

Change in % 3 11.11 43.85 -37.5 -37.5 75.60 -1.8 -42.85 122.2 40.52 50 60 42.57 25 43.48 16.6 44.73

1700000 350000 250000 250000 250000 1800000 450000 2250000 100000 2150000 10000 5000 2135000 15000 2120000 25000 2095000

INTERPRETATION:
From the above income statement, it was observed that the net sales are increased from the previous year to current year i.e., from 16,50,000 to 17,00,000(3%). 43

Gross profit increased from 14,25,000 to 20,50,000 due to the huge increase in the sales of the society. Operating expenses are decreased to 1,50,000, which shows the efficiency of the accounts department of the society.. The operation profit of the HDFC Bank was increased by 42.57% from the previous year. The profit available to the shareholders increased 6,47,500 I.e. 44.73, which gives sufficient level of ESP.

COMPARATIVE BALANCE SHEET OF MARCH 31-03-2007 AND 31-03-2008.

liabilities Share capital Deposits Reserves

Year ending march 2007 100000 300000 200000 2008 152000 220000 80000 44

I/D Amount 52000 -80000 120000

I/D Percentage 52 -26.66 -60

Borrowing BILS Payable Profits Short term loans Total liabilities Assets Advances Investment Properties Stocks Receivable Cash@ Hand, HDFC Bank furniture Total assets

600000 800000 600000 --------2600000 200000 600000 200000 400000 400000 200000 600000 2600000

50000 20000 78000 85000 685000 78000 20000 85000 50000 220000 80000 152000 685000

-550000 -780000 -522000 85000 -1915000 -122000 -580000 -115000 -350000 -180000 -120000 -448000 -1915000

-91.66 -97.5 -87 100 -73.65 -61 -96.66 -57.5 -87.5 -45 -60 -74.66 -73.65

INTERPRETATION:
Deposits have been decreased by Rs. -80000 i.e., -22.66 %, this shows lack of confidence on the society and poor policies followed by them to mobilize the deposits. The advances have decreased by Rs. -122000 i.e., -61 % it reveals that the society is utilizing the finance for the other necessities. There has been decrease in properties by Rs.-115000 i.e.,-57.5 %, it means that society is not improving its liquidity position. Profits decreased by Rs.-52200 i.e.-87% over the precious year. 45

Cash & HDFC Bank balance fallen down by Rs.-120000 i.e.-60%, this might be due to obligations at the end of the year.

COMPARATIVE BALANCE SHEET OF MARCH 31-03-2008 AND 31-03-2009.

liabilities Share capital Deposits Reserves Borrowing BILS Payable Profits Short term loans Total liabilities Assets Advances

Year ending march 2008 152000 220000 80000 50000 20000 78000 85000 685000 2009 150000 200000 78000 65000 25000 80000 100000 698000

I/D Amount -2000 -20000 -2000 15000 5000 2000 15000 13000

I/D Percentage -1.31 -9.09 -2.5 30 2.5 2.56 17.64 1.89

78000

80000 46

2000

2.56

Investment Properties Stocks Receivable Cash@ Hand, HDFC Bank furniture Total assets

20000 85000 50000 220000 80000 152000 685000

100000 150000 200000 78000 90000 ---------698000

80000 65000 150000 -142000 1000 -152000 13000

400 76.47 300 -64.54 12.5 -100 1.89

INTERPRETATION:
The society is earning satisfactory level i.e., 2.56% it reveals that the society is properly using its resources. Reserves has decreased by Rs.-2000 i.e., -2.5% it says that the HDFC Bank utilizing them for issuing the advances to the society. Cash & HDFC Bank balance have increased by Rs 10000 I,e,12.5% from the previous year to strengthen the liquidity position of the HDFC Bank. The deposits has decreased by Rs.-20000 i.e.,-9,09% from the precious year & advances increased by Rs.2000 i.e.,%. So that the society can generate more income from interest. The overall financial performance growth rs13000 i.e,,1.89% show, it shows improved performance of the HDFC Bank than the previous year.

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COMPARATIVE BALANCE SHEET OF MARCH 31-03-2009 AND 31-03-2010.

