Divya Final Final

A STUDY ON FINANCE FUNCTION OF BANK WITH REFERENCE TO HDFC BANK,
GONDIA BRANCH
INDEX
1. Introduction 02
2. Company profile 14
3. Research Methodology 19
A. Problem definition 20
B. Collection of data 21
C. Objectives of the study 23
D. Hypothesis 25
E. Scope of the study 27
F. Limitation of the study (research boundaries) 29
4. Data Analysis 31
5. Findings 42
6. Conclusion 44
7. Recommendation & suggestions 46
8. Bibliography 48
9.Annexure 50
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Introduction
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Introduction Of Financial Analysis:-
The process of evaluating businesses, budgets and other finance related

entities to determine their suitability for investment. Typically, Financial analysis
is used to analyze whether an entity is stable, solvent, Liquid, or profitable enough
to be invested in. When looking at a specific company, the financial analyst will
often focus on the income statement, balance sheet, and cash flow statement. In
addition, one key area of financial analysis involves extrapolating the companys
past performance into an estimate of the companys future performance. Financial
Analysis refers to assessment of a business to deal with the planning, budgeting,
monitoring, forecasting, and improving of all financial details within an
organization.
Financial statement analysis is improving for different reasons:
1.Holding of share
Shareholders are the owners of the company. Time and again, they may have to
take decisions whether they have to continue with the holdings of the companys
share or sell them out. The financial statement analysis is important as it provides
meaningful information to the shareholder in taking such decisions.
2. Decisions and Plans
The management of the company is responsible for taking decision and

formulating plans and policies for the future. They, therefore, always need to
evaluate its performance and effectiveness of their action to realize the companys
goal in the past. For that purpose, financial statement analysis is important to the
companys management.
3. Extension of credit
The creditors are the providers of loan capital to the company. Therefore they may
have to take decision as to whether they have to extent their loans to the company
and demand for higher interest rates.
4. Investment Decision
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The prospective investors are those who have surplus capital to invest in some
profitable opportunities. Therefore, they often have to decide whether to invest
their capital in the companys share. The financial statements analysis is important
to them because they can obtain useful information for their investment decision
making purpose.
Financial Statements
Financial statements are usually the final output of a company &accounting

operations. These statement contains information relating to the revenues,
expenses, assets, liabilities and relating earning of the business. Business owners
often pay close attention to this information since the statements can provides
detailed information about the company &operational performance. Many business
owners and managers use specific analysis tools to closely review their company
&financial statements for making purpose.
Financial Ratios
A traditional financial statements analysis tool is financial ratios. These ratios take
information from the company &financial statements and calculates economic
indicator for comparison to another company or the industry standard. Financial
ratio includes liquidity, asset turnover,financial leverage and profitability
calculations. Liquidity ratios calculate the company & ability to meet short term
financial obligations. Assets turnover ratios indicate how well the company uses its
assets to generate profits. Financial leverages ratio calculates the long terms
solvency of a company. Profitability ratios help companies determine how much
profit they are generating from the sale of various goods or services.
Horizontal Analysis
A horizontal financial statements analysis compares current financial statements to

a previous year &financial information. Company often conduct this analysis by
putting several year of financial statements in a side by side comparison format.
This enables business owners and managers to review the same months over
several year to determinate if revenues, expenses, assets or liability have increased,
decrease or stayed the same. Companies can also use a horizontal analysis to
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compare changes in doller amounts or a percentage changes when comparing

financial statements.
Vertical Analysis
A vertical financial statements analysis is conducted using common size financial

statements. A common size financial statement shows each item on a financial
statement in a percentages figure for each statements line item. A vertical analysis
gives manager a different option for reviewing financial information; manager may
be more comfortable looking at percentages rather than dollar amounts. The
percentages figure represents how individual line item amounts compare to the
aggregate total of the financial statements. For examples : business owners or
manager may wish to know what percentages office supplies were out of the total
expenses reported on May income statements. A common size statements would
divide May &total office supplies expense by the total listed on May & income
statements. This percentage is then listed where the office supplies expenses
amount would be on the financial statements.
Trend Percentage Analysis
A trends percentages analysis is an enhanced trends horizontal analysis technique.