Liabilities Share capital Deposits Reserves Borrowing BILS Payable Profits Short term loans Total liabilities Assets Advances Investment Properties Stocks Receivable Cash@ Hand, HDFC Bank Total assets

Year ending march 2009 150000 200000 78000 65000 25000 80000 100000 698000 80000 100000 150000 200000 78000 90000 698000 2010 150000 220000 100000 75000 35000 85000 0 665000 85000 35000 75000 150000 220000 100000 665000

I/d Amount 0 20000 22000 10000 10000 5000 -100000 33000 5000 -65000 -75000 -50000 142000 10000 33000

I/d Percentage 0 10 28.20 15.38 40 6.25 -100 -4.72 6.55 -65 -50 -25 182.05 11.11 16.76

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INTERPRETATION:
The borrowings have shown a increase of Rs.10000 i.e.,15.38 % its not good for the society, why because the society should pay more and more profits in the form of interest to the creditors. The absolute liquid assets (cash & HDFC Bank balance) has registered a growth of R.s10000 I,e.11.11% which shows the healthy credit worthiness position of the HDFC Bank. The share capital, reserves has shown a favorable increase than the previous year. But the profits have shown a unfavorable increase than the previous year. The overall financial position of the society has grown by 33000 i.e.16.76% than the previous year.

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COMPARATIVE BALANCE SHEET OF MARCH 31-03-2010 AND 31-03-2011.

liabilities Share capital Deposits Reserves Borrowing BILS Payable Profits Total liabilities Assets Advances Investment Properties Stocks Receivable Cash in hand &HDFC Bank Total assets

Year ending march 2010 150000 220000 100000 75000 35000 58000 665000 85000 35000 75000 150000 220000 100000 665000 2011 600000 330000 200000 150000 50000 105000 1435000 370000 400000 45000 170000 200000 250000 1435000

I/D Amount 450000 110000 100000 15000 15000 20000 770000 285000 365000 -30000 20000 -20000 150000 770000

I/D percentage 300 50 100 100 42.85 23.52 115.78 335.29 1042.85 -20 13.33 9.09 150 115.78

50

INTERPRETATION:
The borrowings have shown a tremendous increase of Rs. 75000 i.e.50%, its not good for the society, why because the society, why because the society should pay more and more profits in the form of interest to the creditors. The absolute liquid assets (cash & HDFC Bank balance) has registered a growth of Rs.150000 i.e,, 150% which shows the society is maintaining sufficient finance for the future working capital requirements. The share capital, reserves has shown of favorable increase than the precious year. But the profit has shown a unfavorable increase than the precious year, it means the HDFC Bank is not utilizing its funds for improving the profitability position. the overall financial position of the society has grown by Rs 770000 i.e.115.78% than the precious year.

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COMPARATIVE BALANCE SHEET OF MARCH 31-03-2011 AND 31-03-2012.

liabilities Share capital Deposits Reserves Borrowing BILS Payable Profits Total liabilities Assets Advances Investment Properties Stocks Receivable Cash in hand &HDFC Bank Total assets

Year ending march 2011 600000 330000 200000 150000 50000 105000 1435000 370000 400000 45000 170000 200000 250000 1435000 2012 800000 222000 300000 200000 45000 130000 1697000 270000 600000 25000 110000 90000 602000 1697000

I/D Amount 200000 108000 100000 50000 -5000 25000 262000 -100000 200000 -20000 -60000 -110000 352000 262000

I/D percentage 33.33 -32.72 50 25 -10 23.80 18.25 -27 50 -44.44 -35.29 -55 140.8 18.25

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INTERPRETATION:
The borrowings have shown an increase of Rs.50000 i.e.25% its not good for the society why because the society should pay more and more profits in the form of interest to the debtors. The absolute liquid assets (cash & HDFC Bank balance) has registered a growth of Rs.352000 i.e.140.8% indicates the healthy liquidity position of the HDFC Bank. The share capital, reserves has shown a favorable increase than the previous year. But the deposits have shown a unfavorable decrease than the precious year. The overall financial position of the society has grown by Rs.262000 i.e.18.25% than the precious year.