Trend percentages analyses help companies identify consistent revenues or
expenses from accounting periods. These trends can help mangers make business
decision regarding future operations. Companies will use a specific financial
statement as a base year for comparing all future financial statements. Changes for
each future time period are expressed as a percentage when compared to the base
financial statements. Companies can conduct a trend percentages analysis at
various time of the year or use different financial statements as the base during this
comparison process.
Financial statement
Financial statements are summaries of the operating, Financing, and investment

activities of a business. financial statements should provide information useful to
both investors and creditors in making credit, investments, and creditors can use
these statements to predict, compare, and evaluate the amounts, timing, and
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uncertainty of potential cash flows. In other words, financial statement provides the
information needed to assess a company's future earnings and therefore the cash
flows expected to result from those earnings.
Financial statements are a collection of reports about an organizations financial

results and condition. They are useful for the following reasons:
To determine the ability of a business to generates cash, and the sources and
use of that cash.
To determine whether a business has the capability to pay back is debts.
To track financial results on a trend line to spot any looming profitability
issues.
To derive financial ratios from the statements that can indicates the
conditions of the business.
To investigate the detail of a certain business transaction, as outlined in the
disclosure that company the statements.
There are three basic financial statements
Balance Sheet
Income Statements
Cash flow Statements
Balance Sheet:-
Financial statements are used to provides insight into a companys assets and
debts at a particular point in time. Information about the companys
shareholder equity is included as well. Typically, a company lists its assets on
the left side of the balance sheet and its debts and liabilities on the right.
Sometimes, However a balance sheet has assets listed at the top, debts in the
middle, and shareholders equity at the bottom.
Income Statements:-
Income financial statements present information concerning the revenues

earned by a company in a specified time period. Income statements also show
the companys expenses in attaining the income and shareholder earning per
share. At the bottom of the income statements, a total of the amounts earned or
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lost in included. Often, Income statements provide a record of revenues over a

years time.
Cash Flow statements:-
Cash-flow financial statements provide a look at the movements of cash in

and out of a company. These financial statements include information from
operating, investing, and financing activities. The cash flow statements can be
important in determining whether or not a company has enough cash to pay its
bills, handle expenses, and acquires assets. At the bottom of a cash-flow
statement, the net cash increase or decrease can be found.
Features of Financial Statement
Understandability -The information must be readily understandable to users of

the financial statements.
Relevance - The information must be relevant to the need of the users, which is the
case when the information influences the economic decision of users. This may
involves reporting particularly relevant information or information whose omission
or misstatements could influences the economic decisions users.
Reliability- The information must be free of material error and bias, and not
misleading. Thus, the information should faithfully represent transaction and other
events, reflect the underlying substance of event, and prudently represents
estimates and uncertainties through proper disclosure.
SWOT Of HDFC Banks:-
Strengths :-
Superior customer services vs. c

Great brands images.
Products have required accreditation.
High degree of satisfaction.
Good place to work.
Lower response time with efficient and effective service.
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Dedicates workforce aiming at making a long-term careen in the field.

Right strategy for the right product.
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Weakness :
Some gaps in range for certain sectors.

Customers services staff need training
Processes and system, etc.
Management covers insufficient
Sectoral growth is constraints by low unemployment levels and
competition for staff.
Opportunities:
Profit margins will be good.

Could extend to overseas broadly
New specialist application
Could seek better customer deals.
Fast-track career development opportunities on an industry-wide
Sectoral growth is constraints by low unemployment levels and competition
for staff.
Threats:
Legislation could impact.

Great risk involve
Very high competition prevailing in the industry.
Vulnerable to reactive attack by major competitors.
Lack of infrastructure in rural areas could constrain investment.
High volume/low cost market is intensity competitive.
Competitor
Axis bank
ICICI Bank
City Union
Bank
Development Credit Bank Ltd
Federal bank Ltd
Indusland Bank Ltd
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Kotak Mahindra Bank Ltd.

Yes Bank Ltd
Karnataka Bank Ltd
Laxmi Vilas Bank Ltd
South Indian Bank Ltd.
Jammu Kashmir Bank Ltd
Company Profile
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Company Profile
HDFC BANK
HDFC Bank limited was incorporated in August 1994. It was promoted by

Housing development Finance corporation Limited.(HDFC), Indias largest
housing finance company. It was among the first companies to receive an in
principle approval from the Reserve Bank India (RBI)to set up a bank in the
private sector. The bank started operation as a scheduled commercial bank in
January1995 under the RBIs liberalization policies. On 26 feb 2000, Times Bank
Limited owned by The Times Group (Bennett, Coleman & Co,) was merged with
HDFC Bank Ltd. This was the first merger of two private bank in India.
Shareholder of Time Bank received I share of HDFC Bank for every 5.75 shares of
Times Bank. On 23 May 2008, HDFC Bank acquired Centurion Bank
OfPunjabtaking its total branches to more than 1,000. The amalgamated bank
emerged with a base of about Rs.1, 22,000crore and net advances of about Rs.89,
000crore. The balance sheet size of the combined entity is more than Rs.1,
63,000crore.
Times Bank Amalgamation :
In a milestone transaction in the Indian banking industry, Times Bank Limited

(another new private sector bank promoted by Bennett, Coleman & CO./Times
Group)was merged with HDFC Bank Ltd., effective Feb 26, 2000. As per the
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scheme of amalgamation approved by the shareholder of both banks and the

Reserve Bank of India, Shareholder of Times bank received I share of HDFC
Bank for every 5.75 shares of Times Bank. The acquisition added significant
values to HDFC Bank in terms of increased branch network, expended geographic
reach, Enhanced customer base, skilled manpower and the opportunity to cross-sell
and leverage alternative delivery channels.
BUSINESSFOCUS
HDFC Banks mission is to be a World Class Indian Bank. The objectives is to

build sound customer franchises across distinct businesses so as to be the preferred
provider of banking services for target retail and wholesale customer segments,
and to achieve healthy growth profitability, consistence with the banks risk
appetite. The bank is committed to maintain the highest level of ethical standards,
professional integrity, corporate governance and regulatory compliance. HDFC
Banks business philosophy is best on for core values:
Operational Excellence,
Customer Focus,
CM
Product Leadership Vasudev
People
MD
Pandit Key
Palande Executive Aditya
puri
Director
Renu
Karnad
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Board Of Directors
Chairman - CM Vasudev
Managing Director - AdityaPuri
RenuKarnad
PanditPalande
Director -Partho S Datta
Bobby Parikh
Anami N Roy
Additional Director -KekiMistry
Executive Director - Harish Engineer
PareshSukthankar
Company Secretary - Sanjay Dongre
HDFC Bank Offers a wide range of commercial and transactional banking

services treasury products to wholesale and retail customers. The bank has three
key business segments:
Wholesale Banking Services-
The banks target market ranges from large, blue-chip manufacturing companies in
the Indian corporate to small and mid-sized corporate and agree-based businesses.
Retail Banking Service
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The objectives 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.
Treasury
Within this business, the bank has three main products areas - Foreign
Exchange and Derivatives, Local Currency Money Market & Debt Securities, and
Equities. The Treasury business is responsible for managing the returns and market
risk on this investment portfolio.
HDFC Securities (HCL) and HDB financial Service (HDBFSL) are its
subsidiaries.
HDFC Bank
HDFC Mutual Fund
HDFC Standard Life Insurance Company
HDFC Realty
HDFC Chubb General Insurance Company Limited
Intel Net Global services Limited.
Credit Information Bureau (India ) Limited
Other Company Co-Promoted By HDFC
HDFC Trustee Company Ltd
GRUH Finance Ltd
HDFC Development Ltd
HDFC Venture Capital Ltd
HDFC Ventures Trustee Company Ltd
HDFC Securities Ltd
HDFC Holding Ltd
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Home Loan Services India Pvt. Ltd
Services Offered By theCompany :
Personal Banking
Accounts & Deposits

Loans
Cards
Forex
Investments & insurances
NRI Banking
Accounts & Deposits

Remittances
Investments & Insurances Loans Payment Service
Wholesale Banking
Corporate
Small and Medium Enterprises
Financial Institutions & Trusts
Government Sector
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Research Methodology
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Research Methodology
Research design is a formal plan of action for a research project. Research design
help researchers to layout their research questions, methodologies, implementation,
procedures and data collection and analysis for the conduct of a research project.
Generally there are three types of research design quantitative design, qualitative
design and mixed methods design. Research design is a decision making process.
During the decision making process, the researcher should choose from many
design alternatives and consider over the trade-offs of each approach and decide
the best possible solution. Generally speaking, the research design decisions are
influenced by the questions the investigator is trying to answer, by the resource
such time, trained personnel and money that the researcher have at hand, by the
characteristics of the research sites, and also by the researchers personal
preferences.
A research is a logical and a systematic plan prepared for directing a
research study. It specifies the objectives of the study, methodology and technique
to be adopted for achieving the objective. It constraints the blue print for the
collection, measurement and analysis of the data.
A research design is the arrangement of condition for collection and analysis
of data in a manner that aims to combine relevance to the research purpose with
economy in procedure.
Statement of the Problem
The ultimate objective of any organization is to maximize the gains.

Hence it is essentially required for every bank to make the proper financial analysis
of the performance to get the better understanding of whether they are achieving
their goals or not. Hence it is proposed to make the analysis of bank during the last
years to see the financial performance of the bank. Hence the study is proposed.
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Ratio Analysis and Interpretation
Ratio Analysis of HDFC Bank
Ratio Analysis is the process of determining and interpreting numerical

relationship between figures of the financial statements. Ratio Analysis is the
common sited from of analysis, which deals with each and every aspects of
working capital management. The Technique of ratio analysis is used for
measuring the liquidity or working capital position of a firm.
Advantages of Ratio Analysis
Simplifies Finance Statement: - It simplifies the comprehension of