LIQUIDITY OR SHORT TERM SOLVENCY


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RATIOS: CURRENT RATIOS: FORMULA: Current ratio = Current assets -----------------------Current liabilities CURRENT LIABILITIES 357773744.9 299256401.6 307197938.3 223475367.9 244855617.6 286511814.06 CURRENT RATIO 9.15 11.34 10.93 10.55 12.45 11

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 Average

CURRENT ASSETS 3273084438.4 3393212856.5 3357872071.3 2357783278.8 3047836429.1 15429789074.1

14 12 10 8 6 4 2 0 2007-08 2008-09 2009-10 2010-11 2011-12 avrage 9.15 11.34 10.93 10.55 12.45 11

INTERPRETATION: From the above calculated current ratio of HDFC it is observed that the current ratios of the HDFC Bank is 9.15 in 2007-08, and increased to 12.45 in the year 2011-12.and the HDFC Bank is maintaining the average current ratio as around 11, is more than the standard of current ratio

QUICK RATIO:
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FORMULA: Quick ratio = Quick assets ----------------------Current liabilities

Quick assets liabilities) YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 Average

= Current assets inventory & prepaid expenses

Quick liabilities = Current liability HDFC Bank over draft (if there in current

QUICK ASSETS 3272684438.4 3191362856.5 3057672071.3 2257633278.8 3023666429.1 2960963814.1 1

CURRENT LIABILITIES 357773744.9 299256401.6 307197938.3 223475367.9 244855617.6 286511814.06

QUICK RATIO 9.14 10.67 9.95 10.10 12.34 10.33

14 12 10 8 6 4 2 0 2007-08 2008-09 2009-10 2010-11 2011-12 average 9.14 10.67 9.95 10.1 12.34 10.33

INTERPRETATION: From the above calculated quick ratio of HDFC it is observed that the quick ratios of the HDFC Bank are 9.14 in 2007-08, and increased to 12.34 in the year 55

2011-12. and the HDFC Bank is maintaining the average quick ratio as around 10.33, which is more than the standard of current ratio.

ABSOLUTE LIQUID RATIO (SUPER QUICK RATIO):


FORMULA: Absolute liquid assets ----------------------------Current Liabilities Absolute liquid assets = cash at HDFC Bank + short term / temporary investments Absolute liquid ratio = YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 Average ABSOLUTE LIQUID ASSETS 112462919.4 89066055.3 130859505.9 195511154.3 378889599.8 181357846.94 CURRENT LIABILITIES 357773744.9 299356401.7 307197938.3 223475367.9 244855617.6 28651181.48 ABSOLUTE RATIO 0.314 0.297 0.425 0.874 1.547 0.6914

1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2007-08 2008-09 2009-10 2010-11 2011-12 average 0.314 0.297 0.425 0.874 1.547 0.6914

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INTERPRETATION: From the above calculated absolute liquid ratio of HDFC it is observed that the absolute ratio of the HDFC Bank is 0.314 in 2007-08, and increased to 1.547 in the year 2011-12. And the HDFC Bank is maintaining the average absolute ratio as around 0.6914, which is more than the standard of current ratio.

DEBT-EQUITY RATIO:
FORMULA: External debt Debt equity ratio = -------------------Internal debt External debt = borrowings, adj., Heads by other liabilities, payable a/c. Internal debt = share capital, reserves, deposits. EXTERNAL DEBT 4198113121.1 4275228374.2 2254253674.1 1127983284.7 1747228272.3 2720561345.48 INTERNAL DEBT 1811302135.5 1975170670.3 2277547698.0 2 3115582972.7 30545388936. 9 1886028482.6 8 DEBT EQUITY 2.317 2.164 0.989 0.362 0.572 1.44 YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 Average

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2.5 2 1.5 1 0.5 0 2007-08 2008-09 2009-10 2010-11 2011-12 avrage 2.317 2.164 0.989 0.362 0.572 1.44

INTERPRETATION: From the above calculated debt equity ratio of HDFC it is observed that the debt equity ratio of the HDFC Bank is 2.317 in 2007-08, and decreased to 0.572 in the year 2011-12. and the HDFC Bank is maintaining the average debt equity ratio as around 1.44, which is more than the standard of debt-equity ratio.