financial statements. Ratios tell the whole story of changes in the
financial condition of the business.
Facilities Inter-Firm Comparison: - It provides data for inter firms
comparison. Ratio highlights the factors associated with successful
and unsuccessful firm.
Help in Planning: - It helps in planning and forecasting. Ratio can
assist management, in its basic function of forecasting.
Make Inter-firm Comparison Possible: - Ratio analysis also make
possible comparison of the performance of the different division of
the firm. The ratios are helped in deciding about the efficiency or
otherwise in the past likely performance of the future.
Help in Investment Decision: - It helps in investment decision in the
case of investors and lending decision in the case of bankers etc.
Problem Definition
Limitations of Financial Statements Analysis
1. Ratio analysis using financial statements includes accounting, stock market, and
management related limitation. These limits live analysts with remaining questions
about the company.
2. First of all, ratio analysis is hampered by potential l limitations with accounting

and the data in the financial statements themselves. This can be includes errors as
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well as accounting mismanagement, which involves distorting the raw data using
to derive financial ratios. While accounting measures may have more external
standards and over sides than many other ways of benchmarking companies, this is
still a limit. Ratio analysis using financial statements as a tool for performing stock
valuation can be limited as well.
3. At the management and investor level, ratio analysis using financial statements
can also leave out a number of important aspects of a firms success, such as key
intangible, like brand, relationship, skills, culture. These are primary drivers of
success over the longer term even though they are absent from conventional
financial statements.
4. Other disadvantages of this type of analysis are that if used alone it can present
an overly simplistic view of the company by distilling a great deal of information
into a single no or series of numbers
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Objectives Of The Study
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OBJECTIVE OF THE STUDY
To study the various financial statements like balance sheet and profit and
loss statement, etc. of bank.
To analysis the financial statement to evaluate the performance of the bank
during the proposed period.
Studying the importance of housing,Demand for housing and house finance
in India.
To analysis the trends in housing finance by LICHFL & HDFC.
To evaluate the impact of tax consideration on housing finance with respect
to LICHFL & HDFC.
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Hypothesis of the Study

Promotional policies of bank influence the Buyers decision of
insurance.
Perception of brands influences the buyers decision of home loans.
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Scope of the study
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Scope of the study:-
The study of financial ration will help to us compare the financial health of
HDFC banks.
The study will help to analyze the financial position of the HDFC bank.
The study is used to analyze whether an entity is stable, solvent, liquid, or
profitable enough to be invested in.
The study will helps in planning and forecasting.
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Limitation Of The Study
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Limitation:-
Time: - The research is this project is limited to the time span 5 years (2010
to 2015)
All the ratio of the study may not be sufficient for analysis as this study will
include only limited number of the ratios for analysis.
Geographical area: - The research in this project is limited to Gondia city.
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Data Analysis &

Interpretation
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Theoretical Perspective
Quick Ratio Formula| Acid Test Ratio| Acid Ratio| Liquidity Ratio
The quick ratio formula matches the most easily liquidated portion of current assets
with current liabilities. The intent of this ration is to see if a business has sufficient assets
that are immediately convertible to cash to pay its bills. The key elements of current
assets that are included in the quick ratio are cash, marketable securities, and account
receivable. Inventory is not included in the quick ratio, since it can be quite difficult to
sell off in the short term. Because of the exclusion of inventory from the formula, the
quick ratio is a better indicator than the current ratio of the ability of a company to pay its
obligation.
To calculate the quick ratio, summarize cash, marketable securities and trade receivable,
and divide by current liabilities. Do not include in the numerator any excessively old
receivable trhat are not likely to be paid. The formula is:
Cash + Marketable securities + Accounts Receivable
Current Liabilities
Debts to Equity Ratio
The debt to equity ratio of a business is closely monitored by the leaders and creditors of
the company, since it can provide early warning that an organization is so overwhelmed
by debt that it is unable to meet its payment obligation. This is also a funding issue. For
example, the owner of a business may not want to contribute any more cash to the
company, so they acquire more debt to address the cash shortfall. Or, a company may use
debt to buy back shares, thereby increasing the return on investments to the remaining
shareholder.
Whatever the reason for debt usages, the outcome can be catastrophic, if corporate cash
flows are not sufficient to make ongoing debt payments. This is a concern to lenders
whose loans may not be paid back. Suppliers are also concerned about the ratio for the
same reason. A leader can protect its interest by improving collateral requirements or
restrictive covenants; suppliers usually offer credit its payment obligation to them.
To calculate the debt to equity ratio, simply divide total debt by equity. In this
calculation, the debt figure should also include all leases. The formula is:
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Debt Equity ratio = Total liabilities

Total Equity
Cash Ratio
The cash ratio compares the most liquid assets to current liabilities, to determine if
a company can meet its short-term obligation. It is the most conservative of all the
liquidity measurements, since it excludes inventory (which is included in the current
ratio) and account receivable (which is included in the quick ratio)
The formula for cash ratio is:-
Cash + Cash equivalents
Current Liabilities
Returns on Equity Ratio
The return on equity ratio (also known as the return on net worth) reveals the
amount of returns earned by investor on their investment in business. This return can be
improved when a business buys back its own stock from investors, or by using more debt
and less equity its operation.
The use of debt to buy back stock and thereby increase the return on equity
can backfire. The new debt brings with it a new fixed expense in the form of interest
payments. If sales decline, this added cost of debt could trigger a step decline in profits
that could end in bankruptcy. Thus, a business that relies too much on debt to enhance its
shareholder returns may find itself in significant financial trouble.
To calculate the return on equity, simply divide net income by the total amount of equity.
The formula is:
Net Income
Equity
Earnings per Share Ratio |EPS Ratio
The earning per share ratio (EPS Ratio) measure the amount of a companys net income
that is theoretically available for payments to the holder of its common stock. A company
with high earning per ratio is capable of generating a significant dividend for investors, or
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it may slow the funds back into its business for more growth; in either case, a high ratio
indicates a potentially worthwhile investment, depending on the market price of the
stock.
If an investor is primarily interested in a steady source of income, the EPS ratio is useful
for estimating the amount of room that a company has for increasing its existing dividend
amount. However, in many cases simply reviewing a companys history of making
changes to its dividend is a better indicator of the actual size of future dividends.
It is very worthwhile to track a companys on earnings per share ratio on a line. If

the trend is positive, then the company is either generating an increasing amount of
earnings or buying back its stock.
Formula: Subtract any dividend payments due to the holders of preferred stock from net
income after tax, and divide by the average number of common shares outstanding during
the measurement period. The calculation is:
Net Income After Tax - Preferred stock dividends
Average no of common share outstanding
Net Profit Ratio:-
The net profit percentage is the ration of after-tax profits to net sales. It reveals the
remaining of profit after all costs of production and administration have been deducted
from sales, and income taxes recognized. As such it is one of the best measures of the
overall results of a firm, especially when combined with an evaluation of how well it is
using its working capital. The measure is commonly reported on a trend line, to judge
performance over time. It is used to compare the result of business with its competitors.
Net profit is not an indicator of cash flows, since net profit incorporates number of non-
cash expenses, such as accrued expenses and depreciation.
The formula for the net profit ratio =(Net profit / Net sales) x 100
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1. Following table shows the Employee cost for years 2010-2015 in percentage are below.
Table No. 1
Year 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Employee 167.5141 171.9906 102.2777 123.8889 119.8823
Cost
Following graph represent the fluctuation of employee cost incurred by HDFC bank.
Graph No. 1. Employee cost in percentage
200
167.51 171.99
150 123.89 119.89

102.28
100
50
0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Interpretation
In 2010 the employee cost has high and it is increasing up to 2011. Due to
increasing customer base of bank which required large human resources.
In 2012 to 2013 the employee cost incurred by the bank is less because the effect
of recession which lead to job cutting.
In 2013 to 2014 the employee cost has nearly same because the effect of inflation
may one of the reason of reduces the expenditure of the bank and get opportunity
for use these expenditure for others investment.
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2. Following table shows the Operating Expenses for the year of 2010-2015 in % are given
below.
Table No. 2
Year 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Operating
Expenses in 151.9026 185.2641 105.6614 104.4389 114.8692
%
Following graph represented the operating expenses incurred by HDFC bank
Graph No2 .Operating expenses in percentages
Chart Title
Series 1 Series 2 Series4 Series5
186.26
151.90
105.66 104.44
2010-2011 20111-2012 2012-2013 2013-2014 2014-2015
Interpretation
In 2010 to 2012 the operating cost has increased because the employees
cost has increased which increased the investment of the bank on his
employee.
In 2012 to 2015 the operating cost has remained same because the bank do
not want to increase his expenditure because the recession has may hit the
bank and also inflation may also one of the reason of fewer expenses.
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3. Following table shows the Equity Dividend for the year 2010-2015 in %are as given below.
Table No. 3
March March March March March March

Particular 2010 2011 2012 2013 2014 2015
Equity
Dividend 70 85 100 120 165 215
(%)
Following graph represent the Equity Dividend of HDFC bank.
Graph no 3. Equity Dividend
250
215
200
165
150
120
100
100 85
70
50
0
2010 2011 2012 2013 2014 2015
Interpretation
From 2010 to 2015 the bank has provide good dividend to his equity shareholder. It has
been observe from the graph bank has good financial stability as well as good
profitability which help him to retain his shareholder with them.
It well help the bank to create a new investment from the market because of the good
dividend provide by the bank.
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4. Following table shows the Earning per Share in Rs for the year 2010 to 2015 are as given
below
Table No. 4
March March March March March March