PROFIT ABILITY RATIOS:


GROSS PROFIT RATIO: FORMULA: Gross profit Gross profit ratio = ------------------- x 100 Net sales Gross profit = net sales - Cost of goods sold Net sales YEAR 2007-08 2008-09 2009-10 2010-11 2011-12 Average = Total sales - sales revenue GROSS PROFIT 8381547.75 8605417.96 9373324.56 12823215.74 33424156.36 14521532.86 NET SALES 3963505421.56 4239867264.45 5358043483.07 8868340185.5 10577061148.7 6601363500.6 GROSS PROFIT RATIO 0.211 0.202 0.174 0.144 0.316 0.002

58

0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2007-08 2008-09 2009-10 2010-11 2011-12 average 0.211 0.202 0.174 0.144 0.316 0.002

INTERPRETATION: The gross profit ratio of the HDFC Bank is 0.211 in 2007-08, and decreased to 0.202 in the year 2007-08. And increased to 0.316 in the year 2011-12. And the HDFC Bank is maintaining the working capital turnover ratio as averagely around 0.002.

FINDINGS
From the project study the following conclusions are drawn. The HDFC Bank is earning satisfactory level i.e., 2.56% The overall financial performance growth rs13000 i.e,,1.89% The absolute liquid assets (cash & HDFC Bank balance) has registered a growth of R.s10000 I,e.11.11% which shows the healthy credit worthiness position of the HDFC Bank. Gross profit increased from 70,000 to 1,00,000 due to the decrease of cost of goods sold. The profit available to the shareholders increased to 39.85% The calculated current ratio of HDFC it is observed that the current ratios of the HDFC Bank is 9.15 in 2007-08, and increased to 12.45 in the year 201112. 59

The calculated of HDFC it is observed that the quick ratios of the HDFC Bank is 9.14 in 2007-08, and increased to 10.33 in the year 2011-12 The calculated of HDFC it is observed that the absolute ratio of the HDFC Bank is 0.314 in 2007-08, and increased to 1.547 in the year 2011-12. The above calculated of HDFC it is observed that the debt equity ratio of the HDFC Bank is 2.317 in 2007-08, and decreased to 0.572 in the year 2011-12 The gross profit ratio of the HDFC Bank is 0.211 in 2007-08, and decreased to increased to 0.316 in the year 2011-12.

CONCLUSIONS
The HDFC Bank is maintaining the current ratio above, then the standard during the study period. The HDFC Bank is not utilizing the capital funds in fixed assets. The HDFC Bank is investing the huge funds in the current assets which leads to idle funds. The long term solvency position of the HDFC Bank is not satisfactory. The profitability position of the HDFC Bank is not satisfactory during the study period.

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SUGGESTIONS
To increase the profit of HDFC Bank, HDFC Bank should decrease their operating expenses and increase their income The HDFC Bank should change the capital structure in order to strengthen the long term solvency position of the HDFC Bank. The HDFC Bank should try to reduce the operating and non operating expenses in order to increase the profitability position of the HDFC Bank. The current ratio of the HDFC Bank is very high in comparison with the general rule. It indicates that the HDFC Bank holds more current assets than required. It should reduce it, so that there will profitable use of this amount. Unnecessarily much amount has been blocked in current assets, HDFC Bank should take necessary steps to make productive use of this amount.

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BIBLIOGRAPHY
1. M.Y.KHAN & P.K.JAIN, Financial Management, Tata McGraw Hill Publishing company Ltd. New Delhi-1993. 2. J.D. AGARWAL, Accounting for Financial Analysis, Indian institute of Finance, New Delhi1993. 3. PRASANNA CHANDRA, The investment Game-How to Win, Tata McGraw Hill Publishing company 62

Ltd.NewDelhi-1994. 4. Annual reports of W.D.C.C.B.

WEBSITE:
www.hyderabad.dccbap.orgs

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