Particular 2010 2011 2012 2013 2014 2015
Earnings
Per Share 43.29 44.87 52.77 64.42 84.40 22.02
(Rs)
Following graph represent the EPS of HDFC bank
Graph No. 4 Earning per Share
90 84.4
80
70 64.42
60
52.77
50 44.87
43.29
40
30
22.02
20
10
0
2010 2011 2012 2013 2014 2015
Interpretation
From 2010 to 2014Earnings per share of the equity shareholder has increase this
has create a good image of the bank in the mind of shareholder.
In 2015 an Earning per share of the bank has gone down because the bank want
to retained his profit with them which help to expansion of business.
Government Policies has one of the reasons to retain of profit them which avoid
any disturbance in work.
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Some important heads in Balance sheet useful for comparison for the purpose of analysis are as
given below:
Balance Sheets
Particular March 10 March 11 March12 March13 March14 March15
Equity
share 319.39 354.43 425.38 457.74 467.23 469.34
capital
Reserves 6,113.76 11,142.80 14,226.43 21,064.75 24,914.06 29,455.04
Borrowings 2,815.39 4,478.86 2,685.84 12,915.69 14,394.06 23.846.51
Cash &
Balances 5,182.48 12,553.18 13,527.21 15,483.28 25,100.82 14,991.09
With RBI
Investments 30,564.80 49,393.54 58,817.55 58,607.62 70,929.37 97,482.91
Total 91,235.61 133,176.6 183,270.7 222,485.5 277,352.6 337,909.4

Assets
Above heads are comes under Balance sheet of the bank. This heads play important role to
define financial position of the bank.
Equity share Capital: It refers to the own investment of the equity shareholder in capital of the
bank. On behalf of this investment they get dividend.
Reserves of Bank: Reserves are the profit achieve by a bank where a certain amount it is put
back into the business which can help the business in their rainy days.
Borrowing: It refers to receiving something of value of in exchange for an obligation to pay

back something of usually greater valve at a particular time in the future.
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Investments: It refers to the purchase of financial product or other item of valve which an
expectation of favorable future returns. The sum of current or long term assets owned by bank
which is required for day to day expenses purpose.
Total Assets: It refers to the total holding of bank in term of fixed &current of assets. The
maximum asset shows the net worth of bank &soundness of business.
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5. Following table shows the Equity share Capital for the year 2010-2015 in % are as given
below.
Table 5
Particular March 10 March 11 March 12 March 13 March 14 March 15
Equity
share 319.99 354.43 425.38 457.74 465.23 469.34
Capital
Following graph represent the Reserve of HDFC bank
Graph No. Equity share Capital
600 565.23
500 469.34
457.74
425.38
400
354.43
319.99
300
200
100
5
0
2010 2011 2012 2013 2014 2015
Interpretation
From the above graph it has observe that an equity share capital has increased from 2010
to 2015 and which seems that bank wants to expand their business or acquire other
companies to boost top line growth. There are different in which an equity stake can be
sold in to raise funds.
Due to increases in share capital of the bank which creates a good images in the eye of
stake holder which that will increases the opportunity of growth.
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GONDIA BRANCH
6. Following table shows the reserves for the years 2010 to 2015 in 5 are as given below
Table No. 6
Year 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Reserves (%) 182.2577268 127.6737445 148.0677162 118.2736088 118.226671
Following graph represents the Reserves of HDFC bank
Graph No. 6 Reserves
Chart Title
Series 1 Series 2 Series 3
182.26
148.07
127.67
118.27
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Interpretation
Reserves requirements are to improve the safety and soundness of depository institution.
The higher the reserve requirements, these after depository institution are held to be.
In 2010 to 2011 the reserves of the bank has high which shows the safer depository in the
time of recession
In 2012- to 2015 the reserves of the bank has the less as compared to previous because
they want to increases their business operation which required huge finance . This finance
has generated from the reserves itself.
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7. Following table shows the Borrowing of the bank for the years 2010 to 2015 are as
given below.
Table No. 7
Borrowings 2815.39 4478.86 2685.84 12915.69 14394.06 23846.51
Following graph represents The Borrowings of HDFC bank

Graph No. Borrowing
30000
25000 23846.51
20000
14394.69
15000 12915.63
10000
4478.86
5000
2815.39 2685.84
0
2010 2011 2012 213 2014 2015
Interpretation
From the above graph it has observe that Borrowing has increased from 2010 to
2015 and which seems that bank wants to expand their Business or acquire other
companies to boost top line growth. There are different ways through which the
bank generates borrowing for increases the business operation.
Due to increase in borrowing this creates a futuristic approach of new Business
ventures.
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GONDIA BRANCH
8. Following table shows the cash & balanced with RBI for the years 2010 to 2015 are as given
below.
Table no. 8

Rs in crore
Cash &
Balance 5182.48 12553.18 13527.21 15483.28 25100.82 14991.09
with RBI
Following graph represents the cash and balance with RBI
Graph No. 8 Cash & Balance with RBI
30000
25100.82
25000
20000
15483.28
15000 13527.21
12553.18
10000
5182.48
5000
0
2010 2011 2012 2013 2014 2015
Interpretation
From the above graph it has observe that bank has to maintained a good Total assets from
2010-2015 and which seems that bank do not to take risk to reduce his net worth in the
operation.
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GONDIA BRANCH
9. Following table shows the investment for the year 2010 to 2015 are as given below
Table No. 9
Following graph represents the investments of HDFC bank
Graph No. 9 Investment
Investment 30564.8 49393.54 58817.55 58607.62 70929.37 97482.91
120000
97482.91
100000
80000 70929.37
58817.55 58607.62
60000 49393.54
40000 30564.8
20000
0
2010 2011 2012 2013 2014 2015
Interpretation
From the above graph it has observe that an investments has increased from 2010 to 2015
and which seems that bank wants to Expand their Business or acquire other companies to
boost top line growth. There are different ways to generate finance and used to for new
investment which they get good returns.
Due to increases in Investment of the bank which creates an good images in the eye of
stake holder that bank will increases the opportunity of growth.
43
GONDIA BRANCH
10. Following table shows the total assets for the years 2010-2015 are as given below
Table No. 10
Year 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Total Assets
(%) 145.9699782 137.6148513 121.3824157 124.6761081 121.8339
Following graph represent the total assets of HDFC bank
Graph No. 10
160 145.97
137.61
140
121.38 124.68
120
100
80
60
40
20
0
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Importance of the Study

The banking and financial services industry in India is in a state of inevitable and rapid
transition. The market for banking product and services has become more competitive than ever
before. Due to steady in interest rates over the last two years, customer are now looking for
alternate avenues for saving investments such as pension funds, Mutual funds, life insurance
product etc. Further interest margins and revenues opportunities have become thin driving force
for banks and financial services companies who look for lending opportunities where the
delinquency rates on loans are low and risk is spread across a large base of customers. A rapidly
growing middle class, with an enormous appetite to borrow from bank for a better lifestyle, has
given banks and financial services companies an opportunity like a never before to finance the
demand side of market. Moreover customization of services is fast becoming the norm than a
competitive advantage.
44
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Findings
45
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FINDINGS
Net profit ratio is increased in 2013-14 because bank earns more profit in
that year as compare to other years.
The return on equity is more 2011-12 due to increases in its income.
The return on investment is low in 2010-11 due to its low income as
compare to other years.
The return on total asset is in 2011-12 is more than other year.
Operating profitratio is better in 2014-2015 due to low operating expenses.
EPS of bank is increased year by year.
In interest coverage ratio show up and downs in the ratio due to change in
the interest expenses.
Debt to equity ratio is not 2:1 because bank provides maximum debt.
Current ratio shows the changing position year from 2010 to 2015. Current
assets and current liabilities also change in every year.
46
GONDIA BRANCH
Conclusion
47
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CONCLUSION
From the study of financial statement of the HDFC bank from last five years the
following conclusion are drawn.
Employee Cost: In 2010 an Employee cost was 167.51% and it decrease in

which was 119.88%.
Operating expenses: In 2010 an operating Expenses was 151.51% and it
decreases in 2015 which was 114.86%.
Earnings per share: 2010 an Exchange per share was 4.329 and it decreases
and it decreases in 2015 which was 22.02
Reserves: In 2010 Reserves was 182.25% and it decreases in 2013 which
was 118.22%
Cash & Balance: In 2010 cash & balance was 5182.48 crores and it
increases in 2015 which was 14991.09 Crores.
Total Assets: In 2010 Assets was 145.96% and decreases in 2015 which was
121.83%.
Borrowing: In 2010 Borrowing was 2815.39 croresand it Increases in 2013
which was 23846.51 crores.
Equity Dividend: In 2010 an equity Dividend was 70% and it increases in
2015 which was 215%
Equity share Capital: In 2010 an equity share capital was 319.99 and it
increases in 2013which was 469.3
Investments: In 2010 an Investment was 30564.8 crores and it increase in
2015 which was 97482.9 Crores.
The above conclusion has provide a clear picture in which bank has doing a
cost cutting in their expenses which they incurred and used those fund for
future expansion 7 new Investment for bank. This Help the bank to generate
more profit.
48
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Suggestion
49
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Suggestion
The bank should increase its current assets to improve the liquidity position of the
Bank.
1. The bank should try to reduce its interest expenses.
2. The bank should try to earn more profit in future to sustain in cut- throat
competition.
3. The bank should increase their total assets for development of banks.
4. The bank should minimize their operating expenses.
5. The bank should reimburse at low interest and disburse at high interest.
The bank should acquire new sources of income like fee base and fund base.
50
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Bibliography
51
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Bibliography
Websites:
http://www.thehindubusinessline.com
http://economictimes.indiatimes.com
http://www.hdfcbank.com
http://mgmtfunda.com/swot-analysis-of -hdfc-bank/
www.Moneycontrol.com
Books:
Financial Management R.P.Rustagi
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GONDIA BRANCH
Annexure
1. What is the Employee cost of HDFC bank in year 2013-2014?

a) 167.5141 b) 123.8889
c) 171.9906 d)119.8823
2. What is the highest emoployee cost of HDFC bank in 2010 to 2015?

a)167.5141 b) 102.2777
c)171.9906 d)119.8823
3. What are the operating expenses of HDFC bank in year 2010 to 2015?
a) 151.9026 b)185.2641
c) 185.2641 d) 104.4389
4. What are the decreasing operating expenses in year 2011 to 2012?

a) 185.2641 b) 105.6641
c) 104.4389 d) 114.8692
5. What is the equity dividend low in the year 2010 to 2015?

a)85 b) 100
c) 70 d) 215
6. Are you satisfied the HDFC bank provide good facilities or not ?
a) Yes
b) No
7. What is the EPS of HDFC bank in year 2010 to 2015?

a) 43.29 b) 44.87
c) 64.42 d) 84.40
8. HDFC bank provides.?

a) House loan b) car
c) money d) share
9. What are the highest EPS in year 2010 to 2015?
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GONDIA BRANCH
a) 43.29 b) 84.4
c) 84.40 d) 22.02
10. How often do you HDFC bank Service?

a) as a mayrequired b) daily
c) weekly d) monthly
11. Are you aware towards the HDFC bank service?

a) Yes
b) No.
12. What do you use the above services?

a) Safety b) convenient d) less expensive
13. In the month of March 2013 the equity share capital are increase or
decrease?
a) yes b) no c) both d) none of this
14. Increasing shares create good or bad images in the bank?

a) yes b) no
15. What is the highest investment of HDFC bank in the year 2010 to 2015?
a) 97482.91 b) 58607.62
c) 30564.8 d) 4939.54
Expected Contribution:
1. The study of financial ratios will help used to compare the financial health of
HDFC banks.
2. The study will help analysis the financial positions of the capital of HDFC bank.
3. The study is used to analyze whether an entity is stable, solvent, liquid, or

profitable enough to the invested in.
4. The study will helps in planning and forecasting.
54

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A STUDY ON FINANCE FUNCTION OF BANK WITH REFERENCE TO HDFC BANK,

C. Objectives of the study 23

E. Scope of the study 27

F. Limitation of the study (research boundaries) 29

7. Recommendation & suggestions 46

Introduction Of Financial Analysis:-

The process of evaluating businesses, budgets and other finance related

Financial statement analysis is improving for different reasons:

2. Decisions and Plans

The management of the company is responsible for taking decision and

Financial statements are usually the final output of a company &accounting

A horizontal financial statements analysis compares current financial statements to

compare changes in doller amounts or a percentage changes when comparing

A vertical financial statements analysis is conducted using common size financial

Trend Percentage Analysis

A trends percentages analysis is an enhanced trends horizontal analysis technique.

Financial statements are summaries of the operating, Financing, and investment

Financial statements are a collection of reports about an organizations financial

There are three basic financial statements

Income financial statements present information concerning the revenues

lost in included. Often, Income statements provide a record of revenues over a

Cash Flow statements:-

Cash-flow financial statements provide a look at the movements of cash in

Features of Financial Statement

Understandability -The information must be readily understandable to users of

SWOT Of HDFC Banks:-

Superior customer services vs. c

Dedicates workforce aiming at making a long-term careen in the field.

Some gaps in range for certain sectors.

Profit margins will be good.

Legislation could impact.

Kotak Mahindra Bank Ltd.

HDFC Bank limited was incorporated in August 1994. It was promoted by

Times Bank Amalgamation :

In a milestone transaction in the Indian banking industry, Times Bank Limited

scheme of amalgamation approved by the shareholder of both banks and the

HDFC Banks mission is to be a World Class Indian Bank. The objectives is to

HDFC Bank Offers a wide range of commercial and transactional banking

Wholesale Banking Services-

Retail Banking Service

Home Loan Services India Pvt. Ltd

Services Offered By theCompany :

Accounts & Deposits

Accounts & Deposits

The ultimate objective of any organization is to maximize the gains.

Ratio Analysis and Interpretation

Ratio Analysis of HDFC Bank

Ratio Analysis is the process of determining and interpreting numerical

Advantages of Ratio Analysis

Simplifies Finance Statement: - It simplifies the comprehension of

Limitations of Financial Statements Analysis

2. First of all, ratio analysis is hampered by potential l limitations with accounting

Objectives Of The Study

OBJECTIVE OF THE STUDY

Hypothesis of the Study

Scope of the study

Scope of the study:-

Limitation Of The Study

Data Analysis &

Cash + Marketable securities + Accounts Receivable

Debts to Equity Ratio

Debt Equity ratio = Total liabilities